Southern District of New York

Damian Williams, the United States Attorney for the Southern District of New York, and Ivan J. Arvelo, the Special Agent in Charge of the New York Field Office of Homeland Security Investigations (“HSI”), announced today the arrest of CHARLES RILEY CONSTANT, a/k/a “Chuck Constant,” for charges in connection with a scheme to steal and launder over $1 million in fraudulently obtained loans from the Small Business Administration (“SBA”), including the use of fraud proceeds to purchase cryptocurrency ATMs.  CONSTANT was arrested yesterday morning and is being presented today before a U.S. Magistrate Judge in the Eastern District of Texas.  In connection with CONSTANT’s arrest, law enforcement agents seized, among other things, 18 cryptocurrency ATMs in Texas and Oklahoma that CONSTANT purchased with fraud proceeds to start a cryptocurrency ATM business named “Coindawg LLC,” as well as Coindawg’s website.

U.S. Attorney Damian Williams said: “As alleged, Charles Constant helped to launder over $1 million of proceeds from loans that his co-conspirators fraudulently obtained from the SBA.  He converted the bulk of the crime proceeds into Bitcoin for his co-conspirators and used a portion of the rest to start his own lucrative cryptocurrency ATM business.  Thanks to this Office’s teamwork with the HSI, Constant is now facing serious criminal charges for his alleged crimes.  We will continue to hold accountable people who steal funds intended for small businesses that struggled as a result of the COVID-19 pandemic.”     

HSI Special Agent in Charge Ivan J. Arvelo said: “As alleged, Charles Constant specifically exploited the Small Business Administration’s Economic Injury Disaster Loan program put in place to help our small businesses weather the COVID-19 pandemic, for the purpose of expanding his criminal money laundering enterprise.  Constant is accused of defrauding the federal government and robbing U.S. taxpayers with his illicit money-laundering scheme.  HSI New York will continue to exhaust every resource at our disposal to ensure criminals like this will be held accountable for their actions.”

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

CHARLES RILEY CONSTANT, a/k/a “Chuck Constant,” knowingly assisted others involved in a scheme to fraudulently obtain over $1 million in loans from the SBA, which CONSTANT and his co-conspirators laundered through Bitcoin transactions.  The perpetrators of the fraud against the SBA used false identities and non-existent companies to obtain seven Economic Injury Disaster Loans from the SBA — funds that were intended to help small businesses financially harmed by the COVID-19 pandemic.  The loan proceeds were transferred directly from the SBA to a bank account held by C2 LLC, an entity that CONSTANT owned and registered with the U.S. Treasury Department as a money services business.  CONSTANT then used approximately $700,000 of the crime proceeds — a portion of which he routed through a second bank account held by C2 LLC — to purchase Bitcoin from a cryptocurrency exchange headquartered in New York City.  CONSTANT directed the New York-based exchange to distribute the Bitcoin to his co-conspirators.

CONSTANT then stole the remaining $300,000 of fraud proceeds.  CONSTANT transferred $53,000 of the $300,000 to a third bank account held by C2 LLC and an additional $98,300 to an account in CONSTANT’s name at a cryptocurrency exchange headquartered in California.  Beginning in the fall of 2020, CONSTANT used a portion of these fraud proceeds to purchase, among other things, seven cryptocurrency ATMs (“Crypto ATMs”), cryptocurrency, and promotional services to start a cryptocurrency ATM business named “Coindawg LLC.”  CONSTANT used revenue generated by the seven Crypto ATMs to acquire additional Crypto ATMs and more cryptocurrency to expand Coindawg’s operations.  To date, Coindawg has exchanged over $3,000,000 worth of cryptocurrency and charged 15% in transaction fees.  Below is a photograph of one of the Coindawg Crypto ATMs seized by law enforcement in connection with CONSTANT’s arrest:

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CONSTANT, 54, of Allen, Texas, is charged with one count of conspiracy to commit money laundering, which carries a maximum sentence of 20 years in prison; one count of theft of public money, which carries a maximum sentence of 10 years in prison; and one count of interstate receipt of stolen money, which carries a maximum sentence of 10 years in prison. 

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

Mr. Williams praised the investigative work of the HSI.  Mr. Williams also thanked the HSI Field Office in Dallas, Texas, for their assistance in the investigation of this case.

This case is being handled by the Office’s Complex Frauds and Cybercrime Unit.  Assistant U.S. Attorneys Sarah Lai, Olga I. Zverovich, and Andrew K. Chan 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 herein should be treated as an allegation.

Damian Williams, the United States Attorney for the Southern District of New York, announced today that RAFAEL MARTINEZ, the CEO of MBE Capital Partners, LLC, pled guilty to conspiring to commit wire fraud in connection with loan and lender applications submitted through the Paycheck Protection Program (the “PPP”) administered by the U.S. Small Business Administration (the “SBA”).  MARTINEZ pled guilty before United States District Judge Lewis J. Liman, to whom his case is assigned. 

U.S. Attorney Damian Williams said: “In the depths of the COVID-19 pandemic, Martinez lied to get money that was supposed to help people.  His abuse of the system during a terrible time has now been brought to light.  Martinez took advantage of his employees, a tax preparer, and the public at large — all to fund a lavish lifestyle of cars, jets, and fancy homes.  Let me be clear, this Office will not tolerate such conduct and will continue to bring to justice those who put their greed above the law.”

According to the allegations in the Complaint, court filings, and statements made during plea proceedings:

MARTINEZ used false representations and documents to fraudulently obtain the approval of the SBA for his company, MBE Capital Partners, LLC (“MBE”), to be a non-bank lender through the PPP.  He engaged in this criminal conduct to fraudulently secure hundreds of millions of dollars in capital for PPP loans and, ultimately, to collect more than approximately $71 million in lender fees.  In addition, MARTINEZ engaged in a scheme to obtain a PPP loan for MBE in the amount of approximately $283,764 through false statements regarding the number of employees of MBE and the wages paid to MBE employees and using the forged signature of MBE’s tax preparer. 

At all relevant times, MARTINEZ has been the CEO and primary owner of MBE, a New York limited liability company formed in or about March 2015.  Republic Group, LLC, a/k/a Republic Group Parts, LLC (“Republic Group”), which is owned and controlled by MARTINEZ, serves as the holding company for MBE and conducts business as MBE.  According to MBE’s website, “For over 20 years, MBE Capital Partners has been a leading provider of financing solutions for small and diverse businesses . . .  In 2019, we financed over $1.7 billion in public and private debt and we funded over 35,000 PPP loans worth $800M.” 

On or about April 5, 2020, MARTINEZ applied to a financial institution for a government-guaranteed loan for Republic Group, through the SBA’s PPP.  In connection with the loan application, MARTINEZ represented that MBE had as many as 15 employees and an average monthly payroll of approximately $119,390 in 2019.  In fact, however, from in or about April 2018 through in or about April 2020, MBE had at most four employees who had a total average monthly payroll of no more $25,000.  In order to support the false representations made by MARTINEZ in the loan application about the number of employees at and the wages paid by MBE, MARTINEZ submitted fraudulent and doctored tax records that contained the forged signature of a tax preparer located in Manhattan, New York (the “Tax Preparer”).  Based on the false documentation provided by MARTINEZ, MBE was approved for a PPP loan in the amount of approximately $283,764, which was disbursed to a bank account controlled by MARTINEZ.  A majority of the loan proceeds do not appear to have been used for payroll for employees of MBE or other business expenses.

On or about April 9, 2020, within five days of applying for the PPP loan referenced above, MARTINEZ submitted an application to the SBA for MBE to become a non-bank PPP lender.  As part of the PPP lender application process, MARTINEZ represented that MBE had originated and serviced over $3.8 billion in business loans or other commercial financial receivables for the three-year period from in or about 2017 through in or about 2019 and submitted fraudulent financial statements that purported to be audited by the Tax Preparer’s firm for the years 2018 and 2019.  Based on the false information provided by MARTINEZ to the SBA, MBE was approved as a non-bank lender for PPP loans.

On or about April 27, 2020, MARTINEZ submitted various documents, including the same fraudulent audited financial statements for 2019 provided to the SBA, to a life insurance company (the “Company”) as part of a proposed partnership to fund PPP loans for minority and women-owned small businesses.  On or about May 13, 2020, the Company provided MBE with $100 million to fund PPP loans, which MBE in turn used as collateral to borrow additional capital of approximately $832 million through the Payment Protection Program Liquidity Facility (“PPPLF”) with the Federal Reserve.

As a result of the above fraudulent misrepresentations, MARTINEZ, through his company MBE, became an approved PPP lender and issued approximately $823 million in PPP loans to approximately 36,600 businesses.  These loans earned MARTINEZ a total of approximately $71.3 million in fees.  MARTINEZ spent the proceeds from his criminal conduct on, among other things, the purchase of a villa in the Dominican Republic for over $10 million, a $3.5 million mansion located in Franklin Lakes, New Jersey, a chartered jet service, and several luxury vehicles, including a 2018 Porsche 911 Turbo, a 2017 Ferrari 488 Spider, a 2017 Bentley Continental GT, a BMW 750, and a 1962 Mercedes Benz 190. 

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MARTINEZ, 57, of Franklin Lakes, New Jersey, pled guilty to one count of conspiracy to commit wire fraud, which carries a maximum sentence of five years in prison. 

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

As part of his plea agreement, MARTINEZ agreed to pay restitution in the amount of $71,711,893.07 and to forfeit $44,546,712.94, including more than $15 million previously seized by law enforcement, properties in New Jersey and the Dominican Republic, and five luxury vehicles.

Mr. Williams praised the outstanding investigative work of the Internal Revenue Service, Criminal Investigation; U.S. Small Business Administration, Office of Inspector General; and the Office of Inspector General for the Board of Governors of the Federal Reserve System and the Bureau of Consumer Financial Protection, Eastern Region.

This case is being handled by the Office’s Complex Frauds and Cybercrime Unit.  Assistant U.S. Attorneys Micah Fergenson, Katherine Reilly, and Steven Kochevar are in charge of the prosecution.

Damian Williams, the United States Attorney for the Southern District of New York, announced today that AMIT BHARDWAJ, the former Chief Information Security Officer (“CISO”) at Lumentum Holdings Inc. (“Lumentum”), pled guilty to 13 counts arising from his participation in a scheme to commit insider trading based on material, non-public information (“MNPI”) that BHARDWAJ misappropriated from his employer, Lumentum.  BHARDWAJ traded on the misappropriated MNPI himself and tipped his associates with this same information so that they could place profitable trades in Lumentum’s acquisition targets. BHARDWAJ was arrested and charged in July 2022 and pled guilty earlier today before U.S. District Judge Gregory H. Woods.

U.S. Attorney Damian Williams said: “Amit Bhardwaj, the former Chief Information Security Officer of Lumentum, ironically failed to keep the confidential information he was trusted with secure as he shared it with numerous friends and a family member in order to make a profit.  Not only did Bhardwaj betray his company and cheat the securities markets, but when confronted by the FBI, he also schemed to conceal his illicit behavior and obstruct the investigation.  Today’s guilty plea emphasizes this Office’s commitment to protecting the integrity of the financial markets.”

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

In approximately December 2020, BHARDWAJ learned that Lumentum was considering acquiring Coherent, Inc (“Coherent”).  Based on this information, BHARDWAJ himself purchased Coherent stock and call options, and BHARDWAJ tipped three associates –– his friend Dhirenkumar Patel, another friend, and one of BHARDWAJ’s close family relatives ––and these individuals all traded in Coherent securities as a result.  BHARDWAJ and Patel agreed that Patel would pay BHARDWAJ 50% of the profits that Patel earned by trading in Coherent based on the MNPI provided by BHARDWAJ.  When Coherent’s stock price increased substantially following the announcement of the Lumentum acquisition, BHARDWAJ, his close family member, his friend Patel, and another friend closed their positions in Coherent securities and collectively profited by nearly $900,000.

In or about October 2021, BHARDWAJ learned that Lumentum was engaged in confidential discussions with Neophotonics Corporation (“Neophotonics”) about a potential acquisition.  BHARDWAJ provided this information to SRINIVASA KAKKERA, ABBAS SAEEDI, and Ramesh Chitor, and these individuals all traded in Neophotonics securities as a result.  In connection with Chitor’s trading, BHARDWAJ and Chitor agreed that Chitor and BHARDWAJ would split the profits equally.  When Neophotonics’ stock price increased substantially following the announcement of the Lumentum acquisition in November 2021, KAKKERA, SAEEDI, and Chitor closed their positions in Neophotonics securities and made collectively approximately $4.3 million in realized and unrealized profits.

After they were interviewed by the Federal Bureau of Investigation (“FBI”) voluntarily and served with federal grand jury subpoenas on approximately March 29, 2022, BHARDWAJ took steps to obstruct the federal investigation of their conduct.  On the day of the March 29, 2022, FBI interviews, BHARDWAJ drove to the homes of certain of his co-conspirators to encourage them not to tell the federal authorities the truth about their insider trading scheme.  BHARDWAJ and his associates subsequently met in person on multiple occasions and discussed, among other things, potential false stories that would conceal their insider trading scheme as well as creating false documents to buttress lies regarding payments that were, in reality, related to the insider trading scheme.

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BHARDWAJ, 49, of San Ramon, California, pled guilty to seven counts of securities fraud and two counts of wire fraud, each of which carries a maximum term of 20 years in prison, and four counts of conspiracy to commit securities fraud and wire fraud, each of which carries a maximum term of five years in prison. 

The statutory maximum sentences are prescribed by Congress and are provided here for informational purposes only, as any sentencing of the defendant will be determined by a judge.  BHARDWAJ is scheduled to be sentenced by Judge Woods on July 11, 2023, at 10 a.m.

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

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

Damian Williams, the United States Attorney for the Southern District of New York, Michael J. Driscoll, the Assistant Director in Charge of the New York Field Office of the Federal Bureau of Investigation (“FBI”), and Thomas Fattorusso, Special Agent in Charge of the Internal Revenue Service, Criminal Investigation, New York Field Office (“IRS-CI”), announced today the unsealing of charges against IRINA DILKINSKA in connection with her participation in the massive OneCoin fraud scheme.  OneCoin, which began operations in 2014 and was based in Sofia, Bulgaria, marketed and sold a fraudulent cryptocurrency by the same name through a global multi-level-marketing (“MLM”) network.  As a result of misrepresentations made about OneCoin, victims invested over $4 billion worldwide in the fraudulent cryptocurrency.  DILKINSKA was extradited from Bulgaria yesterday and will be presented before United States Magistrate Judge Sarah Netburn later today.

U.S. Attorney Damian Williams said: “Irina Dilkinska, the supposed Head of Legal and Compliance for the OneCoin cryptocurrency pyramid scheme, accomplished the exact opposite of her job title and allegedly enabled OneCoin to launder millions of dollars of illegal proceeds through shell companies.  Dilkinska helped perpetuate a wide-ranging scheme with millions of victims and billions of dollars in losses, and she will now face justice for her alleged crimes.”

FBI Assistant Director Michael J. Driscoll said: “As alleged in the charges unsealed today, Dilkinska helped her co-conspirator, Mark Scott, launder approximately $400 million in OneCoin proceeds while she was purportedly OneCoin’s Head of Legal and Compliance.  Further, when she learned of Scott’s arrest, she destroyed incriminating documents and sent another co-conspirator incriminating messages.  As the actions announced today should demonstrate, the FBI will continue its determination to bring alleged fraudsters like Dilkinska to justice.”

IRS-CI Special Agent in Charge Thomas Fattorusso said: “The charges against Irina Dilkinska are the outcome of the exceptional investigative work of our federal and international law enforcement partners.  Those who commit fraud are put on notice today that IRS Criminal Investigation is committed to holding them accountable no matter where they are located.”

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

In 2014, RUJA IGNATOVA, a/k/a “the Cryptoqueen,” and KARL SEBASTIAN GREENWOOD co-founded OneCoin,[2] a company based in Sofia, Bulgaria, that marketed a purported cryptocurrency by the same name, which was in fact a fraudulent pyramid scheme.  OneCoin operated as a MLM network through which members received commissions for recruiting others to purchase cryptocurrency packages.  This MLM structure influenced rapid growth of the OneCoin member network.  Indeed, according to OneCoin’s promotional materials, over three million people invested in fraudulent cryptocurrency packages.  OneCoin records show that, between the fourth quarter of 2014 and the fourth quarter of 2016 alone, OneCoin generated €4.037 billion in sales revenue and earned “profits” of €2.735 billion.

DILKINSKA was the purported Head of Legal and Compliance for OneCoin, but rather than ensuring that OneCoin complied with the law, DILKINKSA assisted in the creation and management of shell companies in order to launder OneCoin proceeds and to hold property belonging to IGNATOVA.  For example, in 2016 and 2017, DILKINSKA helped co-conspirator MARK SCOTT, a former equity partner at a prominent international law firm, launder approximately $400 million in OneCoin proceeds through a series of fake Cayman Islands investment funds operated by SCOTT.  Among other things, DILKINSKA used a company named B&N Consult EEOD, which was falsely described as offering “proprietary consulting services, support and software solutions” to its clients and as generating €200 million in 2015 through 2016, to disguise the transfer of millions of dollars as purported “investments” into SCOTT’s funds.  In reality, B&N was a shell company that did not generate legitimate income and was used by DILKINSKA to launder OneCoin proceeds.  In or around September 2018, DILKINSKA learned of SCOTT’s arrest in connection with his laundering of OneCoin proceeds.  Shortly thereafter, DILKINSKA burned incriminating documents, sent co-conspirator KONSTANTIN IGNATOV a text message with a link to a newspaper article about the arrest, and then wrote a series of texts, including, “See this!!!!!”; “Something is going on!!!!!”; and “If this is true I need the mega lawyers for whom [co-conspirator FRANK SCHNEIDER] was talking!!!”

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

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DILKINKSA, 41, of Sofia, Bulgaria, has been charged with one count of conspiracy to commit wire fraud, which carries a maximum potential sentence of 20 years in prison, and one count of conspiracy to commit money laundering, which carries a maximum potential 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 defendant will be determined by a judge.

Mr. Williams praised the outstanding investigative work of the IRS-CI and the FBI, which jointly conducted this investigation with Special Agents from the U.S. Attorney’s Office.  Mr. Williams also thanked the United States Marshals Service, the Justice Department’s Office of International Affairs, and Bulgarian authorities.

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

The case is being prosecuted by the Office’s Complex Frauds and Cybercrime Unit. Assistant U.S. Attorneys Christopher J. DiMase, Nicholas Folly, Juliana N. Murray, 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 descriptions of the Indictment set forth below constitute only allegations, and every fact described should be treated as an allegation.

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

Damian Williams, the United States Attorney for the Southern District of New York,  Michael J. Driscoll, Assistant Director in Charge of the New York Field Office of the Federal Bureau of Investigation (“FBI”), Keechant L. Sewell, the Commissioner of the New York City Police Department (“NYPD”), and Christopher Sapienza, Commissioner of the City of Yonkers Police Department (“YPD”), announced that RIDON KOLA was arrested today based on a criminal Complaint filed in White Plains federal court charging KOLA with making threatening interstate communications, in which KOLA threatened to kill officers of the YPD and the Mayor of Yonkers.  KOLA will be presented in White Plains federal court later today before United States Magistrate Judge Paul E. Davison.

U.S. Attorney Damian Williams said: “As alleged, Ridon Kola posted threats on social media against law enforcement, stating his support for ISIS and his intention to murder numerous police officers.  Undeterred after questioning from law enforcement, Kola’s conduct escalated, as he continued to assure police his threats would be carried out.  Threatening violence against police or to undermine public safety will not be tolerated, as Kola now stands charged and faces prison time for his threats against our dedicated law enforcement partners tasked with keeping us safe.”

FBI Assistant Director Michael J. Driscoll said: “As we allege today, Kola, who has demonstrated support for radical Islamic extremism and terrorist attacks, made a series of threats to the lives of law enforcement and others, and now he will be forced to face the consequences of his actions.  Counterterrorism remains the FBI’s top priority, and through our NY JTTF, we remain committed to keeping all New Yorkers safe from acts of terror.”

NYPD Commissioner Keechant L. Sewell said: “The NYPD remains steadfast in its commitment to fight against the grave threat of violence and hate in every form.  This arrest reinforces our work to protect people and ensure consequences for those who are charged with threatening our way of life.  I want to thank the members of the FBI-NYPD Joint Terrorism Task Force, the United States Attorney’s Office for the Southern District of New York, and everyone else who worked to interdict and stop this threat.”

YPD Commissioner Christopher Sapienza said: “The safety of our residents, our community, and the members of our Police Department is paramount; every threat is investigated to the fullest extent possible.  Thankfully, due to the outstanding collaborative efforts of the FBI’s New York Joint Terrorism Task Force and our Yonkers Police Intelligence Division, our City will enjoy a safe Saint Patrick’s Day parade tomorrow free from intimidation by bad actors.”

As alleged in the Complaint unsealed today:[1]

KOLA has engaged in escalating threats of violence against, among others, law enforcement, culminating in recent online threats against the YPD in connection with the Yonkers St. Patrick’s Day parade scheduled for Saturday, March 18.  KOLA’s posts demonstrate support for radical Islamic extremism and terrorist attacks.  In a recent threatening post, KOLA displayed himself with an axe.

On November 19, 2021, KOLA posted to a YPD official social media account a message in Albanian that translated to the following: “I am going to slaughter you little girls.”

On December 5, 2021, KOLA posted to the same YPD social media account a message stating that: “Starting tomorrow I will start killing your officers just so u know who is doing it, Ridon Kola Albanian blood,” and that he would also kill the Mayor of Yonkers.

Following those threats, in December 2021, YPD detectives interviewed KOLA at his residence.  KOLA admitted to making the threatening posts but claimed he had no plans to harm YPD officers or the Mayor.  Based on his demeanor, YPD subsequently issued a warning to officers to exercise diligence and caution in any encounters with KOLA.  Beginning in early 2023, and continuing in the days leading up to the planned St. Patrick’s Day parade, KOLA has escalated his threats against the YPD and other government officials and has expressed his support for violent Islamic extremism and terrorist attacks.

In January 2023, KOLA posted multiple statements expressing support for “jihad,” or “to war against non-Muslims,” and the establishment of a “caliphate,” and depicting the raised index finger gesture used by jihadist groups, including the terrorist organization the Islamic State of Iraq and al-Sham (“ISIS”).   

On March 6, 2023, appearing to reference YPD’s prior interview of KOLA, KOLA sent a direct message to the YPD social media account stating: “I’m looking for that officer that came to my house and threatened me and my family to kill us. I’m going to burn the world until I find him Vallahi [by God], no matter what happens to me there will never be peace in this country anymore! Allahu Ekberr.”  The phrase “Allahu Ekberr” is one form of an Arabic phrase meaning “God is great,” which radical Islamic extremists have proclaimed in connection with the commission of terrorist attacks.

The next day, March 7, 2023, KOLA posted a statement praising Sayfullo Saipov, the recently convicted perpetrator of a terrorist attack for ISIS in which Saipov used a truck on Halloween in 2017 to murder eight victims and injure many more on a bike bath in lower Manhattan.  KOLA referred to Saipov as “my BROTHER.”

As of March 9, 2023, KOLA’s social media account profile included the statement, “Now is personal America and the world!!!” and a threat to burn “cia fbi nsa police jud[g]es alive w their families too!”

Also on March 9, KOLA sent two direct messages to the YPD social media account stating: “First people to be crucified will be the Yonkers rats Vallahi.  Allahu Ekberr”; and “I will crucify Yonkers cops and their bosses all along McLean ave.  It will be a horror scene . . . Allahu Ekberr.”  McLean Avenue in Yonkers is part of the route for the Yonkers St. Patrick’s Day Parade taking place on March 18, and numerous YPD officers will be posted to the parade route along that street.  KOLA’s residence is in the area of the parade route.

Three days later, on March 12, 2023, KOLA posted to his social media feed a photograph of himself holding an axe with a statement in Albanian, translated to the following: “Come on Judas, I’m waiting for you.”

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KOLA, 32, of Yonkers, New York, is charged with making threatening interstate communications, which carries a maximum sentence of five years in prison. 

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

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 NYPD, and over 50 other federal, state, and local agencies.  Mr. Williams also thanked the YPD and the Yonkers Police Intelligence Division for their assistance.

The case is being handled by the Office’s National Security and International Narcotics Unit.  Assistant U.S. Attorney Kevin Sullivan 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 descriptions of the Complaint set forth below constitute only allegations, and every fact described should be treated as an allegation.

Damian Williams, the United States Attorney for the Southern District of New York, announced that DJONIBEK RAHMANKULOV was sentenced today to 121 months in prison for laundering millions of dollars in criminal proceeds obtained from computer hacking, healthcare fraud, and Small Business Administration loan fraud, as well as operating an international unlicensed money transmitting business.  The defendant was convicted at trial on September 1, 2022, of money laundering conspiracy, bank fraud, and conspiracy to operate an unlicensed money transmitting business.  U.S. District Judge Ronnie Abrams imposed today’s sentence.

U.S. Attorney Damian Williams said: “Djonibek Rahmankulov laundered money for a living.  He exploited the financial system to launder millions of dollars from multiple fraudulent schemes and repeatedly lied to banks to operate his illegal enterprise.  Once caught — and even after he was convicted — the defendant continued to show that he believed he was above the law by threatening a witness and submitting false information to the Court.  Today’s sentence reflects that this Office will find and prosecute those who seek to abuse the U.S. financial system to launder dirty money.”

According to the superseding Indictment, evidence at trial, and statements made in Court:

Between 2017 and September 2020, RAHMANKULOV operated a network of shell companies that were used to launder millions of dollars of criminal proceeds from multiple types of criminal activity.  RAHMANKULOV worked with computer hackers who fraudulently gained control of the bank accounts of victims located throughout the United States and executed millions of dollars in fraudulent wire transfers into bank accounts opened by RAHMANKULOV and his co-conspirators.  RAHMANKULOV received wire transfers into bank accounts he created and bank accounts he instructed others to create and laundered these proceeds through multiple additional bank accounts to prevent the victims and the banks from recovering the stolen funds.

In addition, RAHMANKULOV worked with a network of pharmacies engaged in Medicare and Medicaid fraud.  These pharmacies submitted millions of dollars of fraudulent billing for HIV medications that they did not dispense or obtained illegally, including by repurchasing medications from HIV patients who were Medicaid recipients.  RAHMANKULOV created companies to receive these criminal proceeds from the pharmacies and laundered them through a variety of means, including by using them to fund an unlicensed money transmitting business that illegally moved money to and from multiple countries, including Iran.

In 2020, when the COVID-19 pandemic began, RAHMANKULOV filed fraudulent applications for COVID relief loans from the Small Business Administration for multiple companies he controlled.  He laundered the proceeds of loans and grants through these companies.  RAHMANKULOV also made a number of materially false statements to financial institutions in connection with his money laundering schemes, both when opening bank accounts and when executing financial transactions with those bank accounts.

RAHMANKULOV sought to obstruct justice during the pendency of his case.  In the months before trial, RAHMANKULOV instructed a witness to lie to law enforcement.  When the witness later informed RAHMANKULOV that the witness would tell the truth to law enforcement, RAHMANKULOV threatened the witness, stating, among other things, that if he went to prison, “I will drag all of you with me, and once you are there, then I will have my revenge.”  Nonetheless, the witness testified at trial.  RAHMANKULOV continued seeking to obstruct justice after his conviction.  In advance of his sentencing, he submitted multiple letters to the Court purporting to show support from members of the community, but two of these letters were in fact fraudulent and had not been written by the purported authors.

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In addition to the prison term, RAHMANKULOV, 35, of Queens, New York, was sentenced to three years of supervised release.  RAHMANKULOV was further ordered to pay a forfeiture of $5,413,278 and a $40,000 fine.

Mr. Williams praised the outstanding investigative work of the Federal Bureau of Investigation’s New York Money Laundering Investigation Squad.

The prosecution is being handled by the Office’s Money Laundering and Transnational Criminal Enterprises Unit.  Assistant U.S. Attorneys Cecilia Vogel, Thane Rehn, and Samuel Raymond, with the assistance of Paralegal Specialist Nerlande Pierre, are in charge of the prosecution.

Damian Williams, the United States Attorney for the Southern District of New York, Ivan J. Arvelo, the Special Agent in Charge of the New York Field Office of Homeland Security Investigations (“HSI”), and Keechant L. Sewell, the Commissioner of the New York City Police Department (“NYPD”), announced the arrest of JASON FLEMING after he brandished a loaded semiautomatic Hi-Point carbine rifle and a loaded Smith & Wesson .357 Magnum revolver in broad daylight after a dispute in a bodega in Chelsea.  FLEMING was arrested after a civilian, seeing FLEMING running down the street with a revolver in his hand as police were chasing him, stood in FLEMING’s way and pushed him into a nearby fence and then held onto him until police officers, who were still in pursuit, placed FLEMING under arrest.

U.S. Attorney Damian Williams said: “As alleged, the defendant illegally brandished two loaded firearms in broad daylight on a Manhattan street, one of which was a carbine rifle, frightening numerous New Yorkers, including a child.  Thanks to our law enforcement partners and the heroic efforts of a Good Samaritan, the defendant was apprehended before he could hurt anyone, and his weapons are now off the streets.”          

HSI Special Agent in Charge Ivan J. Arvelo said: “HSI special agents are committed to public safety and do not hesitate to act when members of the community are threatened.  I am proud of our agents’ hard work and efforts with the rapid apprehension of this criminal and the follow-on investigative support provided to the New York City Police Department.  HSI remains steadfast in our commitment to our law enforcement partners in the cause of community safety.”

NYPD Commissioner Keechant L. Sewell said: "The firearms allegedly displayed by the defendant in this case have no place on the streets of New York City.  The NYPD will continue to aggressively pursue anyone who uses these illegal weapons to threaten the people we serve, and we will employ every resource available to hold them fully accountable.  I want to thank the U.S. Attorney's Office for the Southern District of New York, the New York Field Office of Homeland Security Investigations, and everyone else who aided in this arrest."

According to the allegations in the Complaint:[1]

On or about March 16, 2023, JASON FLEMING entered a crowded bodega in the Chelsea neighborhood in Manhattan after having a verbal dispute with a man.  FLEMING then stood in the doorway of the bodega and flashed a handgun as a girl attempted to leave the bodega.  The child then ran away from the store when she was able to pass by FLEMING onto the sidewalk.  The surveillance video then shows FLEMING outside the bodega and pulling back his coat momentarily to reveal a rifle that had been swung over his shoulder.

Police officers then approached FLEMING after a witness called 911, and FLEMING took off running down the sidewalk.  While running, FLEMING brandished a semiautomatic carbine rifle in broad daylight while frightened civilians began running away from him, as seen in the below screenshots from surveillance videos:

FLEMING then threw the rifle over a fence near where customers were dining at a restaurant’s outdoor dining shed.  Law enforcement officers recovered the rifle and found that it was a loaded semiautomatic Hi-Point carbine rifle, a photograph of which is below:

Meanwhile, after throwing the rifle, FLEMING brandished a revolver and continued running down the street, with police officers in foot pursuit.  A nearby civilian, seeing FLEMING running down the street with a revolver in his hand, stood in FLEMING’s way and pushed him into a nearby fence and then held onto him until police officers, who were still in pursuit, placed FLEMING under arrest and handcuffed him.  A screenshot of FLEMING, brandishing the revolver after the civilian made contact with him, is below, along with a photograph of the revolver:

FLEMING was not permitted to possess firearms because of his two prior felony convictions for unlawful firearms possession.

*                *                *

JASON FLEMING, 39, of New York, New York, is charged with possession of firearms after a felony conviction, which carries a maximum sentence of 15 years in prison. 

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

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

This case is being handled by the Office’s Violent & Organized Crime Unit.  Assistant U.S. Attorney Michael R. Herman is in charge of the prosecution.

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

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

Damian Williams, the United States Attorney for the Southern District of New York, announced that JOSHUA STREIT, a/k/a Josh Brody,” was sentenced today in Manhattan federal court by United States District Judge Andrew L. Carter for conducting intrusions into Major League Baseball (“MLB”) computer systems and illegally streaming copyrighted content from MLB, the National Basketball Association (the “NBA”), the National Football League (the “NFL”), and the National Hockey League (the “NHL”) on a website that STREIT operated, which offered the illegally streamed content to the public for profit.   

U.S. Attorney Damian Williams said:  “Joshua Streit intruded into MLB computer networks and illegally streamed sports content online from MLB, the NHL, the NBA, and the NFL for his own personal profit.  Today’s sentence shows that this crime is no game.  Those who compromise computer networks and steal copyrighted content will be held accountable.”

According to allegations in the Complaint, the Information, and statements made during court proceedings:

Beginning in or about 2017 to in or about August 2021, STREIT operated a website which streamed copyrighted content, primarily livestreamed games from major professional sports leagues, including MLB, the NBA, the NFL, and the NHL, which STREIT had no authorization to stream.  STREIT obtained the copyrighted content by gaining unauthorized access to the websites for those sports leagues via misappropriated login credentials from legitimate users of those websites.  One of the victim sports leagues sustained losses of approximately $3 million due to STREIT’s conduct.

In addition, at the same time STREIT was illicitly streaming copyrighted content from MLB, STREIT engaged in an attempt to extort approximately $150,000 from MLB via a threat from STREIT to publicize unrelated vulnerabilities in MLB’s internet infrastructure.  Specifically, in multiple communications with MLB employees, STREIT claimed that he knew MLB reporters who were “interested in the story,” and stated that it would be bad if the vulnerability were exposed and MLB was embarrassed.

*                *                *

In addition to the prison sentence, STREIT, 31, of St. Louis Park, Minnesota, was sentenced to three years of supervised release and ordered to pay $2,995,272.64 in restitution and $500,000 in forfeiture.

Mr. Williams praised the outstanding work of the Federal Bureau of Investigation.  He also thanked MLB, the NBA, the NFL, and the NHL for their ongoing support and assistance with the case.

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

Damian Williams, the United States Attorney for the Southern District of New York, and Michael J. Driscoll, Assistant Director in Charge of the New York Field Office of the Federal Bureau of Investigation (“FBI”), announced the unsealing of a twelve-count Indictment charging HO WAN KWOK, a/k/a “Miles Guo,” a/k/a “Miles Kwok,” a/k/a “Guo Wengui,” a/k/a “Brother Seven,” a/k/a “The Principal,” and KIN MING JE, a/k/a “William Je,” with various wire fraud, securities fraud, bank fraud, and money laundering charges.  JE, who is KWOK’s financier, is also charged with obstruction of justice.  The charges in the Indictment arise from an alleged sprawling and complex scheme by the defendants, and others, to solicit investments in various entities and programs through false statements and representations to hundreds of thousands of KWOK’s online followers.  As alleged, KWOK and JE misappropriated hundreds of millions of dollars in fraudulently obtained funds during the course of their conspiracy.  KWOK was arrested this morning in New York, New York, and will be presented this afternoon.  JE is currently at large. 

In addition, Mr. Williams announced that between September 2022 and March 2023, the U.S. Government seized approximately $634 million from 21 different bank accounts.  The $634 million constitutes proceeds of KWOK’s alleged fraud, which the Government will seek to forfeit.  Today, law enforcement also seized assets that were purchased with proceeds of KWOK’s alleged fraud, including a Lamborghini Aventador SVJ Roads.   

U.S. Attorney Damian Williams said: “As alleged, Ho Wan Kwok, known to many as “Miles Guo,” led a complex conspiracy to defraud thousands of his online followers out of over $1 billion dollars.  Kwok is charged with lining his pockets with the money he stole, including buying himself, and his close relatives, a 50,000 square foot mansion, a $3.5 million Ferrari, and even two $36,000 mattresses, and financing a $37 million luxury yacht. 

As alleged, Kwok lied to his victims and promised them outsized returns if they invested, or provided money to, GTV, his so-called Himalaya Farm Alliance, G|CLUBS, and the Himalaya Exchange. 

Kwok is further charged with laundering hundreds of millions of stolen funds to conceal the conspiracy’s illegal activities and continue the fraud’s operations.  My office and our law enforcement partners will continue to do all that we can to protect the community from the devastating consequences of pernicious fraud schemes.  If you believe you are a victim of Kwok and Je’s fraud, please contact USANYS.GuoVictims@usdoj.gov or https://forms.fbi.gov/NY_GTV.  My Office and the FBI are here to help those who were harmed by this malicious fraud.”

FBI Assistant Director Michael J. Driscoll said: “The indictment today alleges the defendants were behind an elaborate scheme that defrauded thousands of individuals of over one billion dollars.  Fraudulent investment scams make victims out of innocent people, ultimately harming the public’s confidence in the integrity of financial systems.  The FBI continues to make investigating complex financial crimes a top priority, and anyone attempting these crimes will be made to face the consequences in the criminal justice system.”   

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

From at least in or about 2018 through at least in or about March 2023, KWOK, JE, and others, conspired to defraud thousands of victims of more than approximately $1 billion.  KWOK was the leader of this complex conspiracy. 

KWOK is an exiled Chinese businessman who has resided in the United States since in or about 2015 and garnered a substantial online following.  In or about 2018, KWOK founded two purported nonprofit organizations, namely, the Rule of Law Foundation and the Rule of Law Society.  KWOK used the nonprofit organizations to amass followers who were aligned with his purported policy objectives in China and who were also inclined to believe KWOK’s statements regarding investment and money-making opportunities. 

JE is a dual citizen of Hong Kong and the United Kingdom who principally resided in the United Kingdom.  JE owned and operated numerous companies and investment vehicles central to the scheme and served as its financial architect and key money launderer.

KWOK and JE’s fraud relied on at least four interrelated parts:  the GTV Media Group, Inc. (“GTV”) Private Placement, the Farm Loan Program, G Club Operations, LLC (“G|CLUBS”), and the Himalaya Exchange. 

GTV Private Placement

On or about April 21, 2020, KWOK posted a video on social media announcing the unregistered offering of GTV Media Group, Inc. (“GTV”) common stock via a private placement.  GTV was touted as a wide-ranging media company.  In that video, KWOK described, in substance and in part, the investment terms for the GTV Private Placement, and directed people to contact him, via a mobile messaging application, with any questions about the GTV Private Placement.  The video and GTV Private Placement materials included a written “Confidential Information Memorandum” (the “PPM”).  The PPM stated on the cover “Everything Is Just the Beginning!,” provided information about GTV, and contained false representations regarding how the money raised from the GTV Private Placement would be used.

Between on or about April 20, 2020 and on or about June 2, 2020, approximately $452 million worth of GTV common stock was purportedly sold to more than 5,500 investors.  Investors participated in the GTV Private Placement based, in part, on the belief that their money would be invested into GTV to develop and grow that business, as the PPM promised.  In early June 2020, just days after the GTV Private Placement closed, KWOK and JE directed that $100 million of funds raised from the GTV Private Placement be invested in a high-risk hedge fund for the benefit of GTV’s parent company and its ultimate beneficial owner who was a close family relative of KWOK.

Farm Loan Program

KWOK, JE, and their co-conspirators fraudulently obtained more than approximately $150 million in victim funds through the “Himalaya Farm Alliance.”  The Himalaya Farm Alliance, which KWOK organized and promoted, was a collective of informal groups (each known as a “Farm”) located in various cities around the world.  KWOK, JE, and others working on their behalf and at their direction, obtained these funds by making further misrepresentations to the investors in the GTV Private Placement and fraudulently soliciting further investments, this time in the form of “loans” to a Farm, and promising that such loans would be convertible into GTV common stock at a conversion rate of one share per dollar loaned.  On or about July 22, 2020, in a video distributed via social media, KWOK promoted the Farm Loan Program.  After launching the Farm Loan Program, KWOK continued to promote GTV and to falsely represent the value of GTV.  For example, on or about August 2, 2020, in a video distributed via social media, KWOK falsely stated, in substance and part, “How much is GTV? . . . a market value of 2 billion US dollars.”   In truth and in fact, and as KWOK well knew, GTV’s market value was far less. 

KWOK and JE misappropriated funds that were raised through the Farm Loan Program.  For example:  (i) approximately $2.3 million was used to cover maintenance expenses associated with an approximately 145-foot luxury yacht worth approximately $37 million, nominally owned by close family relative of KWOK and used by KWOK, which is pictured below; and (ii) approximately $10 million was transferred to personal bank accounts in the name of JE and/or JE’s spouse.

G|CLUBS

KWOK, JE and others known and unknown, fraudulently induced KWOK’s followers to transfer additional funds to a purported online membership club called G|CLUBS.  From at least in or about October 2020 through at least in or about March 2023, KWOK, JE, and others fraudulently obtained more than approximately $250 million in victim funds through G|CLUBS.  G|CLUBS claimed, on its website, to be “an exclusive, high-end membership program offering a full spectrum of services” and “a gateway to carefully curated world-class products, services and experiences.” 

In truth and in fact, and as KWOK and JE well knew, G|CLUBS provided nothing close to “a full spectrum of services” and “experiences” to its members.  Indeed, most of the money G|CLUBS members paid did not fund the business of G|CLUBS.  Rather, the defendants misappropriated a substantial portion of the victim funds using, among other things, a complex web of entities and bank accounts to do so.  For example,  G|CLUBS funds were used by KWOK and JE:  (i) toward the purchase of KWOK’s 50,000 square foot New Jersey mansion (pictured below); (ii) to purchase various furniture and decorative items including, among other items, Chinese and Persian rugs worth approximately $978,000, a $62,000 television, and a $53,000 fireplace log cradle holder; and (iii) to purchase a custom-built Bugatti sports car for approximately $4.4 million (pictured below):

Himalaya Exchange

KWOK, JE, and others known and unknown, fraudulently obtained more than approximately $262 million in victim funds through the Himalaya Exchange, a purported cryptocurrency “ecosystem” accessible on the Internet.  The Himalaya Exchange included a purported stablecoin called the Himalaya Dollar (“HDO” or “H Dollar”) and a trading coin called Himalaya Coin (“HCN” or “H Coin”).  In videos distributed via social media, KWOK trumpeted the prospects and valuation of the Himalaya Exchange and both HCN and HDO, which he publicly described as cryptocurrencies.  For example, in a video posted on the Internet on or about October 20, 2021, KWOK falsely stated:  “If the H Coin is worthless, [the issuer of H coin] can sell all 20% of the gold, exchange it to you, and become your money.  Or take all the value of 20% gold and ask everyone to unify it and make it yours;” and “If anyone loses money, I can say that I will compensate 100%.  I give you 100%.  Whoever loses money, I will bear it.”  The initial coin offering of HCN and HDO occurred on or about November 1, 2021.  HCN began trading at 10 cents and, within approximately two weeks, the Himalaya Exchange website claimed that each HCN purportedly was worth approximately 27 HDO (i.e., $27), which represented a 26,900% increase in value and a total value of approximately $27 billion.  JE also falsely claimed to media outlets that a €3.5 million Ferrari was purchased via the Himalaya Exchange.  In truth, a Himalaya Exchange employee sent the Ferrari broker an international bank wire to cover the cost of the Ferrari, while also processing a corresponding “transaction” on the Himalaya Exchange to create the false appearance that the purchase had taken place using HDO in order to show HDO was easily tradeable and to promote the Himalaya Exchange.  The buyer of the Ferrari was a close relative of KWOK.

U.S. Government Seizures

On or about September 20, 2022 and September 21, 2022, U.S. authorities served judicially-authorized seizure warrants on several domestic banks, and subsequently seized approximately $335 million of proceeds from bank accounts held in the names of Himalaya Exchange entities and other entities associated with KWOK and JE.  Within approximately two days of the first judicially authorized seizures of Himalaya Exchange-related funds, on or about September 22, 2022, JE contacted the management of a domestic bank that held Himalaya Exchange bank accounts.  JE sought to implement a wire transfer, which he and a Himalaya Exchange executive claimed to the domestic bank was needed to effectuate a “redemption” from HDO to U.S. dollars for an unnamed “VIP” (i.e., very important client of the Himalaya Exchange).  In subsequent communications with the domestic bank, JE revealed that the VIP was, in fact, JE himself.  JE provided the domestic bank with documents reflecting two purported HCN sales by JE on or about September 22, 2022—totaling 46 million HDO, which JE was attempting to “convert” into $46 million.  JE twice emphasized to the domestic bank’s management, in substance and in part, that the $46 million transfer needed to happen “today or it is meaningless.”

U.S. Authorities subsequently seized additional funds from KWOK and JE-associated entities in October 2022 and March 2023.  In total, U.S. Authorities seized more than approximately $634 million of fraud proceeds, including approximately $278 million from bank accounts held in the names of the Himalaya Exchange entities.

Today, pursuant to judicially-authorized warrants, U.S. Authorities are seizing additional items from KWOK-associated properties, which KWOK and JE allegedly purchased with fraud proceeds.

*          *          *

HO WAN KWOK, a/k/a “Miles Guo,” a/k/a “Miles Kwok,” a/k/a “Guo Wengui,” a/k/a “Brother Seven,” a/k/a “The Principal,” 52, of New York, New York, and KIN MING JE, a/k/a “William Je,” 56, of London, England, are charged in an Indictment with the following offenses:

Count

Charge

Defendant

Maximum Penalty

1

Conspiracy to Commit Wire Fraud, Bank Fraud, Securities Fraud and Money Laundering

KWOK and JE

5 years in prison

2

Wire Fraud (GTV Private Placement)

KWOK and JE

20 years in prison

3

Securities Fraud (GTV Private Placement)

KWOK and JE

20 years in prison

4

Wire Fraud (Farm Loan Program)

KWOK and JE

20 years in prison

5

Securities Fraud (Farm Loan Program)

KWOK and JE

20 years in prison

6

Wire Fraud (G|CLUBS)

KWOK and JE

20 years in prison

7

Securities Fraud (G|CLUBS)

KWOK and JE

20 years in prison

8

Wire Fraud (Himalaya Exchange)

KWOK and JE

20 years in prison

9

International Promotional Money Laundering

KWOK and JE

20 years in prison

10

International Concealment Money Laundering

KWOK and JE

20 years in prison

11

Unlawful Monetary Transactions

KWOK and JE

10 years in prison

12

Obstruction of Justice

JE

20 years in prison

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

Mr. Williams praised the investigative work of the FBI.  Mr. Williams further thanked the U.S. Securities and Exchange Commission, which today filed a parallel civil action against KWOK and JE, for its assistance and cooperation in this investigation.  Mr. Williams also expressed appreciation for the assistance of the United States Marshals Service, the Justice Department’s Office of International Affairs, and the U.K. Metropolitan Police.

If you believe you are a victim of KWOK and JE’s fraud, please find more information here: https://www.justice.gov/usao-sdny/united-states-v-ho-wan-kwok-aka-miles-guo-and-kin-ming-je-aka-william-je 

The case is being handled by the Complex Frauds and Cybercrime Unit of the Office’s Criminal Division.  Assistant U.S. Attorneys Ryan B. Finkel, Juliana N. Murray, and Micah F. Fergenson are in charge of the prosecution.

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

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

美国纽约南区检察官 Damian Williams（达米安威廉姆斯）和联邦调查局 (“FBI”) 纽约外地办事处负责人助理主任 Michael J. Driscoll 宣布公开一份12项的起诉书，指控 HO WAN KWOK 豪万郭（音译），a/k/a “Miles Guo”别称”迈乐斯郭”， a/k/a “Miles Kwok”, a/k/a 别称“郭文贵”, a/k/a 别称“七哥”, a/k/a别称“领头人”和 KIN MING JE，吉建明（音译），又名“William Je”“威廉吉”，涉及多种电汇欺诈、证券欺诈、银行欺诈和洗钱指控。 JE吉是郭的财务设计师，他同时还被控妨碍司法公正。起诉书中的指控源于被告和其他人操纵庞大而复杂的阴谋，目的是通过向数十万 KWOK 郭的在线粉丝提供虚假陈述和陈述来招揽对各种实体和项目的投资。如指控所述，KWOK郭和JE吉在串谋过程中挪用了数亿美元的欺诈所得资金。KWOK郭今天早上在纽约市，纽约州被捕，将于今天下午出庭。JE吉目前在逃。

此外，威廉姆斯先生宣布在2022年9月至2023年3月期间，美国政府从21个不同的银行账户中扣押了约6.34亿美元。这6.34亿美元构成了郭某涉嫌欺诈的收益，政府将寻求没收这些收益。今天，执法部门还从KWOK郭的财产中扣押了以下资产，这些资产是 KWOK郭 用涉嫌欺诈的收益购买的，其中包括一辆Lamborghini Aventador SVJ Roads兰博基尼。

美国检察官Damian Williams达米安威廉姆斯说：“正如所指控的那样，HO WAN KWOK 豪万郭（音译），许多人称他为 “Miles Guo”迈乐斯郭”， 操纵一个复杂的阴谋，从他数千名在线追随者骗取了超过10亿美元的资金。郭被控用偷来的钱财中饱私囊，包括为自己和他的近亲购买一座50,000平方英尺的豪宅、一辆价值350万美元的法拉利，甚至还有两张价值 36,000 美元的床垫，以及出资获取一艘价值3700万美元的豪华游艇。

如指控所言，Kwok郭对他的受害者撒谎，并承诺如果他们投资或提供金钱给GTV、给所谓的喜马拉雅农场联盟，G|CLUBS俱乐部和喜马拉雅交易所，就会获得丰厚的回报。郭还被指控洗钱数亿被盗资金，以掩盖串谋从事非法行为并继续进行欺诈活动。我的办公室和我们的执法伙伴将继续竭尽全力保护社区免受恶性欺诈带来破坏性后果。如果您认为自己是 Kwok郭和Je吉的欺诈的受害者，请联系USANYS.GuoVictims@usdoj.gov或访问 http://forms.fbi.gov/NY_GTV。我的办公室和联邦调查局是来帮助那些受到这种恶意欺诈伤害的人们的。”

FBI联邦调察局助理局长Michael J. Driscoll（迈克尔 J. 吉尔斯克勒）说：“今天的起诉书指控的被告是一个精心策划的计划的幕后黑手，该阴谋骗取了数千人超过10亿美元。欺诈性投资骗局使无辜者成为受害者，最终损害公众对金融体系完整性的信心。FBI联邦调察局继续将把调查复杂的金融犯罪作为首要任务，任何企图实施这些犯罪的人都将面临刑事司法系统带来后果。 ”   

正如曼哈顿联邦法院开封的起诉书和法院文件中所称：[1]

从至少在2018年左右到至少在2023年3月左右，KWOK郭、JE吉和其他人共谋诈骗了数千名受害者超过约10亿美元。郭是这个复杂阴谋的领头人。

KWOK郭是一名流亡的中国商人，自2015年左右以来一直居住在美国，并在网上拥有大量追随者。大约在2018年左右，郭成立了两个据称是非营利的组织，即法治基金会和法治协会。郭利用非营利组织招聚追随者，这些追随者与他声称的在中国的政策目标一致，并且也倾向于相信郭关于投资和赚钱机会的陈述。

JE吉为香港及英国双重公民，主要居住于英国。JE吉拥有并经营为数众多的公司和对阴谋成败悠关投资工具，并担任其金融设计师和主要洗钱者。

KWOK郭和JE吉的欺诈至少依赖于四个相互关联的部分：GTV Media Group GTV 媒体团队, Inc. (“GTV”)Private Placement(GTV)私募、The Farm Loan Program 农场贷款项目、G Club Operations, LLC (“G|CLUBS”)G俱乐部操作有限公司和Himalaya Exchange喜马拉雅交换所 。

GTV私募

2020年4月21日前后，KWOK郭在社交媒体上发布了一段视频，宣布通过私募方式未注册发行 GTV Media Group, Inc.(“GTV”) 普通股。 GTV被吹捧为一家范围广泛的媒体公司。在那段视频中，KWOK 实质上和部分地描述了 GTV 私募的投资条款，并指示人们通过移动信息的应用程序与他联系，询问有关 GTV 私募的任何问题。视频和 GTV 私募材料包括书面的“机密信息备忘录”（“PPM”）。 PPM在封面上写着“一切都只是开始！”，提供了有关 GTV 的信息，并包含有关如何使用 GTV 私募筹集的资金的虚假陈述。

在 2020 年 4 月 20 日或前后至 2020 年 6 月 2 日左右，价值约 4.52 亿美元的 GTV 普通股出售给了5，000多名的投资者。投资者参与 GTV 私募的部分原因是相信他们的资金将投资于 GTV 以发展和壮大该业务，正如 PPM 所承诺的那样。 2020 年 6 月上旬，就在GTV私募结束几天后，KWOK郭和JE吉指示从GTV私募筹集的1亿美元资金投资于高风险对冲基金，以受惠于GTV的母公司及它的最终受益拥-郭某的近亲。

农场贷款项目

KWOK郭、JE吉和他们的同谋者通过“喜马拉雅农场联盟”骗取了超过约 1.5亿美元受害人资金。由郭氏组织及推动的喜马拉雅农场联盟，是一个由分布于世界各地不同城市的（每个单元叫“农场”）的非正式团队组成。KWOK郭、JE吉和其他代表他们并在他们的指导下工作的人通过在GTV私募中进一步向投资者作出虚假陈述，并以欺诈方式招揽更多投资，这次是以向农场“贷款”的形式获得这些资金，以及承诺此类贷款可以转换为 GTV 普通股，转换率为每借出 1 美元一股。 2020 年 7 月 22 日前后，KWOK郭在通过社交媒体发布的一段视频中宣传了农场贷款项目。推出农场贷款项目后，KWOK郭继续宣传GTV并虚假陈述GTV的价值。例如，在 2020 年 8 月 2 日左右，在通过社交媒体传播的一段视频中，KWOK郭实质地和部分地虚假陈述，“GTV值多少钱？ . . .市值20亿美元。”事实上，正如 KWOK郭所了解的那样，GTV的市值要低很多。

KWOK郭和JE吉挪用了通过农场贷款项目筹集的资金。例如:(i)约230万美元用于支付与价值约3700万美元的约145英尺豪华游艇相关的维护费用,该游艇名义上由郭的近亲拥有并由郭使用，如下图所示;(ii) 约1000万美元转入JE吉和/或JE吉的配偶名下的个人银行账户。

G|俱乐部

KWOK郭、JE吉及其他已知和未知的人以欺诈手段引诱KWOK郭的追随者将额外资金转移到一个名叫G/俱乐部— 一个号称为在线会员的俱乐部。从至少在2020年10月左右到至少在2023年3月左右，KWOK郭、JE吉和其他人通过G|俱乐部，欺诈性地获得了超过约 2.5 亿美元的受害人资金。 G|俱乐部在其网站上号称是“提供全方位服务的独家高端会员项目”和“通往精心策划的世界级产品、服务和体验的门户”。

事实上，正如 KWOK郭和JE吉所熟知的那样，G|俱乐部并未为其会员提供任何接近于“全方位服务”和“体验”的东西。事实上，G|俱乐部会员支付的大部分钱并没有为 G|俱乐部的业务提供资金。相反，被告挪用了受害人的很大部分地资金，其中包括使用复杂的网络实体和银行账户来执行。例如，KWOK郭和JE吉使用 G/俱乐部的资金： ( i ) 用于购买 KWOK郭50,000平方英尺的新泽西豪宅（如下图）；(ii) 购买各种家具和装饰品，其中包括价值约978,000美元的中国和波斯地毯、价值62,000美元的电视和价值53,000美元的壁炉架； (iii) 以大约440万美元的价格购买一辆定制的布加迪跑车（如下图）：

喜马拉雅交易所

KWOK郭、JE吉和其他已知和未知的人通过 Himalaya Exchange喜马拉雅交易所欺诈性地获得了超过约2.62 亿美元的受害人资金，这是一个自称可以在互联网上使用的加密货币“生态系统”。喜马拉雅交易所包括一种名为 Himalaya Dollar喜马拉雅美元（“HDO”或“H Dollar”H美元）的稳定币和一种名为 Himalaya Coin喜马拉雅硬币（“HCN”或“H Coin”H硬币）的交易币。在通过社交媒体发布的视频中，KWOK郭大肆宣扬喜马拉雅交易所以及HCN（H硬币和HDO（H美元）的前景和估值，他公开将其描述为加密货币。例如，在 2021 年 10 月 20 日前后发布在互联网上的一段视频中，KWOK郭谎称：“如果 H硬币不值钱，[H硬币的发行人]可以卖掉20%的所有的黄金，换给你，并成为你的钱。或者把价值20%的黄金全部拿走，让大家统一起来，使之成为你的；” “如果有人赔钱，我可以说我会100%赔偿。我给你100%。谁亏了钱，我来承担。” HCN(H硬币)和 HDO（H美元） 的首次代币发行发生在2021年11月1日左右。HCN（H硬币）以10美分的价格开始交易，在大约两周内，喜马拉雅交易所网站声称每个HCN（H硬币）价值约27HDO（H美元）（即 27 美元），价值增长了 26,900%，总价值约为 270 亿美元。JE吉还向媒体谎称一辆价值 350万欧元的法拉利是通过喜马拉雅交易所购买的。事实上，喜马拉雅交易所的一名员工向法拉利经纪人发送了一封国际银行电汇，以支付法拉利的费用，同时还在喜马拉雅交易所处理了相应的“交易”，以制造购买是使用 HDO（H美元）进行的虚假表象，以便展示 HDO（H美元）易于交易并促进喜马拉雅交易所。法拉利的买家是郭某的近亲。

美国政府扣押行动

在 2022年9月20日和2022年9月21日前后，美国当局向几家国内银行发出了司法授权的扣押令，随后从以喜马拉雅交易所的实体和其他与郭和吉相关的实体持有的银行账户中扣押了约 3.35 亿美元。在 2022年9月22日左右，即首次司法授权扣押 Himalaya Exchange（喜马拉雅交易所）相关资金后的大约两天内，JE吉联系了一家持有Himalaya Exchange(喜马拉雅交易所)银行账户的国内银行的管理层。 JE吉试图实施电汇，他和喜马拉雅交易所的一位高管向国内银行声称需要电汇才能为一位未具名的“VIP”（即喜马拉雅交易所非常重要的客户）实现从HDO（H美元）“赎回” 美元 .在随后与国内银行的沟通中，JE吉透露，VIP（重要人物）其实就是JE吉本人。 JE吉向国内银行提供的文件反映了JE吉在2022年9月22日左右进行的两笔 HCN（H硬币）销售——总计 4600 万 HDO（H美元），JE吉试图将其“转换”为4600万美元。 JE吉两次实质上和部分地向国内银行的管理层强调，4600万美元的转账需要“在今天进行，否则就毫无意义”。

美国当局随后于2022年10月和2023年3月从KWOK郭和JE吉相关联的实体扣押了额外资金。美国当局总共扣押了超过约 6.34 亿美元的欺诈收益，其中包括来自以喜马拉雅交易所实体持有的银行账户的约 2.78 亿美元。

今天，根据司法授权的逮捕令，美国当局从KWOK郭和JE吉涉嫌用欺诈所得购买的与 KWOK郭相关的财产中没收了其他物品.

*          *          *

HO WAN KWOK, 豪万郭（音译），a/k/a “Miles Guo”别称”迈乐斯郭”, a/k/a, a/k/a “郭文贵”, a/k/a “七哥”, a/k/ a “领头人”, 52 岁，来自纽约市， 纽约州，KIN MING JE(建明吉)，又名“William Je”（威廉吉），56岁，来自英国伦敦，起诉书指控以下的犯罪行为：

项数

指控

被告

最高刑罚

一

串谋从事电汇诈骗、银行诈骗、证券诈骗和洗钱

郭与杰

5年监禁

二

电汇诈骗（GTV私募）

郭与杰

20年监禁

三

证券欺诈(GTV私募)

郭与杰

20年监禁

四

电汇欺诈（农场贷款计划）

郭与杰

20年监禁

五

证券欺诈（农业贷款计划）

郭与杰

20年监禁

六

电汇欺诈 (G|俱乐部)

郭与杰

20年监禁

七

证券欺诈(G|俱乐部)

郭与杰

20年监禁

八

电汇欺诈（喜马拉雅交易所）

郭与杰

20年监禁

九

国际促销洗钱

郭与杰

20年监禁

十

国际隐瞒洗钱

郭与杰

20年监禁

十一

非法货币交易

郭与吉

10年监禁

十二

妨碍司法公正

吉

20年监禁

法定最高刑期由国会规定，此处仅供参考，因为对被告判的的任何刑期都将由法官决定。

威廉姆斯先生赞扬了联邦调查局的调查工作。威廉姆斯先生进一步感谢美国证券交易委员会在本次调查中的协助与合作，该委员会今天对KWOK郭和JE吉提出了平行民事诉讼。威廉姆斯先生还对美国法警部，司法部国际事务办公室和英国大都会警察局的协助表示感谢。

如果您认为自己是KWOK郭和JE吉欺诈的受害者，请在此处查找更多信息：http//www.justice.gov/usao-sdny/united-states-v-ho-wan-kwok-aka-miles-guo-and-kin-ming-je-aka-william-je 。

此案由该办公室刑事部的多层面欺诈和网络安全小组负责。美国助理检察官Ryan B. Finkel、Juliana N. Murray 和 Micah F. Fergenson负责起诉。

起诉书中的指控仅仅是指控，被告被假定为无罪，除非并直到被证明有罪。

[1] 正如介绍性的短句所言，起诉书的全文本以及此处对起诉书指控的描述，构成仅仅是指控，所描述每一个实情都应作为指控来对待。

Former Congressman Stephen Buyer leveraged his privileged position as a corporate advisor to twice use his clients’ material nonpublic information to commit insider trading.  Buyer’s conviction underscores this Office’s commitment to detect and hold accountable those who break our insider trading laws just to make a buck.

Damian Williams, the United States Attorney for the Southern District of New York, announced today that a jury was unable to reach a unanimous decision as to whether to authorize the death penalty for SAYFULLO SAIPOV.  U.S. District Judge Vernon S. Broderick will sentence SAIPOV to the statutorily mandated sentence of life 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, the same 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.     

U.S. Attorney Damian Williams said: “On October 31, 2017, Sayfullo Saipov stole eight innocent lives – and devastated the lives of many more – in a horrendous terrorist attack.  This evil act was fueled by Saipov’s allegiance to ISIS, an allegiance which Saipov proudly maintained after the attack and up through his trial.  Today a jury has declined to authorize the death penalty for Saipov, and accordingly the defendant will be subject to a mandatory sentence of life imprisonment without the possibility of parole.”

Saipov’s crimes were predicated on ISIS’s commitment to murder innocent civilians and its disdain for rule of law.  But, in the end, Saipov’s actions have highlighted one of the pillars of the rule of law in this country: the right to a full and fair public trial before a jury drawn from the community.  We thank the jurors for their careful consideration of the evidence and the law during this long trial, and for their willingness to serve.  We also thank the families of the murdered victims, and the surviving victims, for their patience and understanding as the legal process played out.  Even though the trial has ended, we know that their pain and grief endures.  We stand with them in honoring the lives of their loved ones, and all who were affected by this senseless attack.”

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 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.

*                *                *

SAIPOV, 34, of Uzbekistan, will be sentenced to life in prison on all nine capital counts in the Indictment. 

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 NYPD, and over 50 other federal, state, and local agencies.  Mr. Williams also thanked the FBI Legal Attaché Office for Central Asia and the FBI’s Counterterrorism Division, Laboratory Division, Victim Services Division, and Language Services Section, Homeland Security Investigations, New York, and the Department of Justice’s National Security Division, 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 John Cella of the National Security Division’s Counterterrorism Section and Trial Attorney Michael Warbel of the Capital Case Section. Mr. Williams also thanked Wendy Olsen and the Office’s Victim and Witness Section for their outstanding efforts in assisting the victims of this crime and their families.

Damian Williams, the United States Attorney for the Southern District of New York, Michael J. Driscoll, the Assistant Director in Charge of the New York Field Office of the Federal Bureau of Investigation (“FBI”), and Louis Falco III, the Rockland County Sheriff, announced that DARIN PETERSON and ANTHONY MITCHELL were charged today with production of child pornography.  According to the Complaints, PETERSON and MITCHELL enticed a child (the “Victim”) — while the Victim was 14 and 15-years-old and while the defendants were incarcerated, awaiting trial for murder and other serious charges — to send them digital content of herself engaged in sexually explicit activity.  The defendants were transferred into federal custody today and presented on the charges in White Plains Federal Court.

U.S. Attorney Damian Williams said: “The harm that child sex abuse can inflict on the most innocent of victims is something no child should bear.  That these defendants committed these crimes while awaiting trial for murder and other serious charges makes their conduct especially contemptible, and this Office and our FBI partners will continue to exhaustively detect, identify, and charge any individuals engaged in this sinister conduct.”

FBI Assistant Director Michael J. Driscoll said: “Petersen and Mitchell, while incarcerated awaiting trial for murder and additional violent crimes, allegedly preyed on a child, inducing them to send sexually explicit content to the defendants.  The FBI and our partners in law enforcement will remain tireless in our efforts to protect children from violent predators.”

Rockland County Sheriff Louis Falco III said: “The Rockland County Sheriff’s Office and the Rockland County Intelligence Center were proud to assist the FBI Safe Streets Task Force in this investigation.  Sexual predators who exploit children, who are among the most vulnerable members of society, will be investigated and prosecuted to the fullest extent of the law.”

As alleged in the Complaints:[1]

From on or about August 12, 2022, up to and including on or about September 25, 2022, in the case of MITCHELL, and from on or about December 7, 2022, up to and including on or about January 29, 2023, in the case of PETERSON, the defendants contacted the Victim and demanded that she take and send to them sexually explicit digital media depicting herself.

The defendants committed these crimes while PETERSON awaited trial for murder, assault, and criminal possession of a weapon, and while MITCHELL awaited trial for murder, attempted murder, and criminal possession of a weapon.

*                *                *

MITCHELL, 23, of Haverstraw, New York, and PETERSON, 29, of West Haverstraw, New York, are charged with one count of production of child pornography, which carries a mandatory minimum sentence of 15 years in prison and a maximum potential sentence of 30 years in prison.

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

Mr. Williams praised the outstanding work of the FBI and the Rockland County Sheriff’s Office and thanked the Rockland County District Attorney’s Office for its assistance in this case.

The case is being prosecuted by the Office’s White Plains Division.  Assistant U.S. Attorney Ben Arad 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, constitutes only allegations, and every fact described therein should be treated as an allegation.

Damian Williams, the United States Attorney for the Southern District of New York, and Michael J. Driscoll, the Assistant Director in Charge of the New York Field Office of the Federal Bureau of Investigation (“FBI”), announced today charges against DONNA MURRAY, a former director of finance for a non-profit financial services trade association headquartered in Manhattan, for a months-long embezzlement scheme through which she stole approximately $490,000 from her employer.  MURRAY is expected to be presented later today in the Southern District of Florida.

U.S. Attorney Damian Williams said: “As alleged, Donna Murray betrayed her employer’s trust by using her employer’s bank account — to which she had access as its finance director — as her personal ATM, stealing nearly half a million dollars and spending the stolen money on frivolous items, even including a cat treadmill.  Today’s charges send a message to would-be embezzlers: if you abuse your position of trust for personal gain, we will hold you accountable.”

FBI Assistant Director Michael J. Driscoll said: “As we allege today, Ms. Murray misappropriated approximately $490,000 from her employer over several years and used the funds for a variety of personal uses.  Violating her employer’s trust in the manner in which she did is a federal crime, and, as a consequence, she will now be forced to face the consequences of her actions.”

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

From in or about December 2017 through in or about August 2022, MURRAY was employed as the Director of Finance for a non-profit financial services trade association located in Manhattan.  The organization, which has more than 600 institutional members, works to promote industry thought leadership, participate in industry advocacy work, educate members and stakeholders, and establish industry standards and best practices.

As the Director of Finance, MURRAY had access to the organization’s bank accounts.  From at least October 2019 through at least in or about March 2021, MURRAY misappropriated approximately $490,000 from one of the organization’s bank accounts through more than 100 unauthorized wire transactions from the organization’s bank account to her personal bank account.  To conceal the embezzlement from her employer, MURRAY fabricated recipients and invoice numbers purporting to be associated with the wire transactions in her employer’s general ledger, even though MURRAY was the true recipient of those wire transfers.

After siphoning hundreds of thousands of dollars from her employer’s bank account to her own, MURRAY withdrew from her bank account over $400,000 in cash on more than 300 occasions and used the remainder of the stolen funds for peer-to-peer online money transfers, loan payments, and consumer and luxury items, including Yves Saint Laurent and Michael Kors designer apparel; beauty, wellness, and skincare products and services; home furnishings and décor; hundreds of Amazon orders; smoke shop purchases; and a treadmill for cats.

*                *                *

MURRAY, 38, of Staten Island, New York, is charged with one count of wire fraud, which carries a maximum sentence of 20 years in prison.    

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

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

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

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

[1] As the introductory phrase signifies, the entirety of the text of the Complaint and the description of the Complaint set forth 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, Patrick J. Freaney, Special Agent in Charge of the New York Field Office of the United States Secret Service (“USSS”), Michael J. Driscoll, Assistant Director in Charge of the New York Field Office of the Federal Bureau of Investigation (“FBI”), and Keechant L. Sewell, the Commissioner of the New York City Police Department (“NYPD”), announced today that SILFREDO CASTILLO MARTINEZ was charged with sexual exploitation of a child and production of child pornography as well as receipt, distribution, and possession of child pornography.  CASTILLO MARTINEZ will be presented today before United States Magistrate Judge Gabriel W. Gorenstein.

U.S. Attorney Damian Williams said: “Silfredo Castillo Martinez’s primary responsibility as a daycare provider was to watch over neighborhood children.  Instead, he allegedly abused that role in order to sexually exploit one of the minors under his care.  During the time when he was supposed to be protecting children, he also allegedly received, distributed, and possessed tens of thousands of images of child pornography.  Castillo Martinez’s alleged conduct was unconscionable, and we will continue to work tirelessly to protect the children of our community.” 

USSS Special Agent in Charge Patrick J. Freaney said: “The charges brought forth today allege reprehensible violation and exploitation committed by an individual who was expected to provide extraordinary trustworthiness and protection to the most vulnerable.  Our expert investigators and partners assigned to the Internet Crimes Against Children Task Force have successfully brought this individual before our justice system to face these allegations.  I am thankful for their continued dedication and unending work in our shared investigative priority to keep our children safe from harm.”

FBI Assistant Director Michael J. Driscoll said: “The crimes Castillo Martinez stands charged with today are nearly unimaginable.  As alleged, while operating a licensed day care facility, he enticed an 11-year-old child to engage in sexually-explicit conduct and made recordings of the conduct.  Our children are some of our society’s most vulnerable members, and protecting them from predators remains a top priority for the FBI.  We encourage anyone who believes they may have information relevant to this investigation to contact us at 1-800-CALL-FBI or online at tips.fbi.gov.”

NYPD Commissioner Keechant L. Sewell said: “This investigation highlights the most important function of law enforcement in our society: protecting the vulnerable against criminal predators who would seek to abuse, exploit, and harm them.  Today’s charges affirm, again, that the NYPD and our partners will never abate our efforts to keep children safe – and we will relentlessly pursue anyone who targets them.  To that end, I thank and commend the U.S. Attorney’s Office for the Southern District, the United States Secret Service, the New York Field Office of the FBI, and every investigator who worked on this important case.”

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

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

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

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

*                *                *

CASTILLO MARTINEZ, 32, of the Bronx, New York, is charged with one count of sexual exploitation of a child, which carries a mandatory minimum sentence of 15 years in prison and a maximum sentence of life in prison; one count of receipt and distribution of child pornography, which carries a mandatory minimum sentence of five years in prison and a maximum sentence of 40 years in prison; and one count of possession of child pornography, which carries a maximum sentence of 20 years in prison. 

The minimum and maximum potential 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.

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

Mr. Williams praised the outstanding investigative work of the USSS’s Internet Crimes Against Children Task Force, the FBI, and the NYPD.  Mr. Williams also thanked the Bronx County District Attorney’s Office for its assistance.

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

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 constitutes only allegations, and every fact described herein should be treated as an allegation.

Damian Williams, the United States Attorney for the Southern District of New York, and Michael J. Driscoll, the Assistant Director in Charge of the New York Field Office of the Federal Bureau of Investigation (“FBI”), announced today the arrest of HYUNKOOK KORSIAK for participating in a plot to commit murder for hire in Midtown Manhattan.  Thankfully, and unbeknownst to KORSIAK, he plotted with undercover FBI agents and the intended victim was fictitious.  KORSIAK was arrested last night in Tarrytown, New York, and will be presented today before U.S. Magistrate Judge James L. Cott.

U.S. Attorney Damian Williams said: “As alleged in the complaint, Hyunkook Korsiak agreed to murder another person for the price of $50,000.  Thanks to the work of our remarkable law enforcement partners, Korsiak now stands charged in federal court for his alleged role in this terrible crime.”

FBI Assistant Director Michael J. Driscoll said: "As alleged, the defendant was willing to travel over three hundred miles in order to fulfill his depraved desire to be paid for taking another human’s life.  The defendant displayed callous disregard for life and planned to conduct his act of violence in the middle of Manhattan.  The FBI will not tolerate such acts of violence, and any individual willing to cold heartedly kill another person will be made to face the consequences in the criminal justice system."

As alleged in the amended Complaint filed today in Manhattan federal court and in other court papers and proceedings:[1]

From in or about January 2023, through in or about March 8, 2023, KORSIAK participated in a scheme to murder a fictitious businessman in Manhattan in exchange for a payment of $50,000.  The FBI began its investigation after communications KORSIAK sent expressing his desire to kill a person for money were intercepted by the Bureau of Prisons.  Over the course of the last two months, KORSIAK met with an undercover FBI agent on multiple occasions in both New York and Boston and agreed to murder a fictitious businessman who was purported to be staying at a Midtown Manhattan hotel.  During one of the meetings with the undercover agent, KORSIAK described how he intended to commit the murder and what weapons he planned on using, including an AR-15 rifle and a 9MM pistol that he possessed.  KORSIAK asked the undercover agents to provide him with silencers for the two weapons and a latex mask so that he could defeat facial recognition technology.  In another meeting, KORSIAK told agents that he would use a car to approach the victim as he walked on a Midtown Manhattan street and planned to shoot the victim from inside the car.  KORSIAK’s plan also included the use of a police uniform in an effort to evade capture after he committed the murder. 

On March 8, 2023, KORSIAK traveled from Maine to Tarrytown, New York, where he intended to make his final preparations for the murder.  Instead, Korsiak was apprehended by FBI agents.  KORSIAK was found in possession of four firearms, including two AR-15 rifles and two 9MM semi-automatic pistols.  In addition to the firearms, agents seized (i) a bullet resistant vest; (ii) hundreds of rounds of various caliber ammunition; (iii) a latex mask; (iv) rifle scopes; (v) high-capacity magazines; and (vi) latex gloves, many of the same items KORSIAK told the undercover agents he intended to use during the murder.  These items are pictured below:

KORSIAK has a 2017 federal felony conviction for theft from a licensed firearms dealer. 

*                *                *

KORSIAK, 41, of Augusta, Maine, is charged with one count of murder-for-hire, which carries a maximum potential sentence of 10 years in prison, and one count of possession of a firearm following a felony conviction, which carries a maximum sentence of 15 years in prison.

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

Mr. Williams praised the outstanding investigative work of the FBI and the Special Agents of the United States Attorney’s Office for the Southern District of New York.

The prosecution if this case is being handled by the Office’s Violent and Organized Crime Unit.  Assistant U.S. Attorney Dominic A. Gentile 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 constitutes only allegations, and every fact described herein should be treated as an allegation.

Damian Williams, the United States Attorney for the Southern District of New York, announced that STEFAN GILLIER, a/k/a “Stephan Gillier,” a/k/a “Stefan R.R. Gillier,” a/k/a “Roland Gillier,” a/k/a “Roland Van Gorp,” was sentenced today in Manhattan federal court by United States District Judge Paul A. Engelmayer to 84 months in prison for engaging in a conspiracy to fraudulently obtain over six million dollars’ worth of aircraft parts.  GILLIER was convicted in September 2022 following a one-week jury trial.

U.S. Attorney Damian Williams said: “With today’s sentence, Stefan Gillier’s aircraft parts fraud scheme has been grounded.  As the sentence for this extradited defendant shows, those who flee justice will be held accountable for their crimes, no matter how long it takes.”   

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

GILLIER was the president and ran the day-to-day business activities of RTF International Inc. (“RTF”), a broker of aircraft parts.  RTF began obtaining aircraft parts from Honeywell International, Inc. (“Honeywell”) in June 2004.  Starting in 2005, RTF began increasing the number of parts it ordered from Honeywell, paying for them by check.  RTF paid with checks written in foreign currency and for amounts well above the cost of the parts, which created an apparent credit balance in RTF’s favor in Honeywell’s accounting system.  RTF wrote approximately $17 million worth of checks to Honeywell but stopped payment on approximately $15 million worth of checks.

In particular, GILLIER signed checks to Honeywell on behalf of RTF but repeatedly caused stop payment orders to be placed after Honeywell shipped the parts to RTF.  When questioned by Honeywell’s employees about these stop payment orders, GILLIER, using the alias “Roland Van Gorp,” falsely represented that the stop payment orders were the result of a misunderstanding with the bank and that he would check with RTF’s finance department.  In fact, as GILLIER knew, he had issued the stop payment orders, and RTF did not have a finance department. 

In total, GILLIER was able to obtain over $6 million worth of aircraft parts from Honeywell without paying for the parts. 

In June 2006, Honeywell executed a civil attachment order and recovered some of the aircraft parts stolen by GILLIER.  Following the execution of the civil attachment order by Honeywell, GILLIER caused various large transfers of fraud proceeds into bank accounts controlled by him, his relatives, and a co-conspirator (“CC-1”).  The day after making those transfers, on June 15, 2006, GILLIER left the United States for Canada. 

After Honeywell discovered that it was being victimized by RTF, GILLIER and CC-1 continued their fraud scheme through a new corporate entity, “UN Air Services, Inc.” (“UAS”) (which had no relation to the United Nations).  In 2006, UAS began obtaining aircraft parts from Pratt & Whitney Component Solutions, Inc. (“Pratt & Whitney”).  Like RTF, UAS began stopping payment on checks it had written to Pratt & Whitney for the aircraft parts after Pratt & Whitney delivered the aircraft parts to UAS.

GILLIER was arrested and extradited from Italy in 2019.

*                *                *

In addition to the prison sentence, GILLIER, 49, a citizen of Belgium, was sentenced to three years of supervised release.

Mr. Williams praised the outstanding investigative work of Homeland Security Investigations and the U.S. Department of Defense, Defense Criminal Investigative Service.

The prosecution of this case is being handled by the Office’s Complex Frauds and Cybercrime Unit.  Assistant U.S. Attorneys Dina McLeod, Micah F. Fergenson, and Michael Neff are in charge of the prosecution.

Damian Williams, the United States Attorney for the Southern District of New York, Michael J. Driscoll, the Assistant Director in Charge of the New York Field Office of the Federal Bureau of Investigation (“FBI”), and Fernando P. McMillan, the Special Agent in Charge of the New York Field Office of the U.S. Food and Drug Administration – Office of Criminal Investigations (“FDA-OIC”), announced today the filing of a two-count Indictment (the “Indictment”) charging Laura PERRYMAN, the former Chief Executive Officer (“CEO”) of STIMWAVE LLC, a Florida-based medical device company, in connection with a scheme to create and sell a non-functioning dummy medical device for implantation into patients suffering from chronic pain, resulting in millions of dollars in losses to federal healthcare programs.  PERRYMAN was arrested this morning in Delray Beach, Florida, and will be presented later today in the United States District Court for the Southern District of Florida.  

In addition, Mr. Williams announced the unsealing of a non-prosecution agreement (the “Agreement”) with STIMWAVE LLC ("STIMWAVE"), which filed for bankruptcy on June 15, 2022.  The Agreement was entered into on October 29, 2022, and was sealed by the United States Bankruptcy Court for the District of Delaware, pending the Government’s ongoing investigation.  Under the terms of the Agreement, STIMWAVE has accepted responsibility for its conduct by, among other things: (i) making admissions and stipulating to the accuracy of an extensive Statement of Facts; (ii) paying a $10,000,000 monetary penalty; and (iii) maintaining an adequate compliance program, to include employing a Chief Compliance Officer and holding regular compliance committee meetings.  STIMWAVE is also required to cooperate fully with the Government.  STIMWAVE’s obligations under the Agreement will continue for a period of three years from the date of execution of the Agreement.   

The U.S. Attorney’s Office also unsealed a civil fraud lawsuit filed against STIMWAVE under the False Claims Act (“FCA”), and the parties’ settlement of that suit (the “FCA Settlement”).  The settlement has been submitted to United States District Judge George B. Daniels for approval.  In connection with the FCA Settlement, STIMWAVE admitted and accepted responsibility for conduct alleged in the Government’s civil complaint and agreed to pay $8,600,000 to the United States.  This payment will be credited towards the $10,000,000 monetary penalty discussed above.  The civil complaint also brings claims against PERRYMAN under the FCA, which are pending.

U.S. Attorney Damian Williams said: “As alleged, at the direction of its founder and CEO Laura Perryman, Stimwave created a dummy medical device component — made entirely of plastic — designed to be implanted in patients for the sole purpose of causing doctors to unwittingly bill Medicare and private insurance companies more than $16,000 for each implantation of the piece of plastic.  The defendant and Stimwave did this so that they could charge medical providers many thousands of dollars for purchasing their medical device.  Our Office will continue to do everything in its power to bring to justice anyone responsible for perpetuating health care fraud, which in this case led to patients being used as nothing more than tools for financial enrichment.”

FBI Assistant Director Michael J. Driscoll said: “Ms. Perryman, as the Chief Executive Officer of Stimwave, allegedly led a scheme to sell medical devices that contained a non-functioning component that doctors unwittingly implanted into patients suffering from chronic pain.  As a result of her illegal actions, not only did patients undergo unnecessary implanting procedures, but Medicare was defrauded of millions of dollars.  Today’s action demonstrates the FBI’s continuing commitment to protect Medicare and other government programs from financial fraud and abuse.”

FDA-OIC Special Agent in Charge Fernando P. McMillan said: “Individuals and companies that manufacture and distribute medical devices with non-functional components put the health of patients at significant risk.  We will continue to pursue and bring to justice those who jeopardize the health of their patients and of the public.”

According to the documents unsealed today in Manhattan federal court and the United States Bankruptcy Court for the District of Delaware:[1]

STIMWAVE was a medical device company that manufactured and distributed implantable neurostimulation devices designed to treat intractable, chronic pain.  Founded in 2010 by PERRYMAN and others, STIMWAVE was headquartered in Pompano Beach, Florida.

STIMWAVE was founded on the premise that its products would provide non-opioid alternatives to chronic pain management.  As the founder and CEO of STIMWAVE, PERRYMAN oversaw the design of the StimQ PNS System (the “Device”), a neurostimulator medical device that treated chronic pain by producing electrical currents to target peripheral nerves outside the spinal cord.  From at least in or about 2017 up to and including her termination in or about 2019, PERRYMAN, as STIMWAVE’s CEO, engaged in a multi-year scheme (the “Scheme”) to design, create, manufacture, and market an inert, non-functioning component of the Device — called the “White Stylet” — that served no medical purpose but was included with the Device through in or about 2020 in order to make the product financially viable for doctors to purchase. 

When STIMWAVE originally brought the Device to market in or about 2017, it contained three primary components: (i) an implantable electrode array (the “Lead”) that stimulated the nerve; (ii) an externally worn battery that sat outside the body and wirelessly provided power to the Lead through the patient’s skin (the “Battery”); and (iii) a separate implantable receiver measuring approximately 23 centimeters in length with a distinctive pink handle — called the “Pink Stylet.”  The Pink Stylet contained copper and, unlike the White Stylet, functioned as a receiver to transmit energy from the Battery to the Lead.

STIMWAVE sold the Device to doctors and medical providers for over approximately $16,000.  Medical insurance providers, including Medicare, would reimburse medical practitioners for implanting the Device into patients through two separate reimbursement codes, one for implantation of the Lead and a second for implantation of the Pink Stylet.  The billing code for implanting the Lead provided for reimbursement at a rate of between approximately $4,000 and $6,000, while the billing code for implanting a receiver, like the Pink Stylet, provided for reimbursement at a rate of between approximately $16,000 and $18,000.

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

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

As a result of these misrepresentations regarding the functionality of the White Stylet, PERRYMAN caused doctors and medical providers to unwittingly implant the non-functional White Stylet into patients and submit fraudulent reimbursement claims for implantation of the White Stylet to Medicare, resulting in millions of dollars in losses to the federal government.

On June 15, 2022, STIMWAVE filed for bankruptcy in Delaware under Chapter 11 of the Bankruptcy Code, through which it sold substantially all of its assets to a third-party through an auction.

*                *                *

PERRYMAN, 54, of Delray Beach, Florida, has been charged with one count of conspiracy to commit wire fraud and health care fraud, which carries a maximum potential sentence of 20 years in prison, and one count of health care fraud, which carries a maximum potential sentence of 10 years in prison. 

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

Mr. Williams praised the investigative work of the FBI and thanked the FDA for its assistance.

The criminal case is being handled by the Complex Frauds and Cybercrime Unit of the Office’s Criminal Division.  Assistant U.S. Attorneys Louis A. Pellegrino, Jacob M. Bergman, and Mónica P. Folch are in charge of the prosecution.  The civil case against STIMWAVE and PERRYMAN is being handled by the Civil Frauds Unit of the Office’s Civil Division.  Assistant U.S. Attorneys Jacob M. Bergman and Mónica P. Folch are in charge of the civil case.

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 constitutes only allegations, and every fact described herein should be treated as an allegation.

Damian Williams, the United States Attorney for the Southern District of New York, and Lisa F. Garcia, the Regional Administrator for the U.S. Environmental Protection Agency (“EPA”), Region 2, announced today that the United States has filed a civil lawsuit against UNITED ALLOYS AND STEEL CORPORATION (“Defendant”) and has simultaneously filed a consent decree settling the lawsuit.  In the complaint, brought pursuant to the Comprehensive Environmental Response, Compensation, and Liability Act (“CERCLA”) – commonly known as the Superfund statute – the United States alleged that the Defendant arranged for the disposal or treatment of mercury by Port Refinery, Inc. (“Port Refinery”), a mercury refining business in the Village of Rye Brook, New York, which led to releases of mercury into the environment.  The consent decree provides for a payment of $260,000 by the Defendant for costs incurred by EPA in conducting clean-up activities at the Port Refinery site (the “Site”).

U.S. Attorney Damian Williams said: “United Alloys and Steel Corporation played a part in causing contamination in a residential community by delivering 17,253 pounds of scrap mercury for re-smelting purposes to Port Refinery, and it is paying a share of the costs that EPA had to incur to clean up this site.  The parties responsible for this environmental contamination are now being held accountable.”

EPA Regional Administrator Lisa F. Garcia said: “This company sent scrap mercury to the site operator, which handled mercury in a way that resulted in it being released into the environment and contaminating homes.  Even relatively small amounts of mercury can cause serious health problems.  EPA has addressed mercury vapors in people’s homes at the site, and now we are holding this company accountable for its part in putting people at risk.” 

As alleged in the complaint filed today in White Plains federal District Court:

The Defendant arranged for Port Refinery’s treatment or disposal of scrap mercury at the Site.  Port Refinery’s treatment and processing of mercury sent by the Defendant and other parties led to extensive releases of mercury into the environment, necessitating two separate clean-up actions by EPA.  In connection with the second clean-up, EPA incurred costs at the Site for investigative and removal activities, including, among other things, excavating and disposing of more than 9,300 tons of mercury-contaminated soil from the Site.

In the consent decree filed today, the Defendant admits and accepts responsibility for the following:

• EPA has determined that from the 1970s through the early 1990s, Port Refinery engaged in, among other things, the business of mercury reclaiming, refining, and processing;
• Port Refinery operated in the Village of Rye Brook out of a two-story garage bordered by private residences on its south, east, and west sides;
• EPA has determined that Port Refinery took virtually no environmental precautions or safety measures during its mercury refinement process;
• EPA has determined that Port Refinery released a significant amount of mercury into the environment, contaminating the Site;
• EPA has determined that mercury from the Defendants’ mercury-containing products was comingled at the Site and contributed to the mercury released into the environment; and
• United Alloys and Steel Corporation delivered 17,253 pounds of scrap mercury for re-smelting purposes to Port Refinery during its period of operations.

*                *                *

Pursuant to the consent decree, the Defendant will pay a total of $260,000 in costs incurred by EPA.   The payment amount was based on the Defendant’s documented inability to pay its full share of the costs incurred.

This lawsuit is the United States’ eighth lawsuit against responsible parties to recover clean-up costs for the second clean-up at the Site.  With this settlement, the United States has recovered a total of $3,079,392 from responsible parties. 

The consent decree will be lodged with the District Court for a period of at least 30 days before it is submitted for the Court’s approval to provide public notice and to afford members of the public the opportunity to comment on the consent decree.

Mr. Williams thanked the assigned EPA Region 2 Assistant Regional Counsel for his critical work on this matter.

This case is being handled by the Office’s Environmental Protection Unit.  Assistant U.S. Attorney Anthony J. Sun is in charge of the case.

Damian Williams, the United States Attorney for the Southern District of New York, announced today the guilty pleas of PABLO RENATO RODRIGUEZ, GUTEMBERG DOS SANTOS, SCOTT HUGHES, CECILIA MILLAN, KARINA CHAIREZ, and JACKIE AGUILAR for their roles in an internationally coordinated fraud and money laundering ring that deceived individuals into investing in AirBit Club, a purported cryptocurrency mining and trading company.  AirBit Club co-founder DOS SANTOS pled guilty before United States District Judge George B. Daniels on October 21, 2021.  Senior AirBit Club promoters CHAIREZ, MILLAN, and AGUILAR pled guilty before Judge Daniels on January 31, February 8, and February 22, 2023, respectively, and are scheduled to be sentenced by Judge Daniels on June 28, July 25, and June 27, 2023, respectively.  SCOTT HUGHES, an attorney who laundered Airbit Club fraud proceeds for RODRIGUEZ and DOS SANTOS, pled guilty before Judge Daniels on March 2, 2023, and is scheduled to be sentenced on August 9, 2023.  Airbit Club co-founder RODRIGUEZ pled guilty before Judge Daniels earlier today and is scheduled to be sentenced on July 25, 2023.  As part of their guilty pleas, the defendants collectively have been ordered to forfeit their fraudulent proceeds of Airbit Club, which include seized or restrained assets consisting of U.S. currency, Bitcoin, and real estate currently valued at approximately $100 million.

U.S. Attorney Damian Williams said: “The defendants took advantage of the growing hype around cryptocurrency to con unsuspecting victims around the world out of millions of dollars with false promises that their money was being invested in cryptocurrency trading and mining.  Instead of doing any cryptocurrency trading or mining on behalf of investors, the defendants built a Ponzi scheme and took the victims’ money to line their own pockets.  These guilty pleas send a clear message that we are coming after all of those who seek to exploit cryptocurrency to commit fraud.”    

According to the Superseding Indictment, the defendants’ statements when pleading guilty, and statements made in related court filings and proceedings:

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

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

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

In many instances, as early as 2016, Victims who attempted to withdraw money from the AirBit Club Online Portal and complained to a Promoter were met with excuses, delays, and hidden fees amounting to more than 50% of the Victim’s requested withdrawal, if they were able to make any withdrawal at all.  In one instance, AGUILAR told one Victim of the AirBit Club Scheme who was complaining about her inability to withdraw AirBit Club returns that she should “bring new blood” into the AirBit Club Scheme in order to receive her returns.

In April 2020, another victim received a notice on the AirBit Club Online Portal that his account was closed – and principal investment lost – due to “execution of financial sustainability Reserve, policy #34 of the Airbit Club Terms and Conditions, due to the economic and financial crisis caused by (Covid-19).”

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

*                *                *

RODRIGUEZ, 40, of Irvine, California, DOS SANTOS, 48, of Panama City, Panama, MILLAN, 41, of Greensboro, North Carolina, CHAIREZ, 47, of Modesto, California, AGUILAR, 58, of Plano, Texas, and HUGHES, 47, of Newport Beach, California, have pled guilty to charges including wire fraud conspiracy, which carries a maximum potential sentence of 20 years in prison; money laundering conspiracy, which carries a maximum potential sentence of 20 years in prison; and bank fraud conspiracy, which carries a maximum potential sentence of 30 years in prison.  

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

Mr. Williams praised the outstanding investigative work of Special Agents from Homeland Security Investigations’ (“HSI”) El Dorado Task Force, HSI Panama, the HSI Panama City Transnational Criminal Investigative Unit, and HSI New Orleans.  Mr. Williams further thanked the attorneys and investigators at the Securities and Exchange Commission whose expertise and diligence were integral to the development of this investigation.

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

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

Damian Williams, the United States Attorney for the Southern District of New York, announced that LAURENCE F. DOUD III, the former Chief Executive Officer of Rochester Drug Co-Operative, Inc. (“RDC”), was sentenced today in Manhattan federal court to 27 months in prison for conspiring to unlawfully distribute oxycodone and fentanyl and conspiring to defraud the Drug Enforcement Administration (“DEA”).  DOUD was sentenced today by United States District Judge George B. Daniels after being convicted at trial in February 2022.

U.S. Attorney Damian Williams said: “Laurence Doud cared more about his own paycheck than his responsibility as CEO of RDC to prevent dangerous opioids from making their way to pharmacies, drug dealers, and people struggling with addiction.  The sentence imposed today holds Doud responsible for shipping massive amounts of dangerous and highly addictive oxycodone and fentanyl to pharmacies that he knew were illegally dispensing those controlled substances and reaffirms this Office’s commitment to seeking justice for the many victims of the opioid epidemic.”

According to the Indictment and the evidence at trial:

Violations of the Federal Narcotics Laws

From 2012 through March 2017, DOUD knowingly and intentionally violated the federal narcotics laws by distributing, through RDC, dangerous, highly addictive opioids to pharmacy customers that he knew were being sold and used illicitly.  At the direction of its senior management, including DOUD, RDC supplied large quantities of oxycodone, fentanyl, and other dangerous opioids to pharmacy customers that its own compliance personnel determined were dispensing those drugs to individuals who had no legitimate medical need for them.  RDC, at the direction of DOUD and others, distributed controlled substances to those pharmacies even after identifying “red flags” of diversion, including dispensing highly abused controlled substances in large quantities; dispensing primarily controlled substances; dispensing quantities of controlled substances in amounts consistently higher than accepted medical standards; accepting a high percentage of cash for controlled substance prescriptions; dispensing to out-of-state patients; and filling controlled substances prescriptions issued by practitioners acting outside the scope of their medical practice, under investigation by law enforcement, or on RDC’s “watch list.”  In addition, and at DOUD’s direction, RDC frequently brought on pharmacy customers that had been terminated by other distributors.

Conspiracy to Defraud the DEA

From 2012 through March 2017, DOUD took steps to conceal RDC’s illicit distribution of controlled substances from the DEA and other law enforcement authorities.  Among other things, DOUD made the deliberate decision not to investigate, monitor, or report to the DEA pharmacy customers that DOUD and others at RDC knew were diverting controlled substances for illegitimate use.  Because they knew that reporting these pharmacies would likely result in the DEA investigating and shutting down RDC’s customers, RDC’s senior management, including DOUD, directed the company’s compliance department not to report them and instead to continue supplying those customers with dangerous controlled substances that the company knew were being dispensed and used for illicit purposes.  Among other things, pursuant to DOUD’s instructions, and contrary to the company’s representations to the DEA, RDC opened new customer accounts without conducting due diligence and supplied those customers – some of whom had been terminated by other distributors – with dangerous controlled substances.  Additionally, DOUD caused RDC to avoid filing suspicious order reports with the DEA as required by law.  As a result, the DEA’s ability to identify and prevent the illicit dispensing of highly addictive controlled substances by several of RDC’s pharmacy customers was impeded.

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In addition to his prison term, LAURENCE F. DOUD III, 79, of Port Orange, Florida, was sentenced to three years of supervised release and ordered to pay a $100,000 fine.

Mr. Williams praised the outstanding investigative work of the DEA’s Westchester Tactical Diversion Team and thanked Special Agents of United States Attorney’s Office for their assistance.

The prosecution of this case is being handled by the Office’s Narcotics Unit.  Assistant U.S. Attorneys Thomas Burnett, Nicolas Roos, and Alexandra Rothman are in charge of the prosecution and represented the Government at trial.  Assistant U.S. Attorney Louis Pellegrino also participated in the investigation into RDC and DOUD.

Damian Williams, the United States Attorney for the Southern District of New York, announced that HOWARD ADELGLASS was sentenced today by U.S. District Judge Jed S. Rakoff to 150 months in prison for his participation in a conspiracy to illegally prescribe oxycodone.  ADELGLASS was convicted in November 2022 following a two-week trial before Judge Rakoff. 

U.S. Attorney Damian Williams said: “For years, Howard Adelglass illegally prescribed enormous quantities of highly addictive and deadly opioids to people he knew were suffering from substance abuse disorders or were dealers.  By monetizing his prescription pad and distributing mammoth quantities of oxycodone pills for no legitimate medical purpose, Adelglass practiced as a drug dealer, not a doctor.  Adelglass did not simply betray his medical oath; he destroyed lives and families and helped fuel the opioid epidemic gripping the nation.  Today’s sentence makes clear that this Office and our law enforcement partners will work tirelessly to hold responsible those who have contributed to the national opioid crisis no matter their professional stature.”

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

HOWARD ADELGLASS was a licensed physician.  Together with his office manager, MARCELLO SANSONE, he operated a pain-management clinic located in Midtown Manhattan (the “Clinic”).  The Clinic serviced purported patients seeking oxycodone and other pain-relief medications commonly diverted for illicit purposes.  In exchange for cash payments, sex acts, and cocaine, ADELGLASS wrote thousands of prescriptions for large quantities of oxycodone, many to individuals whom ADELGLASS knew did not need the pills for a legitimate medical purpose.  When they occurred, ADELGLASS’s examinations were perfunctory.  ADELGLASS's purported patients included individuals addicted to opioids and, in some cases, individuals who sold the oxycodone on the street.  Even when faced with clear evidence of his purported patients’ drug abuse and diversion, ADELGLASS continued to prescribe large quantities of oxycodone without a legitimate medical purpose and outside the scope of professional practice.

Initially, ADELGLASS staffed the Clinic with inexperienced young women, some of whom he caused to be addicted to oxycodone through illegal prescriptions.  Around October 2018, after serving as a primary source of patient referrals, SANSONE took over as the Clinic’s office manager.  In that role, SANSONE helped to control access to ADELGLASS and the lucrative prescriptions he wrote for medically unnecessary oxycodone.  With particularly vulnerable patients, ADELGLASS and SANSONE solicited and, in some instances, received sex acts in exchange for illegal oxycodone prescriptions.

Between in or about November 2017 and in or about September 2020, ADELGLASS prescribed more than 1.3 million oxycodone pills. 

*                *                *

In addition to their prison terms, ADELGLASS, 67, of New York, New York, and SANSONE, 37, of Old Bridge, New Jersey, were each sentenced to three years of supervised release.

Mr. Williams praised the outstanding investigative work of the Federal Bureau of Investigation, New York City Police Department, and the U.S. Department of Health and Human Services, Office of Inspector General.

This case is being handled by the Office’s Narcotics Unit.  Assistant U.S. Attorneys Nicholas W. Chiuchiolo, Marguerite B. Colson, and Daniel G. Nessim are in charge of the prosecution.

Damian Williams, the United States Attorney for the Southern District of New York, Michael J. Driscoll, the Assistant Director in Charge of the New York Field Office of the Federal Bureau of Investigation (“FBI”), and William V. Grady, the Dutchess County District Attorney, announced that JUSTTIN KENYOTTA HAYWOOD was sentenced to 17 years in prison for his participation in a murder-for-hire scheme and related shooting in Poughkeepsie in 2020 in which HAYWOOD, having been offered $5,000 to kill another individual, wrongly identified, pursued, and shot at a 17-year-old boy who had been playing basketball in a park with two friends in Poughkeepsie.  HAYWOOD previously pled guilty to murder for hire and being a felon in possession of a firearm and ammunition before United States District Judge Nelson S. Román, who imposed the sentence.

U.S. Attorney Damian Williams said: “Justtin Haywood’s sentence shows that senseless acts of violence will be met with severe consequences.  Haywood agreed to murder another individual and then shot at an innocent 17-year-old boy, who had been playing basketball with friends in a park.  For this crime, Haywood will spend 17 years in federal prison.”

FBI Assistant Director Michael J. Driscoll said: “As this sentence demonstrates, there is no place in our community for anyone willing to commit murder.  Criminal behavior like Haywood's is a dangerous bane to society and often results in innocent people being placed in harm's way.  The FBI's Hudson Valley Safe Streets Task Force and our partners in law enforcement work tirelessly to make those who have complete disregard for humanity face the consequences of their actions.”

Dutchess County Chief Assistant District Attorney Matthew Weishaupt said: “We commend the joint effort by all the agencies involved in bringing Mr. Haywood to justice for this horrific shooting and targeting of an innocent young man.  Let the message be clear: we will use all available resources to bring violent criminals to justice and ensure the safety of our community.  We have an outstanding working relationship with our federal partners and will continue to work together to combat this senseless violence.”

According to the Complaint and the Information filed against the defendant, other documents filed in federal court, and statements made in public court proceedings:

In late December 2019 and early January 2020, Haywood traveled from Colorado to North Carolina and then ultimately up to Poughkeepsie, New York, and met with a co-conspirator (“CC-1”) who offered him $5,000 to kill another male individual.  Haywood agreed to do so, and on January 15, 2020, wrongly believing to have found his intended target, approached three teenagers playing basketball in King Street Park in Poughkeepsie and attempted to shoot one of them, a 17-year-old boy, ultimately chasing them in his car as they fled on foot and firing multiple shots from inside of his car.  Fortunately, no one was hit.

*                *                *           

In addition to his prison sentence, HAYWOOD, 40, of Aurora, Colorado, was sentenced to three years of supervised release.

Mr. Williams praised the outstanding work of the FBI, the Town of Poughkeepsie Police Department, the City of Poughkeepsie Police Department, and the Dutchess County District Attorney’s Office.

The FBI’s Hudson Valley Safe Streets Task Force, the Town of Poughkeepsie Police Department, the City of Poughkeepsie Police Department, and the Dutchess County District Attorney’s Office conducted a joint investigation of the 2020 shooting and murder-for-hire scheme.

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

Damian Williams, the United States Attorney for the Southern District of New York, and Keechant L. Sewell, the Commissioner of the New York City Police Department (“NYPD”), announced the unsealing of a two-count Complaint today charging RAMDEO BALLIRAM and LEONARDO ORTIZ with bank theft and conspiracy to commit bank theft in connection with a years-long scheme in which they stole more than $1 million from Automated Teller Machines (“ATMs”) located in commercial establishments throughout the Bronx.  BALLIRAM and ORTIZ were arrested today and will be presented before U.S. Magistrate Judge James L. Cott.

U.S. Attorney Damian Williams said: “As alleged, the defendants carried out a calculated scheme for years, stealing over a million dollars from ATMs in businesses throughout the Bronx.  The relentless efforts of this Office and our law enforcement partners have finally put an end to the burglaries and thefts allegedly perpetrated by the defendants, and we will continue to be diligent in seeking justice for those affected by these crimes.”  

NYPD Commissioner Keechant L. Sewell said: “For nearly two years, these defendants allegedly targeted multiple small businesses in the Bronx – burglarizing, ransacking, and stealing more than $1 million.  Their brazen scheme undermined public safety throughout an entire borough, and today’s complaint is the next step toward holding them accountable for their crimes.  Thank you to the U.S. Attorney’s Office for the Southern District of New York and all the NYPD investigators who worked together to bring charges in this case.”

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

From at least in or about March 2021 through in or about January 2023, BALLIRAM, ORTIZ, and another individual (“CC-1”) engaged in a series of at least 23 burglaries of commercial establishments throughout the Bronx, in which they stole over $1 million from ATMs.   

The burglaries followed a simple pattern: on each occasion, BALLIRAM, ORTIZ, and at least one other individual broke into Bronx small businesses — often bodegas or restaurants — in the middle of the night in order to steal all the cash from the ATM inside the store.  In the course of stealing all the cash from the ATMs, BALLIRAM and ORTIZ also ransacked each store, stealing all the cash from the register, cigarettes, lottery tickets, alcohol, and digital video recording systems.  BALLIRAM and ORTIZ stole tens of thousands of dollars in cash and valuables each time. 

BALLIRAM and ORTIZ serially followed an armored car (“Bank Van-1”) as it refilled ATMs throughout the Bronx on behalf of a particular bank in order to determine which ATMs to target.  Once BALLIRAM and ORTIZ learned which ATMs had been refilled, they then traveled to that location to break into the store and steal the cash.  BALLIRAM and ORTIZ often used sophisticated tools to break into both the commercial establishments and the ATMs, as pictured below.  On the occasion pictured below, BALLIRAM and ORTIZ stole more than $77,000 from the ATM:

On a few occasions, when they were unable to break into the ATM to steal the cash, BALLIRAM and ORTIZ stole the entire ATM.  On at least one occasion, BALLIRAM and ORTIZ also used a stolen vehicle to carry out the scheme. 

*                *                *

BALLIRAM, 44, of Queens, New York, and Ortiz, 52, of Queens, New York, are each charged with one count of conspiracy to commit bank theft, which carries a maximum potential sentence of five years in prison, and one count of bank theft, which carries a maximum potential sentence of 10 years in prison.

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

Mr. Williams praised the outstanding investigative work of the NYPD, particularly Detectives of the Bronx Grand Larceny Squad, and the Special Agents and Investigative Analysts of the United States Attorney’s Office for the Southern District of New York. 

This case is being handled by the Office’s General Crimes Unit.  Assistant U.S. Attorney Jackie Delligatti 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 constitutes only allegations, and every fact described herein should be treated as an allegation.

Damian Williams, the United States Attorney for the Southern District of New York, announced that SAADAH MASOUD was sentenced today to 18 months in prison for his participation in a conspiracy to commit hate crimes in connection with MASOUD’s repeated physical attacks of Jewish victims in New York City between 2021 and 2022.  The sentence was imposed by U.S. District Judge Denise L. Cote.

U.S. Attorney Damian Williams said: “Saadah Masoud repeatedly attacked New Yorkers based on their religion and national origin.  The prosecution of this case and the sentence imposed today make clear that hate-fueled violence will not be tolerated in our community and that this Office will be unrelenting in our efforts to hold accountable those who perpetrate senseless crimes of hate.”    

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

From at least in or about May 2021 through at least in or about April 2022, MASOUD and others conspired to commit hate crime acts in the Southern District of New York and elsewhere.  In furtherance of the conspiracy, MASOUD assaulted at least three victims based upon the victims’ actual and perceived religion and national origin.  Specifically, the defendant admitted to committing the following acts of violence that were motivated by the victims’ Jewish or Israeli identity or perceived identity:

• On or about April 20, 2022, in Manhattan, MASOUD assaulted a victim who was wearing an Israeli flag;
• On or about June 2, 2021, in Brooklyn, MASOUD and a co-conspirator assaulted a victim who was wearing clothing traditionally associated with the Jewish religion, including a yarmulke, while the victim was sitting outside the victim’s own home; and
• On or about May 20, 2021, in Manhattan, MASOUD assaulted a victim who was wearing a Star of David necklace.

*                *                *

In addition to his prison term, SAADAH MASOUD, 29, of Staten Island, New York, was sentenced to three years of supervised release.

Mr. Williams praised the outstanding investigative work of the New York City Police Department’s Hate Crime Task Force and the Special Agents of the United States Attorney’s Office for the Southern District of New York. 

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

A Kentucky man was sentenced today to 45 years in prison for attempting to murder U.S. service members, providing and attempting to provide material support to terrorists, and illegally transmitting national defense information.

Ethan Phelan Melzer, aka Etil Reggad, 24, of Louisville, pleaded guilty to attempting to murder U.S. service members, providing and attempting to provide material support to terrorists, and illegally transmitting national defense information on June 24, 2022, before U.S. District Judge Gregory H. Woods, who imposed today’s sentence. According to court documents, Melzer planned a jihadist attack on his U.S. Army unit in the days leading up to a deployment to Turkey and sent sensitive details about the unit — including information about its location, movements, and security — to members of the extremist organization Order of the Nine Angles (O9A), a white supremacist, neo-Nazi and pro-jihadist group.

“Today’s sentence holds Mr. Melzer accountable for an egregious and shameful act of betrayal against his own military unit and his country,” said Assistant Attorney General Matthew G. Olsen of the Justice Department’s National Security Division. “The Justice Department will use all available resources to disrupt and bring to justice those who would aid foreign terrorist organizations and use violence to harm our men and women in uniform or any American anywhere.”

“Ethan Melzer infiltrated the U.S. Army in service of a neo-Nazi, white supremacist and jihadist group,” said U.S. Attorney Damian Williams for the Southern District of New York. “He used his membership in the military to pursue an appalling goal: the brutal murder of his fellow U.S. service members in a carefully plotted ambush. By unlawfully disclosing his unit’s location, strength, and armaments to other O9A members and jihadists in furtherance of this ambush, Melzer traitorously sought to attack the very soldiers he was entrusted to protect. Today’s sentence makes clear that Melzer’s brazen actions backfired and that this office — along with our partners in law enforcement and the military — will work tirelessly to bring traitors like Melzer to justice and to protect the safety and integrity of our armed services.”

“Melzer betrayed his fellow soldiers and his country,” said Assistant Director Robert R. Wells of the FBI’s Counterterrorism Division. “Americans serving their country overseas should never have to fear a terrorist attack from within their own ranks, and today’s sentence holds him accountable for his deadly plan to attack the brave men and women of the armed forces who protect our nation.”

According to court documents, Melzer is a member of O9A. O9A espouses neo-Nazi, antisemitic and Satanic beliefs and promotes extreme violence to accelerate and cause the demise of Western civilization. The group has expressed admiration both for Nazis, such as Adolf Hitler, and Islamic jihadists, such as Usama Bin Laden, the now-deceased former leader of al Qaeda. Members and associates of O9A have also participated in acts of violence, including murders. O9A members are instructed to fulfill “sinister” deeds, including “insight roles,” where they attempt to infiltrate various organizations, including the military, to gain training and experience, commit acts of violence, identify like-minded individuals, and ultimately subvert those groups from within.

Melzer joined the U.S. Army in approximately 2018 and infiltrated its ranks as part of an insight role to further his goals as an O9A adherent. In approximately October 2019, Melzer deployed abroad with the Army to Italy as a member of the 173rd Airborne Brigade Combat Team. While stationed abroad, Melzer consumed propaganda from multiple extremist groups, including O9A and the Islamic State of Iraq and al-Sham, which is also known as ISIS. For example, Melzer subscribed to encrypted online forums where he downloaded and accessed videos of jihadist attacks on U.S. troops and facilities and jihadist executions of civilians and soldiers, in addition to far-right, neo-Nazi, and other white supremacist propaganda.

In approximately early May 2020, the Army informed Melzer that he would be reassigned to a unit scheduled for a further foreign deployment, where the unit would be guarding an isolated and sensitive military installation (the Military Base). After he was notified of the assignment, Melzer joined his new unit and attended weeks of training, including classified and unclassified briefings, to prepare for the deployment. As part of this intensive training, Melzer learned details about the purpose, layout, and security of the Military Base. Melzer and his unit also received in-depth training about and practiced for numerous threat scenarios at the Military Base, including how to respond to various potential terrorist attack scenarios.

Upon learning the importance and sensitivity of his upcoming deployment, Melzer immediately began passing that information to members of O9A. Melzer secretly used an encrypted messaging application to propose, advocate for, and plan a deadly attack on his fellow service members. Melzer sent messages to members and associates of O9A and, in particular, a sub-group of O9A known as the “RapeWaffen Division,” providing details about his unit’s anticipated deployment including troop movements, relevant dates, locations, armaments, topography, and security, all in connection with the proposed attack on his unit and the Military Base. Melzer and his co-conspirators used this information to plan what they referred to as a “jihadi attack” with the objective of causing a “mass casualty” event victimizing his fellow service members. For example, after describing the unit’s weaponry during the deployment — and providing information consistent with the briefings he had received — Melzer described to his co-conspirators how an attack would “essentially cripple” the unit’s “fire-teams.”

To further the attack plan, Melzer and his co-conspirators passed these messages to a purported member of al Qaeda. Melzer’s proposed attack evolved as he gathered and distributed additional sensitive information about the deployment. For example, Melzer also promised to leak more information once he arrived at the Military Base — including real-time photographs of the facility and the frequency and channel of U.S. Army radio communications — in order to maximize the likelihood of a successful attack on his unit or on a replacement unit deployed to the Military Base.

Melzer told members of O9A in his encrypted electronic communications “[y]ou just gotta understand that currently I am risking my literal free life to give you all this” and that he was “expecting results.” Melzer further acknowledged that he could be killed during the attack and described his willingness to die for O9A’s goals, writing “who gives a fuck [. . .] it would be another war . . . I would’ve died successfully . . . cause another 10 year war in the Middle East would definitely leave a mark.”  Melzer also acknowledged in his messages that he deleted some of the communications regarding the planning of the attack because the plot amounted to treason.

The FBI New York Joint Terrorism Task Force investigated the case, with valuable assistance provided by the FBI’s Legal Attaché Office in Rome; the Air Force Office of Special Investigations; U.S. Army Counterintelligence; U.S. Army Criminal Investigation Command; and the U.S. Department of State Diplomatic Security Service.

Assistant U.S. Attorneys Sam Adelsberg, Matthew J.C. Hellman and Kimberly J. Ravener for the Southern District of New York are prosecuting the case, with valuable assistance provided by Trial Attorneys Alicia Cook of the National Security Division’s Counterterrorism Section and Scott Claffee of the National Security Division’s Counterintelligence and Export Control Section.

Damian Williams, the United States Attorney for the Southern District of New York, announced today that ETHAN PHELAN MELZER, a/k/a “Etil Reggad,” was sentenced to 45 years in prison for attempting to murder U.S. service members, providing and attempting to provide material support to terrorists, and illegally transmitting national defense information.  MELZER planned a jihadist attack on his U.S. Army unit in the days leading up to a deployment to Turkey and sent sensitive details about the unit — including information about its location, movements, and security — to members of the extremist organization Order of the Nine Angles (“O9A”), a white supremacist, neo-Nazi, and pro-jihadist group.  MELZER pled guilty on June 24, 2022, before U.S. District Judge Gregory H. Woods, who imposed today’s sentence.

U.S. Attorney Damian Williams said: “Ethan Melzer infiltrated the U.S. Army in service of a neo-Nazi, white supremacist, and jihadist group.  He used his membership in the military to pursue an appalling goal: the brutal murder of his fellow U.S. service members in a carefully plotted ambush.  By unlawfully disclosing his unit’s location, strength, and armaments to other O9A members and jihadists in furtherance of this ambush, Melzer traitorously sought to attack the very soldiers he was entrusted to protect.  Today’s sentence makes clear that Melzer’s brazen actions backfired and that this Office — along with our partners in law enforcement and the military — will work tirelessly to bring traitors like Melzer to justice and to protect the safety and integrity of our armed services.”

According to the Indictment and other documents in the public record, as well as statements made in public court proceedings:

MELZER is a member of O9A.  O9A espouses neo-Nazi, anti-Semitic, and Satanic beliefs and promotes extreme violence to accelerate and cause the demise of Western civilization.  The group has expressed admiration both for Nazis, such as Adolf Hitler, and Islamic jihadists, such as Usama Bin Laden, the now-deceased former leader of al Qaeda.  Members and associates of O9A have also participated in acts of violence, including murders.  O9A members are instructed to fulfill “sinister” deeds, including “insight roles,” where they attempt to infiltrate various organizations, including the military, to gain training and experience, commit acts of violence, identify like-minded individuals, and ultimately subvert those groups from within.

MELZER joined the U.S. Army in approximately 2018 and infiltrated its ranks as part of an insight role to further his goals as an O9A adherent.  In approximately October 2019, MELZER deployed abroad with the Army to Italy as a member of the 173rd Airborne Brigade Combat Team.  While stationed abroad, MELZER consumed propaganda from multiple extremist groups, including O9A and the Islamic State of Iraq and al-Sham, which is also known as ISIS.  For example, MELZER subscribed to encrypted online forums where he downloaded and accessed videos of jihadist attacks on U.S. troops and facilities and jihadist executions of civilians and soldiers, in addition to far-right, neo-Nazi, and other white supremacist propaganda. 

In approximately early May 2020, the Army informed MELZER that he would be reassigned to a unit scheduled for a further foreign deployment, where the unit would be guarding an isolated and sensitive military installation (the “Military Base”).  After he was notified of the assignment, MELZER joined his new unit and attended weeks of training, including classified and unclassified briefings, to prepare for the deployment.  As part of this intensive training, MELZER learned details about the purpose, layout, and security of the Military Base.  MELZER and his unit also received in-depth training about and practiced for numerous threat scenarios at the Military Base, including how to respond to various potential terrorist attack scenarios.  

Upon learning the importance and sensitivity of his upcoming deployment, MELZER immediately began passing that information to members of O9A.  MELZER secretly used an encrypted messaging application to propose, advocate for, and plan a deadly attack on his fellow service members.  MELZER sent messages to members and associates of O9A and, in particular, a sub-group of O9A known as the “RapeWaffen Division,” providing details about his unit’s anticipated deployment including troop movements, relevant dates, locations, armaments, topography, and security, all in connection with the proposed attack on his unit and the Military Base.  MELZER and his co-conspirators used this information to plan what they referred to as a “jihadi attack” with the objective of causing a “mass casualty” event victimizing his fellow service members.  For example, after describing the unit’s weaponry during the deployment — and providing information consistent with the briefings he had received — MELZER described to his co-conspirators how an attack would “essentially cripple[]” the unit’s “fire-teams.”

To further the attack plan, MELZER and his co-conspirators passed these messages to a purported member of al Qaeda.  MELZER’s proposed attack evolved as he gathered and distributed additional sensitive information about the deployment.  For example, MELZER also promised to leak more information once he arrived at the Military Base — including real-time photographs of the facility and the frequency and channel of U.S. Army radio communications — in order to maximize the likelihood of a successful attack on his unit or on a replacement unit deployed to the Military Base. 

MELZER told members of O9A in his encrypted electronic communications “[y]ou just gotta understand that currently I am risking my literal free life to give you all this” and that he was “expecting results.”  MELZER further acknowledged that he could be killed during the attack and described his willingness to die for O9A’s goals, writing “who gives a fuck [. . .] it would be another war . . . I would’ve died successfully . . . cause [] another 10 year war in the Middle East would definitely leave a mark.”  MELZER also acknowledged in his messages that he deleted some of the communications regarding the planning of the attack because the plot amounted to treason.

*                *                *

In addition to the prison term, MELZER, 24, of Louisville, Kentucky, was sentenced to three years of supervised release.

Mr. Williams praised the outstanding efforts of the Federal Bureau of Investigation’s (“FBI”) New York Joint Terrorism Task Force, which principally consists of agents from the FBI and detectives from the New York City Police Department, along with the FBI’s Legal Attaché Office in Rome, Italy, the Air Force Office of Special Investigations, U.S. Army Counterintelligence, U.S. Army Criminal Investigation Command, Attorneys from the U.S. Army Africa Office of the Staff Judge Advocate and 173rd Airborne Brigade Combat Team, and the U.S. Department of State Diplomatic Security Service.  Mr. Williams also thanked the Counterterrorism Section and the Counterintelligence and Export Control Section of the Department of Justice’s National Security Division, as well as the Department’s Office of International Affairs, for their assistance.

This prosecution is being handled by the Office’s National Security and International Narcotics Unit.  Assistant U.S. Attorneys Sam Adelsberg, Matthew J.C. Hellman, and Kimberly J. Ravener are in charge of the prosecution, with assistance from Trial Attorneys Alicia Cook of the Counterterrorism Section and Scott Claffee of the Counterintelligence and Export Control Section.

Damian Williams, the United States Attorney for the Southern District of New York, announced that CHET STOJANOVICH, a/k/a “Chester J. Stojanovich,” was sentenced today to three years in prison.  STOJANOVICH was sentenced for defrauding more than a dozen victims of more than $2 million through fraudulent misrepresentations that he would provide his customers with specialized cryptocurrency-mining computers (“Miners”) and Miner-hosting services that would provide the victims with a lucrative stream of “hash power” convertible into cryptocurrency.  Instead, STOJANOVICH misappropriated his victims’ money and failed to provide them with the Miners and Miner-hosting services they had purchased from him.  Stojanovich previously pled guilty on November 29, 2022, to one count of wire fraud and was sentenced today before United States District Judge Denise Cote.

U.S. Attorney Damian Williams said: “Chet Stojanovich took advantage of a flashy new trend in the financial sector to swindle his victims into sending him more than $2 million dollars in exchange for cryptocurrency-related technology and equipment that these victims never received.  This case serves as another reminder that even new financial frontiers are fraught with old-fashioned fraud, but our career prosecutors and law enforcement partners are ever as prepared to root out these schemes.”

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

From at least 2019, until his arrest in April 2022, STOJANOVICH controlled various companies, including Chet Mining Co. LLC (“Chet Mining”).  Starting in approximately March 2019, STOJANOVICH engaged in a scheme to defraud people who were seeking to purchase Miners and Miner-hosting services through which they expected to obtain “hash power” convertible into cryptocurrency and money.  STOJANOVICH defrauded these victims by falsely telling them that: he would purchase, and had purchased, Miners on their behalf; and he would provide them with Miner-hosting services and had already obtained such Miner-hosting services for them.  

In total, STOJANOVICH fraudulently induced more than a dozen customer-victims to pay a total of more than $2 million to STOJANOVICH and his companies, ostensibly in return for Miners and Miner-hosting services.  Despite fraudulent representations to the contrary, STOJANOVICH: (i) failed to provide many of the Miners that he told customers he had acquired; (ii) failed to provide the Miner-hosting services and cryptocurrency hash power that he represented he would provide; (iii) employed deceptive practices to create the illusion that such Miners had been acquired and were being used to provide hash power to those customers; and (iv) misappropriated his customers’ funds and spent the funds on unrelated and personal expenditures, including chartered air flights, hotel rooms, limousines, and private parties.

Eventually, at least six of STOJANOVICH’s victims sought to hold him accountable for his fraud by suing him in a civil case, Holmes et al. v. Chet Mining, Chet Stojanovich, et ano., Case No. 20 Civ. 4448 (LJL) (S.D.N.Y.).  STOJANOVICH sought to obstruct their efforts by lying under oath at a deposition, and lying to the presiding district judge, about the existence and location of electronic evidence in the case.

*                *                *

In addition to his prison sentence, STOJANOVICH, 38, previously of New York, New York, but residing in California since his release on bail in this case, was sentenced today to three years of supervised release, forfeiture of $2,158,927, and restitution to his victims in the amount of $2,108,927.  

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

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.  

Telefonaktiebolaget LM Ericsson (Ericsson), a multinational telecommunications company headquartered in Stockholm, Sweden, has agreed to plead guilty and pay a criminal penalty of more than $206 million after breaching a 2019 Deferred Prosecution Agreement (DPA). 

Ericsson breached the DPA by violating the agreement’s cooperation and disclosure provisions. Based on the same underlying criminal conduct that gave rise to the DPA, Ericsson will plead guilty to engaging in a long-running scheme to violate the Foreign Corrupt Practices Act (FCPA) by paying bribes, falsifying books and records, and failing to implement reasonable internal accounting controls in multiple countries around the world. 

“When the department afforded Ericsson the opportunity to enter into a DPA to resolve an investigation into serious FCPA violations, the company agreed to comply with all provisions of that agreement,” said Assistant Attorney General Kenneth A. Polite, Jr. of the Justice Department’s Criminal Division. “Instead of honoring that commitment, Ericsson repeatedly failed to fully cooperate and failed to disclose evidence and allegations of misconduct in breach of the agreement.  As a result of these broken promises, Ericsson must plead guilty to two criminal offenses and pay an additional fine. Companies should be on notice that we will closely scrutinize their compliance with all terms of corporate resolution agreements and that there will be serious consequences for those that fail to honor their commitments.”

According to court documents, beginning in 2000 and continuing until 2016, Ericsson used third-party agents and consultants to make bribe payments to government officials and to manage off-the-books slush funds in Djibouti, China, Vietnam, Indonesia, and Kuwait. These agents were often engaged through sham contracts and paid pursuant to false invoices, and the payments to them were improperly accounted for in Ericsson’s books and records. In 2019, Ericsson resolved this criminal conduct by entering a DPA with the department in connection with a two-count criminal information filed in the Southern District of New York. As part of the DPA, Ericsson paid a total criminal penalty of over $520 million and agreed to the imposition of an independent compliance monitor for three years. An Ericsson subsidiary, Ericsson Egypt Ltd, also pleaded guilty to a one-count criminal information charging conspiracy to violate the anti-bribery provisions of the FCPA. 

Following the 2019 resolution, Ericsson breached the DPA by failing to truthfully disclose all factual information and evidence related to the Djibouti scheme, the China scheme, and other potential violations of the FCPA’s anti-bribery or accounting provisions.  Ericsson also failed to promptly report and disclose evidence and allegations of conduct related to its business activities in Iraq that may constitute a violation of the FCPA. These disclosure failures prevented the United States from bringing charges against certain individuals and taking key investigative steps.

“Ericsson engaged in significant FCPA violations and made an agreement with the Department of Justice to clean up its act,” said U.S. Attorney Damian Williams for the Southern District of New York. “The company’s breach of its obligations under the DPA indicate that Ericsson did not learn its lesson, and it is now facing a steep price for its continued missteps. As Ericsson’s anticipated guilty plea makes abundantly clear, the Southern District of New York will hold to account companies that fail to live up to obligations to root out and voluntarily report their misconduct to the Department of Justice.”

“Today’s more than $200 million criminal penalty against Ericsson underscores the significant consequences that result when a DPA is breached,” said Chief James C. Lee of the IRS Criminal Investigation (IRS-CI). “Ericsson’s multiple cooperation and disclosure failures led to this breach, resulting in the company having to plead guilty and pay additional penalties.”

Under the terms of the plea agreement, which must be accepted by the court, Ericsson agreed to plead guilty to the original charges deferred by the 2019 DPA: one count of conspiracy to violate the anti-bribery provisions of the FCPA and one count of conspiracy to violate the internal controls and books and records provisions of the FCPA. Ericsson will also be required to serve a term of probation through June 2024 and has agreed to a one-year extension of the independent compliance monitor. The plea agreement also requires Ericsson to pay an additional criminal penalty of $206,728,848 – which includes the elimination of any cooperation credit originally awarded pursuant to the DPA. 

The IRS-CI investigated the case. 

Trial Attorney Michael Culhane Harper of the Criminal Division’s Fraud Section and Assistant U.S. Attorneys David Abramowicz and Juliana Murray for the Southern District of New York are prosecuting the case. 

The Fraud Section is responsible for investigating and prosecuting 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, Kenneth A. Polite, Jr., the Assistant Attorney General of the Justice Department’s Criminal Division, and James C. Lee, the Chief of the Internal Revenue Service - Criminal Investigation (“IRS-CI”), announced that TELEFONAKTIEBOLAGET LM ERICSSON (“ERICSSON”), a multinational telecommunications company headquartered in Stockholm, Sweden, has agreed to plead guilty and pay a criminal penalty of more than $206 million after breaching a 2019 Deferred Prosecution Agreement (“DPA”).

ERICSSON breached the DPA by violating the agreement’s cooperation and disclosure provisions.  Based on the same underlying criminal conduct that gave rise to the DPA, ERICSSON will plead guilty to engaging in a long-running scheme to violate the Foreign Corrupt Practices Act (“FCPA”) by paying bribes, falsifying books and records, and failing to implement reasonable internal accounting controls in multiple countries around the world.

U.S. Attorney Damian Williams said: “Ericsson engaged in significant FCPA violations and made an agreement with the Department of Justice to clean up its act.  The company’s breach of its obligations under the DPA indicate that Ericsson did not learn its lesson, and it is now facing a steep price for its continued missteps.  As Ericsson’s anticipated guilty plea makes abundantly clear, the Southern District of New York will hold to account companies that fail to live up to obligations to root out and voluntarily report their misconduct to the Department of Justice.”

Assistant Attorney General Kenneth A. Polite, Jr. said: “When the Department afforded Ericsson the opportunity to enter into a DPA to resolve an investigation into serious FCPA violations, the company agreed to comply with all provisions of that agreement.  Instead of honoring that commitment, Ericsson repeatedly failed to fully cooperate and failed to disclose evidence and allegations of misconduct in breach of the agreement.  As a result of these broken promises, Ericsson must plead guilty to two criminal offenses and pay an additional fine.  Companies should be on notice that we will closely scrutinize their compliance with all terms of corporate resolution agreements and that there will be serious consequences for those that fail to honor their commitments.”

IRS-CI Chief James C. Lee said: “Today’s more than $200 million criminal penalty against Ericsson underscores the significant consequences that result when a DPA is breached.  Ericsson’s multiple cooperation and disclosure failures led to this breach, resulting in the company having to plead guilty and pay additional penalties.”

According to court documents:

Beginning in 2000 and continuing until 2016, ERICSSON used third-party agents and consultants to make bribe payments to government officials and to manage off-the-books slush funds in Djibouti, China, Vietnam, Indonesia, and Kuwait.  These agents were often engaged through sham contracts and paid pursuant to false invoices, and the payments to the agents were improperly accounted for in ERICSSON’s books and records.  In 2019, ERICSSON resolved this criminal conduct by entering a DPA with the Department in connection with a two-count criminal information filed in the Southern District of New York.  As part of the DPA, ERICSSON paid a total criminal penalty of over $520 million and agreed to the imposition of an independent compliance monitor for three years.  An ERICSSON subsidiary, Ericsson Egypt Ltd, also pled guilty to a one-count criminal information charging conspiracy to violate the anti-bribery provisions of the FCPA. 

Following the 2019 resolution, ERICSSON breached the DPA by failing to truthfully disclose all factual information and evidence related to the Djibouti scheme, the China scheme, and other potential violations of the FCPA’s anti-bribery or accounting provisions.  ERICSSON also failed to promptly report and disclose evidence and allegations of conduct related to its business activities in Iraq that may constitute a violation of the FCPA.  These disclosure failures prevented the United States from bringing charges against certain individuals and taking key investigative steps.

*                *                *

Under the terms of the plea agreement, which must be accepted by the court, ERICSSON agreed to plead guilty to the original charges deferred by the 2019 DPA: one count of conspiracy to violate the anti-bribery provisions of the FCPA and one count of conspiracy to violate the internal controls and books and records provisions of the FCPA.  ERICSSON will also be required to serve a term of probation through June 2024 and has agreed to a one-year extension of the independent compliance monitor.  The plea agreement also requires ERICSSON to pay an additional criminal penalty of $206,728,848 – which includes the elimination of any cooperation credit originally awarded pursuant to the DPA.

Mr. Williams praised the efforts of the IRS-CI, which conducted the investigation in this case.

The case is being handled by the Office’s Complex Frauds and Cybercrime Unit and the Justice Department’s Fraud Section.  Assistant U.S. Attorneys David Abramowicz and Juliana Murray and Trial Attorney Michael Culhane Harper are in charge of the prosecution.

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 BORIS AMINOV, CHRISTY CORVALAN, DAVID FERNANDEZ, DEZYRE BAEZ, and CRYSTAL MEDINA were charged with engaging in a years-long scheme to defraud Medicaid and other government insurance plans out of at least approximately $15 million and exploit at least hundreds of low-income individuals with HIV.  The defendants were arrested this morning and are being presented today in Manhattan federal court before United States Magistrate Judge Gabriel W. Gorenstein.  The case has been assigned to United States District Judge Mary Kay Vyskocil.

U.S. Attorney Damian Williams said: “As alleged, the defendants orchestrated a scheme to get rich by lying to Medicaid and other government insurance programs and depriving vulnerable HIV patients of legitimate and safe medications.  The defendants allegedly made millions of dollars through submitting fraudulent insurance claims, paying illegal kickbacks, and buying and selling black-market HIV medications.  Today’s arrests send a crystal-clear message to those that seek to line their pockets by lying to federal agencies tasked with providing healthcare for low-income individuals and preying on vulnerable members of society – you will not get away with it.”

FBI Assistant Director Michael J. Driscoll said: “The indictment today alleges the defendants operated a scheme designed not only to defraud Medicaid and other government insurance plans, but also take advantage of vulnerable low-income patients with HIV.  This type of criminal activity abuses taxpayer funded healthcare programs and puts those who need help at further risk.  The FBI will always do whatever is necessary to ensure the integrity of healthcare programs like Medicaid and hold those willing to exploit these programs accountable.”

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

From at least in or about July 2020 through at least in or about February 2023, AMINOV, CORVALAN, FERNANDEZ, BAEZ, and MEDINA operated a scheme that defrauded Medicaid and other government insurance plans out of at least approximately $15 million and exploited at least hundreds of low-income individuals with HIV, jeopardizing the health and safety of those vulnerable patients.  AMINOV was a distributor of black-market HIV medications to two pharmacies located in the Bronx, New York (the “Pharmacies”), through which the scheme was perpetrated.  CORVALAN owned and operated the Pharmacies.  She purchased black-market medications from AMINOV that were then dispensed to patients, funded illegal kickbacks to be paid to patients, and additionally paid patients to sell back their HIV medications to the Pharmacies, thereby inducing patients to forego using the medications they were prescribed to treat their HIV infections.  FERNANDEZ, BAEZ, and MEDINA were employees of the Pharmacies who participated in the day-to-day operation of the scheme, including by paying illegal kickbacks to patients to obtain their HIV medications from the Pharmacies and buying-back medications from the patients.

The scheme had two sets of victims: government insurance programs and the patients of the Pharmacies.  

First, Medicaid and other government insurance programs were defrauded out of at least approximately $15 million of payments that they made to the Pharmacies to purchase prescription HIV medications for patients through legitimate channels.  CORVALAN, FERNANDEZ, BAEZ, and MEDINA, however, instead purchased HIV medications from black-market sources, including AMINOV.  Over the duration of the scheme, CORVALAN, FERNANDEZ, BAEZ, and MEDINA used the Pharmacies to pay more than $6 million to purchase black-market HIV medications from AMINOV, which were then distributed to patients.

Second, the scheme exploited low-income HIV patients of the Pharmacies and, in the process, put those vulnerable patients’ health and safety at risk by both paying patients kickbacks to fill their medications at the pharmacies, albeit with black-market drugs, and by encouraging patients to sell back their medications instead of taking them as they were prescribed to control their HIV infections.

The defendants spent the proceeds of the scheme to purchase luxury cars, including a 2021 Mercedes-Benz Maybach with an estimated fair market value of approximately $245,000, millions of dollars in waterfront real-estate, designer clothes, and jewelry.

*                *                *

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

CORVALAN, 41, of the Bronx, New York, is charged with one count of conspiracy to commit wire fraud and health care fraud, which carries a maximum potential sentence of 20 years in prison; one count of conspiracy to commit money laundering, which carries a maximum potential sentence of 20 years in prison; one count of conspiracy to violate the anti-kickback statute, which carries a maximum potential sentence of five years in prison; and aggravated identity theft, which carries a mandatory consecutive sentence of two years in prison.

FERNANDEZ, 24, BAEZ, 22, and MEDINA, 27, all of the Bronx, New York, are charged with one count of conspiracy to commit wire fraud and health care fraud, which carries a maximum potential sentence of 20 years in prison; one count of conspiracy to violate the anti-kickback statute, which carries a maximum potential sentence of five years in prison; and aggravated identity theft, which carries a mandatory consecutive sentence of two years in prison.

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

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

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

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

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

Damian Williams, the United States Attorney for the Southern District of New York, and Michael J. Driscoll, Assistant Director in Charge of the New York Field Office of the Federal Bureau of Investigation (“FBI”), announced today the arrest of KEVIN CHIU, a former business relationship manager at a financial institution headquartered in Manhattan, for a years-long bank fraud and embezzlement scheme to steal over $2 million from his former clients’ accounts.  CHIU was arrested this morning in Brooklyn and will be presented today before U.S. Magistrate Judge James L. Cott. 

U.S. Attorney Damian Williams said: “As alleged, for years, Chiu abused his position as a business relationship manager at a financial institution to steal millions from his clients, including elderly clients.  Today’s arrest is yet another example of this Office’s commitment to holding accountable those who commit financial frauds, especially those who are in positions of trust within financial institutions.”

FBI Assistant Director Michael J. Driscoll said: “The complaint today alleges that Chiu exploited his access to facilitate a years-long scheme to embezzle more than two million dollars from his clients.  Financial crimes like this ultimately undermine the public’s confidence in the financial system.  Today’s arrest should serve as reminder to anyone willing to take advantage of their employment to steal funds - the FBI will ensure you are held accountable in the criminal justice system.”

As alleged in the Complaint:[1]

From at least on or about October 28, 2020, through on or about June 29, 2022, CHIU engaged in a scheme to steal from his clients’ accounts by using fraudulent transaction forms to transfer funds out of their accounts.  He asked at least one elderly client to sign blank transaction forms when she was meeting with CHIU in person and provided that client with fake account statements so she would not know the true balance of her account, which CHIU had largely drained. 

In addition, CHIU transferred stolen funds from some client accounts to others from which he already had stolen to conceal the fraud.  In total, CHIU stole over $2 million from his former clients, several of whom were elderly individual clients. 

CHIU used the money he stole to purchase securities and trade in the market.  He also used the funds for personal expenses.

*                *                *

CHIU, 32, of Brooklyn, New York, is charged with one count of bank fraud, which carries a maximum sentence of 30 years in prison; one count of embezzlement by a bank employee, which carries a maximum sentence of 30 years in prison; one count of money laundering, which carries a maximum sentence of 20 years in prison; and one count of aggravated identity theft, which carries a mandatory sentence of two years in prison. 

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

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

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

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 Lisa F. Garcia, the Regional Administrator of the U.S. Environmental Protection Agency (“EPA”), announced today that the United States entered into Consent Decrees settling a civil lawsuit against the principals of CISNE NY CONSTRUCTION, INC. (“CISNE”) — EDISON RUILOVA and JOSE PACCHA — for violations of the Toxic Substances Control Act (“TSCA”) and EPA’s Renovation, Repair, and Painting Rule (“RRP Rule”).  Defendants violated provisions of TSCA and the RRP Rule that protect public health by reducing the risk of lead poisoning during renovations in residential buildings that may contain lead paint.
U.S. Attorney Damian Williams said: “CISNE NY Construction, Inc. put the public health at risk by failing to abide by lead-safe work practices during renovations of residential buildings.  These consent decrees will help ensure that CISNE NY’s principals abide by safety standards moving forward and send a message that companies and the individuals that run them cannot prioritize profits over complying with health and safety regulations.”

EPA Regional Administrator Lisa F. Garcia said: “Protecting children from the harmful effects of lead exposure is a top priority for EPA.  In New York, where most housing predates the 1978 federal ban on lead in residential paint, lead exposure is a critical public health concern, particularly for children.  Exposure to chips and dust from lead-based paint can cause irreversible brain damage and other debilitating effects, making it essential for renovators to be certified and trained in lead-safe work practices and to implement these practices when disturbing lead-based paint in homes.  EPA remains committed to enforcing these vital federal requirements and increasing accountability and awareness to safeguard families and workers from lead exposure.”

The Consent Decrees, which are subject to public comment and approval by the District Court, would resolve a lawsuit filed in Manhattan federal court in 2022, which alleged that CISNE, its principals EDISON RUILOVA and JOSE PACCHA, and several related entities, violated TSCA and the RRP Rule in the course of renovating several Manhattan apartment buildings.  The lawsuit also alleged that the same defendants violated TSCA and the RRP Rule by failing to provide EPA with records necessary to enable EPA to monitor the defendants’ compliance. 

In the Consent Decrees entered today, JOSE PACCHA and EDISON RUILOVA admitted, acknowledged, and accepted responsibility for the fact that they were the principals of CISNE who were responsible for ensuring the firm’s compliance with the RRP Rule in 2017 and 2018 and that CISNE “violated the RRP Rule and TSCA” as a result of the following conduct during two Manhattan renovation projects: 

• Failing to obtain an RRP firm certification prior to conducting renovation work;
• Failing to have a certified renovator direct the renovations and to ensure that all other persons performing the renovations received training on lead-safe work practices;
• Failing to post warning signs defining the work areas and cautioning occupants and other persons not involved in the renovation activities to keep out;
• Failing to provide an EPA pamphlet on lead hazards, The Lead-Safe Certified Guide to Renovate Right: Important Lead Hazard Information for Families, Child Care Providers, and Schools, to the owner of the units being renovated;
• Failing to contain the renovation work areas to minimize the risk of lead exposure;
• Failing to clean the work areas after the renovations were completed to ensure that no dust, debris, or residue remained in those areas; and
• Failing to make available to EPA the records necessary to demonstrate compliance with the RRP Rule.

*                *                *

Pursuant to the Consent Decrees, EDISON RUILOVA and JOSE PACCHA will each pay $25,000 in civil penalties, an amount based on each individual’s documented inability to pay the full civil penalty for which he otherwise would be liable.  Further, the Consent Decrees require each individual to receive training before conducting future RRP Rule-covered work and require them to operate any future renovation firm that they own, operate, or control in compliance with safe work practices and other RRP Rule requirements.  Failure to comply with the Consent Decrees will result in significant additional penalties. 

To provide public notice and afford members of the public the opportunity to comment on the Consent Decrees, the Consent Decrees will be lodged with the District Court for a period of at least 30 days before it is submitted for the Court’s approval.

Mr. Williams thanked the attorneys and enforcement staff at EPA Region 2 for their critical work in this matter.

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

Damian Williams, the United States Attorney for the Southern District of New York, announced today the sentencing of all seven defendants who previously pled guilty to defrauding the federal “E-Rate” program, designed to provide information technology to underprivileged schools, in connection with E-Rate funds provided to private religious schools in Rockland County, New York.  PERETZ KLEIN, BEN KLEIN, MOSHE SCHWARTZ, SIMON GOLDBRENER, SHOLEM STEINBERG, ARON MELBER, and SUSAN KLEIN had each pled guilty in White Plains federal court to one count of conspiring against the United States and were sentenced in proceedings held between June 2022 and today.  PERETZ KLEIN was sentenced to 48 months in prison; BEN KLEIN was sentenced to 27 months in prison; MOSHE SCHWARTZ was sentenced to 27 months in prison; SIMON GOLBRENER was sentenced to 24 months in prison; SHOLEM STEINBERG was sentenced to 12 months and one day in prison; AARON MELBER was sentenced to nine months in prison; and SUSAN KLEIN was sentenced to time served.  U.S. District Judge Kenneth M. Karas imposed all sentences.

U.S. Attorney Damian Williams said: “The seven defendants who have now pled guilty in this case sought to steal from our most vulnerable population: economically disadvantaged children.  The defendants created elaborate schemes with complete disregard for the fact that the money they selfishly stole should have gone towards providing children with much-needed technology to further their education and brighten their future.  Each defendant now faces serious penalties for their callous crime.”

According to the allegations made in the Indictment and the Informations to which the defendants pled guilty, as well as the defendants’ admissions in court:

The E-Rate program distributes funds to schools and libraries mostly serving economically disadvantaged children so that those institutions can afford needed telecommunication services, internet access, and related equipment.  Over 30,000 applications from schools and libraries seeking funds to serve economically disadvantaged children were received each year during the relevant time period, and every year, requests for E-Rate funds have exceeded funds available.  In order to obtain those funds, educational institutions certify that they are purchasing equipment and services from a private vendor.  If approved, the program defrays the cost by up to 90%.  The educational institution is supposed to enter into an open bidding process in order to select a vendor, and the educational institution and vendor then submit a series of certifications that they comply with a number of requirements of the E-Rate program.  A school applying for E-Rate funds may employ a consultant, but that consultant must be independent of the vendors competing to sell E-Rate funded equipment and services.

The schools at issue in this case never received millions of dollars’ worth of these items and services for which the defendants billed the E-Rate program.  In other cases, the schools and the defendants requested hundreds of thousands of dollars of sophisticated technology that served no real purpose for the student population.  For example, from 2009 through 2015, one day care center that served toddlers from the ages of two through four requested over $700,000 – nearly $500,000 of which was ultimately funded – for equipment and services – including video conferencing and distance learning, a “media master system,” sophisticated telecommunications systems supporting at least 23 lines, and high-speed internet – from companies controlled by certain defendants.  In still other instances, the schools received equipment and services that fulfilled the functions for which the schools had requested E-Rate funds (such as providing the school with internet access), but the schools and the defendants materially overbilled the E-Rate program for the items provided in order to enrich themselves at the expense of the underprivileged children the program was designed to serve.

The defendants also perverted the fair and open bidding process required by the E‑Rate program.  Defendants who held themselves out as independent consultants working for the schools in truth worked for and were paid by other defendants who controlled vendor companies.  These defendants presented the schools with forms to sign or certify, awarding E-Rate funded contracts to companies owned by several defendants.  As a result of false and misleading filings, the defendants received millions of dollars in E-Rate funds for equipment and services that they did not, in fact, provide and which the schools did not use, and the defendants purporting to act as consultants accepted payments totaling hundreds of thousands of dollars from the vendors, despite falsely presenting themselves as independent of the vendors.

In return for their participation in the scheme to defraud the E‑Rate program, certain schools and school officials received a variety of improper benefits from certain defendants, including a percentage of the funds fraudulently obtained from E-Rate for equipment and services that were not, in fact, provided to the schools; free items paid for with E-Rate funds but not authorized by the program, such as cellphones for school employees’ personal use and alarm systems and security equipment (which the E-Rate program does not authorize) installed at the schools; and free services for which the E-Rate program authorizes partial reimbursement (such as internet access) but for which the schools did not – contrary to their statements in filings – make any payment at all.

PERETZ KLEIN, SUSAN KLEIN, BEN KLEIN, and SHOLEM STEINBERG held themselves out as vendors to schools participating in the E‑Rate program.  Corporations controlled by these defendants requested over $35 million in E‑Rate funds and received over $14 million in E‑Rate funds from in or about 2010 to in or about 2016.  Each of these defendants has now admitted that the companies they controlled did not, in fact, provide much of the equipment for which they billed the federal government.

SIMON GOLDBRENER and MOSHE SCHWARTZ held themselves out as consultants who worked for educational institutions supposedly helping schools to participate in the E-Rate program by, among other things, holding a fair and open bidding process to select cost-effective vendors.  GOLDBRENER and SCHWARTZ have now admitted that they were, in fact, paid hundreds of thousands of dollars by the vendors to complete and file false E-Rate documents that circumvented the bidding process and resulted in the payment of millions of dollars to the vendors.

ARON MELBER was an official at a private religious school in Rockland County, New York, that participated in the E-Rate program with some of the defendants.  MELBER has now admitted that he filed false certifications with the E-Rate program, falsely claiming to have obtained authorized E‑Rate funded equipment and services from vendors selected through a fair and open bidding process.

Each defendant pled guilty to one count of a conspiracy to commit wire fraud.

*                *                *

PERETZ KLEIN, 68, of Spring Valley, New York, was sentenced on June 8, 2022, to 48 months in prison followed by 24 months of supervised release and was ordered to forfeit $1,144,288.37 and to pay restitution of the same amount. 

BEN KLEIN, 43, of Monsey, New York, was sentenced on October 19, 2022, to 27 months in prison followed by 24 months of supervised release and was ordered to forfeit $412,586.37 and to pay restitution of the same amount. 

MOSHE SCHWARTZ, 50, of Monsey, New York, was sentenced on June 9, 2022, to 27 months in prison followed by 24 months of supervised release and was ordered to forfeit $275,160.00 and to pay restitution of the same amount. 

SIMON GOLDBRENER, 59, of Monsey, New York, was sentenced on November 7, 2022, to 24 months in prison followed by 24 months of supervised release and was ordered to forfeit $479,357.18 and to pay restitution of the same amount.

SHOLEM STEINBERG, 43, of Monsey, New York, was sentenced on November 7, 2022, to 12 months and one day in prison followed by 24 months of supervised release and was ordered to forfeit $191,423.50 and to pay restitution of the same amount. 

ARON MELBER, 47, of Monsey, New York, was sentenced on February 28, 2023, to nine months in prison followed by 24 months of supervised release and was ordered to forfeit $127,654.55 and to pay restitution of the same amount.

SUSAN KLEIN, 62, of Spring Valley, New York, was sentenced on June 8, 2022, to time served followed by 12 months of supervised release and was ordered to forfeit $1,144,288.37 and to pay restitution of the same amount. 

Mr. Williams thanked the Federal Bureau of Investigation, the Federal Communications Commission - Office of the Inspector General, and the Rockland County District Attorney’s Office for their outstanding work on the investigation. 

This case is being handled by the Office’s White Plains Division.  Assistant U.S. Attorneys Michael D. Maimin, Hagan Scotten, and Vladislav Vainberg are in charge of the prosecution.

Damian Williams, the United States Attorney for the Southern District of New York, announced that TRACII SHOW HUTSONA was sentenced today to 51 months in prison for her embezzlement of more than one million dollars as part of a confidence scheme.  The sentence was imposed by U.S. District Judge Jesse M. Furman.

U.S. Attorney Damian Williams said: “Not long after serving a lengthy sentence for a previous federal conviction, Tracii Show Hutsona betrayed her employer’s trust by misusing her employer’s financial information to fund her own luxury lifestyle for years.  Her desire to live the high life at the expense of her victim has placed her back where she began — facing another substantial federal sentence.”

According to public court filings and statements made in Court:     

Between October 2015 and November 2019, SHOW HUTSONA engaged in a confidence scheme to embezzle over a million dollars from a victim (the “Victim”).  The Victim hired SHOW HUTSONA to serve as a personal assistant at the Victim’s home and trusted SHOW HUTSONA with access to the Victim’s financial information.  Just a few months after she was hired, and while SHOW HUTSONA was on supervised release in connection with a previous federal fraud conviction in California, SHOW HUTSONA began using that access to finance her own luxury lifestyle. 

In February 2016, SHOW HUTSONA opened a credit card account in the Victim’s name without the Victim’s knowledge or authorization.  In September 2018, after the Victim learned about significant expenditures from the Victim’s financial accounts, the Victim confronted SHOW HUTSONA, who confessed that she had used the Victim’s financial accounts for her own personal use and repeatedly apologized to the Victim.  Shortly thereafter, SHOW HUTSONA and the Victim signed an agreement, which stated, among other things, that SHOW HUTSONA had obtained an “additional user card” (the “User Card”) and that SHOW HUTSONA “had been using [the Victim’s] account since July 2016.”  The agreement further stated that SHOW HUTSONA needed to repay $307,498.02 to the Victim.  Having regained the Victim’s trust, in the days and months after executing the agreement with the Victim, SHOW HUTSONA continued to use the Victim’s financial accounts without permission, including through use of the User Card, which SHOW HUTSONA had represented to the Victim had been destroyed. 

In September 2019, the Victim terminated her relationship with SHOW HUTSONA after discovering additional unauthorized charges made by SHOW HUTSONA.  The Victim reported fraudulent expenditures on the Victim’s financial accounts to her bank.  During the bank’s subsequent investigation, SHOW HUTSONA faxed the bank a fraudulent “Power of Attorney” document (the “Power of Attorney”), which appeared to be signed by the Victim and notarized.  The Power of Attorney stated that SHOW HUTSONA would serve as the Victim’s “attorney-in-fact” and have control over the Victim’s “Banking and other financial institution transactions.”  In fact, the Victim did not provide SHOW HUTSONA with any such power of attorney, the Victim did not sign the document, and the notary did not notarize it. 

During the scheme, SHOW HUTSONA, without authorization, added herself as an additional account holder to at least two checking accounts and a savings account maintained by the Victim and obtained multiple credit cards in her own name but drawn on accounts of the Victim (collectively, the “Fraud Accounts”).  Over the course of approximately four years, SHOW HUTSONA used the Fraud Accounts to steal over $1 million from the Victim.  SHOW HUTSONA used the proceeds of her fraud scheme to make payments to SHOW HUTSONA’s concierge business and for personal expenses, such as mobile phones, restaurants and nightclubs, luxury hotels, and jewelry.  To cover the purchases, SHOW HUTSONA transferred hundreds of thousands of dollars into the Fraud Accounts from a checking account of the Victim and two 529 college savings accounts maintained by the Victim on behalf of the Victim’s children. 

*                *                *

In addition to her prison term, SHOW HUTSONA, 54, of Scottsdale, Arizona, was sentenced to three years of supervised release.  She was further ordered to forfeit $1,148,759.28 and to pay restitution in the amount of $1,148,759.28.

Mr. Williams praised the outstanding investigative work of the United States Secret Service and the New York City Police Department.  

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

Damian Williams, the United States Attorney for the Southern District of New York, announced that JAMAL ADAMSON, a/k/a “J-Rock,” was sentenced today to 25 years in prison for the June 20, 2010, murder of David Moore in East Harlem and other racketeering offenses.  ADAMSON previously pled guilty before United States District Judge Gregory H. Woods, who imposed the sentence.   

U.S. Attorney Damian Williams said: “Jamal Adamson callously took the life of another during a gang-related shooting.  As today’s sentence shows, those who commit acts of gang violence in New York City are subject to spending serious time in federal prison.”

As alleged in the Indictment and other documents filed in federal court and based on statements made in public court proceedings:

The Cash Money Boys (“CMB”) gang was a criminal enterprise involved in committing numerous acts of violence, including murder, attempted murder, robberies, and assaults, in and around Manhattan.  Members and associates of CMB engaged in violence to retaliate against rival gangs, to promote the standing and reputation of CMB, and to protect the gang’s narcotics sales. 

From at least in or about 2006 to in or about 2017, members and associates of CMB regularly distributed crack cocaine and other drugs in the vicinity of Lexington Avenue between East 122nd Street and East 123rd Street.  CMB controlled drug sales within this area by preventing non-members, outsiders, and rival drug dealers from selling drugs in the area controlled by the gang.  This included gang members shooting at, assaulting, and/or robbing other drug dealers and members of rival gangs who entered CMB’s territory.  

On June 20, 2010, after members of CMB and a rival gang got into a physical altercation, ADAMSON shot and killed David Moore, 23, near the corner of East 122nd Street and Lexington Avenue. 

*                *                *

In addition to his prison sentence, ADAMSON, 28, of New York, New York, was sentenced to three years of supervised release.    

Mr. Williams praised the outstanding work of the Special Agents of the United States Attorney’s Office for the Southern District of New York and the New York City Police Department.   

The case is being prosecuted by the Office’s Violent and Organized Crime Unit.  Assistant U.S. Attorneys Maurene Comey, Dominic A. Gentile, Christopher J. Clore, and Peter J. Davis are in charge of the prosecution.

Damian Williams, the United States Attorney for the Southern District of New York, announced today that ION VIOREL IONITOIU, a Romanian national who resided in Spain, was extradited to the United States on bank fraud and money laundering offenses arising from a scheme to launder money derived from an online vehicle sale scam that took in at least $5 million from defrauded consumers. 

U.S. Attorney Damian Williams said: “Ionitoiu is the seventh member of an operation that laundered fraud proceeds for online swindlers who preyed on U.S. consumers who has been charged, and he will now face justice for his actions.  This Office is committed to rooting out both those who commit the underlying fraud and their enablers, regardless of where they reside.”

As alleged in the Indictment, and based on other documents filed in court and statements made in court: [1]

From at least March 2019 through at least April 2021, ION VIOREL IONITOIU was an intermediary between co-conspirators who defrauded consumers who were trying to buy vehicles online and a money laundering crew that operated in Brooklyn, New York.  Other members of the conspiracy, pretending to represent car dealerships, advertised vehicles that they did not own and were not authorized to sell on fake websites with domain names that sounded like legitimate car dealerships or through online marketplaces like Craigslist and eBay.  Victims who responded to those advertisements and negotiated a purchase price were instructed by the purported sellers to wire payment to bank accounts in New York.  Unbeknownst to the victims, the accounts were opened at IONITOIU’s direction by co-conspirators who operated in Brooklyn, including KAROL KAMINSKI, STANISLAV TUNKEVIC, ARTURAS GILYS, and SVETLANA VAIDOTIENE.  Once the payments cleared, the account owners quickly withdrew the funds before the victims realized they had been defrauded.  The victims never received the vehicles they thought they had bought or any refunds from the fake sellers.  In total, dozens of victims were defrauded of a total of at least $5 million. 

*                *                *

ION VIOREL IONITOIU, 34, a Romanian national and Spanish resident, was extradited to the United States on February 24, 2023.  IONITOIU is charged with one count of conspiracy to commit bank fraud, which carries a maximum sentence of 30 years in prison and a maximum fine of $1,000,000, and one count of conspiracy to commit money laundering, which carries a maximum sentence of 20 years in prison and a maximum fine of $500,000 or twice the value of the property involved in the transaction. 

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

KAROL KAMINSKI, 33, STANISLAV TUNKEVIC, 48, and ARTURAS GILYS, 41, all of Lithuania, pled guilty to one count of conspiracy to commit bank fraud.  They are scheduled to be sentenced on March 28, 2023, by U.S. District Judge Analisa Torres.

SVETLANA VAIDOTIENE, 55, of Lithuania, was sentenced to time-served (10 months and eight days) on January 17, 2023.  She was also ordered to forfeit and to make restitution in the amount of $271,000 and has been removed from the United States.

Mr. Williams praised the outstanding investigative work of Homeland Security Investigations.  He also thanked the U.S. Department of Justice’s Office of International Affairs of the Department’s Criminal Division, the United States Marshals Service, the Prosecutor General’s Office of the Republic of Lithuania, and the Lithuanian Criminal Police Bureau for their assistance in this investigation.

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

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

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

"For 977 days, Michael Scott Moore, an American journalist, was held hostage in Somalia by pirates.  Today, a unanimous jury found two key players in Moore's years-long captivity guilty on all counts: Mohamed Tahlil Mohamed and Abdi Yusuf Hassan.  Tahlil, a Somali Army officer, left his post to take command of the pirates holding Moore captive and obtained the machineguns and grenade launchers used to threaten and hold Moore.  Hassan, the Minister of Interior and Security for the province in Somalia where Moore was held hostage, abused his government position and led the pirates' efforts to extort a massive ransom from Moore's mother.  Today's guilty verdicts show that neither time nor distance can weaken our resolve to hold those who dare to take Americans hostage overseas fully accountable for their crimes, and to see justice done for the victims of such brutal and brazen attacks against Americans."

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 the arrest of BHASKARRAY BAROT for engaging in a years-long scheme to defraud his former employer out of approximately $4.4 million.  BAROT was arrested this morning in Queens, New York, on a criminal Complaint and was presented before a magistrate judge in the Southern District of New York. 

U.S. Attorney Damian Williams said: “As alleged, over the course of years, Barot created fraudulent invoices and processed them for payment at the Manhattan-based company where he used to work as a procurement manager.  Barot designed the invoices to closely resemble the invoices that the company received from real vendors and other entities owed payment from the company.  But the fraudulent invoices differed in a crucial way:  they directed payment into Barot’s pocket.  Today’s arrest demonstrates that this Office will seek justice for companies that fall victim to corporate theft.”

FBI Assistant Director Michael J. Driscoll said: "As the charges today allege, Barot operated a years-long deception, scamming his employer out of millions of dollars through bogus invoices.  Duplicitous schemes like this bring undue harm to the greater financial community.  The FBI will continue to investigate complex financial crimes and hold the transgressors accountable in the criminal justice system."

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

From at least in or about July 2018, up to and including at least August 2022, BAROT engaged in a scheme to defraud his former employer (the “Company”) of approximately $4.4 million through fake invoices designed to resemble those received from legitimate vendors of the Company.  BAROT used his position as a procurement manager at the Company to process the fraudulent invoices for payment.  When doing so, he often affixed the fake invoices to email messages that he, in some cases, sent in the names of employees of the Company’s real vendors so that it would appear as though the real vendors were seeking payment on the fake invoices.   

The fake invoices, however, stated that payment should be made to entities with names that often differed slightly from those of the real vendor companies.  BAROT then incorporated companies and opened bank accounts in the names of some of the entities listed for payment on the fake invoices so that he could collect the payments that the Company made on the fake invoices.

BAROT repeated these fraudulent tactics with more than a dozen fictitious entities and caused payment to be made by the Company on approximately 40 fake invoices, totaling approximately $4.4 million.

*                *                *

BAROT, 32, of Queens, New York, is charged with one count of wire fraud, which carries a maximum potential sentence of 20 years in prison, and one count of aggravated identity theft, which carries a mandatory consecutive sentence of two years in prison.

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

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

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, Andrew C. Adams, the Director of Task Force KleptoCapture, Ivan J. Arvelo, the Special Agent in Charge of the New York Field Office of Homeland Security Investigations (“HSI”), and Maged Behnam, Acting Special Agent in Charge of the Miami Field Office of the Federal Bureau of Investigation (“FBI”), announced today the filing of a civil forfeiture complaint against six real properties located in New York, New York, Southampton, New York, and Fisher Island, Florida, worth approximately $75 million.  The Complaint alleges that the properties, which are beneficially owned by Russian oligarch Viktor Vekselberg, are the proceeds of sanctions violations and were involved in international money laundering in promotion of sanctions violations committed by, among others, Vladimir Voronchenko, a/k/a “Vladimir Vorontchenko,” who was indicted on February 7, 2023. 

U.S. Attorney Damian Williams said: “Today’s action, filed on the anniversary of Russia’s full-scale invasion of Ukraine, seeks forfeiture of six luxury properties owned by Viktor Vekselberg that his associate Vladimir Voronchenko maintained by funneling millions of dollars into the United States.  With the filing of this complaint, the United States sends a strong message to those who violate sanctions and engage in money laundering that the United States will use every available tool to forfeit criminal proceeds and will use that money to help our allies in Ukraine under the newly enacted law.”

Director of Task Force KleptoCapture Andrew C. Adams said: “Strawmen, corrupt professionals, and shell companies may be the hallmarks of money laundering and sanctions evasion, but they are obstacles that diligent, dedicated investigators and prosecutors will surmount.  Today’s filing marks yet another step that the Department of Justice and our partners at HSI and FBI have taken toward dislodging ill-gotten gains from those who would attempt to evade U.S. sanctions, and toward making the value of these properties available for aid to Ukraine.”

HSI Special Agent in Charge Ivan J. Arvelo said: “For years, Russia’s weaponization of corruption has relied on opaque legal structures – and Western enablers – to move, hide, and spend stolen wealth, enriching its oligarchs and ultimately resourcing the war in the Ukraine.  Since the invasion, HSI New York and our partners have worked tirelessly to cut Russia’s corruptocrats and their assets out of the American financial system.  Today we continue our active measures and remove jewels from the crown of yet another oligarch, stripping him of the luxury assets he so cherishes.”

FBI Acting Special Agent in Charge Maged Behnam said: “The mission of the interagency Task Force KleptoCapture is to enforce sanctions, export restrictions, and economic countermeasures imposed by the United States in response to Russia’s unprovoked military invasion of Ukraine one year ago.  This civil forfeiture complaint is an example of the Task Force’s ongoing work to fulfill this mission.  I commend the hard work, dedication, and cooperation of this team of professionals.”

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

On April 6, 2018, the U.S. Department of the Treasury’s Office of Foreign Assets Control (“OFAC”) designated Vekselberg as a Specially Designated National (“SDN”) in connection with its finding that the actions of the Government of the Russian Federation in Ukraine constituted an unusual and extraordinary threat to the national security and foreign policy of the United States.  On or about March 11, 2022, OFAC redesignated Vekselberg as an SDN and blocked Vekselberg’s yacht and private airplane.

Prior to his designation by OFAC, between in or about 2008 and in or about 2017, Vekselberg, through a series of shell companies, acquired six real properties in the United States, specifically, (i) two apartments on Park Avenue in New York, New York, (ii) an estate in Southampton, New York, (iii) two apartments on Fisher Island, Florida, and (iv) a penthouse apartment also on Fisher Island, Florida (collectively, “the Properties” or the “Defendants-in-rem”).  As of the date of the Complaint, the Properties were worth approximately $75 million. 

Voronchenko, Vekselberg’s close friend and business associate, retained an attorney (the “Attorney”), who practiced in New York, New York, in connection with the acquisition of the Properties.  The Attorney also managed the finances of the Properties, including by paying common charges, property taxes, insurance premiums, and other fees associated with the Properties in U.S. dollar transactions from the Attorney’s interest on lawyer’s trust account (“IOLTA account”).

Prior to Vekselberg’s designation as an SDN, between approximately February 2009 and March 2018, companies owned by Vekselberg sent approximately 90 wire transfers totaling approximately $18.5 million to the IOLTA account.  At the direction of Voronchenko and his family member who lived in Russia, the Attorney used these funds to make various U.S. dollar payments to maintain and service the Properties. 

Immediately after Vekselberg’s designation as an SDN, the source of the funds used to maintain and service the Properties changed.  The IOLTA Account began to receive wires from a bank account in the Bahamas held in the name of a shell company controlled by Voronchenko, Smile Holding Ltd., and from a Russian bank account held in the name of a Russian national who was related to Voronchenko.  Between approximately June 2018 and March 2022, approximately 25 wire transfers totaling approximately $4 million were sent to the IOLTA account.  Although the source of the payments changed, the management of the payments remained the same as before: Voronchenko and his family member directed the Attorney to use these funds to make various U.S. dollar payments to maintain and service the Properties.  Additionally, after Vekselberg was sanctioned in 2018, Voronchenko and others tried to sell both the Park Avenue apartment and the Southampton estate.  No licenses from OFAC were applied for or issued for any of these payments or attempted transfers.  

On or about May 13, 2022, federal agents served Voronchenko on Fisher Island with a Grand Jury subpoena, which called for his personal appearance for testimony and his production of documents, including documents relating to the Properties.  Approximately nine days later, on or about May 22, 2022, Voronchenko took a flight from Miami, Florida, to Dubai, United Arab Emirates, and then went to Moscow, Russia.  Voronchenko failed to appear before the Grand Jury and has not returned to the United States.

*                *                *

The Properties subject to the forfeiture action are as follows:

• 19 Duck Pond Lane, Southampton, New York 11968;
• 515 Park Avenue, Units 21 and 2I, New York, New York 10022;
• 7002 Fisher Island Drive, Unit 7002 PH2, Miami Beach, Florida 33109; and
• 7183 Fisher Island Drive, Units 7182 and 7183, Miami Beach, Florida 33109.

Mr. Williams praised the outstanding work of the New York and Miami field offices of HSI and the FBI.  Mr. Williams further thanked the Department of Justice’s National Security Division and Office of International Affairs and OFAC for their assistance and cooperation in this investigation.

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

This case is being handled by the Office’s Money Laundering and Transnational Criminal Enterprises Unit.  Assistant U.S. Attorneys Jessica Greenwood, Joshua A. Naftalis, and Sheb Swett are in charge of this action. 

[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, and Michael J. Driscoll, the Assistant Director in Charge of the New York Field Office of the Federal Bureau of Investigation (“FBI”), announced today the unsealing of an Indictment charging JAMES ANDREW STILES, a/k/a “Andrew Stiles,” and EDWARD GRAY STILES, a/k/a “Gray Stiles,” with multiple counts of securities fraud and conspiracy to commit both wire fraud and securities fraud in connection with a scheme to commit insider trading based on misappropriated information about potential government loans to be made to the Eastman Kodak Company to finance the production of COVID-19-releated pharmaceutical components.  ANDREW STILES was arrested this morning in South Carolina, and GRAY STILES was arrested this morning in Virginia.

U.S. Attorney Damian Williams said: “By stealing confidential business information, Andrew Stiles allegedly betrayed the trust and confidence of his employer — a pharmaceutical company working to help the public at the height of the COVID-19 pandemic — and schemed with his cousin, Gray Stiles, to collectively make more than a million dollars of illegal profits.  Today’s arrests show that this Office will continue to prosecute those who seek to profit at the expense of the integrity and fairness of our financial markets.”

FBI Assistant Director Michael J. Driscoll said: “As alleged, the defendants are the latest examples of criminal actors relying on material non-public information to trade securities for their own profit.  When individuals motivated by greed illegally tip the scales in their favor, public confidence in the integrity of our financial markets is eroded.  Investigating and holding accountable the perpetrators of these schemes remains a priority for the FBI.”

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

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

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

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

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

ANDREW:     600+.  Maybe 2 weeks out

GRAY:            I can live with that hahaha

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

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

*                *                *

ANDREW STILES, 37, of South Carolina, and GRAY STILES, 37, of Virginia, are each charged with three counts of securities fraud, each of which carries a maximum sentence of 20 years in prison, and one count of conspiracy to commit wire fraud and securities fraud, which carries a maximum sentence of five years in prison.

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

Mr. Williams praised the outstanding work of the FBI.

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

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

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

Damian Williams, the United States Attorney for the Southern District of New York, and Keechant L. Sewell, Commissioner of the New York City Police Department (“NYPD”), announced the unsealing today of an Indictment charging KEVIN PEREZ, a/k/a “Kay Flock,” a/k/a “Kay,” a/k/a “KK,” DEVON MASON, a/k/a “BJ,” ERVIN BEAMON, a/k/a “EJ,” NICHOLAS JOHNSON, a/k/a “Nick,” SEAN SMITH, a/k/a “Sticky,” and JOSSI CASTRO, a/k/a “Jesse,” with racketeering conspiracy and other crimes related to their membership in “Sev Side,” or “DOA,” a street gang based in the Bronx, New York.  On January 26, 2023, a Superseding Indictment was unsealed charging ISZAYAH ROWSON, a/k/a “Zay Munna,” a/k/a “Zay,” and MICHAEL GANT, a/k/a “AP,” with racketeering conspiracy and other crimes related to their membership in “Third Side,” a street gang also based in the Bronx, New York, that was closely affiliated with Sev Side.  PEREZ was also charged with the gang-related murder of Hwascar Hernandez, who was shot to death on December 16, 2021, in the Hamilton Heights section of Upper Manhattan.  PEREZ, MASON, BEAMON, JOHNSON, ROWSON, and GANT were further charged with multiple other violent crimes in connection with the Sev Side and Third Side gangs, including attempted murder and assault with a dangerous weapon arising from seven shootings committed in the Bronx between June 2020 and February 2022.  The Sev Side Indictment is assigned to United States District Judge Lewis J. Liman.  The Third Side Indictment is assigned to United States District Judge Paul A. Engelmayer.

ROWSON and GANT are currently in federal custody in connection with the charges contained in the Third Side Superseding Indictment.  MASON, JOHNSON, and CASTRO were arrested this morning in the Bronx and are expected to be presented later today before Magistrate Judge Valerie Figueredo.  PEREZ, who was in state custody, has been transferred to federal custody and is also expected to be presented later today.  SMITH and BEAMON are fugitives.

U.S. Attorney Damian Williams said: “Over a span of several years, the members of these gangs allegedly terrorized neighborhoods in the Bronx and Manhattan by killing and shooting other people.  Through these charges, we will hold Sev Side and Third Side members responsible for plaguing our communities with gun violence.”

NYPD Commissioner Keechant L. Sewell said: “The deadly nexus of gangs and illegal guns in New York City is a grave threat to public safety in our city.  Combatting this crisis is the NYPD’s top priority, and today’s indictments are another step toward ridding our streets of violence and fear.  I want to thank the U.S. Attorney’s Office for the Southern District of New York and everyone else involved with this case who worked to make our city safer for all the people we serve.”

According to the allegations in the Sev Side Indictment and the Third Side Superseding Indictment and statements previously made on the record in this case and related matters:[1]

From at least 2019 to 2022, members of Sev Side and Third Side, two street gangs based in the 48th Precinct in the Bronx, New York, aligned with one another to terrorize their own and surrounding neighborhoods by committing indiscriminate shootings against members of rival street gangs.  Members of the gangs also promoted the gangs and gun violence on social media and through music they created and promoted, which referenced real acts of violence. 

For years, Sev Side and Third Side engaged in disputes with rival crews in the Bronx and in Manhattan, which resulted in numerous acts of violence, including the following:

• PEREZ murdered Hwascar Hernandez in broad daylight in Manhattan on December 16, 2021;
• PEREZ, GANT, and ROWSON shot at rival gang members on June 20, 2020;
• JOHNSON shot at a rival gang member on June 26, 2020;
• GANT shot at rival gang members on July 7, 2020;
• GANT shot at rival gang members on July 16, 2020;
• ROWSON shot at a rival gang member on December 13, 2020;
• PEREZ, MASON, and BEAMON shot at rival gang members on November 10, 2021; and
• MASON shot at a rival gang member and hit an innocent bystander on February 10, 2022.

*                *                *

A chart containing the names of the defendants who were charged today and on January 26, 2023, and the charges and minimum and maximum penalties they face is attached.  All of the defendants are residents of the Bronx, New York. 

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

Mr. Williams praised the outstanding investigative work of the NYPD and thanked the New York County District Attorney’s Office and the Bronx County District Attorney’s Office for their assistance.

This case is being handled by the Office’s Violent and Organized Crime Unit.  Assistant U.S. Attorneys Elizabeth Espinosa, Jim Ligtenberg, and Ni Qian are in charge of the prosecution.

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

Defendant

Age

Charges

Minimum and Maximum Penalties

KEVIN PEREZ

19

Racketeering Conspiracy, Murder in Aid of Racketeering, Use of a Firearm Resulting in Death, Attempted Murder and Assault with a Dangerous Weapon in Aid of Racketeering, Use of a Firearm for Attempted Murder and Assault with a Dangerous Weapon

Mandatory life in prison or death

DEVON MASON

24

Racketeering Conspiracy, Attempted Murder and Assault with a Dangerous Weapon in Aid of Racketeering, Use of a Firearm for Attempted Murder and Assault with a Dangerous Weapon, Possession of a Firearm with Defaced Serial Number

Maximum of life in prison; mandatory minimum 20 years to run consecutive to any other sentence

ERVIN BEAMON

23

Racketeering Conspiracy, Attempted Murder and Assault with a Dangerous Weapon in Aid of Racketeering, Use of a Firearm for Attempted Murder and Assault with a Dangerous Weapon

Maximum of life in prison; mandatory minimum 10 years to run consecutive to any other sentence

NICHOLAS JOHNSON

21

Racketeering Conspiracy, Attempted Murder and Assault with a Dangerous Weapon in Aid of Racketeering, Use of a Firearm for Attempted Murder and Assault with a Dangerous Weapon

Maximum of life in prison; mandatory minimum 10 years to run consecutive to any other sentence

SEAN SMITH

32

Racketeering Conspiracy, Possession of a Firearm After a Felony Conviction

Maximum of 30 years in prison

JOSSI CASTRO

25

Racketeering Conspiracy

Maximum of 20 years in prison

ISZAYAH ROWSON

22

Racketeering Conspiracy, Attempted Murder and Assault with a Dangerous Weapon in Aid of Racketeering, Use of a Firearm for Attempted Murder and Assault with a Dangerous Weapon; Transportation and Receipt of a Firearm While Under Felony Indictment

Maximum of life in prison; mandatory minimum 20 years to run consecutive to any other sentence

MICHAEL GANT

21

Racketeering Conspiracy, Attempted Murder and Assault with a Dangerous Weapon in Aid of Racketeering, Use of a Firearm for Attempted Murder and Assault with a Dangerous Weapon

Maximum of life in prison; mandatory minimum 20 years to run consecutive to any other sentence

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

Damian Williams, the United States Attorney for the Southern District of New York, announced that RAYMOND WHITE, a/k/a “John Raymond Anthony White,” a/k/a “Raymond Alexander White,” pled guilty yesterday to a scheme in which he defrauded the government by submitting fraudulent documents and false information about himself, his company’s business, and his company’s finances in order to obtain a $4.8 million contract to build a munitions load crew training facility at Joint Base Andrews, Maryland (“Andrews Air Force Base”), and to obtain a bond guarantee from the United States Small Business Administration (“SBA”) in connection with the contract.  WHITE also committed aggravated identity theft by using another person’s signature and Social Security number.  WHITE pled guilty before United States District Judge Edgardo Ramos. 

U.S. Attorney Damian Williams said: “Despite a prior conviction by this Office, Raymond White continued to lie and fabricate information in order to line his own pockets.  This time, White defrauded the government, submitting fraudulent documents and false information to obtain a nearly $5 million construction contract and to obtain a bond guarantee from the SBA in connection with the contract.  This Office will continue to prosecute recidivist fraudsters until the message is clear and they have learned their lesson: committing financial fraud will lead to significant penalties.” 

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

From in or about May 2019 through in or about September 2020, WHITE submitted a bid and related documents to the District of Columbia Army National Guard (“National Guard”) on a contract (the “Contract”) to build a munitions load crew training facility at Andrews Air Force Base.  Prior to obtaining the Contract, WHITE provided the National Guard with fraudulent documents about himself and his company, Kochendorfer Group USA Inc., (“Kochendorfer”).  WHITE submitted similar information to the SBA to obtain a guarantee from the SBA that was a requirement for obtaining the Contract.

The fraudulent documents that WHITE submitted to the National Guard and the SBA included a doctored bank account statement, fake reports from an accounting firm that WHITE had invented, and falsified financials.  These documents purported to show that Kochendorfer had significant cash assets.  In fact, Kochendorfer had virtually no money.  WHITE also submitted a false resume and firm dossier, which described fictitious construction jobs and provided fake references.  WHITE claimed, among other things, that he had overseen the construction of a World Cup soccer stadium in Brazil from 2012 to 2014 when in fact, WHITE was in federal prison during that time frame, serving a prison term on a prior fraud conviction.  WHITE also lied to the SBA by denying that he had any prior criminal convictions.  In furtherance of this fraud on the National Guard and the SBA, WHITE forged the signature of an attorney on a Kochendorfer letter and used another individual’s Social Security number on his SBA guarantee application. 

Based on WHITE’s misrepresentations, the National Guard awarded the Contract to Kochendorfer and the SBA issued a guarantee.  The National Guard terminated the Contract after discovering WHITE’s fraud, and no construction work was ever performed on the site.  As a result of the Contract’s termination, the SBA has fulfilled multiple claims pursuant to the guarantee provided by the SBA.

In 2011, WHITE was convicted following a jury trial in the U.S. District Court for the Southern District of New York under the name “John Raymond Anthony White” for engaging in major fraud, mail fraud, false statements, and witness tampering.  United States v. John Raymond Anthony White, S1 10 Cr. 516 (SHS).  WHITE’s prior conviction arose out of his fraud in the procurement of four government contracts, for a scheme in which he falsely represented that he was a disabled veteran.  As a result of his 2011 federal conviction, WHITE and his prior construction company, Mitsubishi Construction Corporation, were excluded from government contracting for a period of five years.  The name that WHITE used in connection with the Contract — Raymond White — was different from the name he had used in connection with the government contracts at issue in his prior federal conviction. 

*                *                *

WHITE, 58, of New York, New York, pled guilty to one count of major fraud against the United States, which carries a maximum sentence of 10 years in prison; two counts of wire fraud, each of which carries a maximum sentence of 20 years in prison; two counts of false statements and false writings, each of which carries a maximum sentence of five years in prison; and one count of aggravated identity theft, which carries a consecutive mandatory minimum sentence of two years in prison. 

The minimum and maximum potential sentences in this case are prescribed by Congress and are provided here for informational purposes only, as any sentencing of the defendant will be determined by a judge.  Sentencing is scheduled for May 23, 2023, at 11:00 a.m.

Mr. Williams praised the work of the Air Force Office of Procurement Fraud Investigations and Office of Special Investigations and the Army Major Procurement Fraud Unit in this investigation.

The case is being handled by the Office’s General Crimes Unit.  Assistant U.S. Attorneys Edward C. Robinson Jr., Jessica Greenwood, and Frank Balsamello 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 today that FATADE IDOWU OLAMILEKAN, a/k/a “Fatade Olamilekan Idowu,” a/k/a “Olamilekan Idowu Fatade,” a/k/a “Idowu Fatade,” a citizen of Nigeria, was sentenced to five years in prison in connection with a scheme to fraudulently obtain and attempt to obtain millions of dollars of medical equipment, laboratory products, computer equipment and hardware, and other merchandise from suppliers of such merchandise across the United States by impersonating, among other individuals, procurement officials of U.S. state and local governments and educational institutions.  OLAMILEKAN was arrested in Nigeria on October 1, 2021, and extradited from Nigeria to the United States on July 14, 2022, and he has been detained since his arrest.  The defendant previously pled guilty to wire fraud before U.S. District Judge Valerie E. Caproni, who imposed today’s sentence.

U.S. Attorney Damian Williams said:  “Fatade Idowu Olamilekan carried out a sprawling criminal scheme from Nigeria to fraudulently obtain medical equipment and other merchandise by impersonating government officials, including the Chief Procurement Officer for New York.  Olamilekan will now face substantial prison time for his criminal conduct.  This case demonstrates that we will go to great lengths to pursue defendants located abroad who seek to defraud American businesses and individuals.”

According to the allegations in the Indictment and other court documents:

From at least in or about 2018 through at least on or about September 14, 2020, OLAMILEKAN engaged in a scheme to fraudulently obtain and attempt to obtain millions of dollars of medical equipment, laboratory products, computer equipment and hardware, and other merchandise from suppliers of such merchandise across the United States by impersonating, among other individuals, procurement officials of U.S. state and local governments and educational institutions.  In particular, during the COVID-19 pandemic, OLAMILEKAN impersonated the Chief Procurement Officer of New York State in an effort to fraudulently obtain medical equipment, including defibrillators.  OLAMILEKAN engaged in the following conduct to carry out his criminal scheme:

First, OLAMILEKAN engaged in extensive research to identify specific procurement officials of U.S. state and local governments and educational institutions to impersonate and U.S. suppliers of medical, laboratory, and computer equipment to target as part of the scheme.  This research included obtaining information about the current suppliers to the state and local governments and educational institutions OLAMILEKAN sought to impersonate and targeting those suppliers in order to avoid arousing suspicion.  For example, OLAMILEKAN appears to have specifically targeted a medical supplier that was already providing medical equipment to New York State in or to avoid suspicion when OLAMILEKAN, who was impersonating the Chief Procurement Officer of New York State, contacted the supplier to obtain medical equipment.

Second, after OLAMILEKAN identified procurement officials to impersonate, he used aliases and a Lithuanian web hosting company to register email accounts with domains that had slight variations from the legitimate email accounts used by procurement officials in order to “spoof” or impersonate those officials’ email accounts (the “spoofed emailed accounts”).  The spoofed email accounts used by OLAMILEKAN usually had the same username as the procurement official’s email account but added an extra letter or common domain name to the domain of the email account.  These spoofed email accounts were therefore specifically designed to trick suppliers to impersonated procurement officials into thinking the spoofed email accounts were authentic.  In total, OLAMILEKAN registered and used spoofed email accounts impersonating at least (i) eight different procurement officials of state and local governments in California, Illinois, Minnesota, New York, North Carolina, Pennsylvania, Texas, and Vermont; and (ii) three procurement officials of educational institutions located in Georgia and New York.

Third, OLAMILEKAN used the spoofed email accounts to send emails impersonating the procurement official and seeking quotes for medical, laboratory, and computer equipment from targeted suppliers.  These emails typically indicated that the payment terms would be “net 30 days,” which is a standard term of trade credit for government and educational entities that only requires payment for the goods within 30 days of delivery.  OLAMILEKAN therefore impersonated the identities of procurement officials of government entities and educational institutions in order to exploit this industry standard and fraudulently obtain equipment without providing any advance payment information or deposit prior to delivery of the equipment.

Finally, once OLAMILEKAN received a response from a targeted supplier, he provided the supplier with a purchase order containing the forged signature of the impersonated procurement official and an address for a warehouse located in the United States for delivery and storage of the equipment purchased.  Once the purchased items shipped to the warehouse provided by OLAMILEKAN, he typically had the warehouse re-ship the items to another warehouse and, ultimately, from the United States to locations in Australia, the United Kingdom, and/or Nigeria.  OLAMILEKAN also coordinated with the warehouses receiving the shipments from the targeted suppliers using the stolen identity of at least one U.S. resident, thereby further concealing his own identity and avoiding detection of his criminal activity.  Because payment was not due to the suppliers until 30 days after delivery of the equipment, OLAMILEKAN was able to take possession of the equipment prior to detection of the fraud, which typically occurred after payment was not received by the supplier within the 30-day period.

*                *                *

In addition to the prison sentence, OLAMILEKAN, 41, of Lagos, Nigeria, was sentenced to three years of supervised release and ordered to pay restitution and forfeiture of $306,852.18.

Mr. Williams praised the investigative work of the Federal Bureau of Investigation.  Mr. Williams also thanked Nigeria’s Federal Ministry of Justice, Nigeria’s Economic and Financial Crimes Commission (“EFCC”), the Central Authority Unit of Nigeria’s Ministry of Justice, and the Attorney General of the Federal Republic of Nigeria 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 Nigeria.

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

Earlier today, Damian Williams, United States Attorney for the Southern District of New York and Chair of the Attorney General’s Advisory Committee (AGAC), and Breon Peace, United States Attorney for the Eastern District of New York and the Chair of the White Collar Fraud Subcommittee of the AGAC, announced the implementation of the new United States Attorney’s Offices’ Voluntary Self-Disclosure Policy.  The policy, which is effective immediately, details the circumstances under which a company will be considered to have made a voluntary self-disclosure (VSD) of misconduct to a United States Attorney’s Office (USAO).  The policy provides transparency and predictability to companies and the defense bar concerning the concrete benefits and potential outcomes in cases where companies voluntarily self-disclose misconduct, fully cooperate, and timely and appropriately remediate.  The goal of the policy is to standardize how VSDs are defined and credited by USAOs nationwide, and to incentivize companies to maintain effective compliance programs capable of identifying misconduct, expeditiously and voluntarily disclose and remediate misconduct, and cooperate fully with the government in corporate criminal investigations.  The policy was developed pursuant to the Deputy Attorney General’s September 15, 2022, memorandum, “Further Revisions to Corporate Criminal Enforcement Policies Following Discussions with Corporate Crime Advisory Group” (Monaco Memo), which directed each Department of Justice (DOJ) component to develop and publish a VSD policy.

U.S. Attorney Damian Williams said: “The new Voluntary Self-Disclosure Policy is an important step forward in encouraging corporate accountability.  This transparent and clearly delineated policy allows for more predictable outcomes and seeks to incentivize corporations to do the right thing by reporting wrongdoing before detected by regulators and law enforcement.  We hope that this new policy has a long-lasting, nationwide effect in promoting honest corporate culture and leads to more companies getting ahead of financial malfeasance before authorities come to them.”

E.D.N.Y. U.S. Attorney Breon Peace said: “The new Voluntary Self-Disclosure Policy sets a nationwide standard for how U.S. Attorney’s Offices will determine whether a company has made a voluntary self-disclosure, and makes transparent the specific, tangible benefits to a company for making a voluntary self-disclosure fully cooperating, and remediating the criminal conduct.  As a result, no matter where in the country a company operates, it can rely on receiving the same treatment and benefits for voluntarily self-disclosing criminal conduct to a U.S. Attorney’s Office.  We hope and expect that companies, as good corporate citizens, will take advantage of this new policy to report criminal misconduct by employees and agents when they become aware of it, so that individual wrongdoers can be held accountable.  When they do, they will have far better and more predicable outcomes under this policy.” 

The Monaco Memo instructed that each DOJ component that prosecutes corporate crime review its policies on corporate voluntary self-disclosure and, if there was no formal written policy to incentivize self-disclosure, draft and publicly share such a policy.  In response, the AGAC, under the leadership of U.S. Attorney Williams, requested that the White Collar Fraud Subcommittee, under the leadership of U.S. Attorney Peace, develop such a policy.  The policy announced today was prepared by a Corporate Criminal Enforcement Policy Working Group comprised of U.S. Attorneys from geographically diverse districts, including U.S. Attorney Peace, as well as U.S. Attorney for the Eastern District of Virginia Jessica Aber, U.S. Attorney for the District of Connecticut Vanessa Avery, U.S. Attorney for the District of Hawaii Clare Connors, U.S. Attorney for the Eastern District of North Carolina Michael F. Easley, Jr., U.S. Attorney for the Northern District of California Stephanie Hinds, U.S. Attorney for the Western District of Virginia Christopher Kavanaugh, and U.S. Attorney for the District of New Jersey Philip Sellinger.  Assistant U.S. Attorney Amanda Riedel, White Collar Crimes Coordinator for the Executive Office for U.S. Attorneys, also participated in the development of the policy. 

Under the new VSD policy, a company is considered to have made a VSD if it becomes aware of misconduct by employees or agents before that misconduct is publicly reported or otherwise known to the DOJ, and discloses all relevant facts known to the company about the misconduct to a USAO in a timely fashion prior to an imminent threat of disclosure or government investigation.  A company that voluntarily self-discloses as defined in the policy  and fully meets the other requirements of the policy, by — in the absence of any aggravating factor — fully cooperating and timely and appropriately remediating the criminal conduct (including agreeing to pay all disgorgement, forfeiture, and restitution resulting from the misconduct), will receive significant benefits, including that the USAO will not seek a guilty plea; may choose not to impose any criminal penalty, and in any event will not impose a criminal penalty that is greater than 50% below the low end of the United States Sentencing Guidelines (USSG) fine range; and will not seek the imposition of an independent compliance monitor if the company demonstrates that it has implemented and tested an effective compliance program.

The policy identifies three aggravating factors that may warrant a USAO seeking a guilty plea even if the other requirements of the VSD policy are met: (1) if the misconduct poses a grave threat to national security, public health, or the environment; (2) if the misconduct is deeply pervasive throughout the company; or (3) if the misconduct involved current executive management of the company.  The presence of an aggravating factor does not necessarily mean that a guilty plea will be required; instead, the USAO will assess the relevant facts and circumstances to determine the appropriate resolution.  If a guilty plea is ultimately required, the company will still receive the other benefits under the VSD policy, including that the USAO will recommend a criminal penalty of at least a 50% and up to a 75% reduction off the low end of the USSG fine range, and that the USAO will not require the appointment of a monitor if the company has implemented and tested an effective compliance program.

In cases where a company is being jointly prosecuted by a USAO and another DOJ component, or where the misconduct reported by the company falls within the scope of conduct covered by VSD policies administered by other DOJ components, the USAO will coordinate with, or, if necessary, obtain approval from, the DOJ component responsible for the VSD policy specific to the reported misconduct when considering a potential resolution.  Consistent with relevant provisions of the Justice Manual and as allowable under alternate VSD policies, the USAO may choose to apply any provision of an alternate VSD policy in addition to, or in place of, any provision of its policy.

Damian Williams, the United States Attorney for the Southern District of New York, announced that ANDREW DONE, a/k/a “Caballo,” the leader of the “Shooting Boys” gang, was sentenced today to 35 years in prison for the November 5, 2020, murder of Angel Barreiro in the Bronx and other racketeering offenses.  DONE previously pled guilty before United States District Judge Jed S. Rakoff, who imposed the sentence.

U.S. Attorney Damian Williams said: “Andrew Done, dissatisfied with his membership in the Trinitarios gang, decided to perpetuate gang violence in New York City by breaking off from the Trinitarios and starting his own gang.  His decision created a rivalry between his new gang and the Trinitarios, which led to increased acts of violence, multiple shootings, and the tragic murder of Angel Barreiro.  Done’s sentence should highlight that anyone who exacerbates violent crime in our community will face a lengthy prison sentence.”

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

The “Shooting Boys” is a criminal organization based in the University Heights section of the Bronx.  DONE founded the Shooting Boys in or about 2017.  DONE and his followers were originally associated with the “Sunset” chapter of the Trinitarios gang, but DONE decided to break off from the Trinitarios and form his own gang.  DONE then convinced other disaffected Trinitarios to join the Shooting Boys as well.  

Under DONE’s leadership, the Shooting Boys sold crack, cocaine, heroin, and marijuana throughout the Bronx and engaged in a back-and-forth series of shootings with the Trinitarios and other associated gangs.  The rivalry between the Shooting Boys and the Trinitarios led to multiple non-fatal shootings and other acts of violence against rival gang members and innocent bystanders.  It culminated in the murder of Angel Barreiro on November 5, 2020.

On that date, Barreiro was sitting in the driver’s seat of his parked car opposite 1365 Cromwell Avenue in the Bronx.  DONE approached Barreiro, removed a firearm from his jacket, and shot Barreiro multiple times through the car’s passenger side window.  DONE then walked over to the driver’s side of the car and shot Barreiro again.  DONE fled to the Dominican Republic shortly after the murder and was apprehended by the United States Marshals Service in April 2022.

*                *                *

In addition to his prison term, DONE, 24, of the Bronx, New York, was sentenced to five years of supervised release. 

DONE was initially charged by indictment in March 2022 with nine other individuals who were members or associates of the Shooting Boys gang.  The other nine defendants have all pled guilty to various racketeering related charges and have either been sentenced to prison terms or are awaiting sentencing.

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

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

Damian Williams, the United States Attorney for the Southern District of New York, announced today that ANTHONY RICCARDI, an owner and manager of the Connecticut insurance firm Employee Benefit Solutions LLC (“EBS”), pled guilty today in White Plains federal court to conspiracy to commit wire fraud and bank fraud.  Between 2015 and 2019, RICCARDI and his co-conspirators used EBS as part of a widespread, $40 million scheme to misappropriate and steal client healthcare funds and defraud multiple lenders.  RICCARDI pled guilty today before United States District Judge Philip M. Halpern.

U.S. Attorney Damian Williams said: “Anthony Riccardi admitted today to leading a brazen, widespread scheme over nearly five years to abuse his position of trust by stealing millions in fiduciary money that was meant to pay for important employee healthcare expenses.  To keep the scheme going, Riccardi also defrauded lenders out of millions.  Thanks to the tireless efforts of our law enforcement partners to untangle this fraud, Riccardi will now be held accountable for these serious crimes.” 

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

From at least 2015 and continuing through 2019, ANTHONY RICCARDI was the 50% co-owner and Executive Vice President of EBS, which offered a variety of healthcare insurance-related services to clients.  EBS, among other things, provided third party healthcare claims administration (“TPA”) services to clients that elected to “self-fund” (or self-insure) their employee healthcare plans.  As a TPA, EBS would purportedly administer, process, and pay healthcare claims for its clients’ employees in exchange for an administrative fee.

Between at least 2015 and continuing through 2019, EBS represented an automobile dealership chain (“Company-1”) headquartered in Westchester County, New York.  During this time period, EBS served as a TPA for Company-1’s self-funded employee healthcare program and purported to process and pay claims to medical providers that treated Company-1’s employees.  To do this, EBS generated bimonthly “check register” invoices for Company-1 that listed all employee healthcare expenses from healthcare providers during that two-week period.   EBS also administered a bank account on Company-1’s behalf for the express purpose of paying Company-1 healthcare claims.  Company-1 would fund each check register by paying the invoiced amount, expecting that EBS would promptly pay the claims to the healthcare providers.  During this time period, Company-1 transferred approximately $26 million to EBS for the payment of healthcare claims.

In reality, a significant number of purported checks listed on the EBS “check register” invoices were never actually deposited by the healthcare providers.  Instead, approximately $17.87 million in Company-1 healthcare payments were misappropriated with the overwhelming majority simply transferred by EBS into its own operating account, where they were used for non-healthcare expenses by the managers and owners of EBS.  For example, a review of bank records indicates that Company-1 healthcare funds were used by RICCARDI and his co-conspirators to pay their home mortgage expenses as well as a personal credit card account with expenses relating to boating, luxury cars, and golf.

EBS, through RICCARDI and his co-conspirators, made decisions on what few Company-1 healthcare claims they did pay based on which healthcare providers were likely to complain if they did not receive payment or if the claims were connected to Company-1 executives.

The “check registers” sent to Company-1 also contained millions of dollars in fraudulent or inflated healthcare claims that were eventually paid by Company-1.  EBS routinely inflated the Company-1 check registers at the direction of RICCARDI and his co-conspirators.  Such efforts were typically accomplished through RICCARDI and his co-conspirators instructing others to manually create fraudulent entries in the EBS claims processing software, including fake claims under the name of a business controlled by RICCARDI.  RICCARDI and his co-conspirators also took steps to conceal their fraud from Company-1 by creating and sending manipulated and fabricated bank statements and checks to create the appearance that healthcare claims were being paid by EBS, when in reality, they were not.   

By mid-2017, as EBS buckled under mounting outstanding fiduciary obligations, RICCARDI and his co-conspirators began an elaborate effort to conceal and perpetuate the ongoing fraud on Company-1 by applying for multiple fraudulent bank loans and merchant cash advances designed in part to pay various fiduciary obligations that EBS owed to Company-1.  RICCARDI and his co-conspirators fraudulently applied for and received millions of dollars in loans under the auspices of financing the purchase of upgraded billing software for EBS, which included RICCARDI and his co-conspirators submitting fabricated invoices from a fake company that supposedly sold the billing software.

*                *                *

RICCARDI, 46, of New Canaan, Connecticut, pled guilty to one count of conspiring to commit wire fraud and bank fraud, which carries a maximum potential sentence of 30 years in prison.  In connection with the guilty plea, RICCARDI agreed to pay $14,870,653.36 in restitution and forfeit $2,000,000.00.

The statutory maximum penalty is prescribed by Congress and is provided here for informational purposes only, as any sentencing of the defendant will be determined by the judge.   Sentencing has been scheduled for July 20, 2023.

RICCARDI’s co-defendant, Patricia Riccardi, previously pled guilty to one count of conspiring to commit wire fraud and bank fraud before Judge Halpern.  Patricia Riccardi’s sentencing is scheduled for June 20, 2023.

RICCARDI’s co-conspirator, Erin Verespy, was previously sentenced to 66 months in prison following her guilty plea to one count of conspiring to commit wire fraud and bank fraud before United States District Judge Cathy Seibel.

Mr. Williams praised the outstanding investigative work of the U.S. Postal Inspection Service and the Special Agents of the United States Attorney’s Office.  Mr. Williams also thanked the U.S. Department of Labor, Employee Benefits Security Administration; the U.S. Department of Labor, Office of Inspector General; and the United States Secret Service, which are assisting in the investigation, as well as the U.S. Attorney’s Office for the District of Connecticut.

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

Damian Williams, the United States Attorney for the Southern District of New York, announced that EDIBERTO SANTANA, a/k/a “Flaco Veneno,” was sentenced to life imprisonment for leading the Sunset Trinitarios gang from at least 2010 through 2019 and, in that capacity, ordering multiple acts of brutal violence, including the March 13, 2011, murder of Dennis Marquez, age 16, who was stabbed to death in the Bronx; the October 23, 2013, murder of Michael Beltre, age 17, who was shot and killed in the Bronx; and the November 17, 2013, murder of Rafael Alam, age 22, who was shot and killed in the Bronx.  U.S. District Judge Paul A. Crotty imposed today’s sentence.

U.S. Attorney Damian Williams said:  “While nothing can make whole the families and communities of Dennis Marquez, Michael Beltre, and Rafael Alam, we hope that today’s sentence is some measure of closure and justice for them.  We are committed to addressing gang violence in our communities and to holding accountable those who instigate such violence.”

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SANTANA, 33, of Brooklyn, New York, previously pled guilty to one count of racketeering conspiracy with murder as a special sentencing factor, which carries a maximum sentence of life in prison. 

Mr. Williams praised the outstanding work of the Drug Enforcement Administration, Homeland Security Investigations, the New York City Police Department, the New York State Police, and the New York City Department of Investigation.

Assistant U.S. Attorneys Celia V. Cohen, Jacqueline C. Kelly, and Lindsey Keenan are in charge of the prosecution.  The case is being handled by the Office’s Violent and Organized Crime Unit.

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 criminal Complaint today charging JONATHAN GHERTLER with engaging in a sophisticated scheme to impersonate senior leaders of two Manhattan-based investment firms, resulting in over $1 million in losses to their portfolio companies, and impersonating a partner of a global law firm on telephone calls with federal agents who were investigating the scheme.  GHERTLER was arrested yesterday and will be presented in the Middle District of Florida on Tuesday. 

U.S. Attorney Damian Williams said: “As alleged, Jonathan Ghertler impersonated some of the most prominent figures in finance and law to defraud companies of over $1 million and convince federal investigators to stop their investigation into his scheme.  Ghertler is a serial fraudster and has been prosecuted for similar impersonation schemes and frauds in the past, including by this Office.  Today’s arrest demonstrates this Office’s commitment to stopping recidivist fraudsters like Ghertler and to seeking justice for victims of financial frauds.”

FBI Assistant Director Michael J. Driscoll said: “As alleged, Ghertler impersonated high-level executives at two different financial firms and directed personnel from those firms to pay for non-existent internal investigations aimed at determining if there were links between individuals associated with the firms and Jeffrey Epstein.  In addition, when he learned his fraud was being investigated, he impersonated a partner of a law firm purportedly representing one of the financial firms and attempted to convince federal agents that no crime had been committed.  The action we have taken today will ensure Ghertler – in his true identity – will be forced to face the consequences of his deceit.”

According to the allegations in the Complaint:[1]

From at least in or about December 2021, up to and including at least June 2022, GHERTLER impersonated the General Counsel of a global private equity firm (the “Private Equity Firm”).  In doing so, GHERTLER fraudulently caused the Private Equity Firm’s portfolio companies to pay at least $200,000 to fund a non-existent internal investigation into alleged links between senior employees of the Private Equity Firm and Jeffrey Epstein, the deceased financier who, before he died on or about August 10, 2019, had been charged in the Southern District of New York with sex trafficking of minors and conspiring to commit sex trafficking of minors. 

In addition, from at least May 2021, up to and including February 2023, GHERTLER impersonated the founder of an investment firm (the “Investment Firm”), directing the Chief Executive Officer (the “CEO”) of one of the Investment Firm’s portfolio companies (the “IF Portfolio Company”) to make at least $865,000 in payments to fund a non-existent internal investigation related to the founder’s alleged relationship with Epstein.  In recent weeks, GHERTLER, posing as the founder of the Investment Firm, had discussed with the CEO the possibility of making a large investment into a restaurant chain owned by another investment firm.

On or about February 7, 2023, after learning from the CEO that federal investigators were investigating a potentially fraudulent payment made by the Investment Firm, GHERTLER, posing as a partner (the “Partner”) at a global law firm, spoke on the phone with Special Agents with the FBI.  GHERTLER told the federal agents that the IF Portfolio Company had chosen not to report the fraud because it had been “made whole” by the fraudster. 

On or about February 10, 2023, GHERTLER, impersonating the Partner, spoke again with federal agents.  GHERTLER said, after “consult[ing]” with “associates and lower-level partners” at the Global Law Firm who “used to work” at the United States Attorney’s Office for the Southern District of New York, “our position is that, uh, the law states that, umm, you know, if the money was paid back prior to, uh, the crime being, uh, discovered, uh, it’s not a crime.”  GHERTLER added that his “client [i.e., the founder of the Investment Firm] has a lot of other issues he is dealing with right now, so this is one he really doesn’t need to deal with.”

*                *                *

GHERTLER, 60, of Orlando, Florida, is charged with one count of wire fraud, which carries a maximum sentence of 20 years in prison; one count of aggravated identity theft, which carries a mandatory consecutive sentence of two years in prison; and one count of making false statements, which carries a maximum sentence of five years in prison.

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

Mr. Williams praised the outstanding investigative work of the FBI and additionally thanked the Orange County, Florida, Sheriff’s Office and Orlando Police Department for their assistance.

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

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

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

Damian Williams, the United States Attorney for the Southern District of New York, announced today that KEYON DOOLING and ALAN ANDERSON were sentenced to 30 months and 24 months in prison, respectively, for their roles in a scheme to defraud the National Basketball Association (“NBA”) Players’ Health and Welfare Benefit Plan (the “Plan”).  U.S. District Judge Valerie E. Caproni sentenced DOOLING today and previously sentenced ANDERSON on February 10, 2023. 

U.S. Attorney Damian Williams said: “These former players recruited others to take part in this widespread fraud scheme and went to great lengths to keep the scheme running smoothly, facilitating hundreds of thousands of dollars of fraudulent claims.  This Office will continue to aggressively prosecute those engaged in health care fraud schemes, no matter what their profession.  Those considering submitting false claims to health care plans should recognize that they will be subject to serious penalties.”   

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

The Plan is a health care plan providing benefits to eligible active and former players of the NBA.  DOOLING and ANDERSON both played in the NBA and were eligible to receive reimbursements from the Plan for legitimate, qualifying medical expenses.

Co-defendant TERRENCE WILLIAMS orchestrated the scheme to defraud the Plan.[1]  DOOLING and ANDERSON also occupied managerial roles in the scheme.

WILLIAMS, DOOLING, and ANDERSON recruited other former NBA players to defraud the Plan, including by offering to provide them with false invoices to support their fraudulent claims.

WILLIAMS provided the other former NBA players fake invoices from a particular chiropractic office in California, run by co-defendant PATRICK KHAZIRAN,[2] which were created by individuals working with WILLIAMS.  In addition, WILLIAMS obtained fraudulent invoices from a dentist affiliated with dental offices in Beverly Hills, California, run by co-defendant AAMIR WAHAB, and from a doctor at a wellness office in Washington State.  The fraudulent invoices purported to document that ANDERSON, other co-defendants, and, in some cases, members of their families, had been recipients of expensive medical and dental services, but the defendants had not received the medical or dental services described in the invoices WILLIAMS provided them.  In many instances, the defendants were not even located in the vicinity of the service providers on the dates the invoices stated they received medical or dental services.  In particular, GPS location information and documentary evidence, such as flight records, show that the defendants were in locations other than the vicinity of the medical or dental offices falsely claimed as the providers of services.

DOOLING participated in the scheme from at least in or about 2017 through in or about 2019.  DOOLING traded on his reputation among current and former NBA players to refer other former NBA players to co-defendant KHAZIRAN and WAHAB.  DOOLING also recruited and attempted to recruit additional Plan-participants and medical professionals into the fraud scheme.  DOOLING himself submitted fraudulent invoices to the Plan, relating to services purportedly performed by co-defendants KHAZIRAN and WAHAB.  DOOLING received approximately $363,000 in fraudulent reimbursements, and he is responsible for facilitating the fraudulent claims filed by other defendants, who received approximately $194,295 in fraudulent proceeds from the plan.

ANDERSON also recruited multiple former NBA players to the fraud scheme.  When co-conspirators encountered difficulties in obtaining reimbursements for fraudulent claims, ANDERSON encouraged them to submit forged letters of medical necessity to substantiate those claims.  When those letters were unsuccessful, ANDERSON arranged for the co-conspirators to visit a Las Vegas doctor, after-hours, to further attempt to justify the fraudulent claims.  ANDERSON himself submitted approximately $121,000 in fraudulent claims to the Plan.  ANDERSON is also responsible for recruiting and facilitating the fraud of additional defendants who sought approximately $710,000 in fraudulent claims.

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In addition to their prison terms, DOOLING, 42, of Orlando, Florida, was ordered to forfeit $449,250.50 and pay restitution of $547,495; and ANDERSON, 40, of Las Vegas, Nevada, was ordered to forfeit $121,000 and pay restitution of $121,000.

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

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

[1] WILLIAMS has pled guilty to conspiracy to commit wire and health care fraud and aggravated identity theft and is awaiting sentencing.

[2] On February 7, 2023, Judge Caproni sentenced KHAZIRAN to 30 months in prison.