Southern District of New York

Damian Williams, the United States Attorney for the Southern District of New York, Daniel B. Brubaker, Inspector in Charge of the New York Division of the United States Postal Inspection Service (“USPIS”), J. Russell George, the Treasury Inspector General for Tax Administration (“TIGTA”),  Francis J. Russo, the Director of the New York Field Office of U.S. Customs and Border Protection (“CBP”), and Ivan J. Arvelo, Special Agent in Charge for Homeland Security Investigations ("HSI") New York, announced today the unsealing of a seven-count Complaint charging seven participants in an identity theft and fraud scheme, through which they are alleged to have stolen at least $1 million from victims’ bank accounts.  Six of the seven defendants were arrested yesterday and today in Georgia, Florida, and Illinois.  GILBERT HUERTAS, a/k/a “Bully,” and ANAYDA HUERTAS were presented in federal court yesterday in the Middle District of Florida.  CHRISTOPHER PEEPLES, a/k/a “Jerry Chen,” a/k/a “Reginald Griffin,” a/k/a “Charles Richardson,” a/k/a “Robert Wolff,” and MALCOLM REASONOVER, a/k/a “Uncle,” were presented in federal court yesterday in the Northern District of Illinois, and DEMETRIUS TORRY, a/k/a “Meechie,” will be presented today in the Northern District of Illinois.  KHALIL BEY-MUHAMMAD will be presented today in federal court in the Northern District of Georgia.  GERALD LEE, a/k/a “Pimp,” remains at large. 

U.S. Attorney Damian Williams said: “These defendants allegedly developed a sophisticated scheme to steal money from innocent victims’ bank accounts.  The defendants allegedly stole victims’ identities, hijacked their bank accounts and cellphones, brazenly impersonated them at bank branches throughout the country, and drained their accounts.  Thanks to our partners at USPIS, TIGTA, CBP, and HSI, the defendants’ alleged crimes have been brought to a halt.”

USPIS Inspector in Charge Daniel B. Brubaker said: “Peeples allegedly led a crew that perpetrated a complex, multi-state fraudulent scheme that involved identity theft and bank account takeovers.  But today, Peeples and the alleged actions of his co-conspirators are leading them all straight to federal court.  These alleged criminals are charged with draining their victims’ accounts of a fortune.  In some cases, allegedly stealing tens of thousands of dollars at a time.  As part of the charged scheme, Peeples and his crew allegedly stole the identities of unknowing third parties, to hide their crimes behind the good names of their victims.  In total, they allegedly caused at least a $1 million loss, to first the individual victims, and then the banking industry.  We hope all the fraudsters out there are listening: if you plan to commit identity theft and bank fraud, Postal Inspectors and our law enforcement partners will use every resource at our disposal to investigate you and bring you to justice – and we are very good at it.”

TIGTA Treasury Inspector General J. Russell George said: “The Treasury Inspector General for Tax Administration is committed to aggressively pursuing those individuals who use Internal Revenue Service systems to facilitate their fraudulent activity.  Fraudulent schemes such as this undermine the integrity of tax administration.  We would like to thank the United States Postal Inspection Service, Customs and Border Protection, Homeland Security Investigations, and the United States Attorney’s Office for their continued partnership in the pursuit of justice.”

CBP Director Francis J. Russo said: “U.S. Customs and Border Protection is proud to have contributed to this ongoing investigation that resulted in the takedown of an elaborate conspiracy to defraud innocent victims.  CBP will continue to collaborate with our law enforcement partners to uncover and dismantle nefarious criminal networks that seek to defraud innocent victims for illicit gain.”

HSI Special Agent in Charge Ivan J. Arvelo said: "As technology has advanced and become part of our everyday lives, fraudsters too have evolved with the times.  Instances of internet based identity theft are on the rise and criminal organizations falsely operate under the impression that they are immune from prosecution.  These arrests should send a clear message that HSI and our partners will continue to work tirelessly to identify these fraud crews no matter where they may be located and aggressively pursue justice for innocent victims.”

According to the allegations in the Complaint:[1]

Since in or about 2020, law enforcement has been investigating a fraud crew (the “Crew”) led by CHRISTOPHER PEEPLES and whose members also include KHALIL BEY-MUHAMMAD, GERALD LEE, MALCOLM REASONOVER, DEMETRIUS TORRY, GILBERT HUERTAS, and ANAYDA HUERTAS.

From at least 2020 up to and including at least 2022, CHRISTOPHER PEEPLES, and/or KHALIL BEY-MUHAMMAD, purchased or otherwise obtained, through the Internet, personally identifiable and financial information belonging to victims of their scheme.  Such information would generally include victims’ names, dates of birth, home addresses, social security numbers, driver’s license numbers, bank account information (sometimes including passwords), and phone numbers (the “Stolen Information”).

Once PEEPLES and/or BEY-MUHAMMAD obtained Stolen Information for a victim, they would provide that information to co-conspirators responsible for forging identification documents (the “ID Forgers”).  Using the Stolen Information, the ID Forgers would manufacture a counterfeit driver’s license and sometimes a secondary form of false identification (each a “Fake ID”) in the victim’s identity.  If the Fake ID was a form of photo identification, it would bear the photograph of one of the Crew’s members, typically LEE, REASONOVER, or ANAYDA HUERTAS.

In some cases, the Crew would take over the victim’s phone number through a “SIM swap” fraud — that is, by tricking the victim’s cellphone service provider to switch service for the victim’s cellphone number to a SIM card or cellphone controlled by the Crew.  Members of the Crew would either impersonate the victim and claim that the victim’s existing cellphone had been lost or would enlist the assistance of corrupt cellphone store employees who would agree to process the SIM swap in exchange for payment.  The purpose of the SIM swap was to take control of the victim’s cellphone number in order to gain access to the victim’s bank accounts — for example, to receive two-factor authentication or security text messages intended for the victim.

In some cases, the Crew would use the Stolen Information to log into victims’ online banking profiles, create new accounts in a victim’s name at the banks, and transfer funds from a victim’s existing accounts to the newly created accounts.  The purpose of doing so was to divide the victims’ funds among as many bank accounts as possible and steal those funds through smaller withdrawals, which would be less likely to attract scrutiny from individual bank tellers processing single withdrawals in a single account.

Following the preparatory steps described above, the Crew would fly to a city in the United States to fraudulently withdraw funds from victims’ accounts over a period of days.  During these trips, a Crew member (the “Runner”) would enter different bank locations impersonating a particular victim.  The Runner would bring Fake IDs in the victim’s identity (and bearing a photograph of the Runner).  At the teller window, the Runner would request a withdrawal, typically for less than $5,000 at a time to avoid triggering heightened bank scrutiny.  In cases in which the Crew also obtained a “SIM-swapped” cellphone, that cellphone could also be used to intercept and impersonate the victim in response to the bank’s identification verification procedures.  After a successful withdrawal, the Runner — and any Crew members participating in that trip — would drive to another bank branch location nearby to repeat the process until the victim’s bank accounts were substantially drained of funds.  On a given trip, the Crew typically targeted multiple different victims’ accounts and typically stole tens of thousands of dollars or more.

The Crew has stolen at least approximately $1 million from bank accounts belonging to victims.  

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PEEPLES, 33, of Chicago, Illinois, BEY-MUHAMMAD, 25, of Oswego, Illinois, LEE, 64, of New York, New York, REASONOVER, 56, of Chicago, Illinois, TORRY, 33, of Chicago, Illinois, GILBERT HUERTAS, 28, of Tampa, Florida, and ANAYDA HUERTAS, 51, of Tampa, Florida, are each charged with one count of conspiracy to commit wire and bank fraud, which carries a maximum sentence of 30 years in prison; one count of conspiracy to commit access device fraud, which carries a maximum sentence of five years in prison; and one or more counts 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 defendants would be determined by a judge.

Mr. Williams praised the outstanding investigative work of the USPIS, TIGTA, CBP, and Special Agents and Analysts of the United States Attorney’s Office for the Southern District of New York.  Mr. Williams also thanked the HSI New York Darkweb and Cryptocurrency Task Force for their assistance in this matter.

This case is being handled by the Office’s General Crimes Unit.  Assistant U.S. Attorneys Jun Xiang, Matthew R. Shahabian, and Justin Horton are in charge of the prosecution.

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

[1] As the introductory phrase signifies, the entirety of the text of the Complaint and the description of the Complaint set forth 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, Frank A. Tarentino III, the Special Agent-in-Charge of the Drug Enforcement Administration (“DEA”), and Keechant Sewell, the Commissioner of the New York City Police Department (“NYPD”), announced today that a grand jury in Manhattan federal court returned a Superseding Indictment charging ISRAEL GARCIA a/k/a “Shorty Rock,” the former leader of the Get Money Gunnaz set of the Young Gunnaz street gang (the “GMG YGz”) with murder in aid of racketeering and other charges in connection with the October 11, 2010, murder of Alfonso “Joey” McClinton.  GARCIA and 12 others had previously been charged in July 2021 with engaging in a conspiracy to distribute narcotics and with possessing firearms during that conspiracy in connection with their involvement with the GMG YGz.               

U.S. Attorney Damian Williams said: “As a former high school dean, Israel Garcia was trusted with guiding children towards a bright future, but we allege that Garcia himself was participating in the drug trafficking activity that a high school dean should be protecting his students from.  In addition, as alleged, the defendant shot and murdered Alfonso McClinton as part of the defendant’s gang membership and drug dealing.  We will continue to work with our law enforcement partners to weed out violent gang activity from every corner of our community.”

DEA Special Agent in Charge Frank A. Tarentino III said: “This superseding indictment exemplifies law enforcement’s commitment to bringing justice to victims of violent crime.  I commend the dedicated agents, detectives, and prosecutors whose dogged work led to murder charges for Israel Garcia, one of the leaders of the Young Gunnaz.”

NYPD Commissioner Keechant L. Sewell said: “The NYPD and our law enforcement partners ceaselessly pursue all violent criminals who terrorize our neighborhoods.  True to form, our officers were relentless in investigating this murder – despite it occurring more than a decade ago – to ensure that all of those allegedly involved are held responsible.  I want to thank the U.S. Attorney’s Office for the Southern District of New York, the Drug Enforcement Administration’s New York Division, and all who sought justice for this victim and his family.”

As alleged in the Indictment, court filings, and statements made in federal and New York state court:[1] 

For more than a decade, the defendant controlled the sale of narcotics in the vicinity of East 184th Street and Morris Avenue in the Bronx as the leader of the GMG YGz.  As part of their narcotics operation, GMG YGz members carried firearms and engaged in back-and-forth shootings with neighboring, rival crews.  This violence resulted in, among other acts, the 2010 murder of Alfonso “Joey” McClinton (“McClinton”).  The State of New York arrested and prosecuted GMG YGz member Joseph (“Juice”) Johnson for the killing.[2]  Ballistics, video evidence, and eyewitness testimony, however, reveal that there was a second shooter involved in Mr. McClinton’s murder.  Today’s Indictment charges GARCIA with being that second shooter.

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GARCIA, 32, of the Bronx, New York, is charged with (i) murder in aid of racketeering, which carries a maximum sentence of death or life in prison and a mandatory minimum sentence of life in prison; (ii) narcotics conspiracy, which carries a maximum sentence of life in prison and a mandatory minimum sentence of 10 years in prison; (iii) murder while engaged in a narcotics conspiracy, which carries a maximum sentence of death or life in prison and a mandatory minimum sentence of 20 years in prison; (iv) murder through the use of a firearm, which carries a maximum sentence of death or life in prison and a mandatory minimum sentence of five years in prison; (v) firearms use, carrying, and possession in connection with a drug trafficking crime, which carries a maximum sentence of life in prison and a mandatory minimum sentence of five years in prison, which must be served consecutively to any other sentence imposed; (vi) witness tampering, which carries a maximum sentence of 20 years in prison; and (vii) conspiracy to commit witness tampering, which carries a maximum sentence of 20 years in prison. 

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

Mr. Williams praised the investigative work of the DEA, the NYPD, the Department of Homeland Security, Homeland Security Investigations, the United States Marshals Service, and the Organized Crime Drug Enforcement Task Forces.  This prosecution is part of an Organized Crime Drug Enforcement Task Forces (OCDETF) operation.  OCDETF identifies, disrupts, and dismantles the highest-level criminal organizations that threaten the United States using a prosecutor-led, intelligence-driven, multi-agency approach.  Additional information about the OCDETF Program can be found at https://www.justice.gov/OCDETF.

This case is being handled by the Office’s Narcotics Unit.  Assistant U.S. Attorneys Maggie Lynaugh, Micah Fergenson, Jacob Gutwillig, Matthew Hellman, and Kaylan Lasky 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 in this release constitute only allegations, and every fact described should be treated as an allegation.

[2] Johnson was convicted at trial of second-degree murder in The People of the State of New York v. Joseph Johnson, Index Number 4311/2010.  On February 3, 2022, the verdict against Johnson was vacated.  Johnson subsequently pled guilty to manslaughter and is serving a 17-year sentence. 

Damian Williams, the United States Attorney for the Southern District of New York, and Daniel B. Brubaker, Inspector in Charge of the New York Division of the U.S. Postal Inspection Service (“USPIS”), announced that JEFFREY SOBERMAN PARKET, a former bond trader and the former principal of several hedge funds, pled guilty today in Manhattan federal court to wire fraud and bank fraud.  PARKET obtained over $65 million in loans from individual and institutional lenders by fabricating assets, doctoring bank and brokerage statements, and forging business correspondence and signatures, resulting in over $37 million in victim losses.  PARKET pled guilty before United States District Judge Mary Kay Vyskocil.

U.S. Attorney Damian Williams said: “Parket traded on his reputation as a respected financier and fabricated paper assets to defraud lenders of millions of dollars in loans that they never would have made if not for his lies and the sophisticated ruses he used to support those lies.  His scheme cost some of his victims everything they had.  He will now be held accountable for his deceit.”

USPIS Inspector in Charge Daniel B. Brubaker said: “Parket took advantage of his investors’ trust, among them his friends and family members, and perpetrated an intricate scheme involving fraudulent documents and identity theft to hide his fraud from them.  However, Postal Inspectors and our law enforcement partners unraveled Parket’s web of deceit and exposed all his crimes.  Parket’s conviction today vindicates the investors he defrauded of almost $40 million.  His conviction should also serve as a warning to would-be fraudsters: Postal Inspectors will dedicate every resource in our arsenal to protect the integrity of the mail and pursue anyone who betrays the public trust and preys on innocent investors.”

As alleged in the Complaint and Information and based on other filings and statements made in court:

From at least 2016 through December 2021, PARKET fraudulently obtained over $65 million in short-term loans from individuals and financial institutions by materially misrepresenting his financial condition and pledging fake collateral.  Claiming that he needed short-term liquidity for investment opportunities or real estate purchases, PARKET constructed elaborate stories and submitted hundreds of pages of supporting documents to obtain loans he had no intention of repaying.  Among other things, he falsified bank and brokerage statements and contracts allegedly reflecting his significant assets and ownership interests in valuable investment accounts.  To furnish proof of some of these ownership interests, PARKET also used the names, titles, and forged signatures of actual company executives he falsely claimed were his business associates.  He created fake email addresses for them and forged lengthy email correspondence regarding measures supposedly taken by PARKET and his purported business associates to secure the loans.

To perpetuate the scheme, PARKET used loans from new lenders to pay back earlier lenders. He also made fraudulent representations about delayed acquisitions and temporary liquidity issues to induce his existing lenders to extend the maturity date of his loans or to provide him millions of dollars in additional loans.

PARKET’s individual victims included friends and professional acquaintances, some of whom he persuaded to provide him numerous loans.  His institutional victims included short-term bridge lenders, a real estate services company, a bank insured by the Federal Deposit Insurance Corporation, and an insurance company focused on helping clients save for retirement.

Throughout the offense period, PARKET also persuaded family members to transfer funds to his personal accounts by falsely promising to safely invest their life savings on their behalf.  He then used the funds to pay down fraudulently obtained loans.

*                *                *

PARKET, 59, of Great Neck, New York, pled guilty to one count of wire fraud affecting a financial institution and one count of bank fraud, each of which carries a maximum potential sentence of 30 years in prison.

The statutory maximum penalties are prescribed by Congress and are provided here for informational purposes only, as any sentencing of the defendant will be determined by the judge.  Sentencing has been scheduled for June 28, 2023.

Mr. Williams praised the outstanding investigative work of USPIS.

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

Damian Williams, the United States Attorney for the Southern District of New York, and Daniel B. Brubaker, Inspector in Charge of the New York Division of the United States Postal Inspection Service (“USPIS”), announced the return of an Indictment today by a grand jury charging MATTHEW BLAKE MORROW-WU and SHANGZHEN WU, a/k/a “Daniel Wu,” with perpetrating a scheme to defraud a Manhattan architecture firm (the “Company”) at which WU was employed as a business manager.  MORROW-WU and WU were arrested on February 1, 2023, in Los Angeles, California, pursuant to a criminal Complaint and presented in the Central District of California.  The case has been assigned to U.S. District Judge Alvin K. Hellerstein.

U.S. Attorney Damian Williams said: “Morrow-Wu and Wu brazenly used an architecture firm, at which Wu worked, as their personal ATM.  They transferred over $91,000 from the architecture firm to a fictitious law firm that they incorporated, forged false documentation that appeared to authorize the fraudulent transactions, and ultimately sent a fake target letter — purportedly from this Office — to the architecture firm threatening it with criminal prosecution after the architecture firm continued to dispute the fraudulent transactions.  Morrow-Wu and Wu now face a harsh reality as a result of their elaborate lies and false threats of prosecution: a real prosecution by the Southern District of New York.”

USPIS Inspector in Charge Daniel B. Brubaker said: “Morrow-Wu and Wu conspired to allegedly steal nearly $100,000 from a Manhattan-based business.  Their misguided aim was to make money and conceal their scheme by allegedly duping innocent victims into believing they were the target of a federal investigation.  By mailing their fictitious letter, Morrow-Wu and Wu attracted the attention of the U.S. Attorney’s Office and Postal Inspectors.  In an ironic twist, they became the targets of a federal criminal investigation.  Today’s indictment is the next step on the road to justice for this couple.  This indictment should serve as a stern warning to anyone who would use the U.S. Mail to commit fraud: Postal Inspectors and our law enforcement partners will tirelessly pursue you across the country, from one coast to another, to bring you to justice.”

According to the allegations contained in the Complaint, the Indictment, and statements at public court proceedings in the case:[1]

From at least in or about January 2022 through in or about October 2022, MORROW-WU and WU perpetrated a scheme to steal more than $91,000 from the Company, where WU was employed as a business manager, through the fraudulent and unauthorized use of a credit card held by the Company.  MORROW-WU and WU took extensive steps to conceal the fraud, which included the following:

• Forming a sham law firm named Morrow Law Group (“MLG”) to receive the funds under the guise of receiving legal fees from the Company, despite the fact that neither MORROW-WU nor WU appear to be licensed attorneys.
• Fabricating a retainer agreement between MLG and the Company that purported to pre-authorize payments from the Company to MLG, as well as other correspondence from the Company to MLG purportedly authorizing the fraudulent transactions, and forging the signatures of Company representatives in these documents.
• Using a payment processing provider to process the credit card transactions, enabling MORROW-WU and WU to manually input the names of legitimate vendors of the Company as false recipients of the funds and further disguise the true recipients of the funds.

After the Company confirmed the credit card transactions were fraudulent and unauthorized, it disputed the transactions with the credit card company, leading MORROW-WU and WU to attempt to deter any further action by sending the Company a fake “target letter” from the U.S. Attorney’s Office for the Southern District of New York (the “Fraudulent Target Letter”).  The Fraudulent Target Letter purported to be signed by a Special Assistant U.S. Attorney on behalf of the U.S. Attorney and threatened the Company with criminal prosecution for wire fraud, conspiracy to commit wire fraud, and the fraudulent use of credit cards.

*                *                *

MORROW-WU, 38, and WU, 29, both of Los Angeles, California, are each charged with one count of conspiracy to commit wire and mail fraud, which carries a maximum penalty of 20 years in prison; one count of wire fraud, which carries a maximum penalty of 20 years in prison; one count of mail fraud, which carries a maximum penalty of 20 years in prison; one count of impersonating a federal officer, which carries a maximum penalty of three years in prison; and one count of aggravated identity theft, which carries a mandatory 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 sentencings of the defendants will be determined by a judge.

Mr. Williams praised the outstanding investigative work of the Special Agents of the United States Attorney’s Office for the Southern District of New York and the U.S. Postal Inspectors of the USPIS.

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

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

Damian Williams, the United States Attorney for the Southern District of New York, announced that AMOS MUNDENDI, a/k/a “Mos,” a/k/a “El Ashile Mundi,” was sentenced today in Manhattan federal court by United States District Judge Paul A. Engelmayer to 42 months in prison for his participation in a scheme to fraudulently obtain over $30 million in Government-guaranteed loans designed to provide relief to small businesses during the COVID-19 pandemic.  MUNDENDI is the last of five defendants to be sentenced in the case.  MACKENZY TOUSSAINT, APOCALYPSE BELLA, a/k/a “Dias Yumba,” BRANDON JACKSON, and ALVIN MAXWELL were previously sentenced by Judge Engelmayer.

U.S. Attorney Damian Williams said: “Amid the outbreak of the COVID-19 pandemic that wreaked havoc on economies worldwide, Amos Mundendi and his co-defendants illegally plundered funds meant to financially support struggling businesses.  All defendants in this case will now serve substantial prison time for stealing much-needed relief intended for legitimately deserving companies.”

According to allegations in the Complaints, the Indictments, the Superseding Information, and statements made during court proceedings:

TOUSSAINT, BELLA, MAXWELL, and MUNDENDI were involved in an extensive scheme to prepare and submit fraudulent applications to the Small Business Administration (“SBA”) and to at least one company which processed loan applications under the SBA’s Paycheck Protection Program (“PPP”).  Over the course of the scheme, TOUSSAINT, BELLA, MAXWELL, and MUNDENDI attempted to fraudulently obtain over $30 million in Government-guaranteed loans for various companies through the PPP, designed to provide financial relief to qualifying companies during the COVID-19 pandemic.  The scheme resulted in over $15 million in actual loss.

The defendants’ scheme included the submission of fraudulent applications for PPP loans for several companies, including two companies (“Company‑1” and “Company-2”) both located in the Southern District of New York.  The loan proceeds for Companies-1 and -2 totaled approximately $4 million, and the fraudulent funds were distributed to a series of bank accounts located in the United States and elsewhere, including bank accounts controlled by TOUSSAINT and BELLA. 

The PPP loan applications for Company-1 and Company-2 were false, containing lies designed to maximize proceeds to the fraud scheme.  Specifically, applications for both Company-1 and Company-2 contained material differences from loan applications submitted for both companies under the Economic Injury Disaster Loan (“EIDL”) program just months earlier.  For instance, the PPP loan application for Company-1 — which was submitted on June 30, 2020 — represented that Company-1 had over 100 employees.  However, an earlier EIDL loan application for Company-1 dated on or about March 30, 2020, represented that Company-1 had only four employees.

TOUSSAINT, BELLA, and MUNDENDI devised and executed the fraud scheme by conspiring with individuals who owned, operated, or otherwise were affiliated with businesses such as Company-1 and Company-2.  MAXWELL was one such individual — a business-owner who participated in the scheme to fraudulently obtain over $1.6 million for his own business.

In addition, TOUSSAINT and JACKSON engaged in a separate scheme to submit fraudulent EIDL applications, often through the use of synthetic identities (i.e., a fake name used in combination with true personal identifying information of another person).  TOUSSAINT and JACKSON used Social Security Numbers belonging to minors as part of the synthetic identities created for use in the fraud scheme.  At least approximately $1.7 million in EIDL loan funds were disbursed as a result of TOUSSAINT’s and JACKON’s EIDL loan fraud scheme.

*                *                *

In addition to the prison sentence, MUNDENDI, 33, of Irving, Texas, was ordered to pay $9,315,418.00 in restitution.

On October 27, 2022, BELLA, 48, of Clackamas, Oregon, was sentenced to 40 months in prison and ordered to pay $4,088,084.42 in restitution.

On November 10, 2022, TOUSSAINT, 40, of Irving, Texas, was sentenced to 90 months in prison and ordered to pay $12,402,676.92 in restitution.

On December 6, 2022, MAXWELL, 46, of Lancaster, Texas, was sentenced to 18 months in prison and ordered to pay $1,696,534.63 in restitution.

On February 3, 2023, JACKSON, 35, of Farmer’s Branch, Texas, was sentenced to 33 months in prison and ordered to pay $1,772,453.00 in restitution.

Mr. Williams praised the outstanding work of the Federal Bureau of Investigation, the Small Business Administration’s Office of the Inspector General, and the Internal Revenue Service, Criminal Investigation.

The case is being handled by the Office’s Complex Frauds and Cybercrime Unit.  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, announced today that DAVID STONE was sentenced by U.S. District Judge Mary Kay Vyskocil to 28 months in prison for his participation in an insider trading scheme.  STONE previously pled guilty to one count of securities fraud.

U.S. Attorney Damian Williams said: “David Stone unlawfully accessed pre-publication stock picks from an investment advice service so that he could beat the markets and generate millions in trading profits for himself.  Today’s sentence reflects that this Office will find and prosecute those who seek to profit at the expense of the integrity and fairness of our financial markets.”

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

From 2020 up to at least March 2022, DAVID STONE exploited market-moving stock recommendations made by an investment recommendation service (“Advisor-1”) before those recommendations were released to paying subscribers.  STONE, an I.T. professional, accessed Advisor-1’s computing system using log-in credentials he obtained without authorization and used his improperly obtained access to view information relating to Advisor-1’s recommendations before they were announced to Advisor-1’s paying subscribers.

Advisor-1’s stock recommendations typically lead to higher closing prices for the recommended stock as compared to the prior day’s closing price.  By trading on those recommendations before they were announced, STONE was able to obtain significant profits unavailable to other market participants.  In fact, across all the brokerage accounts he traded in, STONE realized gains of at least $4.8 million.

In addition to his own trading, STONE supplied these stolen trading tips to another person (“Tippee-1”). From in or about January 2021 up to and including in or about March 2022, on approximately 45 different days, STONE sent emails to Tippee-1 providing stock names and/or ticker symbols ahead of Advisor-1 announcements of stock recommendations to its paying subscribers.  A brokerage account associated with Tippee-1 traded ahead of Advisor-1’s recommendations on more than a dozen occasions. As a result of that trading, Tippee-1 profited more than approximately $2.7 million.

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In addition to the prison sentence, DAVID STONE, 37, of Nampa, Idaho, was sentenced to three years of supervised release and ordered to forfeit $2,883,800 and particular shares of stock, to pay $344,000 in restitution to Advisor-1, and to pay a $20,000 fine.

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

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

Damian Williams, the United States Attorney for the Southern District of New York, announced that a jury returned a guilty verdict today against SURESH MUNSHANI on charges of conspiracy to commit wire fraud and conspiracy to commit money laundering.  MUNSHANI is scheduled to be sentenced on May 10, 2023, by U.S. District Judge Jed S. Rakoff, who presided over the one-week trial. 

U.S. Attorney Damian Williams said: “Suresh Munshani and his brother thought they could get away with stealing nearly $1 million from his brother’s employer and laundering that money through a Canadian bank account, but today’s jury verdict shows that this Office will continue to follow the dirty money to bring those responsible for financial crimes to justice.”

According to the Superseding Indictment and the evidence presented at trial:

Between 2011 and 2018, SURESH MUNSHANI conspired with his brother, Suni Munshani, to steal from the victim company (the “Company”) and to launder the stolen funds back to his brother.  During the relevant period, Suni Munshani was the Chief Executive Officer (“CEO”) of the Company, which provided data security services to its clients.  In furtherance of the scheme, SURESH MUNSHANI, among other things, formed a fake company, added the name of that fake company to a bank account he controlled in Canada, lied to his bank about how he was using his account, and worked with his brother to deposit into that account approximately $860,000 stolen from the Victim Company.  SURESH MUNSHANI thereafter laundered the majority of the stolen money back to a bank account controlled by Suni Munshani and kept approximately $150,000 of the stolen funds for himself.            

Suni Munshani previously pled guilty to one count of conspiracy to commit wire fraud in connection with his involvement in the scheme. 

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SURESH MUNSHANI, 58, of New York, New York, was convicted of one count of wire fraud conspiracy and one count of money laundering conspiracy.  Each count carries a maximum sentence of 20 years in prison.

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

Mr. Williams praised the outstanding investigative work of the Federal Bureau of Investigation’s New York Office for their assistance.

This case is being handled by the Office’s Complex Frauds and Cybercrime Unit.  Assistant U.S. Attorneys Timothy V. Capozzi and Steven J. Kochevar, with the assistance of Paralegal Specialist Geoffrey Mearns, are in charge of the prosecution.

Damian Williams, the United States Attorney for the Southern District of New York, announced that ROBERT WADE was sentenced to 168 months in prison and DARRIUS CHRISTOPHER was sentenced to 137 months in prison by U.S. District Judge Sidney H. Stein.  CHRISTOPHER and WADE were each convicted, following trial, on December 7, 2022, of one count of possessing ammunition after having previously been convicted of a felony and one count of conspiracy to possess ammunition after having previously been convicted of a felony.

U.S. Attorney Damian Williams said: “Today’s sentence demonstrates that those who use illegal weapons to inflict violence in our community will be held accountable for their crimes.  I thank our law enforcement partners in the New York City Police Department and the Drug Enforcement Administration for working with us to keep violent criminals off the streets and to keep our communities safe.”

According to evidence presented in court during the trial: 

On October 25, 2019, minutes before 7:42 p.m., CHRISTOPHER and WADE were dropped off by a car on Ryer Avenue in the Bronx, New York, approximately one block north of Slattery Playground.  CHRISTOPHER and WADE walked side-by-side southbound toward a group of approximately 10 young people gathered on the sidewalk next to Slattery Playground.  As they approached the group from the opposite side of Ryer Avenue, CHRISTOPHER removed a handgun from his pocket and racked the weapon, readying it to fire.  Soon after, CHRISTOPHER crossed the street and approached the group of people while WADE positioned himself on the opposite street of Ryer Avenue.  When CHRISTOPHER was mere feet from the group, CHRISTOPHER and WADE both opened fire.  CHRISTOPHER fired three shots while WADE fired seven bullets at the crowd.  CHRISTOPHER and WADE hit three victims, all of whom received treatment from a local hospital that night and were released.  CHRISTOPHER and WADE then made a prompt escape into a waiting getaway car a few blocks away.

Evidence at trial demonstrated that CHRISTOPHER and WADE were members of a gang and that one of the shooting victims had posted online video footage insulting rival gang members only hours before the shooting.  CHRISTOPHER and WADE’s shooting was revenge for insults one of their victims lodged against their gang.

When imposing today’s sentences, Judge Stein described the defendants’ crime as “horrific.”  Judge Stein further remarked he “couldn’t overstate the extreme gravity of this crime, shooting innocent bystanders” simply because the defendants “were called names.”

*                *                *

CHRISTOPHER, 31, of the Bronx, New York, had previously been convicted of three crimes, including attempted robbery in the second degree and attempted assault in the first degree.  WADE, 34, of the Bronx, New York, had previously been convicted of four crimes, including assault in the second degree and attempted possession of a loaded firearm in the second degree.  In addition to the prison term, CHRISTOPHER and WADE were sentenced to three years of supervised release.

Mr. Williams praised the outstanding investigative work of the New York City Police Department and the Drug Enforcement Administration in this investigation.

The prosecution is being handled by the Office’s Narcotics Unit.  Assistant U.S. Attorneys Ryan B. Finkel and Mollie E. Bracewell are in charge of the prosecution.

Damian Williams, the United States Attorney for the Southern District of New York, announced today that CAMILO ENRIQUEZ-NUNEZ, a/k/a “Viejo,” the leader of a drug trafficking organization that distributed thousands of kilograms of cocaine, pled guilty today in Manhattan federal court before U.S. District Judge Paul A. Engelmayer to conspiring to distribute more than 5,000 kilograms of cocaine. 

U.S. Attorney Damian Williams said: “Thanks to our partners at the DEA, approximately 1,300 kilograms of cocaine was seized before it could hit the streets.  Now, the leader of this major trafficking organization has been held accountable for his crimes.”

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

ENRIQUEZ-NUNEZ controlled a drug trafficking organization (the “DTO”) responsible for trafficking more than 5,000 kilograms of cocaine from Puerto Rico to the mainland United States.

On September 29, 2021, law enforcement officers seized 920 kilograms — more than one ton — of cocaine belonging to the DTO in New Jersey.  Three defendants were arrested in New Jersey along with that seizure.

On July 18, 2022, ENRIQUEZ-NUNEZ was arrested in Puerto Rico.  At approximately the same time as the arrest, law enforcement also seized approximately 380 kilograms of additional cocaine, four assault rifles, and $750,000 in cash belonging to the DTO.

*                *                *

ENRIQUEZ-NUNEZ, 43, of Puerto Rico, pled guilty to one count of conspiracy to distribute and possess with intent to distribute cocaine, which carries a maximum potential sentence of life in prison. 

The maximum potential sentence is prescribed by Congress and is provided here for informational purposes only, as the sentencing of the defendant will be determined by a judge.  Sentencing before Judge Engelmayer is scheduled for May 30, 2023, at 11:00 a.m.

Mr. Williams praised the outstanding investigative work of the Drug Enforcement Administration.

The case is being prosecuted by the Office’s Narcotics Unit.  Assistant U.S. Attorneys Samuel P. Rothschild, Kevin Mead, and Marguerite B. Colson are in charge of the prosecution.

Damian Williams, the United States Attorney for the Southern District of New York, announced that WILLIE DENNIS was sentenced today by U.S. District Judge Jed S. Rakoff to two years in prison for cyberstalking three victims, all his former colleagues at a global law firm (the “Law Firm”).  DENNIS was convicted in October 2022 following a one-week trial before Judge Rakoff.

U.S. Attorney Damian Williams said: “Willie Dennis, a former law firm partner in Manhattan, waged a relentless cyberstalking campaign against his own former colleagues.  During the years-long, merciless harassment, Dennis’s victims were forced to change their ways of living out of fear that Dennis would make good on his threats.  The sentence imposed today ensures that Dennis’s victims will no longer needlessly endure his attacks.”

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

WILLIE DENNIS, a former partner at the Law Firm, engaged in a years-long campaign of harassment, intimidation, and threats against his victims, who were partners at the Law Firm.  As part of that campaign, DENNIS sent the victims thousands of harassing, threatening, and intimidating emails and text messages.  Despite having been warned by the Law Firm over and over again that his communications were unwanted, abusive, and harassing, DENNIS continued to send nonstop messages to his former partners.  He sent the messages at all hours of the day and night.  DENNIS targeted the victims and their families, and he threatened their physical safety.  He demeaned the victims, called some of them by racist and antisemitic names, and warned them that they would become “biblical symbols.”  In his threats, he told one victim to “sleep with one eye open.”

*                *                *

In addition to his prison term, DENNIS, 60, of New York, New York, was sentenced to three years of supervised release. 

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

This case is being handled by the Office’s General Crimes Unit.  Assistant U.S. Attorneys Sarah L. Kushner, Stephanie Simon, and Kimberly Ravener are in charge of the prosecution.

Damian Williams, the United States Attorney for the Southern District of New York, announced that ROVIER CARRINGTON pled guilty today in Manhattan federal court before U.S. District Judge Valerie E. Caproni to submitting false declarations to the court in connection with a $50 million civil lawsuit. 

U.S. Attorney Damian Williams said: “Rovier Carrington submitted fake evidence in court, knowingly swore that the fake evidence was true, and doubled down on his lies when confronted.  Today’s conviction sends a message: when a party in civil litigation swears to tell the truth, breaking that oath has consequences.”

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

In a civil lawsuit that CARRINGTON filed in Manhattan federal court (the “Civil Case”), CARRINGTON sued Hollywood executives alleging that the executives had sexually assaulted him and that they had defrauded him in connection with a decision to refuse to produce CARRINGTON’s reality television program.  CARRINGTON sought damages of $50 million in the Civil Case. 

CARRINGTON submitted to the court several falsified emails (the “Faked Emails”) as exhibits to his amended complaint in the Civil Case, which included the following fabricated exchanges:

• CARRINGTON: My mind is scrambled after last night. I can't remove “Our Jewish bodies” and “Call me Mr. [Executive-1]” from repeating in my head. I can’t properly sit down after being viciously assaulted yet again by that two-sided shit [Executive-1]. This was too far. Too damn far. I have cuts on my face and thighs from him forcing himself into me. That bastard can’t take NO for an answer and he remains using his title to force himself onto me.
• CARRINGTON: Also, If [third party] thinks he can mute me like the others with an envelope filled with cash driving by his personal driver, he’s sadly mistaken. I get assaulted two days ago at the “Super 8” premiere by [Executive-1] who's been stalking me prior to this. Did [Executive-1] tell you he shows up at my place begging for me to be his private Boyfriend ? and say’s, “If I cared about my career I’d obey” ? He threaten my career becuase [sic] I want to work and not fly private with him or attend art museums when his trophy isn't there. This dude is newly married and doesn't comprehend he forces himself onto me. [Executive-1] clearly knows he's crossed the line after spitting in my face and grabbing my genitals while relaying “I'll never work again”.
• CARRINGTON: Here’s the dramatic series I was discussing with you. I appreciate you finally moving forward with both shows. Especially with our contract in place.
  Executive-2: I’ll present the material to my business associates and we’ll figure out how to combine the reality show with the series. You keep me happy and we’ll do well together. :)

When confronted about the Faked Emails, CARRINGTON submitted a false affidavit to the court in the Civil Case, in which he swore under penalty of perjury that “Each and every email annexed to my Amended Complaint, and hereto, are forwarded copies of the original email I received, or exchanged, in the exact same condition, upon which the email was received, or exchanged . . . I have not doctored, fabricated, or altered, any of the emails annexed to my Amended Complaint, and hereto.”

The court in the Civil Case conducted a detailed investigation into whether the Faked Emails were real, which CARRINGTON tried to obstruct.  Among other things, CARRINGTON (i) deleted one of the email accounts from which he had purportedly sent some of the Faked Emails the day after he filed his amended complaint; (ii) deleted another email account from which he had purportedly sent some of the Faked Emails, after the court began its investigation, and then called the email provider to confirm that the account’s emails would never be accessible; and (iii) failed to appear in court for questioning about the Faked Emails.

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

*                *                *

CARRINGTON, 34, of Los Angeles, California, pled guilty today to one count of submitting a false declaration to a court, which carries a maximum sentence of five years in prison.

The maximum potential sentence in this case is prescribed by Congress and is provided here for informational purposes only, as any sentencing of the defendant will be determined by the judge.  CARRINGTON is scheduled to be sentenced by Judge Caproni on June 1, 2023, at 3:00 p.m.

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

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

Damian Williams, the United States Attorney for the Southern District of New York, announced today the guilty plea of EDDY ALEXANDRE, the leader of a purported cryptocurrency and foreign exchange (“forex”) trading platform called EminiFX, who solicited more than $248 million in investments from tens of thousands of individual investors after making false representations in connection with the EminiFX trading platform.  U.S. District Judge John P. Cronan accepted the defendant’s guilty plea.

U.S. Attorney Damian Williams said: “Eddy Alexandre admitted today to luring investors to his cryptocurrency investment scam by fabricating weekly returns of at least 5%.  In reality, Alexandre failed to invest a substantial portion of this investors’ money and even used some funds for personal purchases.  Alexandre’s scam caused investors to lose millions of dollars, and this case should serve as yet another warning to cryptocurrency executives that the Southern District of New York is closely watching and ready to prosecute any and all misconduct in the crypto markets.”

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

From in or about September 2021, up to and including in or about May 2022, ALEXANDRE operated EminiFX, Inc. (“EminiFX”), a purported investment platform that ALEXANDRE founded, and for which he solicited more than $248 million in investments from tens of thousands of individual investors. ALEXANDRE marketed EminiFX as an investment platform through which investors would earn passive income through automated investments in cryptocurrency and forex trading.  ALEXANDRE offered his investors “guaranteed” high investment returns using new technology that he claimed was secret. Specifically, ALEXANDRE falsely represented to investors that they would double their money within five months of investing by earning at least 5% weekly returns on their investment using a “Robo-Advisor Assisted account” to conduct trading.  ALEXANDRE referred to this technology as his “trade secret” and refused to tell investors what the technology was.  Each week EminiFX’s website falsely represented to investors that they had earned at least 5% on their investment, which they could withdraw or re-invest.

In truth and in fact, and as ALEXANDRE well knew, EminiFX did not earn 5% weekly returns for its investors.  ALEXANDRE did not even invest a substantial portion of the investor funds entrusted to him, and ALEXANDRE sustained millions of dollars in losses on the limited portion of funds that he did invest, which he did not disclose to his investors.  Instead of using investors’ funds as he had promised, ALEXANDRE also misdirected at least approximately $14,700,000 to his personal bank account.  For example, ALEXANDRE used $155,000 in investor funds to purchase a BMW car for himself and spent an additional $13,000 of investor funds on car payments, including to Mercedes Benz.

*                *                *

ALEXANDRE, 50, of Valley Stream, New York, pled guilty to one count of commodities fraud and agreed to pay forfeiture in the amount of $248,829,276.73, as well as restitution in an amount to be specified by the Court.  The offense of commodities fraud carries a maximum sentence of 10 years in prison. 

The maximum potential sentence in this case is prescribed by Congress and is provided here for informational purposes only, as any sentencing of the defendant will be determined by the judge.  Sentencing before Judge Cronan is scheduled for July 12, 2023, at 4:00 p.m.

Mr. Williams praised the investigative work of the Federal Bureau of Investigation and also thanked the Commodity Futures Trading Commission, which brought a separate civil action.

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

Damian Williams, the United States Attorney for the Southern District of New York, announced today the guilty pleas of four members and two associates of the Genovese Organized Crime Family to racketeering conspiracy.  Genovese Family associate THOMAS POLI pled guilty before United States District Judge John G. Koeltl on September 29, 2022, and is scheduled to be sentenced by Judge Koeltl on April 13, 2023.  Genovese Family Captain NICHOLAS CALISI, Solider JOHN CAMPANELLA, and associate MICHAEL POLI pled guilty before Judge Koeltl on February 8, 2023, and are scheduled to be sentenced by him on June 27, 2023.  Genovese Family Captain RALPH BALSAMO and Soldier MICHAEL MESSINA pled guilty before Judge Koeltl earlier today and are scheduled to be sentenced by him on June 28, 2023.

U.S. Attorney Damian Williams said: “We remain committed to protecting the people of the Southern District of New York from being preyed on by organized crime.  Today’s pleas demonstrate that those who swear a lifetime allegiance to criminal organizations will be prosecuted, no matter their efforts to insulate themselves.”

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

The Genovese Organized Crime Family is part of a nationwide criminal organization known by various names, including “La Cosa Nostra” (“LCN”) and the “Mafia,” which operates through entities known as “Families.”

Like other LCN Families, the Genovese Organized Crime Family operates through groups of individuals known as “crews.”  Each “crew” has as its leader a person known as a “Captain” and consists of “made” members, known as “Soldiers.”  Soldiers are aided in their criminal endeavors by other trusted individuals, known as “associates,” who sometimes are referred to as “connected” or identified as “with” a Soldier or other member of the Family.  Associates participate in the various activities of the crew and its members.  In order for an associate to become a made member of the Family, the associate typically needs to demonstrate the ability to generate income for the Family and/or that the associate is capable of committing acts of violence.

A Captain is responsible for supervising the criminal activities of his crew, resolving disputes between and among members of the Family, resolving disputes between members of the Family and members of other Families and other criminal organizations, and providing Soldiers and associates with support and protection.  In return, the Captain typically receives a share of the illegal earnings of each of his crew’s Soldiers and associates.

At times relevant to the charges in the Superseding Indictment, NICHOLAS CALISI and RALPH BALSAMO were Captains in the Genovese Family, MICHAEL MESSINA and JOHN CAMPANELLA were Soldiers in the Genovese Family, and MICHAEL POLI and THOMAS POLI were associates of the Genovese Family.

Members of the Genovese Family, including CALISI, BALSAMO, MESSINA, and CAMPANELLA, and associates MICHAEL POLI and THOMAS POLI, engaged in extortionate extensions of credit, financing extortionate extensions of credit, collecting extensions of credit by extortion, extortion, operating illegal gambling businesses, and the transmission of gambling information.

*                *                *

A chart containing the ages, residency information, and the charges to which the defendants pled guilty, as well as the maximum penalties they face, is attached.  

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

Mr. Williams praised the outstanding investigative work of the Office of the New York Attorney General’s Organized Crime Task Force and the Kings County District Attorney’s Office and thanked the Federal Bureau of Investigation for its assistance in this investigation.

The case is being handled by the Office’s Violent and Organized Crime Unit.  Assistant U.S. Attorneys Celia V. Cohen, Rushmi Bhaskaran, and Justin Rodriguez, as well as Special Assistant U.S. Attorney Pamela Murray, are in charge of the prosecution. 

Defendant

Age

City Of Residence

Charges

Max Penalties

MICHAEL MESSINA

69

New Fairfield, CT

Racketeering conspiracy

20 years

NICHOLAS CALISI

63

Boca Raton, FL

Racketeering conspiracy

20 years

RALPH BALSAMO

51

Bronx, NY

Racketeering conspiracy

20 years

JOHN CAMPANELLA

47

Bronx, NY

Racketeering conspiracy

20 years

MICHAEL POLI

37

Hawthorne, NY

Racketeering conspiracy

20 years

THOMAS POLI

64

Bronx, NY

Racketeering conspiracy

20 years

Damian Williams, the United States Attorney for the Southern District of New York, announced that LEROY GIBBS was sentenced yesterday by U.S. District Judge Colleen McMahon to 33 months in prison, and JULIO FIGUEROA was sentenced today by U.S. District Judge Denise L. Cote to 15 months in prison, for accepting bribes in exchange for awarding no-bid contracts at the New York City Housing Authority (“NYCHA”) facilities where they worked.  GIBBS also obstructed justice in the weeks before his sentencing.  GIBBS and FIGUEROA each previously pled guilty to one count of solicitation and receipt of a bribe. 

U.S. Attorney Damian Williams said: “Leroy Gibbs and Julio Figueroa betrayed the trust of NYCHA and harmed the residents of Douglass Houses and Ft. Independence Houses, taxpayers, and the contractors who were forced to pay them bribes in order to receive work – all so that they could line their pockets.  By accepting bribes, they put greed above their duty to the public.”

According to the Complaints, Informations, and statements made in court proceedings and filings:

In February 2020, GIBBS, who was then employed as the Resident Buildings Superintendent at Douglass Houses in New York, New York, solicited and accepted approximately $2,000 in bribes from a confidential informant (the “CI”) in exchange for awarding no-bid contracts to the CI worth a total of approximately $9,950 from NYCHA for work at that NYCHA facility.  

These were not the only bribes GIBBS solicited and received; between at least 2019 and 2022, GIBBS demanded bribes from numerous other contractors who sought to do work for NYCHA at Douglass Houses.  For example, in one text message exchange in February 2020, GIBBS wrote to a contractor, “so there isn’t anything confusion like before. What is my $ from this?  I have to ask because you guys were trying to be funny last time.”  The contractor replied, “Good evening sir[,] 50k yours 50k us.”  If contractors were too explicit about the bribery scheme in their messages to GIBBS, he admonished them; for example, when a contractor asked GIBBS, “Did [my associate] gave you 4k last week?”, GIBBS replied, “Don’t ever text something like that.  Ever are you crazy.”  GIBBS also referred to his practice of receiving a $1,000 bribe for each awarded job as his “side hustle,” and wrote that he had previously “put hands on” a contractor who had threatened to report his corruption.   

In January 2023, just weeks before he was due to be sentenced, GIBBS took several steps to obstruct justice, including by deleting text messages and obtaining a new phone number to communicate with a co-conspirator. 

Between July 2021 and August 2022, FIGUEROA, who was then employed as the Assistant Resident Buildings Superintendent at the Ft. Independence St.-Heath Ave. Houses in the Bronx, New York, solicited and accepted approximately $6,000 in bribes from the CI in exchange for awarding no-bid contracts to the CI worth a total of approximately $46,622 from NYCHA for work at that NYCHA facility.  FIGUEROA continued to solicit bribes even after learning about the arrests of nine NYCHA contractors in September 2021 for paying bribes, telling the CI that he hoped he would not be the subject of an undercover investigation and that he would probably only deal with the CI from then on because the news of the arrests scared him. 

*                *                *

In addition to his prison sentence, GIBBS, 58, of Bay Shore, New York, was sentenced to three years of supervised release, including 120 hours of community service per year, and was ordered to pay a $100,000 fine, forfeit $2,000, and pay $2,000 in restitution. 

In addition to his prison sentence, FIGUEROA, 45, of the Bronx, New York, was sentenced to three years of supervised release and was ordered to forfeit $6,000 and pay $6,000 in restitution. 

Mr. Williams praised the outstanding investigative work of the New York City Department of Investigation, the United States Department of Housing and Urban Development’s Office of Inspector General, 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 Public Corruption Unit.  Assistant U.S. Attorneys Catherine Ghosh and Robert B. Sobelman are in charge of the prosecution.

Damian Williams, the United States Attorney for the Southern District of New York, announced today that DILLON JORDAN, a/k/a “Daniel Jordan,” a/k/a “Daniel Maurice Hatton,” a/k/a “Daniel Bohler,” was sentenced today to five years in prison in connection with operating a prostitution business with national and international reach from 2010 through 2017.  JORDAN pled guilty to conspiracy to violate the Mann Act on September 1, 2022, before U.S. District Judge John P. Cronan.  Judge Cronan imposed today’s sentence.

U.S. Attorney Damian Williams said: “For years, the defendant operated and profited from an extensive prostitution business that catered to wealthy men and was predicated on the exploitation of young women.  This Office is committed to prosecuting the perpetrators of sex crimes, especially those who use physical and emotional abuse to make a profit.”

According to the allegations in the Indictment and statements made in Court:

From in or about 2010 through at least in or about May 2017, JORDAN operated a prostitution business throughout the United States and abroad.  JORDAN maintained a roster of women who resided around the United States and who, in exchange for payment, performed sexual acts for JORDAN’s clients at locations throughout the United States, including the Southern District of New York, and abroad.  JORDAN communicated with the clients of his prostitution business by email to coordinate the prostitution services, which included sending to clients photos of women who were available for hire for prostitution services, discussing the price of prostitution services, and overseeing travel logistics for women to travel to engage in prostitution.  At times, JORDAN himself arranged the interstate travel for the women to engage in prostitution, and at other times, clients, at JORDAN’s direction, arranged the interstate travel for the women whom JORDAN directed to those clients.  To facilitate his prostitution business, JORDAN also coordinated with a United Kingdom-based madam by sharing and referring customers and prostitutes.

JORDAN personally recruited women to work for him to engage in prostitution. JORDAN emotionally and sexually abused at least some of the women who engaged in paid sex work at his direction or whom he sought to recruit to engage in prostitution on his behalf.  Prior to operating the prostitution business that is the basis of this conviction, JORDAN was in prison in Cuba for eight years for sex crimes.  JORDAN began operating the prostitution business that is the basis of this conviction immediately upon his return to the United States from Cuban prison in 2010.  

JORDAN primarily managed the finances of the prostitution business through two front companies – a purported party and event planning company and a movie production company – incorporated in California.  JORDAN opened multiple bank accounts for these companies, which he used to accept cash, wire, and check payments for prostitution services from clients and to pay for the expenses of the prostitution business, including paying the women for their prostitution services by cash and check.  By using the two front companies to receive deposits from the prostitution business, JORDAN ensured that transactions involving those proceeds from the prostitution business would disguise the nature, source, and origin of those proceeds.   

In imposing today’s sentence, Judge Cronan emphasized that JORDAN’s “whole business was based on the exploitation of women… Each of whom has endured permanent physical and emotional scars… I may have well gone beyond five years, if I had the authority to do so.”

*                *                *

In addition to the prison term, JORDAN, 50, of Lake Arrowhead, California, was sentenced to three years of supervised release.  JORDAN was further ordered to pay a forfeiture of $1,429,717.

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

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

Damian Williams, the United States Attorney for the Southern District of New York, announced that ADAM BELARDINO, the former chief executive officer of the Maddox Group, was sentenced in White Plains federal court to 42 months in prison for fraud in connection with separate schemes to defraud clients and to fail to pay over contributions made by Maddox Group employees to the Maddox Group 401(k) plan.  BELARDINO had previously pled guilty to two counts of wire fraud and one count of making a false statement to a government agency.  He was sentenced today by U.S. District Judge Kenneth M. Karas.

According to the allegations in the Superseding Information to which BELARDINO pled guilty and other court documents:

Embezzlement from Victim-1

BELARDINO had managed Victim-1’s investments at another firm before he founded Maddox in July 2019.  In August 2019, BELARDINO convinced Victim-1 to liquidate some of her portfolio and to transfer the liquidated funds to Maddox for investment.  Victim-1 then transferred more than $313,000 to Maddox in eight separate transactions between August 2019 and October 2020.  Instead of investing Victim-1’s money as he had promised, BELARDINO used her money to pay the operating expenses of Maddox, including payroll and office rent; to pay down prior debt; to pay credit card charges, which consisted primarily of personal items; and to pay for personal travel. 

In September 2021, Victim-1 directed BELARDINO to transfer her portfolio at Maddox to her brokerage account at another firm.  From September 2021 to February 2022, BELARDINO sent Victim-1 and members of her family emails and texts in which he said he was liquidating the portfolio and would return the funds shortly.  BELARDINO also provided Victim-1’s family with documents suggesting that a wire transfer of the funds to Victim-1’s bank account was imminent or pending.  BELARDINO also deposited checks drawn on a checking account held by Maddox (“the Maddox Account”) into Victim-1’s bank account for what he claimed was the full value of her portfolio. 

Victim-1 never received any funds by wire and the checks BELARDINO deposited into her bank account were returned because the Maddox Account did not have sufficient funds to cover the checks.  BELARDINO sent members of Victim-1’s family emails and texts in which he said in substance and in part that he was working with bank officials to resolve the problem and that his family would repay Victim-1 if he was unable to do so.  BELARDINO also sent members of Victim-1’s family a document that falsely stated that the Maddox Account had sufficient funds to repay Victim-1.

Scheme to Obtain Fraudulent Life Insurance Commissions – Victim-2

In or about May 2019, BELARDINO served as the agent for Insurance Company-1 in connection with an application by Victim-2 for a life insurance policy with a face amount of $1 million, which amount was eventually increased to $18 million.  As an agent, BELARDINO received commissions from Insurance Company-1 once Victim-2’s application was approved. 

In or about April 2020, BELARDINO applied for a life insurance policy with a face amount of $3 million with Insurance Company-2 on behalf of Victim-2 without Victim-2’s knowledge or authorization.  BELARDINO made materially false statements regarding Victim-2’s income, net worth, and health in the application.  In or about August 2020, BELARDINO caused Insurance Company-2 to increase the face amount of the policy to $6 million without Victim-2’s knowledge or authorization.  BELARDINO paid and attempted to pay the policy premiums of $194,280 with Victim-2’s funds without her knowledge or authorization.  BELARDINO received approximately $84,997 in commissions from Insurance Company-2.

In or about January 2021, BELARDINO applied for a life insurance policy with a face amount of $5 million with Insurance Company-3 on behalf of Victim-2 without Victim-2’s knowledge or authorization.  BELARDINO made materially false statements regarding Victim-2’s income, net worth, and health in the application.  BELARDINO caused Insurance Company-3 to increase the face amount of the policy to $6.5 million in March 2021 and to $12.1 million in May 2021, all without Victim-2’s knowledge or authorization.  BELARDINO paid the policy premiums in a total amount of $105,000 with Victim-2’s funds without her knowledge or authorization.  BELARDINO received approximately $94,500 in commissions from Insurance Company-3.

False Statement in Connection with Fraudulent Withholding of Employee 401(k) Contributions

BELARDINO adopted a retirement savings plan pursuant to Title 26, United States Code, Section 401(k) (the “Plan”) on behalf of the Maddox Group that became effective on January 1, 2020.  He served as the trustee of the Plan.  Under the Plan, an employee of Maddox could elect to have money withheld from his paycheck each pay period in an amount he chose within specified legal limits.  BELARDINO was required to deposit these withheld funds into the Plan for investment at the employee’s direction in various options offered by the Plan.  Taxes on the money deposited to the Plan as well as gains from investment of those funds would be deferred.  BELARDINO was required to deposit funds withheld for the Plan into the Plan’s trust account for investment within seven business days.

From on or about November 1, 2020, through on or about August 13, 2021, BELARDINO withheld $8,004.67 from the paychecks of the four Maddox employees other than himself who chose to participate in the Plan.  BELARDINO failed to deposit these withheld funds into the Plan’s trust account and instead converted those funds to his and Maddox’s use.

On or about October 14, 2021, BELARDINO authorized the Plan administrator to file with the Internal Revenue Service a Form 5500-SF for the 2020 calendar year in which he falsely answered in the negative when asked “During [2020]:  Was there a failure to transmit to the plan any participant contributions . . .?”

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In addition to his prison sentence, BELARDINO, 36, of New York, New York, was sentenced to three years of supervised release.  He was also ordered to pay restitution in the amount of $501,499.67 and to forfeit $501,499.67.   

Mr. Williams praised the outstanding investigative work of the Special Agents of the Federal Bureau of Investigation and Criminal Investigators of the Employee Benefits Security Administration of the United States Department of Labor.

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

Damian Williams, the United States Attorney for the Southern District of New York, announced that GREG MCKENZIE, a former Bureau of Prisons correctional officer, was sentenced to 36 months in prison for obstructing a federal investigation into the smuggling of a firearm into the Metropolitan Correctional Center (“MCC”) by lying to federal investigators about using a prepaid cellphone to communicate secretly with Deejay White, the inmate who possessed the firearm in the MCC, and his wife Dawntiana White, who helped smuggle in the firearm.  The loaded firearm was recovered from inside the MCC on March 5, 2020.  MCKENZIE pled guilty before United States District Judge P. Kevin Castel on September 14, 2022.  Judge Castel sentenced MCKENZIE earlier today.

U.S. Attorney Damian Williams said: “Greg McKenzie, a former correctional officer, obstructed an investigation into the smuggling of a firearm into the MCC that endangered the safety of inmates, prison staff, and the greater community.  By lying about his secret communications with the very inmate who possessed a firearm in the MCC and that inmate’s wife, who helped smuggle the firearm into the MCC, McKenzie thwarted a serious criminal investigation and sacrificed the integrity of the institution he swore to protect.  McKenzie’s sentence underscores this Office’s commitment to holding public servants accountable and ensuring that no one is above the law.”

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

On or about March 5, 2020, a loaded .22 caliber firearm (the “Firearm”) was recovered from inside an MCC prison cell that had last been occupied by two inmates, including Deejay White.  Approximately five weeks earlier, on January 30, 2020, MCKENZIE purchased a prepaid cellphone (the “McKenzie Prepaid Cellphone”) and used it to communicate with Deejay White and his wife Dawntiana on multiple occasions on January 31, 2020, and February 1, 2020.  In addition, cellphone location information indicated that on the evening of January 31, 2020, MCKENZIE and Dawntiana each traveled to the same vicinity in the Bronx at about the same time, after which MCKENZIE drove to lower Manhattan and started a shift at the MCC at midnight.  MCKENZIE’s assignment for that shift was to work on the unit where Deejay was housed. 

Surveillance video and call detail records further established that, upon entering the MCC for his shift, MCKENZIE circumvented a metal detector.  Shortly after MCKENZIE’s shift began, Deejay White used a contraband cellphone to call and then text the McKenzie Prepaid Cellphone.  Within minutes, MCKENZIE returned to Deejay White’s cellblock – alone – while appearing to carry an object under his left arm. 

On July 23, 2021, Deejay White pled guilty to possessing the Firearm inside the MCC before Judge Castel, and on July 13, 2021, Dawntiana White pled guilty to conspiring to smuggle the Firearm into the MCC before U.S. District Judge Katherine Polk Failla.

On November 4, 2021, two federal agents conducted a voluntary interview with MCKENZIE.  During the interview, MCKENZIE falsely denied ownership, possession, and use of the McKenzie Prepaid Cellphone, and falsely denied ever using any prepaid cellphone to communicate with an MCC inmate or inmate’s associate.   

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In addition to his prison sentence, MCKENZIE, 35, of Danbury, Connecticut, was sentenced to three years of supervised release.

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

The prosecution of this case is being handled by the Office’s Public Corruption and Narcotics Units.  Assistant U.S. Attorneys Aline R. Flodr, Jonathan E. Rebold, and Daniel H. Wolf are in charge of the prosecution, with assistance from Assistant U.S. Attorney Juliana N. Murray. 

Damian Williams, the United States Attorney for the Southern District of New York, Frank A. Tarentino III, the Special Agent-in-Charge of the New York Field Office of the Drug Enforcement Administration (“DEA”), Keechant L. Sewell, the Commissioner of the New York City Police Department (“NYPD”), and Steven A. Nigrelli, the Acting Superintendent of the New York State Police (“NYSP”), announced that AGARI REYES-SILLERO was arrested while attempting to sell approximately 50,000 multicolored fentanyl pills to a cooperating witness in exchange for $400,000.  REYES-SILLERO was arrested on Monday and was presented today before Magistrate Judge Ona T. Wang.

U.S. Attorney Damian Williams said: “The pills the defendant allegedly attempted to sell were bright and colorful, which obscured their true danger.  The 50,000 pills seized by law enforcement contained fentanyl, one of the deadliest drugs on the planet.  Thanks to the work of our law enforcement partners, these lethal drugs have now been taken off the street.”

DEA Special Agent-in-Charge Frank A. Tarentino III said: “Fake counterfeit prescription pills are flooding this city.  Fentanyl is the deadliest drug to ever hit the streets and traffickers are masking the threat by selling lethal doses in colorful pill forms mimicking prescription medication.  DEA analysis indicates that 60% of trafficked fentanyl pills on the street contain lethal doses; therefore, 30,000 deadly doses were removed from circulation by the hardworking members of the New York Drug Enforcement Task Force.  I commend our law enforcement partners for their hard work on this investigation.”

NYPD Commissioner Keechant L. Sewell said: “The NYPD and our law enforcement partners will never waver in our commitment to rid New York of fentanyl.  Anyone who displays the negligent depravity to sell this deadly poison on our streets – to put lives at risk for a profit – will be held fully accountable.  I commend and thank for their exceptional work the Office of the U.S. Attorney for the Southern District, the DEA, the New York State Police, and every member of the NYDETF involved in this important case.”

NYSP Acting Superintendent Steven A. Nigrelli said: “I commend the vital collaborative work of our law enforcement partners in the relentless efforts to keep illegal drugs off our streets.  The arrest of Ms. Reyes-Sillero reinforces that we will continue to be vigilant in stopping the flow of these dangerous drugs into our neighborhoods.  Each arrest, each seizure is saving lives and decreases the additional crime that surrounds these illegal and dangerous operations.”

As alleged in the Complaint:[1]

On or about February 5, 2023, REYES-SILLERO met with a witness who was cooperating with law enforcement (“CW-1”) to sell CW-1 approximately 50,000 fentanyl pills.  After entering CW-1’s car with the pills, REYES-SILLERO confirmed that CW-1 was to pay $400,000.  Law enforcement agents arrested REYES-SILLERO and seized the fentanyl pills, which were packaged inside four protein powder containers, as pictured below:

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REYES-SILLERO, 34, of Mexico, is charged with one count of possession with intent to distribute 400 grams and more of fentanyl.  This offense carries a mandatory minimum sentence of 10 years in prison and a maximum term of life in prison.

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

Mr. Williams praised the outstanding investigative work of the DEA, the NYPD, and the New York State Police. 

This case is being handled by the Office’s Narcotics Unit.  Assistant U.S. Attorneys Patrick R. Moroney and Andrew W. Jones 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 constitutes only allegations, and every fact described herein should be treated as an allegation.

A federal jury yesterday convicted Ruslan Maratovich Asainov, 46, a U.S. citizen and former resident of Bay Ridge, New York, of all five counts of an indictment charging him with conspiracy to provide material support to ISIS; providing material support to ISIS in the form of personnel, training, expert advice and assistance; receipt of military-type training from ISIS; and obstruction of justice. The jury also found that the defendant’s provision of material support to ISIS resulted in the death of one or more persons. The verdict followed a two-week trial before U.S. District Judge Nicholas G. Garaufis.

“Mr. Asainov, a US citizen, traveled abroad to kill and train others to kill on behalf of ISIS. Now, he is being held accountable,” said Assistant Attorney General for National Security Matthew G. Olsen. “Part of the National Security Division’s core mission is to protect Americans from terrorist organizations who would do them harm and we will bring to justice all those who would try.”

“As proven at trial, Asainov was a member of ISIS who was so committed to the terrorist organization’s evil cause that he abandoned his young family here in Brooklyn, New York, to make an extraordinary journey to the battlefield in Syria where he became a lethal sniper and trained many others to kill their adversaries, and even after being captured still pledged his allegiance to ISIS’ murderous path,” said U.S. Attorney Breon Peace for the Eastern District of New York. “There is no place in a civilized world for the defendant’s bloody campaign of death and destruction. Today’s verdict in an American courtroom is a victory for our system of justice, and against ISIS and those like the defendant who are committed to murdering innocent people here in the United States and abroad.”

“The defendant in this case fought for ISIS and also trained many others how to kill for that terrorist organization,” said Assistant Director Robert R. Wells of the FBI’s Counterterrorism Division. “This verdict demonstrates the FBI and our partners will use all of our legally available tools to hold accountable anyone who assists ISIS or other terrorist groups.”

As proven at trial, between December 2013 and March 2019, Asainov provided and conspired to provide material support and resources in the form of personnel, including himself and others, training, and expert advice and assistance, to a foreign terrorist organization, namely ISIS, knowing that ISIS was a designated foreign terrorist organization that had engaged in terrorist activity and terrorism. Asainov also received military-type training from ISIS, in violation of federal law.

Asainov converted to Islam in 2009 and subsequently became increasingly interested in Islamic extremism. By the fall of 2013, he was consuming radical Islamic content online. He abruptly dropped out of classes at the Borough of Manhattan Community College in September 2013 and began making preparations to travel to Syria to wage violent jihad.

On Dec. 24, 2013, Asainov abandoned his wife and daughter in Brooklyn, and traveled on a one-way ticket from New York to Istanbul, Turkey, to obtain entry into Syria.

Over the course of approximately five years fighting on behalf of ISIS, Asainov fought in numerous battles against ISIS enemies, including engagements at Kobani; Tabqa; Raqqa; Dayr Az Zawr; up to and including ISIS’s last stand in Syria at Baghouz in March 2019. Asainov received training in how to use automatic rifles, machine guns and rocket propelled grenades. In Tabqa, in mid-2014, he volunteered to train as a sniper. Over time, Asainov became a sniper trainer or “emir” on behalf of ISIS, estimating that he taught nearly 100 students. A former U.S. Navy SEAL scout sniper testified that the defendant’s self-described sniper training course was consistent with what the former SEAL would expect to be taught in a sniper training program.

From Syria, the defendant attempted to recruit another individual to travel from the United States to Syria to fight for ISIS, and sought to obtain funds to purchase a scope for his rifle from the same person. The defendant also told his estranged spouse that he was fighting on behalf of ISIS, described by him in a recorded January 2015 voicemail as “the most atrocious terrorist organization in the world that ever existed.” Asainov’s wife testified that he sent her a photograph of three dead fighters, one of whom was wearing a patch that stated “Islamic State of Iraq and al-Sham,” i.e., ISIS, in Arabic script.

Asainov was captured in Syria after ISIS’s last stand at Baghouz, near the Syria-Iraq border. Just before his capture, Asainov discarded his rifle and destroyed his cell phone.

Asainov admitted to agents from the FBI’s Joint Terrorism Task Force that he had fought in numerous battles on behalf of ISIS as a warrior and sniper, serving in several different katibas or ISIS fighting brigades. In recorded phone calls to his mother from facilities operated by the Bureau of Prisons (BOP), the defendant told her that he was carrying out Allah’s orders when he waged jihad and killed for ISIS, that he intended to return to waging jihad if released and that he would fight until he “meet[s] Allah,” i.e., until his death. In September 2020, staff at a BOP facility confiscated a makeshift ISIS flag affixed to Asainov’s cell wall. The defendant had filled in an 8.5” x 11” sheet of paper with black ink and Arabic writing in the design of the ISIS flag.

When sentenced, Asainov faces up to life in prison. A federal district court judge will determine any sentence after considering the U.S. Sentencing Guidelines and other statutory factors.

The Justice Department’s Office of International Affairs, the FBI’s Legal Attachés abroad and foreign authorities in multiple countries on multiple continents provided critical assistance in this case. The Bosnian and Herzegovinian authorities, and the FBI Legal Attaché Office in Sarajevo provided extraordinary assistance in the investigation and prosecution. The Ministry of Justice for the Republic of Finland, the Stuttgart Police Department and Federal Office of Justice in the Federal Republic of Germany, the Department of Justice & Constitutional Development in the Republic of South Africa, and the Prosecutor General’s Office in Ukraine, and the FBI’s Legal Attaché Offices in or responsible for those countries provided valuable assistance in the investigation.

Assistant U.S. Attorneys Douglas M. Pravda, Saritha Komatireddy, J. Matthew Haggans, Nicholas J. Moscow and Nina C. Gupta for the Eastern District of New York are prosecuting the case, with assistance provided by Trial Attorney Jennifer Levy of the National Security Division’s Counterterrorism Section and Paralegal Specialists Mary Clare McMahon and Wayne Colon.

Damian Williams, the United States Attorney for the Southern District of New York, AnnMarie R. Highsmith, the Executive Assistant Commissioner for U.S. Customs and Border Protection’s (“CBP”) Office of Trade, Francis J. Russo, the Director of CBP Field Operations New York, and Ivan J. Arvelo, the Special Agent in Charge of the New York Field Office of Homeland Security Investigations (“HSI”), announced that the United States has filed and settled a civil lawsuit against Samsung C&T America, Inc. (“SCTA”), a global trading and investment company that is a U.S. subsidiary of the Korean conglomerate Samsung C&T Corporation.  Among other things, SCTA imports and sells footwear manufactured overseas in partnership with other companies.  SCTA performs services in connection with the importation and sale of footwear, including financing, transportation, warehousing, and distribution.  The settlement resolves claims brought by the United States that between May 2016 and December 2018, SCTA violated the False Claims Act by misclassifying imported footwear under the Harmonized Tariff Schedule (“HTS”) and by not paying the full amount of customs duties owed. 

Under the settlement agreement approved by U.S. District Judge Paul G. Gardephe, SCTA will pay a total of $1 million to the United States.  As a part of the settlement agreement, SCTA also made admissions regarding certain conduct alleged in the Government’s Complaint.  Specifically, SCTA admitted that it misclassified certain imported footwear on entry documents filed with CBP and, in some instances, underpaid customs duties on the footwear.  SCTA further admitted that it had reason to know that certain documents provided to its customs brokers inaccurately described the construction and materials of the imported footwear and that SCTA failed to verify the accuracy of this information before providing it to its customs brokers. 

U.S. Attorney Damian Williams said: “SCTA improperly avoided paying the full customs duties owed to the United States by misclassifying certain footwear that it imported and thereby reducing the duty rate applied.  This Office is committed to combatting customs fraud by holding companies accountable when they misclassify goods and evade paying their legally required duties.”

CBP Executive Assistant Commissioner AnnMarie R. Highsmith said: “Misclassification and avoiding the payment of lawful duties on imported goods is a serious matter.  This practice allows entities to import goods without paying the U.S. Government the lawful amount of duties owed, creating an unfair advantage over law-abiding American businesses.  I am glad that we were able to work with our federal partners to reach a satisfactory settlement to recover these funds.”

CBP Director of Field Operations Francis J. Russo said: “U.S. Customs and Border Protection demonstrated its tenacity once again in preventing the circumvention of the payment of proper duties.  This was a total team effort by CBP import specialists and regulatory auditors, HSI investigators, and the U.S. Attorney’s Office for the Southern District of New York to uncover SCTA’s misclassification of goods, which shortchanged the United States government of the proper amount of customs duties owed.”

HSI Special Agent in Charge Ivan J. Arvelo said: “For two and a half years, Samsung C&T America, Inc. submitted false information to the United States Government, misclassified imported goods, and underpaid customs duties.  As this settlement proves, HSI, along with our law enforcement partners, will hold accountable organizations that engage in improper trade practices and deny our government of vital revenues.”

As alleged in the Complaint filed in Manhattan federal court:

From May 2016 through December 2018 (the “Relevant Period”), SCTA, in conjunction with a business partner, imported footwear manufactured overseas, including from manufacturers in China and Vietnam, into the United States.  The tariff classifications for footwear depend on the characteristics of the footwear, including the footwear’s materials, its construction, and its intended use.  Depending on the classification of the footwear, the duties owed vary significantly.

During the Relevant Period, SCTA, as the importer of record for certain customs entries referenced in the Government’s Complaint, violated the False Claims Act by misclassifying certain footwear under the HTS and by causing entry summary forms to be presented to CBP that SCTA knew or had reason to know contained false classifications.  SCTA provided its customs brokers with documentation and information, including invoices, that (i) misclassified the footwear under the HTS, and/or (ii) contained inaccurate information concerning the materials and construction of the footwear.  Accordingly, in many instances, the footwear was entered at a lower duty rate than would have been applicable had the footwear been properly classified.  As a result of the misclassifications, SCTA avoided paying the full amount of the customs duties owed.   

In the settlement agreement, SCTA admitted, acknowledged, and accepted responsibility for the following conduct:

• As the United States importer of record, SCTA was responsible for paying the customs duties owed on the footwear at issue and providing accurate documents to CBP to allow CBP to assess customs duties applicable to the footwear.
• SCTA and its business partner provided SCTA’s customs brokers with invoices and other documents and information that purportedly reflected the tariff classification of the footwear under the HTS, as well as the corresponding materials and construction of the footwear.  SCTA knew that its customs brokers would rely on the documents and information to prepare the entry summaries submitted to CBP, which required classifying the footwear under the HTS, determining the applicable duty rates, and calculating the amount of the customs duties owed on the footwear.
• SCTA had reason to know that certain documents provided to its customs brokers, including invoices, inaccurately stated the materials and construction of the footwear at issue.  SCTA failed to verify the accuracy of this information before providing it to its customs brokers.  As a result, SCTA materially misreported the classification of the footwear under the HTS and misrepresented the true materials and construction of the footwear.
• SCTA, through its customs brokers, misclassified the footwear at issue on the associated entry documents filed with CBP and, in many instances, underpaid customs duties on the footwear. 

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

Mr. Williams thanked CBP and HSI for their assistance and support with the case.

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

Damian Williams, the United States Attorney for the Southern District of New York, announced today that ISHAN WAHI, a former product manager at Coinbase Global, Inc. (“Coinbase”), pled guilty to two counts of conspiracy to commit wire fraud in connection with a scheme to commit insider trading in cryptocurrency assets by using confidential Coinbase information about which crypto assets were scheduled to be listed on Coinbase’s exchanges.  WAHI was arrested and charged in July 2022 and pled guilty earlier today before U.S. District Judge Loretta A. Preska.

U.S. Attorney Damian Williams said: “Ishan Wahi – a former Coinbase product manager – admitted in court today that he tipped others regarding Coinbase’s planned token listings so that they could trade in crypto assets for a profit.  Wahi is the first insider to admit guilt in an insider trading case involving the cryptocurrency markets.  Whether it occurs in the equity markets or the crypto markets, stealing confidential business information for your own personal profit or the profit of others is a serious federal crime.  The Southern District of New York has decades of experience pursuing insider trading cases, and we will continue to use our expertise to prosecute this crime no matter what form it takes and where it occurs.”

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

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

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

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

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

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

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ISHAN WAHI, 32, of Seattle, Washington, pled guilty to two counts of conspiracy to commit wire fraud, which each carry, respectively, a maximum sentence of 20 years in prison.

 The statutory maximum sentence is prescribed by Congress and is provided here for informational purposes only, as any sentencing of the defendant will be determined by a judge.  WAHI is scheduled to be sentenced by Judge Preska on May 10, 2023, at 12:00 p.m.

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

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

Damian Williams, the United States Attorney for the Southern District of New York, and Jocelyn E. Strauber, the Commissioner of the New York City Department of Investigation ("DOI"), announced that MARK O’MARA, a disaster relief consultant, pled guilty to fraud in connection with his work for an Illinois-based consulting firm (“Company-1”) that provided Hurricane Sandy-related recovery services to the City of New York.  O’MARA surrendered today and pled guilty before U.S. District Judge Richard M. Berman in federal court in Manhattan.  O’MARA is the second Company-1 employee to plead guilty in recent months to fraud related to Hurricane Sandy relief work, as WALTER MELNICK previously pled guilty in a separate case assigned to U.S. District Judge Victor Marrero. 

U.S. Attorney Damian Williams said: “Instead of helping New York City recover from the devastation of Hurricane Sandy, Mark O’Mara helped himself by fraudulently obtaining housing benefits to which he was not entitled.  I commend the Department of Investigation and this Office for holding to account those who conspire to defraud invaluable federal programs.”

DOI Commissioner Jocelyn E. Strauber said: “This defendant used Hurricane Sandy as an opportunity for personal profit, through a scheme to pocket federal relief funds intended to help New Yorkers rebuild from this disaster.  Today, he takes responsibility for that conduct, pleading guilty to federal offenses, including destroying evidence, and agreeing to repay the City nearly $225,000, forfeit over a quarter-million dollars, and pay any past-due taxes.  DOI and our law enforcement partners in the U.S. Attorney’s Office for the Southern District of New York are committed to stopping frauds that drain public resources and holding accountable those who participate.”

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

Beginning in or about 2013, in the aftermath of Hurricane Sandy, the City of New York (the “City”) received billions of dollars in federal money to fund Hurricane Sandy-related recovery efforts.  The City used certain of these funds to hire Company-1 to assist with Hurricane Sandy relief (the “Sandy Project”).  Company-1 hired O’MARA to work on the Sandy Project.

Between at least in or about 2013 and in or about 2019, while working for Company-1, O’MARA submitted fraudulent information and documents, including a fraudulent lease agreement, to the New York City Office of Management and Budget (“NYC-OMB”) via Company-1 in order to obtain lodging reimbursements from the City to which he knew he was not entitled.  Between in or about 2017 and in or about 2019, O’MARA also conspired with others – including another consultant at Company-1, WALTER MELNICK – to defraud the City by falsely claiming that he was residing in an apartment purchased by an individual at MELNICK’s direction.  O’MARA fraudulently obtained more than approximately $250,000 from the City via Company-1 as a result of these schemes. 

Additionally, in or about February 2020, when the City began raising concerns about Company-1’s travel reimbursements, O’MARA destroyed relevant emails and other communications to cover up the fraud. 

MELNICK previously pled guilty in a separate case to conspiring to commit federal program fraud while working for Company-1 on the Sandy Project for fraudulently obtaining housing reimbursements based on a fake lease and other fraudulent documentation.  MELNICK agreed to pay $387,749 in forfeiture and restitution.  MELNICK is scheduled to be sentenced by Judge Marrero on February 24, 2023. 

O’MARA is cooperating with the Government.

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MARK O’MARA, 41, of New York, New York, pled guilty to one count of federal program fraud, which carries a maximum sentence of 10 years in prison; one count of wire fraud in connection with a presidentially-declared major disaster, which carries a maximum sentence of 30 years in prison; one count of conspiracy to commit federal program fraud and wire fraud, which carries a maximum sentence of five years in prison; and one count of destruction of evidence, which carries a maximum sentence of 20 years in prison.  Under the terms of his plea agreement, O’MARA agreed to forfeit $258,900 and to pay restitution to NYC-OMB in the amount of $224,687.26.

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 would be determined by a judge. 

Mr. Williams praised the outstanding investigative work of DOI. 

This matter is being handled by the Office’s Public Corruption Unit.  Assistant U.S. Attorneys Jane Kim and Catherine Ghosh are in charge of the prosecution.

Damian Williams, the United States Attorney for the Southern District of New York, announced today that PATRICK KHAZIRAN, a/k/a “Dr. Pat,” was sentenced to 30 months in prison for his role in a scheme to defraud the National Basketball Association (“NBA”) Players’ Health and Welfare Benefit Plan (the “Plan”).  U.S. District Judge Valerie E. Caproni imposed the sentence. 

U.S. Attorney Damian Williams said: “As a medical provider, Patrick Khaziran had a responsibility not to abuse his position of trust.  Instead, Khaziran used his role as a licensed chiropractor to generate dozens of fraudulent invoices for at least 22 former NBA players.  He did this to enrich himself and his co-conspirators at the expense of the NBA Players’ Health and Welfare Benefit Plan.  Today’s sentence sends a clear message that those who engage in health care fraud schemes, particularly medical providers, will face stringent penalties.”   

According to the Information, 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.  KHAZIRAN is a chiropractor licensed in the State of California who owns and operates a chiropractic and rehabilitation office in Los Angeles, California (“Chiropractic Office-1”). Chiropractic Office-1 serves the general public and also provides rehabilitation services to professional athletes.

From at least in or about 2016, up to and including at least in or about 2019, KHAZIRAN participated in a scheme with several other former NBA players, including Terrence Williams and Keyon Dooling, to defraud the Plan.[1]  KHAZIRAN’s role in the scheme was to provide false documentation showing that former NBA players received certain medical services when, in truth and in fact, the medical services were never provided. 

KHAZIRAN accomplished his role in the scheme in two ways.  First, beginning in 2016, KHAZIRAN created, and caused others to create, fraudulent invoices for former NBA players.  The former NBA players that received fraudulent invoices, in turn, submitted the fraudulent invoices to the Plan to request reimbursements to which they were not entitled.  Second, KHAZIRAN charged, and caused others to charge, the Plan-issued debit cards of former NBA players.  The Plan-issued debit cards were intended to be used by Plan participants to pay for eligible medical services at the point of service.  However, KHAZIRAN charged the Plan-issued debit cards of former NBA players for medical services that were never actually provided.  In total, KHAZIRAN’s fraudulent invoices and fraudulent debit card charges resulted in approximately $1.3 million in losses to the Plan.  In return for his participation in the scheme, KHAZIRAN received approximately 33% of that amount, i.e., approximately $439,000.  The remaining fraud proceeds were kept by the former NBA players with whom KHAZIRAN conspired.

*                *                *

In addition to his prison term, KHAZIRAN, 40, of Los Angeles, California, was ordered to forfeit $439,000 and pay restitution of $1,300,000.

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 and Dooling have plead guilty and await sentencing.

Damian Williams, the United States Attorney for the Southern District of New York, announced that ROGER RALSTON, the CEO of DirectView Holdings, Inc. (“DirectView”), a Florida-based video surveillance and security company, was sentenced to five years in prison for defrauding elderly victims in connection with an international telemarketing scheme that caused losses of nearly $16 million.  RALSTON previously pled guilty before U.S. District Judge Jed S. Rakoff, who imposed the sentence.  Co-defendants Christopher Wright and Steven Hooper previously pled guilty and were sentenced to 52 months in prison and 42 months in prison, respectively, for their roles in the fraud.

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

Between approximately 2009 and 2015, RALSTON and other co-conspirators engaged in a scheme to defraud victims in the United Kingdom of nearly $16 million through the sale of false, fraudulent, and materially misleading investments, and to launder the proceeds of the fraud through bank accounts in multiple foreign jurisdictions.  RALSTON and his co-conspirators used the services of telemarketing call centers to identify and cold-call potential victims, who were primarily elderly or retired individuals residing in the United Kingdom.  Over a series of telephone calls, the telemarketers persuaded victims to invest money under various false and misleading pretenses, including the promise of short-term, high-yield, no-risk returns, when in fact the investments were high-risk, illiquid, and in some instances, entirely fictitious.  Many victims were persuaded to make additional investments under the false pretense that they would be permitted to sell their holdings if (and only if) they purchased more.  In reliance on the false representations and promises, the victims wired funds to various bank accounts in the United States, including in the Southern District of New York, in the names of corporate entities controlled by RALSTON.  RALSTON then mailed and emailed documents related to the fraudulent investments, including purchase contracts and investment certificates, to the victims.  Victims who tried to sell their investments found that they were unable to do so.  The victims never received a refund on their principal or any return on their investments.  

In order to conceal the nature, location, source, ownership, and control of the proceeds of the fraudulent scheme, RALSTON regularly transferred a substantial portion of the fraud proceeds from bank accounts in the United States, including in the Southern District of New York, to overseas bank accounts, including accounts in Cyprus, Switzerland, and the United Kingdom, in the names of various shell companies controlled by RALSTON’s co-conspirators.

The nature of the particular fraudulent investment vehicles being marketed to the victims changed over time.  From in or about 2009 until in or about 2011, RALSTON and his co-conspirators sold DirectView stock to the victims based on telemarketers’ false representations and promises that the shares were a no-risk, short-term investment in a debt-free company and that the shares were likely to increase over 100% in value in a short period of time.  In contrast to what RALSTON represented to victims, DirectView’s annual report filed with the United States Securities and Exchange Commission for the year ending December 31, 2010, contained dire warnings about the poor fiscal health of DirectView and the risk attendant in purchasing stock, including that the company “may be forced to cease operations” due to losses and cash flow problems, and purchasers “may find it extremely difficult or impossible to resell our shares.”

From in or about 2011 until in or about 2015, RALSTON and his co-conspirators engaged in the sale of fraudulent carbon credits and offsets.  The boiler room callers appealed to victims by claiming that the investments would be environmentally friendly and help address the climate crisis.  The victims were falsely promised that the carbon-related investments they purchased could be easily sold, carried no risk, and would yield a significant, short-term return.  In fact, the carbon credits and offsets that were sold to the victims were fake and did not represent any actual carbon credits or offsets.  RALSTON caused fraudulent carbon certificates to be created and sent to the victims.

*                *                *

In addition to the prison term, RALSTON, 54, of Riviera Beach, Florida, was sentenced to three years of supervised released and ordered to pay restitution in the amount of $15,714,859 and forfeiture in the amount of $15,713,621.20.

Mr. Williams praised the outstanding investigative work of Internal Revenue Service-Criminal Investigation in this case.

This case is being prosecuted by the Office’s Money Laundering and Transnational Criminal Enterprises and Complex Frauds and Cybercrime Units.  Assistant U.S. Attorneys Jessica Feinstein, Olga I. Zverovich, and David Felton are in charge of the prosecution.

A federal court in New York unsealed an indictment today charging a citizen of the Russian Federation and legal permanent resident of the United States with participating in a scheme to make over $4 million in U.S. dollar payments to maintain four real properties in the United States that were owned by Viktor Vekselberg, a sanctioned oligarch, as well as to attempt to sell two of those properties.

According to court documents, Vladimir Voronchenko, aka Vladimir Vorontchenko, 70, of Moscow, Russia; New York, New York; Southampton, New York; and Fisher Island, Florida, is additionally charged with contempt of court in connection with his flight from the United States following receipt of a grand jury subpoena requiring his personal appearance and testimony.

According to allegations in the indictment, Voronchenko, who resided at various times in New York, Florida, and Russia, held himself out as a successful businessman, art collector, and art dealer, and as a close friend and business associate of Vekselberg.

On April 6, 2018, the U.S. Department of the Treasury’s Office of Foreign Assets Control (OFAC) designated Viktor 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 real properties in the United States, specifically, (a) an apartment on Park Avenue in New York, New York, (b) an estate in Southampton, New York, (c) an apartment on Fisher Island, Florida, and (d) a penthouse apartment also on Fisher Island, Florida (collectively, the Properties). As of the date of the indictment, the Properties were worth approximately $75 million.

Voronchenko 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, shell 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 Southampton estate. No licenses from OFAC were applied for or issued for 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. 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.

Voronchenko charged with conspiring to violate and evade U.S. sanctions, in violation of the International Emergency Economic Powers Act (IEEPA); violating IEEPA; conspiring to commit international money laundering; and international money laundering, each of which carries a maximum sentence of 20 years in prison. Voronchenko was also charge with contempt of court, which carries a maximum sentence within the discretion of the court. The indictment also provides notice of the United States’ intention to forfeit from Voronchenko the proceeds of his offenses, including the Properties. 

U.S. Attorney Damian Williams for the Southern District of New York, Task Force KleptoCapture Director Andrew C. Adams, Special Agent in Charge Ivan J. Arvelo of Homeland Security Investigations (HSI) New York Field Office, and Acting Special Agent in Charge Maged Behnam of the FBI Miami Field Office made the announcement.

The FBI and HSI are investigating the case with valuable assistance provided by the Justice Department’s National Security Division and Office of International Affairs, and OFAC.

Assistant U.S. Attorneys Jessica Greenwood, Joshua A. Naftalis, and Sheb Swett for the Southern District of New York are prosecuting the case.

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

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

Damian Williams, the United States Attorney for the Southern District of New York, 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 unsealing of an Indictment charging VLADIMIR VORONCHENKO, a/k/a “Vladimir Vorontchenko,” a citizen of the Russian Federation and legal permanent resident of the United States, with participating in a scheme to make over $4 million in U.S. dollar payments to maintain four real properties in the United States that were owned by Viktor Vekselberg, a sanctioned oligarch, as well as to attempt to sell two of those properties.  The Indictment also charged VORONCHENKO with contempt of court in connection with his flight from the United States following receipt of a Grand Jury subpoena requiring his personal appearance and testimony.

U.S. Attorney Damian Williams said: “The indictment unsealed today signals the United States’ continued commitment to holding individuals who violate sanctions to account.  Vladimir Voronchenko and others illegally funneled millions of dollars into the United States to maintain luxury U.S. residences owned by Russian oligarch Viktor Vekselberg.  With these charges, the United States sends a strong message that it will continue to vigorously enforce economic sanctions, including those imposed in response to Russia’s illegal and unjustified aggression in Ukraine.”

Director of Task Force KleptoCapture Andrew C. Adams said: “Shell companies, strawmen, and professional money launderers did not shield Voronchenko or the illicit transactions charged today from the investigative persistence of HSI, FBI, and the attorneys of the Southern District of New York.  Today’s indictment is yet another reminder of the priority that the Department of Justice places on uncovering the proceeds of kleptocracy and sanctions evasion and on prosecuting those who would take a paycheck in exchange for facilitating money laundering and sanctions evasion.”

HSI Special Agent in Charge Ivan J. Arvelo said: “Russian illicit finance is a threat to U.S. national and homeland security, one that expands fissures of vulnerability in our financial system.  With the advent of the Ukrainian invasion, such global threats were made increasingly more domestic, as Putin’s enablers were revealed to have sequestered billions in illicit wealth in U.S. based real property and luxury assets.  HSI will not allow the American financial system to unknowingly facilitate dark money transfers, and today we have charged another oligarch facilitator for his alleged actions in support of the corrupt regime.” 

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

VORONCHENKO, who resided at various times in New York, New York, Southampton, New York, Fisher Island, Florida, and Russia, held himself out as a successful businessman, art collector, and art dealer, and as a close friend and business associate of Viktor Vekselberg. 

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 real properties in the United States, specifically, (i) an apartment on Park Avenue in New York, New York, (ii) an estate in Southampton, New York, (iii) an apartment on Fisher Island, Florida, and (iv) a penthouse apartment also on Fisher Island, Florida (collectively, “the Properties”).  As of the date of this Indictment, the Properties were worth approximately $75 million. 

VORONCHENKO 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, shell 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 VOROCHENKO, “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 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.  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.

*                *                *

VORONCHENKO, 70, of Moscow, Russia, New York, New York, Southampton, New York, and Fisher Island, Florida, was charged with conspiring to violate and evade U.S. sanctions, in violation of the International Emergency Economic Powers Act (“IEEPA”); violating the IEEPA; conspiring to commit international money laundering; and international money laundering, each of which carries a maximum sentence of 20 years in prison.  VORONCHENKO was also charged with contempt of court, which carries a maximum sentence within the discretion of the Court.  The Indictment also provides notice of the United States’ intention to forfeit from VORONCHENKO the proceeds of his offenses, including the Properties. 

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

Mr. Williams praised the outstanding work of HSI and 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 the prosecution. 

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

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

James Bradley, aka Abdullah, 21, of the Bronx, New York, and Arwa Muthana, 30, of Hoover, Alabama, were sentenced to 11 years in prison followed by 10 years of supervised release and nine years in prison followed by 10 years of supervised release, respectively, for attempting to provide material support to a designated foreign terrorist organization, the Islamic State of Iraq and al-Sham (ISIS).

In September 2022, Bradley and Muthana pleaded guilty to attempting to provide material support to ISIS before U.S. District Judge Paul A. Engelmayer. According to court documents, Bradley and Muthana are ISIS supporters who sought to travel to the Middle East to join and fight for ISIS. Bradley expressed violent extremist views since at least 2019, including his desire to support ISIS by traveling overseas to join the group or committing a terrorist attack in the United States. In May 2020, Bradley stated to an undercover law enforcement officer (UC-1) a belief that ISIS may be good for Muslims because ISIS was establishing a caliphate. Bradley also expressed his desire to conduct a terrorist attack in the United States and discussed potentially attacking the United States Military Academy in West Point, New York. Bradley explained that if he could not leave the United States, he would do “something” in the United States instead, referring to carrying out an attack.

In June 2020, Bradley reaffirmed his interest to UC-1 in attacking a military base and that doing so would be his contribution to the cause of jihad. In January 2021, Bradley mentioned to UC-1 another university in New York State where he frequently saw Reserve Officer Training Corps (ROTC) cadets training. Bradley stated that he could use his truck in an attack along with Muthana, take “out” all of the ROTC cadets.

In late January 2021, Bradley married Muthana in an Islamic marriage ceremony. Beginning before and continuing after their marriage, Bradley and Muthana discussed, planned, and ultimately attempted to travel to the Middle East together to join ISIS. In or about early March 2021, Bradley traveled from New York to Alabama to visit Muthana. They returned to New York together to travel from New York to join ISIS in the Middle East. Thereafter, Bradley raised the possibility of UC-1 helping the couple board a cargo ship to travel to the Middle East or Africa. UC-1 subsequently put Bradley in contact with a purported associate who could assist in making travel arrangements via cargo ship. In reality, the purported facilitator was a law enforcement officer acting in an undercover capacity (UC-2).

Later in March 2021, Bradley met with UC-2 and expressed his desire to travel via cargo ship and to “fight among the rank[s] of the Islamic State.”  Bradley subsequently provided UC-2 $1,000 in cash as travel costs. Bradley told UC-2 that he and Muthana both planned to be “fighting” after arriving in the Middle East. Bradley also told UC-2 that he had a dream that he had given “bay’ah,” an Arabic term meaning the oath of allegiance, to Abu Ibrahim al-Hashimi al-Qurashi, the former leader of ISIS.

On March 25, 2021, UC-2 told Bradley that the cargo ship would be leaving on March 31 from a seaport in Newark, New Jersey. Bradley praised Allah and confirmed he and Muthana planned to travel on the ship. On March 31, 2021, Bradley and Muthana met with UC-2 en route to the seaport. During this meeting, Muthana confirmed to UC-2 that she was traveling to the Middle East to fight for ISIS. Bradley and Muthana were arrested as they walked on a gangplank to board the cargo ship. After Muthana was arrested, she waived her Miranda rights and stated during an interview that she was willing to fight and kill Americans if it was for Allah. Also on March 31, 2021, in connection with court-authorized searches, the FBI seized from a bedroom previously used by Bradley a hand-drawn image of a jihadi flag commonly used by ISIS and a hand-drawn map of the Pakistan region. The FBI also recovered a machete from a truck used by Bradley.

In the months and years prior to their arrests, Bradley and Muthana also accessed, posted, and distributed extremist online content, including materials indicative of their support for ISIS. Such material included Bradley’s postings of images of ISIS fighters, Usama Bin Laden, and terrorist attacks. Bradley also distributed to UC-1 videos of ISIS fighters, a 2020 stabbing attack against a New York City Police Department (NYPD) officer, and extremists shooting a uniformed soldier. Content on Muthana’s cellphone, which was searched pursuant to a court-authorized search warrant, included images of an ISIS flag with Arabic writing, ISIS propaganda, firearms, quotations of the deceased former al Qaeda in the Arabian Peninsula member Anwar al-Awlaki, and a video showing an individual in prisoner garb being chained and then burned alive.

Assistant Attorney General Matthew G. Olsen of the Justice Department’s National Security Division, U.S. Attorney Damian Williams for the Southern District of New York, Assistant Director Robert R. Wells of the FBI Counterterrorism Division and Assistant Director in Charge Michael J. Driscoll of the FBI New York Field Office made the announcement.

The 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, investigated the case.

Assistant U.S. Attorneys Kaylan E. Lasky and Jason A. Richman for the Southern District of New York are prosecuting the case with valuable assistance provided by Trial Attorney Jennifer Burke of the National Security Division’s Counterterrorism Section.

Damian Williams, the United States Attorney for the Southern District of New York, announced that JAMES BRADLEY, a/k/a “Abdullah,” and ARWA MUTHANA were sentenced to 11 and nine years in prison, respectively, for attempting to provide material support to a designated foreign terrorist organization, the Islamic State of Iraq and al-Sham (“ISIS”).  BRADLEY pled guilty on September 9, 2022, and MUTHANA pled guilty on September 12, 2022, before United States District Judge Paul A. Engelmayer in Manhattan federal court.  Judge Engelmayer sentenced BRADLEY on February 2, 2023, and sentenced MUTHANA earlier today.

U.S. Attorney Damian Williams said: “James Bradley and Arwa Muthana were determined to travel to the Middle East to fight in the name of hate and terror.  Even worse, if they failed in making it to the Middle East, Bradley was prepared to carry out an attack on American soil.  I commend the FBI New York Joint Terrorism Task Force for investigating and arresting these two individuals before they had the opportunity to wage violence on behalf of a brutal terrorist organization.  Bradley and Muthana’s sentences reemphasize this Office’s determination to thwart those who wish to cause suffering and create destruction through terror.”

According to the Complaint, Indictment, and other public documents in the case, as well as statements made during court proceedings:[1]

BRADLEY and MUTHANA are ISIS supporters who attempted to travel to the Middle East to join and fight for ISIS.  BRADLEY expressed violent extremist views since at least 2019, including his desire to support ISIS by traveling overseas to join the group or committing a terrorist attack in the United States.  In May 2020, BRADLEY stated to an undercover law enforcement officer (“UC-1”) that he believed that ISIS may be good for Muslims because ISIS was establishing a caliphate.  BRADLEY further expressed his desire to conduct a terrorist attack in the United States and discussed potentially attacking the United States Military Academy in West Point, New York.  BRADLEY explained that if he could not leave the United States, he would do “something” in the United States instead, referring to carrying out an attack.

In June 2020, BRADLEY reaffirmed his interest to UC-1 in attacking a military base and that doing so would be his contribution to the cause of jihad.  In January 2021, BRADLEY mentioned to UC-1 another university in New York State where he frequently saw Reserve Officer Training Corps (“ROTC”) cadets training.  BRADLEY stated that he could use his truck in an attack and that he, along with MUTHANA, could take all of the ROTC cadets “out.”

In late January 2021, BRADLEY married MUTHANA in an Islamic marriage ceremony.  Beginning before and continuing after their marriage, BRADLEY and MUTHANA discussed, planned, and ultimately attempted to travel to the Middle East together in order to join and fight with ISIS.  In or about early March 2021, BRADLEY traveled from New York to Alabama to visit MUTHANA, and BRADLEY and MUTHANA traveled back to New York together in order to travel from New York to join ISIS in the Middle East.  Thereafter, BRADLEY raised the possibility of UC-1 helping BRADLEY and MUTHANA get on a cargo ship to travel to the Middle East or Africa for the purpose of ultimately joining and fighting for ISIS.  UC-1 subsequently put BRADLEY in contact with a purported associate who could assist BRADLEY in making arrangements for BRADLEY and MUTHANA to travel to the Middle East via cargo ship.  In reality, the purported facilitator was a law enforcement officer acting in an undercover capacity (“UC-2”).

Later in March 2021, BRADLEY met with UC-2 and expressed his desire to travel via cargo ship and to “fight among the rank[s] of the Islamic State.”  BRADLEY subsequently provided UC-2 $1,000 in cash as travel costs for BRADLEY and MUTHANA to take a cargo ship to Yemen. BRADLEY told UC-2 that he and MUTHANA both planned to be “fighting” after arriving in the Middle East.  BRADLEY also told UC-2 that he had a dream that he had given “bay’ah,” an Arabic term meaning the oath of allegiance, to Abu Ibrahim al-Hashimi al-Qurashi, the former leader of ISIS.

On March 25, 2021, UC-2 told BRADLEY that the cargo ship would be leaving on March 31 from a seaport in Newark, New Jersey.  BRADLEY praised Allah and confirmed he and MUTHANA planned to travel on the ship.  On March 31, 2021, BRADLEY and MUTHANA met with UC-2 en route to the seaport.  During this meeting, MUTHANA confirmed to UC-2 that she was traveling to the Middle East to fight for ISIS.  BRADLEY and MUTHANA were arrested as they walked on a gangplank to board the cargo ship.  After MUTHANA was arrested, she waived her Miranda rights and stated during an interview that she was willing to fight and kill Americans if it was for Allah.  Also on March 31, 2021, in connection with court-authorized searches, the Federal Bureau of Investigation (“FBI”) seized from a bedroom previously used by BRADLEY a hand-drawn image of a jihadi flag commonly used by ISIS and a hand-drawn map of the Pakistan region, and the FBI also recovered a machete from a truck used by BRADLEY.

In the months and years prior to their arrests, BRADLEY and MUTHANA also accessed, posted, and distributed extremist online content, including materials indicative of their support for ISIS.  Such material included BRADLEY’s postings of images of ISIS fighters, Usama Bin Laden, and terrorist attacks, and his distribution to UC-1 of videos of ISIS fighters, a 2020 stabbing attack against a New York City Police Department (“NYPD”) officer, and extremists shooting a uniformed soldier.  Content on MUTHANA’s cellphone, which was searched pursuant to a court-authorized search warrant, included images of an ISIS flag with Arabic writing, ISIS propaganda, firearms, quotations of the deceased extremist preacher and former al Qaeda in the Arabian Peninsula member Anwar al-Awlaki, including, for example, a copy of the cover of a book authored by al-Awlaki, titled “44 Ways to Support Jihad,” and a video showing an individual in prisoner garb being chained and then burned alive.

*                *                *

In addition to the prison term, BRADLEY, 21, of the Bronx, New York, and MUTHANA, 30, of Hoover, Alabama, were each sentenced to 10 years of supervised release.

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

The case is being handled by the Office’s National Security and International Narcotics Unit.  Assistant U.S. Attorneys Kaylan E. Lasky and Jason A. Richman are in charge of the prosecution, with assistance from Trial Attorney Jennifer Burke of the Counterterrorism Section.

[1] Communications, conversations, and statements discussed and quoted herein are described in substance and in part.

A Puerto Rico man is scheduled to make his initial appearance this afternoon at the federal courthouse in Manhattan to face commodities fraud, commodities market manipulation, and wire fraud charges in connection with the manipulation of the Mango Markets decentralized cryptocurrency exchange. 

According to court documents, Avraham Eisenberg, 27, engaged in a scheme to fraudulently obtain approximately $110 million worth of cryptocurrency from the cryptocurrency exchange Mango Markets and its customers and achieved this objective by artificially manipulating the price of certain perpetual futures contracts. He was previously arrested on Dec. 26, 2022, in San Juan, Puerto Rico, pursuant to a criminal complaint and ordered detained.

“Exploiting decentralized finance platforms is the new frontier of old school financial crimes in which criminals abuse emerging technologies for their own personal gain,” said Assistant Attorney General Kenneth A. Polite, Jr. of the Justice Department’s Criminal Division. “With this prosecution, the Criminal Division is sending the message that no matter the mechanism used to commit market manipulation and fraud, we will work to hold those responsible to account.”

Mango Markets is a decentralized cryptocurrency exchange that allows investors to, among other things, purchase and borrow cryptocurrencies and cryptocurrency-related financial products.  Mango Markets is run by the Mango Decentralized Autonomous Organization (the Mango DAO). The Mango DAO has its own crypto token named MNGO, which investors can buy and sell. Holders of the MNGO token are allowed to vote on changes to the Mango Markets platform and issues related to the governance of the Mango DAO.

“As alleged, Avraham Eisenberg manipulated the Mango Markets cryptocurrency exchange in order to obtain over $100 million in illicit profits for himself,” said U.S. Attorney Damian Williams for the Southern District of New York. “Through his scheme, Eisenberg left others holding the bag. Market manipulation is illegal in all of its forms, and this office is committed to prosecuting such schemes wherever they occur – including the cryptocurrency markets.”

“The defendant is alleged to have executed a scheme through which he fraudulently acquired over $100 million worth of cryptocurrency,” said Assistant Director in Charge Michael J. Driscoll of the FBI New York Field Office. “The FBI is dedicated to safeguarding the integrity of all financial markets and will ensure any individual willing to exploit one be held responsible in the criminal justice system.”

Eisenberg is charged in the Southern District of New York with one count of commodities fraud, one count of commodities manipulation, and one count of wire fraud. If convicted, he faces a maximum penalty of 10 years in prison for the commodities fraud count, maximum penalty of 10 years in prison for the commodities manipulation count, and maximum penalty of 20 years in prison for the wire fraud count.

The FBI is investigating the case with assistance from Homeland Security Investigations and IRS Criminal Investigation. The Commodity Futures Trading Commission and the Securities and Exchange Commission initiated parallel civil proceedings.

National Cryptocurrency Enforcement Team (NCET) Trial Attorney Jessica Peck and Assistant U.S. Attorneys Thomas Burnett and Noah Solowiejczyk for the Southern District of New York are prosecuting the case.

The NCET was established to combat the growing illicit use of cryptocurrencies and digital assets. Under the Criminal Division, the NCET conducts and supports investigations into individuals and entities that enable the use of digital assets to commit and facilitate a variety of crimes, with a particular focus on virtual currency exchanges, mixing and tumbling services, and infrastructure providers. The NCET also sets strategic priorities regarding digital asset technologies, identifies areas for increased investigative and prosecutorial focus, and leads the department’s efforts to collaborate with domestic and foreign government agencies as well as the private sector to aggressively investigate and prosecute crimes involving cryptocurrency and digital assets.

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

Damian Williams, the United States Attorney for the Southern District of New York, announced today that ONEKEY, LLC, a New Jersey construction company, and its principal, FINBAR O’NEILL, pled guilty to willfully violating Occupational Safety and Health Administration (“OSHA”) regulations, resulting in the death of a construction worker (“Victim-1”) in Poughkeepsie, New York, on or about August 3, 2017.  The defendants pled guilty before U.S. Magistrate Judge Paul E. Davison, to whom the case is assigned.  The defendants are scheduled to be sentenced on May 12, 2023.

U.S. Attorney Damian Williams said: “Onekey, a construction company, and its principal, Finbar O’Neill, endangered the safety of their workers by willfully disregarding regulations and taking shortcuts to sidestep their safety obligations.  This conduct led to the tragic death of a worker on a construction site.  Today’s guilty plea should serve as a reminder to all businesses that failure to comply with safety regulations endangers their workers and unfairly disadvantages business that are following the rules, and this Office will hold you accountable.”

According to statements and filings in federal court:

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

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

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

*                *                *

ONEKEY, LLC, a New Jersey corporation, pled guilty to one count of willful violation of OSHA regulations resulting in death.  The foregoing count carries a maximum fine of $500,000.  FINBAR O’NEILL, 57, of Paramus, New Jersey, pled guilty to one of count of willful violation of OSHA regulations resulting in death.  The foregoing count carries a maximum sentence of six months in prison and a maximum fine of $250,000.  

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

Mr. Williams praised the outstanding work of OSHA and the Department of Labor, Office of the Inspector General (“DOL-OIG”).

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

Damian Williams, the United States Attorney for the Southern District of New York, announced that NICKOLAS SHARP pled guilty today in Manhattan federal court to multiple federal crimes in connection with a scheme he perpetrated to secretly steal gigabytes of confidential files from a public New York-based technology company where he was employed (“Company‑1”).  While purportedly working to remediate the security breach for Company-1, SHARP extorted the company for nearly $2 million for the return of the files and the identification of a remaining purported vulnerability.  SHARP subsequently re-victimized his employer by causing the publication of misleading news articles about the company’s handling of the breach that he perpetrated, which were followed by the loss of over $4 billion in Company-1’s market capitalization.  SHARP pled guilty to intentionally damaging a protected computer, wire fraud, and making false statements to the Federal Bureau of Investigation (“FBI”) before U.S. District Judge Katherine Polk Failla.

U.S. Attorney Damian Williams said: “Nickolas Sharp’s company entrusted him with confidential information that he exploited and held for ransom.  Adding insult to injury, when Sharp wasn’t given his ransom demands, he retaliated by causing false news stories to be published about the company, which resulted in his company’s market capitalization plummeting by over $4 billion.  Sharp’s guilty plea today ensures that he will face the consequences of his destructive actions.”

As alleged in the Indictment and based on statements and filings made in court:

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

In about December 2020, SHARP repeatedly misused his administrative access to download gigabytes of confidential data from his employer.  For the majority of this cybersecurity incident (the “Incident”), SHARP used a virtual private network (“VPN”) service that he subscribed to from a company named Surfshark to mask his Internet Protocol (“IP”) address when he accessed Company-1’s AWS and GitHub infrastructure without authorization.  At one point during the exfiltration of Company-1 data, SHARP’s home IP address became unmasked following a temporary internet outage at SHARP’s home.

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

On or about March 24, 2021, FBI agents executed a search warrant at SHARP’s residence in Portland, Oregon, and seized certain electronic devices belonging to SHARP.  During the execution of that search, SHARP made numerous false statements to FBI agents, including, among other things, in substance, that he was not the perpetrator of the Incident and that he had not used Surfshark VPN prior to the discovery of the Incident.  When confronted with records demonstrating that SHARP purchased the Surfshark VPN service in July 2020, approximately six months prior to the Incident, SHARP falsely stated, in part and substance, that someone else must have used his PayPal account to make the purchase.

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

Following the publication of these articles, between March 30, 2021, and March 31, 2021, Company-1’s stock price fell approximately 20%, losing over $4 billion in market capitalization.

*                *                *

SHARP, 37, of Portland, Oregon, pled guilty today to one count of transmitting a program to a protected computer that intentionally caused damage, one count of wire fraud, and one count of making false statements to the FBI.  These offenses carry a total maximum sentence of 35 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.  SHARP is scheduled to be sentenced by Judge Failla on May 10, 2023, at 3:00 p.m.

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

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

Damian Williams, the United States Attorney for the Southern District of New York, Kenneth A. Polite, Jr., the Assistant Attorney General of the Justice Department’s Criminal Division, and Michael J. Driscoll, the Assistant Director in Charge of the New York Field Office of the Federal Bureau of Investigation (“FBI”), announced that AVRAHAM EISENBERG will make his initial appearance in the Southern District of New York later today in connection with an Indictment charging him with commodities fraud, commodities market manipulation, and wire fraud in connection with EISENBERG’s manipulation of the Mango Markets decentralized cryptocurrency exchange.  As alleged in the Indictment filed on January 9, 2023, EISENBERG engaged in a scheme to fraudulently obtain approximately $110 million worth of cryptocurrency from the cryptocurrency exchange Mango Markets and its customers and achieved this objective by artificially manipulating the price of certain perpetual futures contracts.  EISENBERG was previously arrested on December 26, 2022, in San Juan, Puerto Rico, pursuant to a criminal Complaint.  EISENBERG will appear in federal court in Manhattan today and will be presented on the charges before United States Magistrate Judge Jennifer E. Willis.  The case has been assigned to United States District Judge Richard Berman. 

U.S. Attorney Damian Williams said: “As alleged, Avraham Eisenberg manipulated the Mango Markets cryptocurrency exchange in order to obtain over $100 million in illicit profits for himself.  Through his scheme, Eisenberg left others holding the bag.  Market manipulation is illegal in all of its forms, and this Office is committed to prosecuting such schemes wherever they occur – including in the cryptocurrency markets.”

Assistant Attorney General Kenneth A. Polite, Jr. said: “Exploiting decentralized finance platforms is the new frontier of old school financial crimes in which criminals abuse emerging technologies for their own personal gain.  With this prosecution, the Criminal Division is sending the message that no matter the mechanism used to commit market manipulation and fraud, we will work to hold those responsible to account.”

FBI Assistant Director Michael J. Driscoll said: “The defendant is alleged to have executed a scheme through which he fraudulently acquired over $100 million worth of cryptocurrency.  The FBI is dedicated to safeguarding the integrity of all financial markets and will ensure any individual willing to exploit one be held responsible in the criminal justice system.”           

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

Background on Mango Markets

Mango Markets is a decentralized cryptocurrency exchange that allows investors to, among other things, purchase and borrow cryptocurrencies and cryptocurrency-related financial products.  Mango Markets is run by the Mango Decentralized Autonomous Organization (the “Mango DAO”).  The Mango DAO has its own crypto token called MNGO, which investors could buy and sell.  Holders of the MNGO token are allowed to vote on changes to Mango Markets and issues related to the governance of the Mango DAO.

Investors on Mango Markets can, among other things, buy and sell perpetual futures contracts (“Perpetuals”).  When an investor buys or sells a Perpetual for a particular cryptocurrency, the investor is not buying or selling that cryptocurrency but is, instead, buying or selling exposure to future movements in the value of that cryptocurrency relative to another cryptocurrency.  An investor who buys a Perpetual based on the relative value of the stablecoin USDC and MNGO (a “MNGO Perpetual,” for short) at a price of 0.02 USDC/MNGO is “long” on MNGO, and the value of that position will rise if the value of MNGO rises above 0.02 USDC/MNGO.  Conversely, the investor who sold that Perpetual is “short” on MNGO, and the value of that position will rise if the value of MNGO falls relative to USDC.  Either party to a Perpetual can settle the Perpetual at any time and realize their gain or loss. 

To determine the settlement price of Perpetuals, Mango Markets uses an “oracle,” which is a computer program that calculates the relative value of two cryptocurrencies by looking at the exchange rate of those cryptocurrencies on various cryptocurrency exchanges (the “Oracle”).  When the Oracle price changes for a particular cryptocurrency pairing, the settlement price of Perpetuals based on that cryptocurrency pairing also changes on Mango Markets.  Each party to a Perpetual on Mango Markets also regularly makes or receives payments known as “funding” payments.  Funding payments are calculated based on the midprice of bids and asks for that Perpetual compared to the Oracle price for that Perpetual.  Funding payments are designed to ensure the purchase price for Perpetuals stays close to settlement prices. 

Investors can also engage in “spot” trades on Mango Markets.  In a spot trade, an investor exchanges one cryptocurrency for another, at whatever the prevailing exchange rate between those two cryptocurrencies is at the time of the transaction.

Mango Markets also allows investors to use their deposits and positions as collateral for borrowing and withdrawing cryptocurrency from the Mango Markets exchange.  To borrow through Mango Markets, an investor accesses the Mango Markets website and clicks a button labeled “borrow” that allows the investor to borrow cryptocurrency.  The investor can then withdraw the borrowed cryptocurrency by clicking another button labeled “withdraw.”  The borrowed cryptocurrency comes from cryptocurrency that other investors have deposited in Mango Markets accounts.  The amount that an investor on Mango Markets can withdraw is determined by a formula that looks at, among other things, the value of the cryptocurrency deposited in the investor’s account, the value of the investor’s positions on Mango Markets, and the amount of cryptocurrency that the investor has already borrowed through Mango Markets.  Mango Markets uses a formula to track the relationship between these assets and liabilities, which Mango Markets labels the “health” of the account.  If the “health” of a Mango Markets account falls below a certain threshold, the investor’s positions on Mango Markets can be liquidated

EISENBERG’s Market Manipulation Scheme

EISENBERG engaged in a scheme to steal approximately $110 million by artificially manipulating the price of MNGO Perpetuals on Mango Markets.  To achieve this objective, EISENBERG took a number of steps.  First, EISENBERG used an account that he controlled on Mango Markets to sell a large amount of MNGO Perpetuals and used a separate account on Mango Markets to purchase those same MNGO Perpetuals.  One account that EISENBERG controlled held a “long” position, the value of which would rise if the value of MNGO relative to USDC rose above the threshold of 0.0382 USDC/MNGO (the “Long MNGO Perpetual Position”).  The second account that EISENBERG controlled held a “short” position, the value of which would rise if the value of MNGO relative to USDC fell below 0.0382 USDC/MNGO (the “Short MNGO Perpetual Position”).  EISENBERG was the owner of both positions and had sold to himself, from himself, the MNGO Perpetuals.

Second, EISENBERG made a series of large purchases of MNGO using the stablecoins USDC and USDT on multiple cryptocurrency exchanges with the objective of artificially increasing the price of MNGO relative to USDC and, in turn, the price of MNGO Perpetuals on Mango Markets.  EISENBERG’s manipulative trading caused the price of MNGO Perpetuals on Mango Markets to rise approximately 1300% in a period of approximately 20 minutes.

Finally, as the price of MNGO Perpetuals on Mango Markets rose due to the manipulative purchasing by EISENBERG, the apparent value of the MNGO Perpetuals that EISENBERG had purchased for himself also rose.  Because Mango Markets allows investors to borrow and withdraw cryptocurrency based on the value of their assets on the platform, the artificial increase in the value of the MNGO Perpetuals EISENBERG had purchased from himself allowed him to borrow, and then withdraw, approximately $110 million worth of various cryptocurrencies from Mango Markets, which came from deposits of other investors in the Mango Markets exchange.  EISENBERG withdrew nearly all then-available funds from Mango Markets.  When Eisenberg borrowed and withdrew this cryptocurrency, he had no intention of repaying the borrowed funds but rather intended to steal those funds.

After EISENBERG stopped purchasing MNGO with USDC in connection with his fraudulent scheme, the price of MNGO Perpetuals on Mango Markets – which was no longer being artificially propped up by EISENBERG – collapsed.

*                *                *

AVRAHAM EISENBERG, 27, of San Juan, Puerto Rico, is charged with one count of commodities fraud, which carries a maximum sentence of 10 years in prison; one count of commodities manipulation, which carries a maximum sentence of 10 years in prison; and one count of wire fraud, which carries a maximum sentence of 20 years in prison.

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

Mr. Williams praised the investigative work of the FBI and further thanked the Department of Homeland Security’s Homeland Security Investigations and the Internal Revenue Service-Criminal Investigation for their assistance with the investigation.  Mr. Williams further thanked the Commodity Futures Trading Commission and the Securities and Exchange Commission, both of which have initiated civil proceedings against EISENBERG, for their cooperation and assistance in the investigation.

This case is being handled by Assistant U.S. Attorneys Thomas Burnett and Noah Solowiejczyk of the Office’s Securities and Commodities Fraud Task Force and Jessica Peck of the National Cryptocurrency Enforcement Team (NCET).

The NCET was created by the Criminal Division to combat the growing illicit use of cryptocurrencies and digital assets.  Under the supervision of the Criminal Division, the NCET conducts and supports investigations into individuals and entities that are enabling the use of digital assets to commit and facilitate a variety of crimes, with a particular focus on virtual currency exchanges, mixing and tumbling services, and infrastructure providers. 

The allegations in the Indictment and 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 Indictment and the Complaint, and the description of the Indictment and 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 a jury returned a guilty verdict today against STANISLAV YAKUBOV, a/k/a “Steve,” on three counts in a Superseding Indictment, including one count of money laundering conspiracy and two counts of making false statements to federal law enforcement agents.  YAKUBOV is scheduled to be sentenced on June 1, 2023, by U.S. District Judge Edgardo Ramos, who presided over the eight-day trial.     

U.S. Attorney Damian Williams said: “Stanislav Yakubov agreed to purchase hundreds of thousands of dollars’ worth of diamond-encrusted, stolen luxury watches that had been taken during violent robberies, the victims of which included jewelers from Yakubov’s own community.  Yakubov’s actions fueled a year-long robbery spree that targeted nearly a dozen victims, and his conviction sends a message to the community that the purchase and laundering of stolen property will be vigorously investigated and prosecuted.”

Photographs of some of the stolen watches are set forth below.  If you believe you know the whereabouts of any of these watches, please contact the U.S. Attorney’s Office for the Southern District of New York at 1-866-874-8900, and reference this case:

According to the Superseding Indictment and the evidence presented at trial:

From at least in or about October 2019 up to and including November 2020, STANISLAV YAKUBOV, and others known and unknown, agreed to purchase stolen watches worth up to hundreds of thousands of dollars, each that had been taken during armed robberies.  The watches owned by victims targeted in the robberies included diamond-encrusted Richard Mille, Rolex, Audemars Piguet, and Patek Philippe watches owned by jewelers as part of the jewelers’ businesses based in Manhattan’s Diamond District and elsewhere.  

The robberies and attempted robberies included the following: 

1. On October 3, 2019, a jeweler in Long Island City, New York, was robbed of, among other things, a Richard Mille watch worth over $150,000.
2. On October 25, 2019, a jeweler in Jamaica, New York, was robbed of, among other things, a Rolex watch worth over $118,000.
3. On December 10, 2019, a jeweler in Brooklyn, New York, was robbed of, among other things, a Patek Philippe watch worth over $160,000 and a diamond necklace worth over $77,000. 
4. On January 14, 2020, a jeweler in Rego Park, New York, was robbed of, among other things, a Richard Mille watch worth over $500,000.
5. On February 16, 2020, a jeweler in Jamaica Estates, New York, was robbed of, among other things, an Audemars Piguet watch worth over $28,000.
6. On February 20, 2020, an individual in Long Island City, New York, was robbed of, among other things, an Audemars Piguet watch worth over $125,000.
7. On June 11, 2020, a jeweler in Brooklyn, New York, was robbed of, among other things, a Richard Mille watch worth over $148,000. 
8. On July 6, 2020, a jeweler in Hoboken, New Jersey, was robbed of, among other things, a Richard Mille watch worth over $81,000. 
9. On July 20, 2020, a jeweler in Queens, New York, was the victim of an attempted robbery involving a Richard Mille watch worth over $180,000.
10. On August 2, 2020, a food critic/social media influencer was robbed of, among other things, a Richard Mille watch worth over $250,000 in the vicinity of Englewood Cliffs, New Jersey. 

In addition, on or about October 20, 2020, and March 24, 2021, YAKUBOV knowingly and willfully made false statements to federal law enforcement officers investigating the robbery spree.  YAKUBOV falsely said, among other things, that he never purchased any watches from the robbery crew and that the robbers were merely customers who had purchased jewelry from YAKUBOV in the past.

*                *                *

YAKUBOV, 42, of Queens, New York, was convicted of one count of conspiracy to commit money laundering, which carries a maximum prison term of 20 years, and two counts of making false statements to federal law enforcement agents, each of which carry a maximum prison term of five years.

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 Special Agents of the U.S. Attorney’s Office for the Southern District of New York and the New York City Police Department.  Mr. Williams also thanked the Bergen County, New Jersey, Prosecutor’s Office, the Englewood Cliffs, New Jersey, Police Department, the Weehawken, New Jersey, Police Department, and the Nassau County Police Department for their assistance.

This case is being handled by the Office’s Violent and Organized Crime Unit.  Assistant U.S. Attorneys Mathew Andrews, Andrew K. Chan, and Thomas John Wright, with the assistance of Paralegal Specialist Grayson Glogoff, are in charge of the prosecution.

Damian Williams, the United States Attorney for the Southern District of New York, announced today that MARIANNA LEVIN was sentenced to 54 months in prison for her leadership role in a broad fraud scheme that defrauded Medicaid for home health and personal care services that were not actually rendered, resulting in the loss of more than $100 million.  United States District Judge John P. Cronan imposed the sentence.  LEVIN pled guilty to wire fraud on June 1, 2022.

U.S. Attorney Damian Williams said: “For years, Marianna Levin, the owner of a Brooklyn-based home health agency, defrauded taxpayers through a massive, fraudulent home health scheme.  As part of the scheme, Levin billed tens of millions of dollars to Medicaid for home health services that were not actually rendered.  As a result, the scheme diverted much-needed resources meant to support services for vulnerable individuals.  Today’s sentence sends a message that those who engage in health care fraud schemes will face stiff penalties.”

According to statements and filings in federal court:

Since in or about 2015, LEVIN engaged in a widespread fraud scheme through which she and her co-conspirators defrauded Medicaid for home health and personal care services that were not actually rendered.  During the course of the scheme, LEVIN served in a senior, executive role at a licensed home care service agency based in Brooklyn, New York (“Agency-1”).  In or about 2016, LEVIN and her co-conspirators opened a second licensed home care service agency based in Brooklyn (“Agency-2” and, together with Agency-1, the “Agencies”).  LEVIN served as the owner of Agency-2 and also continued in her leadership role at Agency-1.

The Agencies purported to provide home health and personal care services to patients residing in all five boroughs of New York City and Nassau County.  Combined, the Agencies employed approximately 3,000 home health and personal care aides (the “Aides”).  Most of the Aides were licensed to provide home health aide services and personal care services.

Home care is a health service provided in the patient’s home to promote, maintain, or restore health or to lessen the effects of illness and disability.  Home care includes personal care services, administered by Aides, including housekeeping, meal preparation, bathing, toileting, and grooming.

From in or about 2015 to in or about December 2020, Medicaid reimbursed the Agencies hundreds of millions of dollars for home health and personal care services.  A significant portion of the Agencies’ billings were fraudulent.  In particular, the Agencies billed Medicaid for “no-show” cases in which Aides claimed to be performing home health or personal care services when they were not.  At times when Aides falsely claimed to be performing home health or personal care services, they, in fact, stayed home, ran personal errands, vacationed, and socialized with family and friends.  The fraud at the Agencies coincided with ballooning costs on home care in New York State.  In or about January 2020, New York’s State budget director announced, in substance and in part, that spending in the home health space tripled between the 2013 and 2019 fiscal years, representing a $4.8 billion increase. 

With no-show cases at the Agencies, an Aide’s fraudulently obtained wages were often split between the no-show Aide and the no-show patient.  In addition to paying kickbacks to no-show patients, no-show Aides sometimes paid kickbacks to conspirators who referred no-show cases to Aides at the Agencies. 

LEVIN and her co-conspirators also engaged in other fraudulent activity to boost the Agencies’ billing and increase the amount of money paid out to the Agencies. 

Over the course of the scheme, LEVIN received more than $5 million in compensation from the Agencies.

In imposing the sentence, Judge Cronan emphasized the seriousness of LEVIN’s involvement in the fraud, the losses it caused, and the need to deter other home care businesses and workers from engaging in similar crimes.

*                *                *

In addition to her prison term, MARIANNA LEVIN, 49, of Brooklyn, New York, was ordered to forfeit $1,496,000 and pay restitution of $36,328,183. 

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

This case is being handled by the Office’s Complex Frauds and Cybercrime Unit.  Assistant U.S. Attorneys Nicholas W. Chiuchiolo and Daniel G. Nessim 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”), AnnMarie R. Highsmith, Executive Assistant Commissioner for U.S. Customs and Border Protection’s (“CBP”) Office of Trade, and Francis Russo, Director of CBP Field Operations New York, announced that the United States has entered into a settlement agreement to resolve a civil fraud lawsuit against HIGH LIFE LLC (“HIGH LIFE”), an apparel design and import company headquartered in Manhattan, for underreporting to CBP the value of apparel imported into the United States.  The settlement resolves claims that HIGH LIFE underreported the value of 67 apparel shipments in order to avoid paying the full customs duties owed.  Under the settlement agreement approved by U.S. District Judge Victor Marrero, HIGH LIFE has agreed to pay $1.3 million to the United States and has made admissions regarding certain conduct alleged in the Government’s Complaint. 

U.S. Attorney Damian Williams said: “Rather than comply with the law, High Life chose to underreport the value of apparel imported into this country to avoid paying legally mandated customs duties.  This Office will continue to hold companies accountable when they make misrepresentations to CBP to enhance their own bottom line.”

HSI Special Agent-in-Charge Ivan J. Arvelo said: “This settlement should serve as a warning to companies that attempt to bolster their bottom line by cheating and defrauding the United States.  Individuals or organizations that knowingly and willfully use tactics such as undervaluing or misclassifying goods to avoid paying lawful customs charges are violating the laws of international commerce and HSI will not stand by idly.  Our special agents will work diligently with our law enforcement partners to protect legitimate businesses by apprehending those that exploit our trade systems and rob our government of vital revenues.”

CBP Executive Assistant Commissioner AnnMarie R. Highsmith said: “Importers need to know that manipulating the values they report to CBP can come with serious consequences.  This case is a great example of the collaborative trade enforcement efforts between teams at CBP, who identified the original pattern of misconduct, and the U.S. Attorney’s Office.” 

CBP Director of Field Operations Francis Russo said: “U.S. Customs and Border Protection has a cadre of dedicated professionals – import specialists and regulatory auditors – with expertise in the financial details surrounding imports, including terms of sale and their effect on the dutiable value of goods when they arrive in the United States.  Our trade experts found anomalies in High Life’s value calculations based on the terms of sale to its foreign suppliers and paved the way for the Justice Department and Homeland Security Investigations to move this case forward and bring it to a successful conclusion.  Their knowledge and collaboration with our law enforcement partners stopped High Life’s efforts to defraud the United States of hundreds of thousands of dollars in revenue.”           

As alleged in the Complaint filed in Manhattan federal court:

HIGH LIFE purchases apparel from foreign vendors (the “Vendors”), who in turn contract with overseas factories to manufacture the apparel.  In December 2015, after CBP had detained numerous HIGH LIFE shipments due to concerns that the declared values were fraudulent, HIGH LIFE decided to transition its business model.  Instead of purchasing the apparel on Landed Duty Paid (“LDP”) terms — meaning that HIGH LIFE paid the Vendors a price inclusive of all costs associated with importing the merchandise — HIGH LIFE began purchasing the merchandise on Free on Board (“FOB”) terms.  Under the new FOB model, HIGH LIFE assumed importation responsibilities, including the responsibility to declare the value of the imported goods and pay the associated customs duties. 

As the importer of record, HIGH LIFE was permitted, if certain criteria were met, to declare the value of the imported goods based on the price the Vendors paid the factories (“First Sale Price”), instead of the price HIGH LIFE paid the Vendors.  However, HIGH LIFE could only declare the First Sale Price as the value of the orders if the goods were the subject of a bona fide sale between the Vendors and the factories, the goods were clearly destined for export to the United States, and the factories and the Vendors dealt with each other at arm’s length, in the absence of any non-market influences that affected the legitimacy of the sales price.

From January 21, 2016, through June 1, 2016 (the “Relevant Time Period”), HIGH LIFE materially underreported the value of previously ordered apparel in 67 imported shipments.  In transitioning from LDP to FOB terms, HIGH LIFE developed a formula that worked backwards from a previously negotiated LDP price to calculate what HIGH LIFE wanted the FOB price and First Sale Price to be and then used that First Sale Price to declare the values of 67 shipments.  The prices used by HIGH LIFE for customs reporting purposes were determined after the orders for the apparel had been placed, after the pricing structure had been negotiated, and after the apparel was in production.  It was improper to declare the imported merchandise using these values because the prices were not based on a bona fide sale between the Vendors and the overseas factories and were not the result of arm’s length negotiations between those Vendors and the factories in the absence of any non-market influences.  Indeed, HIGH LIFE instructed the Vendors on how to calculate and report the prices that HIGH LIFE ultimately used to declare the values to CBP. 

As part of the settlement, HIGH LIFE admits, acknowledges, and accepts responsibility for the following conduct:

• Once HIGH LIFE transitioned to an FOB model, it assumed importation responsibilities for the shipments.  As the importer of record, HIGH LIFE could then, if certain criteria were met, declare the value of the imported goods based on the price the Vendors paid the factories, instead of the price HIGH LIFE paid the Vendors.  However, HIGH LIFE could only declare the First Sale Price as the value of the orders if the goods were the subject of a bona fide sale between the Vendors and the factories, clearly destined for export to the United States, and the factories and the Vendors dealt with each other at arm’s length, in the absence of any non-market influences that affected the legitimacy of the sales price.
• In transitioning from LDP to FOB terms, HIGH LIFE developed a formula that worked backwards from a previously negotiated LDP price to calculate what HIGH LIFE wanted the FOB price and First Sale Price to be and then used that First Sale Price to declare the values of 67 shipments made during the Relevant Time Period (the “Subject Orders”).  HIGH LIFE requested the Vendors to delay shipping merchandise while the First Sale Prices for the Subject Orders were finalized.  Indeed, on December 24, 2015, HIGH LIFE’s Production Manager asked the Vendors to “hold as many shipments as possible until we finalize the First Sale.”
• Beginning in late December 2015 and continuing through January 2016, HIGH LIFE instructed the Vendors to apply HIGH LIFE’s formula to calculate the First Sale Price that HIGH LIFE would report to CBP for purposes of calculating the duties owed by HIGH LIFE.
• After the Vendors emailed spreadsheets to HIGH LIFE that purported to reflect the First Sale Prices for the Subject Orders, a member of HIGH LIFE’s production team sent an email to the Vendors directing them to “rework your FOB and [First Sale Price] based on the Highlife Estimate freight.”  Following their receipt of these emails, the Vendors replied to HIGH LIFE within 24 hours with revised First Sale Prices for the merchandise included in the Subject Orders.
• When importing the Subject Orders, HIGH LIFE ultimately declared to CBP that the duties owed should be calculated based on the First Sale Prices the Vendors reported to HIGH LIFE.
• If HIGH LIFE had paid duties to CBP based on the prices HIGH LIFE itself paid for the merchandise included in the Subject Orders, instead of calculating the duties based on the purported First Sale Prices reported by the Vendors pursuant to HIGH LIFE’s instructions, HIGH LIFE would have paid significantly higher customs duties for the Subject Orders.

*                *                *

Mr. Williams praised the outstanding investigative work of the Department of Homeland Security, HSI, and CBP.

This case is being handled by the Office’s Civil Frauds Unit.  Assistant U.S. Attorneys Jessica Jean Hu and Anthony J. Sun are in charge of the case.

Damian Williams, the United States Attorney for the Southern District of New York, announced today that the United States has filed and settled a civil fraud lawsuit against HUNTER COLLEGE (“HUNTER”) and JEFFREY T. PARSONS-HIETIKKO (“PARSONS”), a former HUNTER psychology professor who served as Director of Hunter’s Center for HIV Educational Studies (“CHEST”).  The lawsuit resolves the United States’ allegations that for many years: (i) PARSONS improperly invoiced personal expenses to National Institutes of Health (“NIH”) funds, including expenses related to scuba diving trips, international flights for his family, a tropical birthday celebration, and travel for his work as a private consultant; (ii)  HUNTER used NIH funds to pay PARSONS over $90,000 in retention bonuses without disclosing these payments to NIH as required; and (iii) PARSONS and HUNTER submitted false timekeeping records that misrepresented the time that CHEST staff spent working on NIH grant-related projects, resulting in the use of NIH grant funds to compensate CHEST staff for work performed for private clients.  The lawsuit alleges that these impermissible uses of NIH funds violated HUNTER’s certifications to NIH and the U.S. Department of Health and Human Services (“HHS”) that the NIH funds would be used only for allowable research and academic purposes.

Under the settlement approved by U.S. District Judge Ronnie Abrams, PARSONS, 55, of Teaneck, New Jersey, and HUNTER agreed to pay $375,000 and $200,000, respectively, to the United States and made detailed factual admissions regarding their conduct.  

U.S. Attorney Damian Williams said: “NIH provides funding to academic institutions for the purpose of furthering important research that impacts communities and improves lives.  For years, Jeffrey Parsons-Hietikko obtained these funds under false pretenses, then used them to cover his personal expenses and for other purposes totally unrelated to research.  Hunter College improperly used NIH funds to pay undisclosed bonuses to Parsons and for other expenses unrelated to NIH-funded work.  When individuals and institutions abuse federal grant money, this Office will hold them accountable.”

As alleged in the Complaint filed in Manhattan federal court:

During his time at HUNTER, where he was promoted on multiple occasions and achieved the status of Distinguished Professor in 2012, PARSONS proved himself to be singularly proficient at obtaining NIH funding to support his and CHEST’s research.  HUNTER considered PARSONS to be one of its most prized faculty members and offered him a number of perks, including discretionary spending accounts financed by NIH funds, a high level of personal control over CHEST’s federal grant funds, and special accommodations in the approval process for obtaining reimbursements from federal funds for his expenses.  PARSONS then abused his authority and influence by repeatedly drawing from these discretionary accounts to fund personal expenses.

From January 1, 2010, through May 17, 2018 (the “Covered Period”), PARSONS and HUNTER defrauded the United States by materially misusing federal funds obtained from NIH and making false certifications and statements to NIH and HHS.  First, PARSONS defrauded the Government by improperly using NIH funds that HUNTER had certified to HHS would only be used to support the facilities and administrative costs associated with HUNTER’s NIH grants (the “Indirect Cost Funds”) to reimburse himself for his personal travel expenses, including expenses relating to personal scuba diving trips, international flights for his family, and a tropical birthday celebration.  PARSONS falsely represented that these reimbursement requests all had an academic or research purpose.  PARSONS also improperly used Indirect Cost Funds to double the reimbursement he received for travel relating to his non-NIH-related work as a private consultant to external clients.

From December 2010 through December 2013, HUNTER improperly used the Indirect Cost Funds to pay PARSONS over $90,000 in undisclosed retention bonuses, even though NIH rules and regulations prohibited the Indirect Cost Funds from being used to make such payments.  HUNTER never disclosed and, indeed, took steps to hide its use of the Indirect Cost Funds to pay these bonuses to PARSONS.

During the Covered Period, PARSONS also misused CHEST’s NIH grant funds to pay CHEST staff for time they spent working for CHEST’s private consulting clients, rather than on NIH grant-related projects.  In order to obtain NIH funds for this purpose, PARSONS approved timekeeping records representing that those staff spent their time and effort working on NIH-funded research projects.  In reality, however, CHEST staff had also spent time working on unrelated projects commissioned by third parties, which were not properly reimbursable from the NIH grant funds and were not accurately reflected on the documents PARSONS submitted to obtain reimbursement.  Although HUNTER was on notice that CHEST staff performed work on outside projects, it nevertheless sought and received NIH funds to improperly pay CHEST staff for this outside work.  The third parties that commissioned CHEST to work on the outside projects separately paid for the work performed by CHEST staff.  HUNTER directed those payments into discretionary accounts to benefit CHEST and PARSONS, including one account used to reimburse PARSONS for alcohol expenses.  Moreover, even after HUNTER became aware that NIH-funded CHEST staff had been improperly utilized to perform work for PARSONS’s private consulting company, HUNTER never took steps to investigate or report to NIH this misuse of NIH funding.

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

• From 2013 through 2017, PARSONS requested reimbursement from Indirect Cost Funds for scuba diving trips to the Cayman Islands, Bonaire, Cuba, Costa Rica, Fiji, Cozumel, and Belize (the “Scuba Trips”).  As part of his request for reimbursement from Indirect Cost Funds, PARSONS represented that the Scuba Trips had a research purpose.  However, PARSONS did not create any documents, data, or records reflecting research he conducted while he was on the Scuba Trips.
• In addition to the Scuba Trips, from 2016 through 2017, PARSONS also requested reimbursement from Indirect Cost Funds for travel to Cape Town (the “Cape Town Trip”) and Puerto Rico (the “Puerto Rico Trip,” and together with the Cape Town Trip, the “Personal Trips”).  As part of his request for reimbursement from Indirect Cost Funds for the Personal Trips, PARSONS represented that the Personal Trips had an academic purpose. 
• From 2016 through 2018, PARSONS sought and received reimbursement from Indirect Cost Funds to reimburse himself for travel to Denver, Chicago, and Los Angeles.  However, during these trips, PARSONS was not working on projects relating to CHEST’s NIH grants and, instead, was working as a consultant for other institutions.  PARSONS did not reimburse HUNTER or NIH for any of the Indirect Cost Funds he received relating to his travel to Denver, Chicago, and Los Angeles as a consultant for other academic institutions.
• Throughout the Covered Period, PARSONS caused HUNTER to request NIH grant funds to pay the salaries of CHEST staff ostensibly working on CHEST’s NIH-funded research.  PARSONS approved a spreadsheet that purported to reflect the percentage of time and effort that CHEST staff spent working on CHEST’s NIH-funded research (the “Staff Allocation Spreadsheet”).  During the Covered Period, CHEST staff not only worked on projects connected to HUNTER’s own NIH-funded research, but also on unrelated projects commissioned by third parties (“Outside Projects”).  During the Covered Period, the Staff Allocation Spreadsheet failed to accurately reflect the time and effort CHEST staff spent working on the Outside Projects.  Instead, during the Covered Period, the Staff Allocation Spreadsheet reflected CHEST staff as working entirely on CHEST’s NIH-funded research.

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

• During the Covered Period, HUNTER was aware that CHEST staff worked on Outside Projects and received payments from third parties for that work.  However, the staff’s work on many of the Outside Projects was not reflected on the Staff Allocation Spreadsheet at all, and when it was, the Staff Allocation Spreadsheet understated the time that CHEST staff spent working on those Outside Projects.  Instead, the time and effort of CHEST’s staff on the Outside Projects was incorrectly allocated on the Staff Allocation Spreadsheet to projects that NIH funded directly through NIH grants.  HUNTER, in reliance on these incorrect Staff Allocation Spreadsheets, sought and received reimbursement from the NIH for staff time and effort expended on the Outside Projects.
• HUNTER deposited the funds it received as payment for CHEST’s staff work on the Outside Projects into accounts to benefit CHEST and PARSONS, and one of these accounts was used to reimburse PARSONS for expenses for alcohol at CHEST-related events.
• From December 2010 through December 2013, HUNTER used Indirect Cost Funds to pay PARSONS over $90,000 of retention bonuses, which were never disclosed to NIH.  Throughout the Covered Period, NIH rules and regulations prohibited the use of Indirect Cost Funds to pay faculty retention bonuses not previously disclosed to NIH.

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

*                *                *

Mr. Williams praised the outstanding investigative work of the Federal Bureau of Investigation and the Office of Inspector General for HHS.

This case is being handled by the Office’s Civil Frauds Unit.  Assistant U.S. Attorney Jessica Jean Hu is in charge of the case.

Damian Williams, the United States Attorney for the Southern District of New York, AnnMarie R. Highsmith, Executive Assistant Commissioner for U.S. Customs and Border Protection’s (“CBP”) Office of Trade, and Francis Russo, Director of CBP Field Operations New York, announced today that the United States has filed and settled a civil lawsuit against International Vitamins Corporation (“IVC”), a United States-based company that imports and sells vitamins and nutritional supplements from China.  The settlement resolves claims that, for years, IVC defrauded the United States by misclassifying more than 30 of its products under the Harmonized Tariff Schedule (“HTS”) in order to avoid paying customs duties and by failing to pay back duties owed to the United States even after IVC finally corrected its longstanding misclassifications.

Under the settlement agreement approved by U.S. District Judge Mary Kay Vyskocil, IVC will pay $22,865,055 to the United States.  As part of the settlement agreement, IVC also made admissions regarding its conduct.  IVC admitted that, between 2015 and 2019, it utilized HTS classifications for 32 products it imported from China (the “Covered Products”) that carried duty-free rates, even though those products, if accurately classified, would have been subject to the payment of duties.  IVC also admitted that even after it retained a consultant in 2018 who informed IVC that it had been misclassifying the Covered Products, IVC did not implement the correct classifications for over nine months and never remitted duties that it had underpaid to the United States because of its misclassification of the Covered Products.

U.S. Attorney Damian Williams said: “IVC engaged in a fraudulent scheme to avoid customs duties owed to the United States by misclassifying many of its products as duty-free when importing them from China.  Worse yet, IVC made no effort to right its wrongs even after acknowledging internally that it had underpaid millions of dollars of duties owed.  This Office is committed to combatting customs fraud by holding companies accountable when they attempt to avoid paying what they owe when importing goods from abroad.”

CBP Executive Assistant Commissioner AnnMarie R. Highsmith said: “This case reflects a pattern of behavior in which this company knowingly misclassified imported merchandise to avoid paying duties.  They did so despite clear prior rulings by CBP on the correct classification for this specific type of product.  Their failure to adhere to the customs laws, which are designed to protect U.S. revenue and U.S. consumers, will cost the company more than $22.8 million under the terms of a civil settlement with the United States.  The dedication of the men and women of the CBP Office of Trade, the Office of Chief Counsel New York, and the United States Attorney’s Office to protect a fair and competitive trade environment is vital to facilitating lawful trade.”

CBP Director of Field Operations Francis Russo said: “U.S. Customs and Border Protection provided the critical link to an ongoing investigation into an attempt to circumvent payment of proper duties.  This case serves as a great example of collaborative law enforcement efforts to uncover and dismantle enterprises that seek to defraud the United States government for personal gain while causing economic harm to their competitors.”

As alleged in the Complaint filed in Manhattan federal court:

From January 1, 2015, through September 13, 2019 (the “Covered Period”), IVC made thousands of entries of the Covered Products (consisting of raw and bulk vitamins and nutritional supplements) into the United States from China while materially misreporting to CBP the duty rates applicable to those products under the HTS.  IVC knowingly submitted or caused its customs brokers to submit entry documents to CBP that contained false classifications of the Covered Products in order to avoid paying duties owed and failed to remit underpaid duties even after IVC confirmed that the classifications it had used were incorrect.

IVC utilized inaccurate HTS classifications for the Covered Products despite receiving repeated notices from CBP informing IVC that the classifications it had been using for similar goods were erroneous.  After continuing to use the incorrect HTS classifications for more than three years, IVC retained a consultant to analyze the propriety of its classifications.  Even after the consultant confirmed that IVC had been misclassifying the Covered Products under the HTS, IVC persisted in using its incorrect classifications for these goods for over nine months.  Throughout, IVC provided the incorrect classifications to its customs brokers, knowing that they would rely on those classifications when preparing documents to be submitted to CBP on IVC’s behalf.

When IVC finally adopted the correct classifications for the Covered Products, IVC made no effort to pay back the duties that it had long owed to the United States because of its pervasive misclassifications.  As a result, IVC underpaid millions of dollars of duties owed to CBP for its imports.

In the settlement agreement, IVC admitted, acknowledged, and accepted responsibility for the following conduct:

• During the Covered Period, IVC’s customs brokers used information provided by IVC to prepare and submit customs entry summaries to CBP relating to imports of the Covered Products.  IVC knew that its customs brokers would rely on the information it provided when classifying the Covered Products and preparing the entry summaries to be submitted to CBP. 
• During the Covered Period, IVC provided its customs brokers with HTS classifications for the Covered Products that applied to medicaments and vitamins and that would incur no duties.  The Covered Products should have been classified as food preparations subject to the payment of duties.  IVC continued providing its customs brokers with these inaccurate HTS classifications even after CBP issued Notices of Action to IVC in 2016 and 2017 regarding classification errors made by IVC for similar non-Covered Products, namely, incorrectly classifying the similar non-Covered Products as duty-free when the correct classifications were for food preparations subject to duties.
• In the fall of 2018, IVC retained a consultant to review the HTS classifications IVC was using for all of the products IVC was then importing into the United States, including the Covered Products.  After analyzing the 134 products, the consultant provided IVC with the correct HTS classifications for each of the Covered Products.  The corrected codes carried higher duty rates than the HTS classifications IVC was using at the time.  As a result, IVC had underpaid duties on the Covered Products.
• IVC did not implement the corrected codes for the Covered Products that were imported into the United States on entry documentation submitted to CBP until around September 13, 2019.  Soon after, an IVC executive explained his view “that as each item is reviewed and corrected,” IVC had “a very strong go forward but the clean up is tough.”  IVC never remitted the duties it had underpaid for the Covered Products, apart from in response to several discrete Notices of Action.
• As a result, IVC, through its customs brokers, misclassified the Covered Products on entry documents filed with CBP and, throughout the Covered Period, routinely underpaid customs duties on the Covered Products. 

*                *                *

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

Mr. Williams thanked CBP for its investigative efforts and ongoing support and assistance with the case.

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

"Billy Ortega ran a drug delivery service that delivered fentanyl, killing three victims on a single day.  Worse yet, Ortega was fully aware that a customer had previously overdosed from the deadly fentanyl Ortega laced into his product, yet continued sending the drugs to his victims.  As a unanimous jury determined, Ortega will now be held accountable for the victims’ tragic and untimely deaths.  This case exemplifies that the national fentanyl epidemic continues to claim lives and inflict havoc on families from all walks of life.  Drug dealers don’t label their drugs as poison, they just sell them with indifference to the tragedy left in their wake.  Combatting the fentanyl epidemic in our communities is one of my Office’s top priorities."

Damian Williams, the United States Attorney for the Southern District of New York, announced the conviction in Manhattan federal court of BILLY ORTEGA, a/k/a “Jason,” for distributing the fentanyl that killed three young New York City professionals: Julia Ghahramani, Amanda Scher, and Ross Mtangi.  The jury convicted ORTEGA following a two-week trial before U.S. District Judge Ronnie Abrams.

U.S. Attorney Damian Williams said: “Billy Ortega ran a drug delivery service that delivered fentanyl, killing three victims on a single day.  Worse yet, Ortega was fully aware that a customer had previously overdosed from the deadly fentanyl Ortega laced into his product, yet continued sending the drugs to his victims.  As a unanimous jury determined, Ortega will now be held accountable for the victims’ tragic and untimely deaths.  This case exemplifies that the national fentanyl epidemic continues to claim lives and inflict havoc on families from all walks of life.  Drug dealers don’t label their drugs as poison, they just sell them with indifference to the tragedy left in their wake.  Combatting the fentanyl epidemic in our communities is one of my Office’s top priorities.”

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

From at least in or about 2015 to at least in or about February 2022, BILLY ORTEGA was the leader of a narcotics delivery service in the New York City area that principally distributed cocaine.  ORTEGA used his mother’s apartment in Manhattan as his stash house, employing family members and close friends to manage his drugs and cash and to deliver his drugs to customers.  In order to protect his drug business, ORTEGA supplied the guns that were kept at the stash house.  Over a span of years, ORTEGA ran his drug delivery service over text message, acting as the central contact who, like a dispatcher, coordinated drug deliveries by texting his couriers and his customers.

In the course of a single day – March 17, 2021 – ORTEGA delivered, through one of his couriers, fentanyl-laced cocaine to Ghahramani, Mtangi, and Scher at three separate locations in Manhattan.  All three victims died after consuming the drugs distributed by ORTEGA. 

On the day of the three poisonings – and prior to the fentanyl being delivered to any of the three victims – ORTEGA received the following text message from a different customer warning ORTEGA that his drugs had almost killed someone else.  Specifically, at approximately 2:29 p.m. on March 17, 2021, that other customer sent ORTEGA the following text message: “Hey man. Just on a follow up from yesterday - I gave most of my last bag to my buddy and he just called me this second to say he ended up in hospital last night. [. . .] He had to get a Narcan shot and was released in the early hours.”[1]  ORTEGA read this text message prior to coordinating the three deliveries of the drugs, from the same fentanyl-tainted batch of cocaine, that killed the three victims in this case. 

Later that night on March 17, 2021, after the victims had stopped responding to ORTEGA’s text messages, ORTEGA offered the fentanyl-tainted batch of cocaine to another drug dealer so he could test it out on “some girls.”  Specifically, at approximately 10:25 p.m. on March 17, 2021, ORTEGA texted the drug dealer: “If you[’re] going to be around way let me know have some every one is saying it’s to[o] Strong . . . Give it to some girls and you let me know lol bro.”

*                *                *

BILLY ORTEGA, 35, of West Milford, New Jersey, was convicted of one count of narcotics conspiracy resulting in death, three counts of narcotics distribution resulting in death, and one count of use and carrying of a firearm in furtherance of the narcotics conspiracy.  The charges carry a mandatory minimum sentence of 25 years in prison and a maximum sentence of life in prison.  

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

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

This investigation was conducted by the OCDETF New York Strike Force in partnership with the Drug Enforcement Administration’s (“DEA”) law enforcement partners.  The OCDETF New York Strike Force comprises federal, state, and local law enforcement agencies supported by OCDETF and the New York/New Jersey High Intensity Drug Trafficking Area.  The Strike Force is affiliated with the DEA’s New York Division and includes agents and officers of the DEA, NYPD, New York State Police, Homeland Security Investigations, U.S. Internal Revenue Service Criminal Investigation Division, Bureau of Alcohol, Tobacco, Firearms, and Explosives, U.S. Customs and Border Protection, U.S. Secret Service, U.S. Marshals Service, New York National Guard, Clarkstown Police Department, U.S. Coast Guard, Port Washington Police Department, and New York State Department of Corrections and Community Supervision.

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

[1] “Narcan” is an opiate blocker, used to counteract the deadly effects of drugs like fentanyl. 

یک دادگاه فدرال در نیویورک امروز اتهامات قتل اجاره ‌ای و پولشویی را علیه سه عضو یک سازمان جنایی اروپای شرقی به دلیل برنامه ریزی ترور یک شهروند آمریکایی که توسط دولت ایران به دلیل صحبت علیه نقض حقوق بشر رژیم هدف قرار گرفته بود، اعلام کرد.

طبق اسناد دادگاه، رفعت امیروف، با نام مستعار فرخ‌الدین میرزایف، ملقب به ریم و رم، ۴۳ ساله، اهل ایران؛ پولاد عمروف، با نام مستعار آراز علی اف، با نام مستعار پولاد قاقا، با نام مستعار هاچی قاقا، ۳۸ ساله، از جمهوری چک و اسلوونی و خالد مهدی اف، ۲۴ ساله، از یونکرز، نیویورک، در یک کیفرخواست جایگزین که امروز در ناحیه جنوبی نیویورک منتشر شد، به پولشویی و قتل اجاره ای متهم شدند. امیروف که مقیم ایران است، در ۲۶ ژانویه وارد ناحیه جنوبی نیویورک شد و امروز با اتهامات وارده نزد قاضی سارا ال. کیو محاکمه خواهد شد. مهدی اف در تاریخ ۲۹ جولای ٬ ٬۲۰۲۲ به اتهامات موجود در یک شکایت جنایی اساسی دستگیر شد و در تاریخ ۳۱ ژانویه٬ ٬۲۰۲۳ در ساعت ۴ بعد از ظهر نزد کالین مک ماهون محترم به اتهامات موجود در کیفرخواست جایگزین محاکمه خواهد شد. عمروف در ۴ ژانویه٬ ٬۲۰۲۳ در جمهوری چک دستگیر شد و ایالات متحده درخواست استرداد او را به اتهامات موجود در کیفرخواست جایگزین خواهد کرد.

” قربانی در این پرونده به دلیل استفاده از حقوقی که هر شهروند آمریکایی از آن برخوردار است، هدف قرار گرفت. قربانی نقض حقوق بشر؛ رفتار تبعیض آمیز با زنان؛ سرکوب مشارکت و بیان دموکراتیک؛ و استفاده از زندان، شکنجه و اعدام خودسرانه، که توسط دولت ایران انجام می‌شوند را بااطلاع عمومی می رساند “ ٬ مارک برنان گارلند، دادستان کل ایالات متحده گفت. ” وزارت دادگستری تلاش‌های یک رژیم استبدادی را برای تضعیف آن حمایت‌ها و حاکمیت قانون که دموکراسی ما بر آن استوار است را تحمل نخواهد کرد. ما تلاش های یک قدرت خارجی برای تهدید، ساکت کردن یا آسیب رساندن به آمریکایی ها را تحمل نخواهیم کرد. ما برای شناسایی کردن، یافتن و به دست عدالت سپاریدن کسانی که امنیت مردم آمریکا را به خطر می اندازند، کوتاهی نخواهیم کرد. “ 

لیزا او. موناکو، معاون دادستان کل امریکا، گفت: "کیفرخواست امروز یک تهدید خطرناک برای امنیت ملی را آشکار می‌کند - یک تهدید دوگانه که توسط یک گروه جنایتکار بین‌المللی وحشی که از آنچه تصور می‌کرد پناهگاه امن یک کشور متقلب: ایران، عمل می‌کنند، ایجاد شده است."

با ادامه ادغام تهدیدات امنیتی ملی و کیفری، وزارت دادگستری از همه ابزارهای خود برای محافظت جدی از آزادی و پاسخگویی به همه کسانی که از خشونت برای تضعیف آن استفاده می‌کنند، استفاده خواهد کرد.

کریستوفر رای، مدیر اف‌بی‌آی، گفت: ”کیفرخواستی که امروز اعلام شد نشان‌دهنده تعهد اف‌بی‌آی به دنبال کردن حقایق به هر کجا که منجر شود، برای رسیدن به سران توطئه‌های جنایتکارانه در هر کجا که هستند، و استفاده از دسترسی دوربرد‌مان برای آوردن مسئولین به اینجا برای رویارویی با عدالت در ایالات متحده است. رفتار متهم نشان می دهد که بازیگران ایرانی تا چه حد حاضرند منتقدان را ساکت کنند، حتی اقدام به ترور یک شهروند آمریکایی در خاک آمریکا کنند. ما مصمم هستیم که از حقوق همه آمریکایی ها در برابر نفوذ ظالمانه رژیم های متخاصم محافظت کنیم. “

متیو جی. اولسن، دادیار دادستان کل از بخش امنیت ملی وزارت دادگستری، گفت: ”اتهامات امروز بر تعهد وزارت برای محافظت از آمریکایی ها و ارزش های اساسی ما در برابر همه شکلهای سرکوب و فشار فراملی تأکید می کند. برای بازیگران خارجی، که با این تصور که از دسترس ما دور هستند، نقشه خشونت را در خاک ما می‌کشند، بدانید، که ما شما را در هر کجا که باشید، تعقیب خواهیم کرد تا زمانی که عدالت را اجرا کنیم. “

دامیان ویلیامز، دادستان ایالات متحده در ناحیه جنوبی نیویورک گفت: ”همانطور که گفته می شود، متهمان اعضای یک گروه جنایتکار سازمان یافته هستند که برای ترور، در همین شهر نیویورک، یک شهروند آمریکایی ایرانی‌تبار که منتقد استبداد رژیم و نادیده گرفتن آن به حقوق بشر است، استخدام شده اند. این دومین بار در دو سال گذشته است که این دفتر و شریکان ما در اف‌بی‌آی توطئه‌هایی را که از داخل ایران برای ربودن یا کشتن این قربانی به‌خاطر ”جنایت“ استفاده از حق آزادی بیان، تفکر مستقل سیاسی و دفاع از حقوق ستمدیدگان و محرومان در داخل ایران سرچشمه می‌گیرد، مختل کرده‌اند. به لطف تلاش‌های فوق‌العاده دادستان‌های حرفه‌ای و ماموران اف‌بی‌آی که تحقیقات را رهبری می‌کردند، این توطئه جدید برای ساکت کردن قربانی مختل شده و متهمان در دادگاه آمریکایی با عدالت روبرو خواهند شد. “

به توجه به ادعاهای مندرج در کیفرخواست جایگزین، سایر پرونده های دادگاه و اظهارات بیان شده در جریان دادرسی:

امیروف یکی از رهبران یک سازمان جنایی اروپای شرقی (سازمان) است که در ایران اقامت دارد. عمروف همچنین نقش رهبری در سازمان دارد و در اروپای شرقی اقامت دارد. مهدی اف، یکی از اعضای سازمان، ساکن یونکرز، نیویورک است. این سازمان با ایران ارتباط دارد و خشونت آمیز است و در قتل، آدم ربایی، حمله و اخاذی شرکت می کند و اعضا معمولاً خود را با خالکوبی و سایر نمایش های ستاره های هشت پر معرفی می کنند.

حداقل از جولای ۲۰۲۲، این سازمان موظف به انجام قتل یک شهروند آمریکایی ایرانی‌تبار (قربانی) بود که قبلاً هدف توطئه‌های دولت ایران برای هراساندن، آزار و اذیت و ربودن قربانی قرار گرفته بود. قربانی یک روزنامه نگار، نویسنده و فعال حقوق بشر، ساکن بروکلین، نیویورک است که نقض حقوق بشر و سرکوب بیان سیاسی توسط دولت ایران، از جمله در ارتباط با تداوم اعتراضات علیه رژیم در سراسر ایران را به اطلاع عموم رسانده است. در سال‌های ۲۰۲۰ و ۲۰۲۱، مقامات اطلاعاتی و دارایی‌های ایران نقشه‌ای برای ربودن قربانی از داخل ایالات متحده برای تحویل به ایران در تلاش برای خاموش کردن انتقاد قربانی از رژیم داشتند. این توطئه توسط اف‌بی‌آی مختل و افشا شد و منجر به تشکیل اتهامات توطئه آدم ربایی و اتهامات دیگر فدرال در ناحیه جنوبی نیویورک علیه چندین شرکت کننده در توطئه در ایالات متحده علیه فراهانی و همکاران، ٬۲۱جنایی ٬۴۳۰ گردید.

حدود یک سال پس از ثبت اتهامات فرحانی، سازمان وظیفه ترور قربانی را در خاک ایالات متحده بر عهده گرفت. تقریباً در اواسط جولای ۲۰۲۲، امیروف اطلاعات هدفگیری را - که امیروف از افراد دیگر در ایران دریافت کرده بود - در مورد قربانی و محل سکونت قربانی برای عمروف ارسال کرد. عمروف نیز به نوبه خود اطلاعات هدف گیری را به مهدی اف منتقل کرد تا نظارت بر قربانی و شناسایی محل سکونت قربانی و محله اطراف آن را آغاز کند. مهدی اف عکس‌ها و فیلم‌هایی از محل اقامت قربانی برای عمروف فرستاد تا با امیروف و طراحان توطئه‌ در ایران به اشتراک بگذارد.

پس از نظارت اولیه مهدی اف از محل سکونت قربانی، امیروف و عمروف قرار گذاشتند که مبلغ ۳۰۰۰۰ دلار نقدی به مهدی اف در شهر نیویورک برای پیشبرد نقشه تحویل دهند. مهدی اف بخشی از این پرداخت نقدی را برای خرید یک تفنگ تهاجمی به سبک AK-47 به همراه دو خشاب مهمات و حداقل ۶۶ گلوله استفاده کرد. مهدی اف در ارتباطات الکترونیکی به خود می بالید که یک ”ماشین جنگی“ برای خود تهیه کرده است.

بین ۲۰ تا ۲۸ جولای٬ ۲۰۲۲، مهدی اف بارها به محله قربانی سفر کرد تا نظارت و شناسایی انجام دهد و گزارش‌هایی از فعالیت‌ها، عکس‌ها و فیلم‌های قربانی را برای توضیح بیشتر به امیروف برای عمروف ارسال کرد. در ۲۴ جولای٬ ۲۰۲۲، مهدی اف پس از رسیدن به اقامتگاه قربانی، به عمروف گزارش داد که مهدی اف ”در صحنه جنایت“ است. عمروف مهدی اف را تشویق کرد: ”تو مردی! “مهدی اف به عمروف توضیح داد که ما از هر دو طرف جلوی آن را گرفتیم، زمانی که او از خانه خارج شود نمایشی خواهد بود. “عمروف این گزارش را برای امیروف ارسال کرد و او در پاسخ گفت:” انشاءالله “.

مهدی اف در آن روز نتوانست ترور را انجام دهد و چند روز بعد برای یافتن فرصت‌هایی برای انجام مأموریت قتل بازگشت. امیروف، عمروف و مهدی اف راهبردهای مختلفی را برای بیرون کشیدن قربانی طراحی کردند، از جمله تلاش برای درخواست گل از قربانی از باغ قربانی. مهدی اف در ۲۸ جولای ۲۰۲۲ ویدئویی را که از داخل ماشینی که مهدی اف در حال رانندگی بود گرفت و به عمروف فرستاد که تفنگ تهاجمی را به همراه پیام "ما آماده ایم" نشان می داد. قربانی پس از مشاهده فعالیت مشکوک در خارج از محل سکونت، منطقه را ترک کرد و مهدی اف مدت کوتاهی پس از آن از محل خارج شد. پس از اینکه مهدی اف از محل اقامت قربانی دور شد، پس از یک تخلف رانندگی متوقف شد و در بازرسی بعدی خودرو، افسران پلیس تفنگ تهاجمی، ۶۶ گلوله، حدود ۱۱۰۰ دلار پول نقد و یک ماسک اسکی مشکی را پیدا کردند.

امیروف، عمروف و مهدی اف به موارد زیر متهم می شوند: (۱) قتل اجاره‌ای که حداکثر مجازات آن ۱۰ سال زندان است؛ (۲) توطئه برای انجام قتل اجاره‌ای، که حداکثر مجازات آن ۱۰ سال زندان است؛ و (۳) توطئه برای ارتکاب پولشویی که حداکثر مجازات آن ۲۰ سال زندان است. مهدی اف همچنین به داشتن اسلحه گرم با شماره سریال محو شده متهم است که حداکثر پنج سال زندان است.

اف‌بی‌آی و بخش ضدجاسوسی-سایبری دفتر ساحویی آن در نیویورک، گروه ویژه ضد تهدیدات ایران اف‌بی‌آی در نیویورک، گروه ویژه ضد جاسوسی اف‌بی‌آی نیویورک و گروه ویژه و مشترک عملیات تروریستی اف‌بی‌آی نیویورک در حال بررسی این پرونده هستند، با کمک‌های ارزنده‌ای که توسط پلیس شهر نیویورک (NYPD) واداره اطلاعات NYPD، همچنین بخش امنیت ملی و دفتر امور بین الملل وزارت دادگستری ارائه شده‌اند.

مایکل دی. لاکارد، جیکوب اچ. گوتویلیگ، و متیو جی. سی. هلمن، دستیاران دادستانی ایالات متحده برای ناحیه جنوبی نیویورک، با کمک های ارزشمندی که توسط دادستان محاکمه کریستوفر ام. ریگالی از بخش ضد جاسوسی و کنترل صادرات بخش امنیت ملی ارائه شده است، این پرونده را تحت تعقیب قرار می دهند

کیفرخواست صرفا یک ادعاست. همه متهمان تا زمانی که مجرمیت آنها فراتر از شک معقول در دادگاه ثابت نشود بی گناه فرض می شوند.

به روز شده در ۲۷ ژانویه٬ ۲۰۲۳

Damian Williams, the United States Attorney for the Southern District of New York, Merrick B. Garland, the Attorney General of the United States, Lisa O. Monaco, the Deputy Attorney General of the United States, Christopher A. Wray, the Director of the Federal Bureau of Investigation (“FBI”), Matthew G. Olsen, the Assistant Attorney General for National Security, and Michael J. Driscoll, Assistant Director in Charge of the New York Field Office of the FBI, announced the unsealing of murder-for-hire and money-laundering charges against RAFAT AMIROV, a/k/a “Farkhaddin Mirzoev,” a/k/a “Pᴎᴍ,”  a/k/a “Rome,” POLAD OMAROV, a/k/a “Araz Aliyev,” a/k/a “Polad Qaqa,” a/k/a “Haci Qaqa,” and KHALID MEHDIYEV, and firearms offenses against MEHDIYEV.  The charges are contained in a Superseding Indictment unsealed today in Manhattan federal court.  The case is pending before U.S. District Judge Colleen McMahon.  AMIROV was taken into custody in the Southern District of New York on January 26, 2023, and will be arraigned on the charges in the Superseding Indictment by Magistrate Judge Sarah L. Cave today.  MEHDIYEV was arrested on July 29, 2022, on charges contained in an underlying criminal complaint and will be arraigned on the charges in the Superseding Indictment before Judge McMahon on January 31, 2023, at 4:00 p.m.  OMAROV was arrested in the Czech Republic on January 4, 2023, and the United States will request his extradition on the charges in the Superseding Indictment.

U.S. Attorney Damian Williams said: “As alleged, the defendants are members of an organized crime group hired to assassinate, right here in New York City, a U.S. citizen of Iranian origin who has been critical of the regime’s autocracy and its disregard for human rights.  This is the second time in the past two years that this Office and our partners at the FBI have disrupted plots originating from within Iran to kidnap or kill this victim for the ‘crime’ of exercising the right to free speech, to independent political thought, and to advocating for the rights of the oppressed and disenfranchised inside Iran.  Thanks to the extraordinary efforts of the career prosecutors and FBI agents who led the investigation, this new plot to silence the victim has been disrupted and the defendants will face justice in an American court.”

Attorney General Merrick B. Garland said: “The Victim in this case was targeted for exercising the rights to which every American citizen is entitled.  The Victim publicized the Iranian Government's human rights abuses; discriminatory treatment of women; suppression of democratic participation and expression; and use of arbitrary imprisonment, torture, and execution.  The Department of Justice will not tolerate attempts by an authoritarian regime to undermine those protections and the rule of law upon which our democracy is based.  We will not tolerate attempts by a foreign power to threaten, silence, or harm Americans.  We will stop at nothing to identify, find, and bring to justice those who endanger the safety of the American people.”

Deputy Attorney General Lisa O. Monaco said: “Today’s indictment exposes a dangerous menace to national security – a double threat posed by a vicious transnational crime group operating from what it thought was the safe haven of a rogue nation: Iran.  As national security and criminal threats continue to blend, the Department of Justice will use all its tools to zealously protect freedom and hold accountable all those who would use violence to undermine it.”  

Director Christopher A. Wray said: “The indictment unsealed today reflects the FBI’s commitment to follow the facts wherever they lead, to work our way up to the leaders of criminal plots wherever they are, and to use our long reach to bring those responsible here to face justice in the United States.  The conduct charged shows how far Iranian actors are willing to go to silence critics, even attempting to assassinate a U.S. citizen on American soil.  We are determined to safeguard the rights of all Americans from the oppressive reach of hostile regimes.”

Assistant Attorney General Matthew G. Olsen said: “Today’s charges underscore the Department’s commitment to protecting Americans and our fundamental values in the face of all forms of transnational repression.  To foreign actors who plot violence on our soil believing they are out of reach, know that we will pursue you, wherever you may be, until we deliver justice.”

FBI Assistant Director Michael J. Driscoll said: “We allege the defendants are members of an organized crime group that was tasked with carrying out the coldblooded murder of an American citizen in our city who has long been a target of the Iranian regime.  This plot was an attempt to silence a voice critical of Iranian authoritarianism and human rights atrocities.  The FBI, along with our partners in law enforcement, will continue to aggressively pursue individuals tasked by Iran or other hostile foreign governments to perform illegal action inside our borders or against our citizens.  The FBI will not tolerate foreign governments attempting to violate our laws and freedom.”

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

AMIROV is a leader in an Eastern European criminal organization (the “Organization”) who resides in Iran.  OMAROV also holds a leadership role in the Organization and resides in Eastern Europe.  MEHDIYEV, a member of the Organization, resides in Yonkers, New York.  The Organization has ties to Iran and is violent, engaging in murders, kidnappings, assaults, and extortions, and members typically identify themselves with tattoos and other displays of eight-pointed stars. 

Since at least July 2022, the Organization was tasked with carrying out the murder of a U.S. citizen of Iranian origin (the “Victim”), who previously has been the target of plots by the Government of Iran to intimidate, harass, and kidnap the Victim.  The Victim is a journalist, author, and human rights activist, residing in Brooklyn, New York, who has publicized the Government of Iran’s human rights abuses and suppression of political expression, including in connection with continuing protests against the regime across Iran.  As recently as 2020 and 2021, Iranian intelligence officials and assets plotted to kidnap the Victim from within the United States for rendition to Iran in an effort to silence the Victim’s criticism of the regime.  That plot was disrupted and exposed by the FBI and led to the filing of federal kidnapping conspiracy and other charges in the Southern District of New York against several participants in the plot in United States v. Farahani, et al., 21 Cr. 430 (RA) (S.D.N.Y.).

About one year after the Farahani charges were filed, the Organization was tasked with carrying out the Victim’s assassination on U.S. soil.  Beginning in approximately mid-July 2022, AMIROV sent targeting information – which AMIROV had received from other individuals in Iran – about the Victim and the Victim’s residence to OMAROV.  OMAROV, in turn, communicated the targeting information to MEHDIYEV in order to begin conducting surveillance of the Victim and reconnaissance of the Victim’s residence and surrounding neighborhood.  MEHDIYEV sent photographs and videos of the Victim’s residence to OMAROV for further sharing with AMIROV and the plot’s orchestrators in Iran. 

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

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

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

*                *                *

AMIROV, 43, of Iran, OMAROV, 38, of the Czech Republic and Slovenia, and MEHDIYEV, 24, of Yonkers, New York, have each been charged with: (i) murder-for-hire, which carries a maximum sentence of 10 years in prison; (ii) conspiracy to commit murder-for-hire, which carries a maximum sentence of 10 years in prison; and (iii) conspiracy to commit money laundering, which carries a maximum sentence of 20 years in prison.  MEHDIYEV is also charged with possessing a firearm with an obliterated serial number, which carries a maximum sentence of five years in prison. 

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

Mr. Williams praised the outstanding investigative work of the FBI and its New York Field Office Counterintelligence-Cyber Division, the New York FBI Iran Threat Task Force, the New York FBI Counterintelligence Task Force, and the New York FBI Joint Terrorism Task Force.  Mr. Williams also thanked the New York City Police Department (“NYPD”) and the NYPD Intelligence Bureau, as well as the Department of Justice’s National Security Division and the Department of Justice’s Office of International Affairs for their assistance.

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

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

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

A federal court in New York today unsealed murder-for-hire and money laundering charges against three members of an Eastern European criminal organization for plotting the murder of a U.S. citizen who has been targeted by the Government of Iran for speaking out against the regime’s human rights abuses.

According to court documents, Rafat Amirov, aka Farkhaddin Mirzoev, aka Pᴎᴍ, aka Rome, 43, of Iran; Polad Omarov, aka Araz Aliyev, aka Polad Qaqa, aka Haci Qaqa, 38, of the Czech Republic and Slovenia; and Khalid Mehdiyev, 24, of Yonkers, New York, are charged with money laundering and murder-for-hire in a superseding indictment unsealed today in the Southern District of New York. Amirov, who resides in Iran, arrived in the Southern District of New York on Jan. 26, and will be arraigned on charges before Magistrate Judge Sarah L. Cave today. Mehdiyev was arrested on July 29, 2022, on charges contained in an underlying criminal complaint and will be arraigned on the charges in the superseding indictment before the Honorable Colleen McMahon on Jan. 31, 2023, at 4 p.m. ET. Omarov was arrested in the Czech Republic on Jan. 4, 2023, and the United States will request his extradition on the charges in the superseding indictment.

“The Victim in this case was targeted for exercising the rights to which every American citizen is entitled. The Victim publicized the Iranian Government's human rights abuses; discriminatory treatment of women; suppression of democratic participation and expression; and use of arbitrary imprisonment, torture, and execution,” said Attorney General Merrick B. Garland. “The Department of Justice will not tolerate attempts by an authoritarian regime to undermine those protections and the rule of law upon which our democracy is based.  We will not tolerate attempts by a foreign power to threaten, silence, or harm Americans. We will stop at nothing to identify, find, and bring to justice those who endanger the safety of the American people.”

“Today’s indictment exposes a dangerous menace to national security – a double threat posed by a vicious transnational crime group operating from what it thought was the safe haven of a rogue nation: Iran,” said Deputy Attorney General Lisa O. Monaco. “As national security and criminal threats continue to blend, the Department of Justice will use all its tools to zealously protect freedom and hold accountable all those who would use violence to undermine it.”  

“The indictment unsealed today reflects the FBI’s commitment to follow the facts wherever they lead, to work our way up to the leaders of criminal plots wherever they are, and to use our long reach to bring those responsible here to face justice in the United States,” said FBI Director Christopher Wray. “The conduct charged shows how far Iranian actors are willing to go to silence critics, even attempting to assassinate a U.S. citizen on American soil. We are determined to safeguard the rights of all Americans from the oppressive reach of hostile regimes.”

“Today’s charges underscore the Department’s commitment to protecting Americans and our fundamental values in the face of all forms of transnational repression,” said Assistant Attorney General Matthew G. Olsen of the Justice Department’s National Security Division. “To foreign actors who plot violence on our soil believing they are out of our reach, know that we will pursue you, wherever you may be, until we deliver justice.”

“As alleged, the defendants are members of an organized crime group hired to assassinate, right here in New York City, a U.S. citizen of Iranian origin who has been critical of the regime’s autocracy and its disregard for human rights,” said U.S. Attorney Damian Williams for the Southern District of New York. “This is the second time in the past two years that this office and our partners at the FBI have disrupted plots originating from within Iran to kidnap or kill this victim for the ‘crime’ of exercising the right to free speech, to independent political thought, and to advocating for the rights of the oppressed and disenfranchised inside Iran. Thanks to the extraordinary efforts of the career prosecutors and FBI agents who led the investigation, this new plot to silence the victim has been disrupted and the defendants will face justice in an American court.”

According to the allegations contained in the superseding indictment, other court filings, and statements made during court proceedings:

Amirov is a leader in an Eastern European criminal organization (the Organization) who resides in Iran. Omarov also holds a leadership role in the Organization and resides in Eastern Europe. Mehdiyev, a member of the Organization, resides in Yonkers, New York. The Organization has ties to Iran and is violent, engaging in murders, kidnappings, assaults, and extortions, and members typically identify themselves with tattoos and other displays of eight-pointed stars.

Since at least July 2022, the Organization was tasked with carrying out the murder of a U.S. citizen of Iranian origin (the Victim), who previously has been the target of plots by the Government of Iran to intimidate, harass and kidnap the Victim. The Victim is a journalist, author and human rights activist, residing in Brooklyn, New York, who has publicized the Government of Iran’s human rights abuses and suppression of political expression, including in connection with continuing protests against the regime across Iran. As recently as 2020 and 2021, Iranian intelligence officials and assets plotted to kidnap the Victim from within the United States for rendition to Iran in an effort to silence the Victim’s criticism of the regime. That plot was disrupted and exposed by the FBI and led to the filing of federal kidnapping conspiracy and other charges in the Southern District of New York against several participants in the plot in United States v. Farahani, et al., 21 Cr. 430.

About one year after the Farahani charges were filed, the Organization was tasked with carrying out the Victim’s assassination on U.S. soil. Beginning in approximately mid-July 2022, Amirov sent targeting information – which Amirov had received from other individuals in Iran – about the Victim and the Victim’s residence to Omarov. Omarov, in turn, communicated the targeting information to Mehdiyev in order to begin conducting surveillance of the Victim and reconnaissance of the Victim’s residence and surrounding neighborhood. Mehdiyev sent photographs and videos of the Victim’s residence to Omarov for further sharing with Amirov and the plot’s orchestrators in Iran.

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

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

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

Amirov, Omarov, and Mehdiyev are charged with: (1) murder-for-hire, which carries a maximum sentence of 10 years in prison; (2) conspiracy to commit murder-for-hire, which carries a maximum sentence of 10 years in prison; and (3) conspiracy to commit money laundering, which carries a maximum sentence of 20 years in prison. Mehdiyev is additionally charged with possessing a firearm with an obliterated serial number, which carries a maximum sentence of five years in prison.

The FBI and its New York Field Office Counterintelligence-Cyber Division, the New York FBI Iran Threat Task Force, the New York FBI Counterintelligence Task Force and the New York FBI Joint Terrorism Task Force are investigating the case, with valuable assistance provided by the New York City Police Department (NYPD) and the NYPD Intelligence Bureau, as well as the Justice Department’s National Security Division and Office of International Affairs.

Assistant U.S. Attorneys Michael D. Lockard, Jacob H. Gutwillig, and Matthew J.C. Hellman for the Southern District of New York are prosecuting the case, with valuable assistance provided by Trial Attorney Christopher M. Rigali of the National Security Division’s Counterintelligence and Export Control Section.

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

Damian Williams, the United States Attorney for the Southern District of New York, announced today that JULIO MARQUEZ ALEJANDRO, a/k/a “Chino,” was sentenced to life in prison, and LUIS BLONDET was sentenced to 50 years in prison, each for their leading roles in a brutal drug cartel that is responsible for dozens of murders, the bribery of corrupt police officers in Puerto Rico, and the distribution of thousands of kilograms of cocaine in New York, Puerto Rico, and elsewhere.  In April 2022, a jury convicted MARQUEZ ALEJANDRO and BLONDET of racketeering and murder-related charges after a three-week trial before U.S. District Judge Jesse M. Furman, who sentenced MARQUEZ ALEJANDRO yesterday and BLONDET earlier today.  

U.S. Attorney Damian Williams said: “For years, Julio Marquez Alejandro and Luis Blondet repeatedly resorted to heinous murder for their own benefit.  Dozens of people died as a result of the reign of terror their organization carried out.  But this Office is committed to seeking justice for otherwise forgotten victims, no matter how long it takes.  Thanks to outstanding work from our law enforcement partners, Marquez Alejandro and Blondet will rightly spend decades in prison.”

According to the evidence at trial and other filings in the case:

MARQUEZ ALEJANDRO was one of the founding fathers of “La Organizacion de Narcotraficantes Unidos,” or “La ONU,” a criminal enterprise whose members and associates engaged in, from in or about 2004 to in or about 2016, dozens of murders, the bribery of corrupt police officers in Puerto Rico, and the distribution of thousands of kilograms of cocaine, including the shipment of cocaine from Puerto Rico to New York.  Cocaine supplied by La ONU was distributed in New York City, including out of a children’s daycare center in the Bronx.  BLONDET was also a member and leader of La ONU and one of MARQUEZ ALEJANDRO’s closest allies.

The evidence at trial established that MARQUEZ ALEJANDRO personally ordered, authorized, or otherwise helped facilitate the murders of at least 15 people to maintain or expand his power and profits.  The evidence also showed that BLONDET personally participated in or helped facilitate the murders of seven people.  For example:

On or about April 9, 2005, BLONDET murdered Crystal Martinez Ramirez at a party in San Juan, Puerto Rico.  After Martinez Ramirez refused BLONDET’s sexual advances, BLONDET shot Martinez Ramirez in the head twice and dumped her body on a street corner.

On or about December 28, 2006, Israel Crespo Cotto was murdered on the orders of MARQUEZ ALEJANDRO because Crespo Cotto was believed to be cooperating with law enforcement.  MARQUEZ ALEJANDRO’s assassins killed Crespo Cotto, a double amputee, while he was sitting in his wheelchair in the Manuel A. Perez public housing projects in San Juan, Puerto Rico.  Crespo Cotto was shot 24 times.

On or about May 9, 2007, members of La ONU, including MARQUEZ ALEJANDRO, hired corrupt Puerto Rico police officers to participate in the murder of Anthony Castro Carrillo in Carolina, Puerto Rico, in exchange for a cash bonus.  Members of La ONU and two corrupt cops stormed Castro Carrillo’s residence while dressed as police officers and shot and killed him.

MARQUEZ ALEJANDRO, BLONDET, and other members of La ONU arranged for the murder of Hommysan Cariño Bruno, a leader of a rival drug organization, paying a driver to kill Cariño Bruno and providing the murder weapon.  Cariño Bruno was shot and killed while inside a van on or about April 29, 2008, in San Juan, Puerto Rico.

On or about March 20, 2009, Carlos Barbosa was murdered on the orders of MARQUEZ ALEJANDRO because Barbosa was believed to be plotting to seize power from MARQUEZ ALEJANDRO.  Barbosa was shot over a dozen times while getting his hair cut at a barbershop in Levittown, Puerto Rico.

On or about November 27, 2009, Emanuel Correa Romero, a/k/a “Oreo,” was murdered on the orders of MARQUEZ ALEJANDRO.  Members of La ONU beat Correa Romero until he appeared dead.  After the assault, members of La ONU placed Correa Romero’s body into a suitcase and later reported back that they shot the suitcase dozens of times and then lit it on fire.

At the sentencing of MARQUEZ ALEJANDRO, Judge Furman emphasized MARQUEZ ALEJANDRO’s “stunning disrespect for the value of other human life” and “the scale of human suffering for which he is responsible.”       

When sentencing BLONDET, Judge Furman underscored that BLONDET’s murder of Crystal Martinez Ramirez was “grotesque and inhumane.”

*                *                *

In addition to their prison terms, MARQUEZ ALEJANDRO, 52, of San Juan, Puerto Rico, and BLONDET, 48, of San Juan, Puerto Rico, were ordered to forfeit $11.52 million and $212,000, as proceeds of their crimes, respectively.

Mr. Williams praised the investigative work of the U.S. Postal Inspection Service, the Drug Enforcement Administration, and the Bureau of Alcohol, Tobacco, Firearms, and Explosives.

The prosecution is being handled by the Office’s Violent and Organized Crime Unit.  Assistant U.S. Attorneys Jamie E. Bagliebter, Peter J. Davis, Jacob R. Fiddelman, and Justin V. Rodriguez are in charge of the prosecution and represented the Government at trial with the assistance of Paralegal Specialists William Coleman and Christopher Sykes.  Assistant U.S. Attorneys Jordan Estes, Andrew Thomas, Lara Pomerantz, Allison Nichols, and Dina McLeod also participated in the investigation and prosecution of the case.

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”), Keechant Sewell, the Commissioner of the New York City Police Department (“NYPD”), and Patrick Freaney, Special Agent in Charge of the New York Field Office of the United States Secret Service (“USSS”), announced the unsealing of an Indictment today charging 16 members of a Washington Heights-based narcotics trafficking organization with conspiring to distribute narcotics in New York and with possessing firearms in furtherance of the narcotics trafficking conspiracy.  ALEXANDER FRANCISCO, a/k/a “Javy,” ARISTIDES RAMIREZ, a/k/a “AR,” DAVID GLOVER, ALEX GARCIA, a/k/a “AG,” ANEUDY ALVARADO, a/k/a “Smiley,” JERIEL ABREU, a/k/a “Jerry Gunz,” LAZARETH PAULINO, a/k/a “Laz,” JOAN MERCEDES, a/k/a “Saul,” and ENMANUEL LIRIANO, a/k/a “Chubster,” a/k/a “Eman,” were arrested today and presented before United States Magistrate Judge Sarah L. Cave.  CHRISTOPHER SANTOS, a/k/a “Casper,” was arrested previously in this matter.  ALVIN EUSEBIO, a/k/a “Goo,” EDWARD RODRIGUEZ, and JAWAN MILLS, a/k/a “JD,” were already in custody in other jurisdictions.  RAY EDUARDO, JONATHAN RODRIGUEZ, a/k/a “JR,” and EDDY CAMINERO, a/k/a “Malibu,” remain at large.  This case is assigned to United States District Judge Gregory H. Woods.

U.S. Attorney Damian Williams said: “As alleged in the Indictment, these defendants injected substantial quantities of narcotics into the community, putting dangerous drugs on the streets and putting lives in danger.  Thanks to the extraordinary work of our partners at NYPD, HSI, and the USSS, the defendants now face federal charges for their crimes.”

HSI Special Agent in Charge Ivan J. Arvelo said: “The success of today’s operation represents another important stride in our ongoing effort to combat narcotics trafficking and firearms use in New York City and also reinforces our commitment to our law enforcement partners.  I’m proud of our agents’ extensive investigative work to apprehend these members from the Washington Heights-based 174th Street Crew - a crew who are known to traffic narcotics and possess firearms.  HSI will continue to work closely with the New York City Police Department, the U.S. Secret Service, and all of our local, state, and federal law enforcement partners to dismantle these dangerous criminal enterprises and hold their members accountable for their blatant disregard for the law.”

NYPD Commissioner Keechant L. Sewell said: “This investigation, involving several law enforcement agencies across multiple jurisdictions, is a perfect example of how focused collaboration makes us all safer.  The illegal drug trade wreaks havoc in our most vulnerable communities, and our job is to ensure that anyone who peddles this poison be brought to justice swiftly and successfully.  This dangerous and exploitative criminal behavior will never be tolerated in our city, and I want to thank the U.S. Attorney’s Office for the Southern District of New York, Homeland Security Investigations New York, the New York Field Office of the United States Secret Service, and everyone else who worked on this case and made New York City safer for all the people we serve.”  

USSS Special Agent in Charge Patrick Freaney said: “The Secret Service’s New York Field Office is proud to work with our law enforcement partners in keeping our local neighborhoods safe from the variety of dangerous threats that criminal organizations pose.  The Secret Service, HSI, and the NYPD enjoy a robust partnership founded on our mutual dedications to public safety and security, and I can assure the public this partnership makes for a safer New York City for us all.” 

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

From at least in or about 2019, up to and including January 2023, in the Southern District of New York and elsewhere, ALEXANDER FRANCISCO, ARISTIDES RAMIREZ, DAVID GLOVER, ALVIN EUSEBIO, ALEX GARCIA, ANEUDY ALVARADO, EDWARD RODRIGUEZ, JERIEL ABREU, RAY EDUARDO, LAZARETH PAULINO, JONATHAN RODRIGUEZ, JAWAN MILLS, JOAN MERCEDES, EDDY CAMINERO, ENMANUEL LIRIANO, and CHRISTOPHER SANTOS operated a large-scale narcotics trafficking organization in, among other places, New York City.  This organization (the “174th Street Crew”) operated principally in the Washington Heights neighborhood of Manhattan between West 174th and West 175th Streets and Amsterdam and Audubon Avenues (the “Set”).  Within the Set, the 174th Street Crew conducted narcotics trafficking on the street and from multiple store fronts.  The 174th Street Crew ran an organized, sophisticated narcotics trafficking operation that is best described as a street pharmacy, which sold a variety of narcotics, both illicit and prescription, to its customers, including methamphetamine, cocaine, heroin, crack cocaine, fentanyl, oxycodone, Xanax, and marijuana.  The crew operated on the Set at all hours, and its members were assigned to work in designated shifts.  Managers ensured that the Set was properly staffed for narcotics distribution and fined and disciplined members who missed work or demanded proof of illness (such as a doctor’s note or picture of a positive COVID-19 test).

Members and managers of the 174th Street Crew frequently carried and used firearms, including to protect the stash of narcotics belonging to the 174th Street Crew.  In addition to one firearm seized today, twice in the past 13 months – in December 2021 and August 2022 – NYPD officers recovered handguns possessed by 174th Street Crew members holding stashes of narcotics on the Set.

During simultaneous arrests and searches conducted today in New Jersey and New York, law enforcement agents seized quantities of methamphetamine, cocaine, heroin, oxycodone, Percocet, and suboxone, as well as large sums of cash.

*                *                *

All defendants are charged with conspiracy to distribute and possess with intent to distribute (i) 500 grams and more of mixtures and substances containing a detectable amount of methamphetamine, its salts, isomers, or salts of its isomers; (ii) 500 grams and more of mixtures and substances containing a detectable amount of cocaine; (iii) mixtures and substances containing a detectable amount of heroin; (iv) mixtures and substances containing a detectable amount of fentanyl; and (v) mixtures and substances containing a detectable amount of oxycodone.  This charge carries a mandatory minimum sentence of 10 years in prison and a maximum sentence of life in prison.  All defendants are also charged with possessing firearms in furtherance of the narcotics trafficking offense charged in the Indictment, which carries a mandatory minimum sentence of five years in prison, which must be served consecutively to any other sentence imposed, and a maximum sentence of life in prison.

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

Mr. Williams praised the outstanding investigative work of the Department of Homeland Security, Homeland Security Investigations, the New York City Police Department, the U.S. Secret Service, and the Organized Crime Drug Enforcement Task Forces (“OCDETF”).  This prosecution is part of an OCDETF operation.  OCDETF identifies, disrupts, and dismantles the highest-level criminal organizations that threaten the United States using a prosecutor-led, intelligence-driven, multi-agency approach.  Additional information about the OCDETF Program can be found at https://www.justice.gov/OCDETF.

The prosecution of this case is being handled by the Office’s Narcotics Unit.  Assistant U.S. Attorneys Ashley C. Nicolas and Andrew W. Jones 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 set forth herein, constitute only allegations, and every fact described should be treated as an allegation.

Damian Williams, the United States Attorney for the Southern District of New York, announced the convictions of GEORGE GULDI, a former Suffolk County legislator and disbarred attorney, and VICTORIA DAVIDSON for defrauding Ditech Financial LLC, a mortgage lender, out of more than a quarter of a million dollars.  The jury convicted GULDI and DAVIDSON of all counts following an approximately two-week trial before U.S. District Judge Alvin K. Hellerstein.

U.S. Attorney Damian Williams said: “George Guldi, while in prison, concocted and conducted a scheme along with his co-conspirator, Victoria Davidson, to brazenly steal more than $250,000 through blatant lies.  Today, a jury held them accountable for their scheme, and they will both face justice for their shameless misconduct.”

According to the Complaint, the Superseding Indictment, court filings, evidence presented during the trial, and public information:

In February 2017, Ditech Financial LLC (“Ditech”), a mortgage lender, received a payment of approximately $250,000 from JPMorgan Chase in connection with the settlement of a civil lawsuit between several financial institutions.  Ditech mistakenly treated the funds as a payment from GULDI toward his own mortgage, and it sent a letter to GULDI in March 2017 stating that it would not credit the payment because he owed more than the payment. 

GULDI, who was in state prison at the time for insurance-related offenses and knew that he had not actually sent any money to Ditech, then enlisted his former girlfriend, DAVIDSON, to contact Ditech and try to “break” the funds “loose,” as he put it in a recorded call from prison.  In the ensuing weeks, DAVIDSON called Ditech at least 19 times and, during those calls, told multiple lies in an attempt to obtain the funds — including falsely stating that she was an attorney and an officer of GULDI’s company and that GULDI had purportedly sent the funds to Ditech “accidentally” and wanted them returned. 

In April 2017, after weeks of DAVIDSON’s misrepresentations, Ditech wired the funds to DAVIDSON’s personal bank account.  Within two weeks, DAVIDSON had drained the bulk of the funds out of her account, paying various of her and GULDI’s expenses and purchasing multiple cashier’s checks.  Within months, the money was gone.

*                *                *

GULDI, 69, of Ludlow, Vermont, and DAVIDSON, 57, of Lakeville, Connecticut, were each convicted of one count of conspiracy to commit wire fraud and bank fraud, one count of wire fraud, and one count of bank fraud.  The conspiracy and bank fraud counts carry a maximum sentence of 30 years in prison, and the wire fraud count carries a maximum sentence of 20 years in prison.

The statutory maximum penalties are prescribed by Congress and are provided here for informational purposes only, as sentencing of the defendants will be determined by the judge.  GULDI is scheduled to be sentenced on May 30, 2023, and DAVIDSON is scheduled to be sentenced on May 31, 2023.

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

This case is being handled by the Office’s General Crimes Unit.  Assistant U.S. Attorneys Madison Reddick Smyser, Jonathan L. Bodansky, and Daniel C. Richenthal, with the assistance of Paralegal Specialists Arjun Ahuja and William Sirmon IV, 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 the unsealing of an Indictment today charging PEACHES STERGO with engaging in a years-long scheme to defraud an 87-year-old Holocaust survivor of his life savings.  STERGO was arrested today and will be presented in the Middle District of Florida.  The case has been assigned to U.S. District Judge Edgardo Ramos.

U.S. Attorney Damian Williams said: “As alleged, for years, Stergo deceived an 87-year-old Holocaust survivor, maliciously draining his life savings so she could become a millionaire through fraud.  Stergo forged documents and impersonated a bank employee in exchange for a life of fancy trips, Rolex watches, and luxury purchases.  Today’s arrest reemphasizes this Office’s commitment to seeking justice for victims of financial frauds.”

FBI Assistant Director Michael J. Driscoll said: "Today we allege the defendant callously preyed on a senior citizen simply seeking companionship, defrauding him of his life savings.  The FBI is determined to get justice for victims of fraud and to ensure that scammers face justice for their actions.”

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

From at least in or about May 2017, up to and including at least October 2021, STERGO engaged in a scheme to defraud an 87-year-old Holocaust survivor (the “Victim”) of over $2.8 million, which was his life savings. 

STERGO met the Victim on a dating website approximately six or seven years ago.  In or about early 2017, STERGO asked the Victim to borrow money to pay her lawyer, who she claimed was refusing to release funds from an injury settlement.  After the Victim gave her the money, STERGO said the settlement funds had been deposited into her TD Bank account.  In reality, bank records show STERGO never received any money from an injury settlement.

Over the next four and a half years, STERGO continued her lies.  She repeatedly demanded that the Victim deposit money into her bank accounts.  She claimed that if he did not, her accounts would be frozen, and he would never be paid back.  In total, the Victim wrote 62 checks — totaling over $2.8 million — that were deposited into one of two of STERGO’s bank accounts.   

In furtherance of the fraud, STERGO created a fake email account, intended to appear as if it belonged to a TD Bank employee.  She also created fake letters from a TD Bank employee and fake invoices.

While the Victim lost his life savings and was forced to give up his apartment, STERGO lived a life of luxury with the millions she received from the fraud: she bought a home in a gated community, a condominium, a boat, and numerous cars, including a Corvette and a Suburban.  During the course of the fraud, STERGO also took expensive trips, staying at places like the Ritz Carlton, and spent many tens of thousands of dollars on expensive meals, gold coins and bars, jewelry, Rolex watches, and designer clothing from stores like Tiffany, Ralph Lauren, Neiman Marcus, Louis Vuitton, and Hermes.

*                *                *

STERGO, 36, of Champions Gate, Florida, 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.

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

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

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

Damian Williams, the United States Attorney for the Southern District of New York, announced that ILONA DZHAMGAROVA, ARTHUR ARCADIAN, and IGOR REZNIK have each pled guilty to conspiracy to commit immigration fraud.  DZHAMGAROVA and ARCADIAN pled guilty today, and REZNIK pled guilty on August 24, 2022, each before U.S. District Court Judge Mary Kay Vyskocil.

U.S. Attorney Damian Williams said: “The defendants — a husband and wife team of licensed immigration attorneys and a writer who worked with them — invented offensive lies to cheat our country’s asylum process, which is meant to protect vulnerable people who legitimately fear persecution because of their race, religion, political beliefs, or sexual orientation.  When attorneys cynically exploit those fears for financial gain by pedaling false claims and coaching clients to lie under oath, they abuse the trust placed in them and make a mockery of the asylum system.  With their guilty pleas, the defendants are being held accountable for their serious crimes.”

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

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

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

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

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DZHAMGAROVA, 46, ARCADIAN, 44, both of Brooklyn, New York, and REZNIK, 41, of New York, New York, each pled guilty to one count of conspiring to commit immigration fraud and each face a maximum of five years in prison. 

The maximum potential sentence in this case is prescribed by Congress and is provided here for informational purposes only, as any sentencing of the defendants will be determined by a judge.  DZHAMGAROVA and ARCADIAN are scheduled to be sentenced by U.S. District Court Judge Mary Kay Vyskocil on May 31, 2023.  REZNIK is scheduled to be sentenced by Judge Vyskocil on May 5, 2023. 

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

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

Damian Williams, the United States Attorney for the Southern District of New York, announced that VITALY BORKER, the operator of “EyeglassesDepot.com” and other online retailers of purported designer eyewear, pled guilty today to one count of wire fraud in connection with a scheme to defraud customers of his websites.  BORKER pled guilty before United States District Judge Jed S. Rakoff.

U.S. Attorney Damian Williams said: “Once again, Vitaly Borker has pled guilty to crimes relating to his fraudulent operation of eyewear websites.  Borker’s plea today demonstrates this Office’s intolerance for recidivism, and we can only hope that the third time is the charm and that Borker finally learns his lesson.”

According to the previously filed Complaint and Indictment in this case and statements made in court:

Beginning in at least June 2020, after being released from federal custody and entering a Residential Reentry Center, VITALY BORKER operated an eyewear sales and repair services website called EyeglassesDepot.com.  EyeglassesDepot.com claimed, among other things, that it sold “brand new and 100% authentic designer eyeglasses and sunglasses” and that it had “thousands of pairs of glasses in stock…ready for shipping as early as TODAY.”  In truth, however, the eyewear sold to customers of EyeglassesDepot.com was often used or counterfeit.  Rather than carrying a large inventory of “brand new and 100% authentic eyewear,” EyeglassesDepot.com filled its customers’ orders by purchasing comparable items on a third-party online marketplace (the “Marketplace”).  The eyewear purchased by EyeglassesDepot.com from the Marketplace was often used or counterfeit, but EyeglassesDepot.com passed off the glasses as new and authentic.  In addition, while EyeglassesDepot.com claimed to be a “leader in the repair of sunglasses and eyeglasses” and able to “fit any eyeglasses or sunglasses with your custom prescriptions,” customers who sent eyewear to EyeglassesDepot.com either did not have their eyewear repaired at all or otherwise received unsatisfactory work.

In order to conceal his role in operating EyeglassesDepot.com, BORKER – who has twice previously been convicted in this District of crimes relating to his operation of eyewear websites – used the identities of other individuals in connection with the operation of EyeglassesDepot.com.

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BORKER, 46, of Brooklyn, New York, pled guilty to one count of wire fraud, which carries a maximum sentence of 20 years in prison.

The maximum potential sentence in this case is prescribed by Congress and is provided here for informational purposes only, as any sentencing of the defendant will be determined by the judge.  BORKER is scheduled to be sentenced at 10:00 a.m. on April 21, 2023, by U.S. District Judge Jed S. Rakoff.

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

This case is being handled by the Office’s General Crimes Unit.  Assistant U.S. Attorneys Matthew Weinberg, William Kinder, Jeffrey Coyle, and Sarah Mortazavi are in charge of the prosecution.

“Robert Hadden was a predator in a white coat.  For years, he cruelly lured women who sought professional medical care to his offices in order to gratify himself.   Hadden’s victims trusted him as a physician, only to instead become victims of his heinous predilection.   We thank and commend the brave women who came forward to tell their stories, many of whom testified at trial, to end his years-long cycle of abuse.”

Damian Williams, the United States Attorney for the Southern District of New York, announced today that ROBERT BERNARDI, the founder and former Chief Executive Officer of the Virginia-based email security company GigaMedia Access Corporation, d/b/a GigaTrust (“GigaTrust”), was sentenced to five years in prison by United States District Judge Paul G. Gardephe.  BERNARDI was sentenced for orchestrating a scheme to defraud investors and lenders of millions of dollars through false and misleading misrepresentations, including fabricated bank statements and audit reports, and by impersonating a purported customer, auditor, and GigaTrust lawyer.

U.S. Attorney Damian Williams said: “Robert Bernardi repeatedly lied and impersonated others in order to convince investors and lenders to fund his failing company.  Rather than admit that GigaTrust was underperforming, Bernardi concocted multiple schemes to keep the company afloat, defrauding investors and lenders out of millions.  Today’s sentence is a just consequence of Bernardi’s fraudulent actions”

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

From in or about 2016 through at least in or about 2019, GigaTrust was a private company headquartered in Virginia that purported to be a market-leading provider of cloud-based content security solutions.  BERNARDI founded GigaTrust and served as its CEO.  BERNARDI, along with two co-defendants, NIHAT CARDAK and SUNIL CHANDRA, devised a scheme to defraud investors and lenders by (i) fabricating and disseminating false and misleading bank account statements that overstated GigaTrust’s cash deposits; (ii) fabricating and disseminating false and misleading audit materials that purported to have been issued by GigaTrust’s auditors and overstated GigaTrust’s performance; (iii) forging and disseminating a false and misleading letter purporting to be from GigaTrust’s New York-based counsel; and (iv) impersonating or causing others to impersonate a purported customer and auditor of GigaTrust on telephone calls with a prospective lender. 

Specifically, BERNARDI sent fabricated audit materials to a New York-based investment firm, and BERNARDI and CARDAK used fabricated bank statements to obtain multiple rounds of loans and investments for GigaTrust worth millions of dollars.  After a New York-based bank (“Bank-1”), which had loaned GigaTrust $25 million, declared that GigaTrust had defaulted on the terms of its loan agreement, BERNARDI and CARDAK induced additional investments in GigaTrust through, among other things, forging a letter purporting to be from GigaTrust’s New-York based counsel.  Shortly thereafter, while negotiating another $25 million deal with a lender (“Lender-1”), BERNARDI and CARDAK devised a scheme to impersonate a GigaTrust customer and auditor on requested diligence calls, which induced Lender-1 to make a $25 million loan to GigaTrust.  BERNARDI recruited CHANDRA to pose as one of GigaTrust’s alleged customers on a call with Lender-1.  BERNARDI and CARDAK also fabricated bank statements and sent them to Lender-1 right before closing the $25 million deal. 

GigaTrust filed for Chapter 7 bankruptcy protection in the District of Delaware on or about November 27, 2019.

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In addition to his prison term, BERNARDI, 68, of McLean, Virginia, was sentenced to three years of supervised release and ordered to forfeit $3,442,264 and to pay restitution to his victims.

Mr. Williams praised the outstanding investigative work of the Federal Bureau of Investigation in this case.  Mr. Williams further thanked the Securities and Exchange Commission, which has separately filed a civil enforcement action against the defendants, for its assistance in the investigation. 

This case is being handled by the Office’s General Crimes Unit.  Assistant U.S. Attorneys Peter J. Davis and Emily A. Johnson are in charge of the prosecution.

NIHAT CARDAK pled guilty on January 12, 2023, and is scheduled to be sentenced on May 16, 2023.  The charges contained in the Indictment are merely accusations as to SUNIL CHANDRA, and CHANDRA 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.