Southern District of New York

A former Special Agent in Charge of the FBI New York Counterintelligence Division and a former Soviet and Russian diplomat were arrested Saturday on criminal charges related to their alleged violating and conspiring to violate the International Emergency Economic Powers Act (IEEPA) and conspiring to commit money laundering and money laundering.

According to court documents, Charles F. McGonigal, 54, of New York City, and Sergey Shestakov, 69, of Morris, Connecticut, are charged in a five-count indictment unsealed today in the Southern District of New York with violating and conspiring to violate the IEEPA, and with conspiring to commit money laundering and money laundering.

According to court documents, on April 6, 2018, the U.S. Department of the Treasury’s Office of Foreign Assets Control (OFAC) designated Oleg Deripaska as a Specially Designated National (SDN) in connection with its finding that the actions of the Government of the Russian Federation with respect to Ukraine constitute an unusual and extraordinary threat to U.S. national security and foreign policy. According to the U.S. Treasury, Deripaska was sanctioned for having acted or purported to act on behalf of, directly or indirectly, a senior official of the Government of the Russian Federation and for operating in the energy sector of the Russian Federation economy.

McGonigal is a former Special Agent in Charge (SAC) of FBI’s Counterintelligence Division in New York who retired in 2018. While working at the FBI, McGonigal supervised and participated in investigations of Russian oligarchs, including Deripaska. Sergey Shestakov is a former Soviet and Russian diplomat who later became a U.S. citizen and a Russian interpreter for courts and government offices.

In 2021, McGonigal and Shestakov conspired to provide services to Deripaska, in violation of U.S. sanctions imposed on Deripaska in 2018. Specifically, following their negotiations with an agent of Deripaska, McGonigal and Shestakov agreed to and did investigate a rival Russian oligarch in return for concealed payments from Deripaska. As part of their negotiations with Deripaska’s agent, McGonigal, Shestakov and the agent attempted to conceal Deripaska’s involvement by, among other means, not directly naming Deripaska in electronic communications, using shell companies as counterparties in the contract that outlined the services to be performed, using a forged signature on that contract and using the same shell companies to send and receive payment from Deripaska.

McGonigal and Shestakov were aware that their actions violated U.S. sanctions because, among other reasons, while serving as SAC, McGonigal received then-classified information that Deripaska would be added to a list of oligarchs considered for sanctions as part of the process that led to the imposition of sanctions against Deripaska. In addition, in 2019, McGonigal and Shestakov worked on behalf of Deripaska in an unsuccessful effort to have the sanctions against Deripaska lifted. In November 2021, when FBI agents questioned Shestakov about the nature of his and McGonigal’s relationship with Deripaska’s agent, Shestakov made false statements in a recorded interview.

McGonigal and Shestakov are charged in the Southern District of New York with one count of conspiring to violate and evade U.S. sanctions, in violation of the IEEPA, one count of violating IEEPA, one count of conspiring to commit money laundering and one count of money laundering, each of which carries a maximum sentence of 20 years in prison. Shestakov is also charged with one count of making false statements, which carries a maximum sentence of five years in prison. Shestakov and McGonigal were arrested in New York on Saturday and will make their initial court appearances this afternoon before Magistrate Judge Sarah L. Cave in Manhattan federal court.

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 Alan E. Kohler Jr. of the FBI Counterintelligence Division, and Assistant Director in Charge Michael J. Driscoll of the FBI New York Field Office made the announcement.

The FBI is investigating the case, with valuable assistance provided by the U.S. Customs and Border Protection as well as the New York City Police Department.

Assistant U.S. Attorneys Hagen Scotten, Rebecca T. Dell and Derek Wikstrom for the Southern District of New York and Trial Attorney Scott Claffee of the National Security Division’s Counterintelligence and Export Control Section are prosecuting the case.

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, and Michael J. Driscoll, Assistant Director in Charge of the New York Field Office of the Federal Bureau of Investigation (“FBI”), announced the unsealing of a five-count Indictment charging CHARLES MCGONIGAL and SERGEY SHESTAKOV with violating and conspiring to violate the International Emergency Economic Powers Act (“IEEPA”) and with conspiring to commit money laundering and money laundering.  SHESTAKOV is also charged with making material misstatements to the FBI.  The defendants were arrested on Saturday evening, and they will be presented this afternoon before Magistrate Judge Sarah L. Cave in Manhattan federal court.  The case has been assigned to U.S. District Judge Jennifer H. Rearden.  

U.S. Attorney Damian Williams said: “As alleged, Charles McGonigal, a former high-level FBI official, and Sergey Shestakov, a Court interpreter, violated U.S. sanctions by agreeing to provide services to Oleg Deripaska, a sanctioned Russian oligarch.  They both previously worked with Deripaska to attempt to have his sanctions removed, and, as public servants, they should have known better.  This Office will continue to prosecute those who violate U.S. sanctions enacted in response to Russian belligerence in Ukraine in order to line their own pockets.”

FBI Assistant Director in Charge Michael J. Driscoll said: “The FBI is committed to the enforcement of economic sanctions designed to protect the United States and our allies, especially against hostile activities of a foreign government and its actors.  Russian oligarchs like Oleg Deripaska perform global malign influence on behalf of the Kremlin and are associated with acts of bribery, extortion, and violence.  As alleged, Mr. McGonigal and Mr. Shestakov, both U.S. citizens, acted on behalf of Deripaska and fraudulently used a U.S. entity to obscure their activity in violation of U.S. sanctions.  After sanctions are imposed, they must be enforced equally against all U.S. citizens in order to be successful.  There are no exceptions for anyone, including a former FBI official like Mr. McGonigal.  Supporting a designated threat to the United States and our allies is a crime the FBI will continue to pursue aggressively.”

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

In 2014, the President issued Executive Order 13660, which declared a national emergency with respect to the situation in Ukraine.  To address this national emergency, the President blocked all property of individuals determined by the U.S. Treasury to be responsible for or complicit in actions or policies that threatened the security, sovereignty, or territorial integrity of Ukraine, or who materially assist, sponsor, or provide support to individuals or entities engaging in such activities.  Executive Order 13660 and regulations issued pursuant to it prohibit making or receiving any funds, goods, or services by, to, from, or for the benefit of any person designated by the U.S. Treasury.

On April 6, 2018, the United States Department of the Treasury’s Office of Foreign Assets Control (“OFAC”) designated Oleg Deripaska as a Specially Designated National (“SDN”) in connection with its finding that the actions of the Government of the Russian Federation with respect to Ukraine constitute an unusual and extraordinary threat to U.S. national security and foreign policy (the “OFAC Sanctions”).  According to the U.S. Treasury, Deripaska was sanctioned for having acted or purported to act on behalf of, directly or indirectly, a senior official of the Government of the Russian Federation and for operating in the energy sector of the Russian Federation economy.   

CHARLES MCGONIGAL is a former Special Agent in Charge (“SAC”) of FBI’s Counterintelligence Division in New York, who retired in 2018.  While working at the FBI, MCGONIGAL supervised and participated in investigations of Russian oligarchs, including Deripaska.  SERGEY SHESTAKOV is a former Soviet and Russian diplomat who later became a U.S. citizen and a Russian interpreter for courts and government offices.

In 2021, MCGONIGAL and SHESTAKOV conspired to provide services to Deripaska, in violation of U.S. sanctions imposed on Deripaska in 2018.  Specifically, following their negotiations with an agent of Deripaska, MCGONIGAL and SHESTAKOV agreed to and did investigate a rival Russian oligarch in return for concealed payments from Deripaska.  As part of their negotiations with Deripaska’s agent, MCGONIGAL, SHESTAKOV, and the agent attempted to conceal Deripaska’s involvement by, among other means, not directly naming Deripaska in electronic communications, using shell companies as counterparties in the contract that outlined the services to be performed, using a forged signature on that contract, and using the same shell companies to send and receive payments from Deripaska.

MCGONIGAL and SHESTAKOV were aware that their actions violated U.S. sanctions because, among other reasons, while serving as SAC, MCGONIGAL received then-classified information that Deripaska would be added to a list of oligarchs considered for sanctions as part of the process that led to the imposition of sanctions against Deripaska.  In addition, in 2019, MCGONIGAL and SHESTAKOV worked on behalf of Deripaska in an unsuccessful effort to have the sanctions against Deripaska lifted.  In November 2021, when FBI agents questioned SHESTAKOV about the nature of his and MCGONIGAL’s relationship with Deripaska’s agent, SHESTAKOV made false statements in a recorded interview.

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CHARLES MCGONIGAL, 54, of New York, New York, and SERGEY SHESTAKOV, 69, of Morris, Connecticut, are charged with one count of conspiring to violate and evade U.S. sanctions, in violation of the IEEPA, one count of violating the IEEPA, one count of conspiring to commit money laundering, and one count of money laundering, each of which carries a maximum sentence of 20 years in prison.  SHESTAKOV is also charged with one count of making false statements, which carries a maximum sentence of five years in prison. 

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

Mr. Williams praised the outstanding work of the FBI New York Field Office’s Counterintelligence Division and the valuable assistance from U.S. Customs and Border Protection as well as the New York City Police Department.   

The case is being prosecuted by the Office’s Public Corruption Unit.  Assistant U.S. Attorneys Hagan Scotten, Rebecca T. Dell, and Derek Wikstrom are in charge of the prosecution with assistance from Trial Attorney Scott A. Claffee of the National Security Division’s Counterintelligence and Export Control Section.

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

 

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

Damian Williams, the United States Attorney for the Southern District of New York, announced today that LAWRENCE RAY, a/k/a “Lawrence Grecco,” received a sentence of 60 years in prison for racketeering conspiracy, violent crime in aid of racketeering, extortion, sex trafficking, forced labor, tax evasion, and money laundering offenses.  RAY was sentenced today by United States District Judge Lewis J. Liman after being convicted at trial in April 2022.

U.S. Attorney Damian Williams said: “Larry Ray is a monster.  For years, he inflicted brutal and lifelong harm on innocent victims.  Students who had their lives ahead of them.  He groomed them and abused them into submission for his own gain.  Through physical and psychological abuse, he took control over his victims’ minds and bodies and then extracted millions of dollars from them.  The sentence imposed today will ensure that Ray will never harm victims again.  I commend the brave victims who testified in Court in the face of incredible trauma.  I also thank the career prosecutors in this Office and our law enforcement partners who made the just conviction and sentence in this case possible.”

According to the Indictment and the evidence at trial:

From in or about 2010 through the present, LAWRENCE RAY subjected a group of college students and other victims he met after moving into his daughter’s dorm room at Sarah Lawrence College to sexual and psychological manipulation and physical abuse.  RAY’s tactics included sleep deprivation, psychological and sexual humiliation, verbal abuse, threats of physical violence, physical violence, threats of criminal legal action, alienating the victims from their families, and exploiting the victims’ mental health vulnerabilities. 

Through this manipulation and abuse, RAY extracted false confessions from the victims to causing purported damages to RAY and his family and associates and then extorted payment for those purported damages through several means.  The victims made payments to RAY by draining their parents’ savings, opening credit lines, soliciting contributions from acquaintances, selling real estate ownership, and at RAY’s direction, performing unpaid labor for RAY and earning money through prostitution. 

Through fear, violence, and coercion, RAY forced one female victim to engage in commercial sex acts to pay damages to RAY that she did not actually owe.  Beginning when she was just a college student, RAY sexually groomed this victim and collected sexually explicit photographs and other personal information, which he then used to coerce her into continued commercial sex acts.  RAY also used physical violence.  On one occasion, RAY tied his victim to a chair, placed a plastic bag over her head, and nearly suffocated her.  RAY collected millions of dollars in forced prostitution proceeds from this victim.

In addition, RAY forced three female victims to perform unpaid labor on a family member’s property in North Carolina.  Through a course of psychological and physical abuse, RAY forced these three victims to do extensive physical labor, sometimes in the middle of the night, for no pay.

Associates of RAY helped RAY collect and transfer the criminal proceeds, which RAY shared with at least two associates.  RAY then laundered his criminal proceeds through an internet domain business and evaded paying taxes on his proceeds. 

At the sentencing today, Judge Liman underscored “the resiliency of the human spirit and the courage of the victims.”

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In addition to the prison term, RAY, 63, of Piscataway, New Jersey, was sentenced to a lifetime of supervised release.  He was also ordered to forfeit $2,444,349, the proceeds from the sale of his GoDaddy portfolio, and the Pinehurst, North Carolina, residence where the forced labor took place.  Restitution will be decided by the Court within 90 days of today’s sentencing.

Mr. Williams praised the efforts of the Federal Bureau of Investigation and the New York City Police Department.

RAY's co-defendant Isabella Pollok is scheduled to be sentenced on February 22, 2023, at 11:00 a.m.

This case is being handled by the Office’s Violent and Organized Crime Unit.  Assistant U.S. Attorneys Danielle Sassoon, Mollie Bracewell, and Lindsey Keenan are in charge of the prosecution.  

Damian Williams, the United States Attorney for the Southern District of New York, announced that MATTHEW TAYLOR WITKOWSKI pled guilty today to a one-count criminal Information charging him with conspiracy to commit health care fraud.  WITKOWSKI is scheduled to be sentenced on April 20, 2023, before United States District Judge Denise Cote.

U.S. Attorney Damian Williams said: “Medicare is a valuable, taxpayer-funded program designed to provide affordable health care to people over 65 or with disabilities, not to enrich those who would seek to benefit themselves through fraud.  Today, Matthew Taylor Witkowski admitted to illegally selling orders for durable medical equipment, which were used to bilk Medicare out of millions of dollars.”

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

From at least August 2019 through the date of his arrest in July 2022, WITKOWSKI and a co-conspirator (“CC-1”) engaged in a scheme to defraud Medicare by illegally obtaining and selling fraudulent written orders for goods and services paid for by Medicare, including for durable medical equipment (“DME”).  Using a call center that he owned and operated in the Dominican Republic, WITKOWSKI illegally generated and purchased fraudulent written orders for DME and then sold those fraudulent orders to pharmacies and DME suppliers, including in New York City.  Those pharmacies and DME suppliers then used those fraudulent orders as the basis for more than $8 million in fraudulent claims to Medicare.  Many of these fraudulent orders used names and personal health information of actual Medicare beneficiaries, without the beneficiaries’ authorization or prior knowledge.  Many of these fraudulent orders also contained professional information of doctors and other health-care providers enrolled in the Medicare program, as well as the purported electronic signatures of these providers, which were falsified and created without the authorization or knowledge of these providers.

During the course of the scheme, WITKOWSKI took more than $4 million in illegal kickbacks from DME suppliers, who made these payments to True Prospects Marketing, Inc., a company controlled by Witkowski and CC-1, and to Sales Drive Marketing LLC, a company owned and controlled by WITKOWSKI.

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WITKOWSKI, 37, an American citizen who has been residing in the Dominican Republic, and is currently on bail in Florida, pled guilty today to a single count of conspiracy to commit health care fraud.  That charge carries a maximum sentence of 10 years in prison. 

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

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

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

Damian Williams, the United States Attorney for the Southern District of New York, announced today that PATRICK EDWIN GORYCHKA was sentenced to 42 months in prison by United States District Judge Kenneth M. Karas for his possession of child pornography.  The sentencing today followed GORYCHKA’s guilty plea on May 23, 2022.

U.S. Attorney Damian Williams said: “The availability of child pornography spread through chatrooms and discreet websites is every modern parent’s worst nightmare.  This Office will continue to prioritize protecting our most vulnerable citizens, children, from this kind of exploitation.”

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

In October 2019, the Federal Bureau of Investigation (“FBI”) received information from an FBI Online Undercover Employee (“UC-1”) concerning UC-1’s communications with an individual using the Kik username “epg84,” who was later identified as GORYCHKA, in a Kik chat room known to be frequented by individuals with a sexual interest in children.  UC-1 identified himself as a 48-year-old uncle who had engaged in sex acts with his niece.  GORYCHKA, who identified himself as “Eric G.,” asked UC-1 for photos of UC-1’s niece.  UC-1 told GORYCHKA that UC-1 had met a “pedo mom” (“UC-2”) in New York.  UC-1 told GORYCHKA that “she keeps kids of illegals while they work for a couple weeks” and “makes some $ on the side.”  GORYCHKA stated, “Omg that’s hot” and asked UC-1 to connect him to UC-2.   

Thereafter, UC-2, going by the name “Jane,” and GORYCHKA engaged in numerous communications from in or about October 31, 2019, through in or about November 16, 2019.  During these communications, GORYCHKA said he was interested in “preteens” and told UC-2, “I heard that you could potentially facilitate certain things.”  GORYCHKA said that he was interested in a “similar setup” as UC-1 and told UC-2, “I have money.” 

On November 2, 2019, GORYCHKA transmitted two links to Mega, a New Zealand-based cloud storage platform that permits users to store and share electronically stored information, including images and videos.[1]  Both links contained numerous images and videos of children engaging in sexually explicit activity.

In imposing the sentence, Judge Karas underscored, “The possession of child pornography feeds a business that exploits the most vulnerable in our society.”

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In addition to the prison term, Judge Karas sentenced GORYCHKA, 40, of Manitowoc, Wisconsin, to five years of supervised release.

Mr. Williams praised the efforts of the FBI, West Point’s Criminal Investigation Division, the Bureau of Alcohol, Tobacco, Firearms, and Explosives, and the Town of New Windsor Police Department in connection with this investigation. 

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

 

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[1] With respect to Mega, a user can send a link to a Mega cloud account to another person.  Once the link to the Mega cloud account is transmitted, the person who clicks on the link to the cloud account can access, view, and download the files contained in that Mega cloud account.

 

Damian Williams, the United States Attorney for the Southern District of New York, announced that EDWARD MULLINS, the former President of the Sergeants Benevolent Association (“SBA”), the union that represents all current and former Sergeants of the New York City Police Department, pled guilty today to one count of wire fraud in connection with a scheme to steal hundreds of thousands of dollars from the SBA through the submission of fraudulent expense reports.  MULLINS pled guilty before United States District Judge John G. Koeltl. 

U.S. Attorney Damian Williams said: “Edward Mullins promised to look out for the thousands of hard-working NYPD Sergeants who are members of the SBA.  Instead, as admitted today in federal court, he stole hundreds of thousands of dollars from them to fund his lavish lifestyle.  Thanks to the hard work of the FBI, Mullins’s betrayal has been exposed, and he now faces jail time and significant financial penalties.”

According to the Information filed in the case and statements made in court:

The SBA is the fifth-largest police union in the United States with its headquarters located in lower Manhattan.  The SBA’s membership consists of all active and retired Sergeants of the NYPD, with approximately 13,000 members.  From 2002 until October 2021, EDWARD MULLINS served as President of the SBA.

Beginning in 2017, MULLINS devised a scheme to steal hundreds of thousands of dollars from the SBA.  MULLINS used his personal credit card to pay for meals at high-end restaurants and to purchase luxury personal items, among other things, and then submitted false and inflated expense reports to the SBA, representing that his charges were legitimate SBA expenditures when in fact they were not.  MULLINS routinely included meals on his expense reports that were not SBA-related.  MULLINS also inflated the costs of his meals – whether SBA-related or not.  For example, if the actual cost of a meal was $522.55, MULLINS would seek reimbursement from the SBA for $822.55 and pocket the difference.  MULLINS would also take personal expenses like supermarket bills and claim them on his expense reports as SBA-related meals for which he also sought reimbursement.

MULLINS’s fraudulent expenses were paid through the SBA’s Contingent Fund, which is funded primarily through annual dues paid by SBA members.  In total, MULLINS stole at least $600,000 from the SBA through the filing of hundreds of fraudulent expense reports.

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MULLINS, 61, of Port Washington, New York, pled guilty to one count of wire fraud, which carries a maximum sentence of 20 years in prison.  As part of his plea agreement, MULLINS agreed to forfeit $600,000 to the United States and to make restitution in the amount of $600,000 to the SBA.

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.  MULLINS is scheduled to be sentenced at 12:00 p.m. on May 25, 2023, by U.S. District Judge John G. Koeltl.

Mr. Williams praised the outstanding investigative work of the Federal Bureau of Investigation and the FBI/New York City Police Department Public Corruption Task Force. 

This case is being handled by the Office’s Public Corruption Unit.  Assistant U.S. Attorneys Alexandra Rothman, Andrew Rohrbach, and David Robles and are in charge of the prosecution.

Damian Williams, the United States Attorney for the Southern District of New York, announced the conviction in Manhattan federal court of STEPHEN SIMMONS, a/k/a “S-Dot,” for possessing ammunition that he used to shoot a man in the leg on June 16, 2022.  The jury convicted SIMMONS following trial before U.S. District Judge Valerie E. Caproni. 

U.S. Attorney Damian Williams said: “Stephen Simmons possessed ammunition in furtherance of a violent shooting in the elevator of a residential apartment building.  Residents of the Bronx should rest easier tonight knowing that this dangerous recidivist is off the streets.”

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

On June 16, 2022, SIMMONS chased a man into the elevator of a large apartment building in the Bronx.  SIMMONS stood just feet away and fired his gun into the elevator while three individuals stood trapped inside.  SIMMONS’s shot hit the victim in the leg, and the victim was thereafter transported to the hospital for emergency medical attention.  SIMMONS fled the scene and was subsequently arrested on July 22, 2022.

At the time of the June 16, 2022, shooting, SIMMONS had been previously convicted of a felony.

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SIMMONS, 37, of the Bronx, New York, was convicted of one count of being a felon in possession of ammunition, which carries a maximum penalty of 10 years in prison. 

The statutory maximum penalty is prescribed by Congress and is provided here for informational purposes only, as any sentencing of the defendant would be determined by the judge.  SIMMONS is scheduled to be sentenced by Judge Caproni on May 9, 2023.

Mr. Williams praised the outstanding investigative work of the Federal Bureau of Investigation, the New York City Police Department, and Task Force Officers assigned to the United States Attorney’s Office.

The case is being supervised by the Office’s General Crimes Unit.  Assistant U.S. Attorneys Jamie Bagliebter, Courtney Heavey, and Lindsey Keenan, with the assistance of Paralegal Specialist Isabel Loftus, are in charge of the prosecution.

Damian Williams, the United States Attorney for the Southern District of New York, and Douglas L. Parker, Assistant Secretary of Labor for Occupational Safety and Health, announced that earlier today the United States Department of Labor’s Occupational Safety and Health Administration (“OSHA”) issued citations for three facilities to AMAZON.COM SERVICE LLC (“AMAZON”) arising out of referrals received from the United States Attorney’s Office for the Southern District of New York (the “Office”). 

These citations are for serious violations of Section 5(a)(1) of the Occupational Safety and Health Act (“OSH Act”) for AMAZON’s failure to furnish a place of employment which was free from recognized hazards that were causing or likely to cause death or serious physical harm to employees.  Specifically, the citations explained that employees at three AMAZON facilities were exposed to ergonomic hazards which put them at high risk for lower back injuries and other musculoskeletal disorders (“MSDs”).  These hazards resulted from the high frequency with which workers are required to lift packages and other items; the heavy weight of the items; awkward postures, such as twisting, bending, and long reaches while lifting; and long hours required to complete assigned tasks.  These facilities are located in New Windsor, New York, Waukegan, Illinois, and Deltona, Florida. Additionally, at the Deltona, Florida, warehouse, OSHA also cited AMAZON for exposing workers to the hazard of being struck by falling boxes with merchandise. 

U.S. Attorney Damian Williams said: “Amazon became the nation’s largest online retailer thanks, in no small part, to the hundreds of thousands of Americans who work each year in Amazon’s massive warehouses.  Each of these workers has the right to a place of work free from severe safety hazards.  These citations are a step toward protecting the hard-working people at Amazon’s warehouses who have been laboring under hazardous conditions.  OSHA’s investigation regarding workplace safety hazards at Amazon warehouses continues.  And our Office is investigating possible fraudulent conduct designed to hide injuries from OSHA and others.  We ask that anyone who has information relevant to this investigation contact the U.S. Attorney’s Office.” 

OSHA Assistant Secretary of Labor Douglas L. Parker said: “Each of these inspections found work processes that were designed for speed but not safety, and they resulted in serious worker injuries.  While Amazon has developed impressive systems to make sure its customers’ orders are shipped efficiently and quickly, the company has failed to show the same level of commitment to protecting the safety and well-being of its workers.  Our hope is that the findings of our investigations inspire Amazon and other warehouses to make the safety and health of their workers a core value.”

These citations arise out of workplace safety inspections at six AMAZON warehouses across the country that OSHA conducted beginning in mid-July and early August of last year in response to referrals received from the Office.  OSHA’s investigation at three of AMAZON’s facilities — located outside of Albany, New York, Boise, Idaho, and Denver, Colorado — is ongoing.  Per the OSH Act, OSHA has six months from a violation to issue citations.  In mid-December, OSHA issued citations for AMAZON’s failure to appropriately log injuries for reporting to OSHA at all six facilities. 

The Civil Division of the Office is also investigating worker safety hazards at AMAZON warehouses across the country, as well as whether AMAZON engaged in a fraudulent scheme designed to hide the true number of injuries to AMAZON workers and whether AMAZON made false representations to lenders about those injuries and its safety record to obtain credit.

Members of the public can report workplace safety and injury-related issues at AMAZON warehouses to this Office.  Anyone who has information about safety issues — including safety issues related to the pace of work — or a failure to report injuries, or inadequate medical care at AMAZON’s onsite first-aid center or at a clinic recommended by AMAZON can share that information with this Office via the following link: https://www.justice.gov/usao-sdny/webform/sdny-amazon-warehouse-investigation.

The matter is being handled by the Office’s Civil Division.  Assistant U.S. Attorneys Jacob Lillywhite, Dominika Tarczynska, Elizabeth J. Kim, and Adam Gitlin are in charge of the investigation.

Damian Williams, the United States Attorney for the Southern District of New York, announced that DEREK JONES, a disbarred California attorney, was sentenced today to five and a half years in prison.  JONES ran fraudulent investment funds, including real-estate investment firms and a venture-capital firm, through which he defrauded investors of over $8.6 million over a period of more than seven years, from at least 2012 through 2019.  JONES previously pled guilty to one count of wire fraud and was sentenced today before United States District Judge Loretta A. Preska.

U.S. Attorney Damian Williams said: “When investors purchase shares in real-estate funds and other investment funds, those investors have every right to expect that the people promoting and selling those investments are treating them honestly and telling them the truth about their investments.  Today, Derek Jones, a disbarred attorney, was held accountable for violating this right over an extended period of time, selling interests in real estate that he falsely claimed to own and defrauding his investors out of millions of dollars.”

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

From at least 2012 through at least 2019, JONES deceived his victims into investing in various companies and investment funds that he controlled, including purported real-estate development and investment firms using variations of the names “BlueRidge,” “Living City,” and “Atiswin,” and the purported venture capital firm Realize Holdings (“Realize”).  

In fraudulently inducing victims to invest in his funds, JONES routinely lied to investors, including in glossy brochures and legal documents that contained misrepresentations about real estate that JONES falsely claimed was owned or otherwise controlled by BlueRidge, Living City, and Atiswin.  For example, JONES falsely told investors and prospective investors that BlueRidge was developing a “resort village” on land it controlled on Semiahmoo Spit in Washington State and, separately, that BlueRidge had purchased an existing hotel in that same location, when in fact neither BlueRidge nor JONES owned or controlled any of that property.  In other cases, JONES falsely claimed that his companies were under contract to purchase a ranch in Colorado and that his companies had secured long-term leases for various pieces of property slated for development, including California properties in Santa Monica, Hermosa Beach, and Los Angeles.  Instead of using investors’ money as he promised, JONES misappropriated investors’ money, using much of it to make Ponzi-style payments to other investors to whom he owed money in connection with earlier transactions and for personal and family expenses, including the private-school tuition of his children.

In executing his scheme, JONES also sent falsified and counterfeit documents to investors and others.  For example, on repeated occasions, JONES provided doctored bank statements showing that he had millions of dollars in various corporate accounts, when in fact he had little or no money in such accounts.  On other occasions, he provided counterfeit financial statements that falsely purported to be based on internal audits of companies that he controlled.  He also sent investors and others falsified contracts with key pages removed, forged land-leases, and fictional statements of asset allocation.  JONES also used the names of other individuals — without those individuals’ authorization or knowledge — to communicate via email with investors and thus foster the illusion that JONES’s businesses were viable operations with real employees.

In total, JONES defrauded investors out of more than $8.6 million.

During the commission of the fraud charged in this case, JONES was suspended from the practice of law by the State Bar Court of California for earlier fraudulent conduct.  JONES was ultimately disbarred in July 2022 based on findings by the State Bar Court that he had intentionally misappropriated money belonging to a client in 2011 and that he had made misrepresentations to the client, to the court, and to others.

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JONES, 48, of San Marino, California, pled guilty on November 1, 2021, to a single count of wire fraud.  He was sentenced today to five and a half years in prison, three years of supervised release, forfeiture of $8,679,787.66, and restitution to his victims in an amount to be determined within the next 90 days.  

Mr. Williams praised the excellent 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 David Raymond Lewis and David M. Abramowicz are in charge of the prosecution.

Damian Williams, the United States Attorney for the Southern District of New York, announced that TOBY MURCHISON was sentenced today to 60 months in prison for conspiring to commit sex trafficking of a 16-year-old girl.  MURCHISON was sentenced by U.S. District Judge Vincent L. Briccetti.  MURCHISON previously pled guilty to one count of conspiracy to commit sex trafficking.

U.S. Attorney Damian Williams said:  “Toby Murchison preyed on a 16-year-old girl who had run away from home.  Murchison placed this young woman in harm’s way by conspiring to have her engage in commercial sex and benefited financially from her misfortune.  It is difficult to imagine more outrageous conduct, and today’s sentence signals the tenacity with which this Office will prosecute those who take advantage of minor victims.” 

According to the allegations contained in the Information and other court documents filed in White Plains federal court:

In or about April 2021, MURCHISON conspired with one or more people to recruit a 16-year-old victim (“Minor Victim-1”) to engage in commercial sex acts in and around Newburgh, New York.  MURCHISON met Minor Victim-1, who had run away from home, in the Newburgh area.  MURCHISON and a co-conspirator helped Minor Victim-1 to procure “dates” (i.e., meetings with men to engage in commercial sex acts) and then secured hotel rooms, including in Newburgh and Fishkill, in which Minor Victim-1 would meet the men for “dates” and perform sex acts in exchange for money.  Minor Victim-1 then gave some or all of the proceeds from those commercial sex acts to MURCHISON. 

*                *                *

In addition to his prison sentence, MURCHISON, 43, of Oneonta, New York, was sentenced to five years of supervised release. 

Mr. Williams praised the outstanding investigative work of Homeland Security Investigations New York, Resident Agent in Charge Hudson Valley, and the Dutchess County Sherriff’s Office. 

The prosecution of this case is being handled by the White Plains Division.  Assistant U.S. Attorney Stephanie Simon is in charge of the prosecution.

Damian Williams, the United States Attorney for the Southern District of New York, announced today that NIHAT CARDAK, the former Chief Financial Officer (“CFO”) of the Virginia-based email security company GigaMedia Access Corporation, d/b/a GigaTrust (“GigaTrust”), pled guilty today in Manhattan federal court in connection with 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. District Judge Paul G. Gardephe accepted the defendant’s guilty plea.

U.S. Attorney Damian Williams said: “Nihat Cardak, along with his co-defendants Robert Bernardi and Sunhil Chandra, chose to lie and mislead investors and lenders in order to keep GigaTrust afloat instead of owning up to the company’s financial reality.  Their scheme came crashing down in 2019 as GigaTrust filed for bankruptcy, and Cardak and Bernardi have now accepted responsibility for their criminal 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.  Robert Bernardi founded GigaTrust and served as its Chief Executive Officer, while CARDAK and Sunil Chandra were GigaTrust’s CFO and Vice President of Business Development, respectively.  The defendants 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.

On August 17, 2022, Bernardi pled guilty to conspiracy to commit securities fraud, bank fraud, and wire fraud before Judge Paul G. Gardephe. 

*                *                *

CARDAK, 52, of Clifton, Virginia, pled guilty to one count of conspiracy to commit securities fraud, 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.  Sentencing for CARDAK is scheduled for May 16, 2023.

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 filed a civil enforcement action against the defendants, for its cooperation and assistance in this 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.

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

 

---

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

Damian Williams, the United States Attorney for the Southern District of New York, Michael J. Driscoll, the Assistant Director in Charge of the New York Office of the Federal Bureau of Investigation (“FBI”), and Susan A. Frisco, the Acting Special Agent in Charge of the New York Regional Office of the U.S. Department of Health and Human Services, Office of the Inspector General (“HHS-OIG”), announced the unsealing of a seven-count Indictment today charging five defendants with participating in schemes to steal millions of dollars from government-funded childcare programs for low-income families, including by stealing proceeds from a fake after-school program that received millions in funding and by using funds to purchase private real estate, items at auction, and a luxury vehicle.  Four of the defendants were arrested today and will be presented before U.S. Magistrate Judge Robert W. Lehrburger in federal court in Manhattan.  HAROLD SCHWARTZ was arrested and will be presented in the Southern District of Florida.  The case has been assigned to U.S. District Judge Jennifer H. Rearden.   

U.S. Attorney Damian Williams said: “As alleged, the defendants brazenly participated in schemes that stole from programs meant to benefit society’s most vulnerable members — children — and spent the proceeds of their crimes on items like real estate, cars, and to buy items at auction.  Their schemes used children as currency, creating a fake afterschool program and ‘enrolling’ in that program children who never attended it, all so they could line their own pockets.  Let me be clear: this Office is committed to rooting out the abuse of government funds intended for the public welfare.”

FBI Assistant Director Michael J. Driscoll said: “Today we allege the defendants operated multiple schemes to enrich themselves by defrauding government-funded childcare programs designed to assist needy families.  The FBI remains dedicated to uncovering and eliminating the abuse of government-sponsored programs and ensuring those who exploit programs intended to assist low-income families will be held accountable.”

HHS-OIG Acting Special Agent in Charge Susan A. Frisco said: “The monies that the defendants are alleged to have stolen were intended to support New York families that greatly need financial assistance in securing safe and quality care for their children.  HHS-OIG and our law enforcement partners are fervent in our efforts to detect and investigate individuals believed to defraud federally funded childcare programs and deprive deserving enrollees in an attempt to gain personal wealth.”

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

MARTIN HANDLER, MENACHEM LIEBERMAN, HAROLD SCHWARTZ, ISIDORE HANDLER, and BEN WERCZBERGER participated in multiple related schemes to steal from and defraud daycares receiving funding from the City of New York’s Administration for Children’s Services (“ACS”) and the U.S. Department of Health and Human Services (“HHS”). 

Among their schemes, MARTIN HANDLER, LIEBERMAN, SCHWARTZ, and ISIDORE HANDLER participated in a scheme to fraudulently claim reimbursement from ACS for the enrollment of children in a fake after-school program purportedly operated by a non-profit daycare provider (“Daycare Provider-1”), resulting in the theft of more than $1,000,000.

MARTIN HANDLER and LIEBERMAN perpetrated another fraudulent scheme against HHS by concealing their secret ownership of Daycare Provider-1, an ostensible “non-profit” entity without any legal owners that has received in excess of $90 million in federal funding since 2009.  MARTIN HANDLER’s and LIEBERMAN’s secret ownership of Daycare Provider-1 allowed them to circumvent statutory and regulatory restrictions against less-than-arm’s length partnerships.  MARTIN HANDLER and LIEBERMAN steered Daycare Provider-1 into partnerships with their respective for-profit daycares (“Daycare Provider-2 and Daycare Provider-3”), that resulted in millions of dollars of federal funding for Daycare Provider-2 and Daycare Provider-3. 

MARTIN HANDLER, LIEBERMAN, SCHWARTZ, and ISIDORE HANDLER also submitted false information to HHS to hide their fraudulent schemes.  In about December 2021, HHS initiated an investigation into Daycare Provider-1 and conveyed allegations that had arisen about LIEBERMAN’s relationship with Daycare Provider-1.  MARTIN HANDLER, LIEBERMAN, SCHWARTZ, and ISIDORE HANDLER then conspired to submit a letter to the regional HHS office responding to these allegations that, among other things, falsely denied LIEBERMAN had a less-than-arm’s length relationship with Daycare Provider-1, even though, in fact, LIEBERMAN secretly owned it.

MARTIN HANDLER and BEN WERCZBERGER participated in a scheme to steal, and to launder the proceeds of their theft, from HANDLER’s for-profit daycare, Daycare Provider-2.  MARTIN HANDLER and WERCZBERGER stole at least $2.8 million in federal funding intended for childcare services for low-income children in the Bronx.  They carried out this theft by funneling a portion of HHS’s monthly funding to WERCZBERGER, by providing no-show jobs to WERCZBERGER’s wife and grandson, and by having Daycare Provider-2 cover the cost of a luxury SUV for WERCZBERGER’s wife. 

Finally, MARTIN HANDLER himself stole funds from Daycare Provider-2’s operating expenses, including to purchase real estate, to repay a $500,000 loan to a business associate, to purchase historical items at auction, and to purchase a luxury vehicle.

*                *                *

A chart containing the names of the defendants who were charged today and the charges and maximum penalties they face is attached.  The statutory maximum sentences are prescribed by Congress and are provided here for informational purposes only, as any sentencing of the defendants will be determined by the judge.

Defendant

Age

Charges

Maximum Penalties

MARTIN HANDLER

Brooklyn, NY

48

Wire Fraud Conspiracy

Count One

Conspiracy to Defraud the United States

Count Three

Conspiracy to Falsify Documents and Records

Count Four

Theft of Government Funds

Count Five

Money Laundering Conspiracy

Count Six

Theft of Government Funds

Count Seven

20 years

 

Five years

 

Five years

 

10 years

 

20 years

 

10 years

MENACHEM LIEBERMAN

Brooklyn, New York

46

Wire Fraud Conspiracy

Count One

Aggravated Identity Theft

Count Two

Conspiracy to Defraud the United States

Count Three

Conspiracy to Falsify Documents and Records

Count Four

20 years

 

Two-year term consecutive to any other prison term

 

Five years

 

Five years

 

HAROLD SCHWARTZ

Brooklyn, New York

67

Wire Fraud Conspiracy

Count One

Conspiracy to Falsify Documents and Records

Count Four

20 years

 

Five years

ISIDORE HANDLER

Brooklyn, New York

37

Wire Fraud Conspiracy

Count One

Conspiracy to Falsify Documents and Records

Count Four

20 years

 

Five years

BEN WERCZBERGER

Brooklyn, New York

70

Theft of Government Funds

Count Five

Money Laundering Conspiracy

Count Six

10 years

 

20 years

Mr. Williams praised the outstanding investigative work of the FBI and HHS-OIG.  Mr. Williams also thanked the U.S. Department of Agriculture, Office of the Inspector General for their assistance with this investigation. 

This case is being handled by the Office’s Public Corruption Unit.  Assistant U.S. Attorneys Daniel Wolf and Mollie Bracewell 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 constitutes only allegations, and every fact described herein should be treated as an allegation.

Damian Williams, the United States Attorney for the Southern District of New York, Merrick B. Garland, the Attorney General of the United States, Christopher A. Wray, the Director of the Federal Bureau of Investigation (“FBI”), Michael J. Driscoll, Assistant Director in Charge of the New York Field Office of the FBI, and Keechant L. Sewell, the Commissioner of the New York City Police Department (“NYPD”), announced today that TREVOR THOMAS BICKFORD has been charged with federal crimes in connection with BICKFORD’s efforts to wage jihad by killing U.S. Government officials and his knife attack on three NYPD officers in Times Square on New Year’s Eve.  BICKFORD was charged by Complaint with attempting to kill officers and employees of the U.S. Government and persons assisting them.  BICKFORD is currently in state custody and will be transported to and presented in Manhattan federal court at a later date to face the federal charges filed in the Southern District of New York.

U.S. Attorney Damian Williams said: “On this past New Year’s Eve, revelers flocked to Times Square to ring in the New Year with friends and family.  But Trevor Bickford allegedly targeted the iconic yearly celebration to carry out a brazen act of violence and hatred in the name of jihad.  Bickford’s alleged attack in one of the most visited destinations in the world on its busiest night of the year ironically only served to spotlight the coordination, resolve, and dedication of American law enforcement to guard the wellbeing of the public.  We sincerely thank our law enforcement partners for their outstanding work and bravery, and especially wish a full and speedy recovery to the officers injured in this senseless attack.”

Attorney General Merrick B. Garland said: “As detailed in today’s complaint, we allege that the defendant plotted a jihad-inspired attack targeting U.S. government officials, and on December 31st, 2022, attacked three NYPD officers who were part of the joint federal-state law enforcement operation protecting the Times Square New Year’s Eve celebration.  We are deeply grateful for the bravery of the officers who were injured in this horrible attack and who put their lives on the line every day to serve their communities.  Together with our law enforcement partners at every level of government, the Justice Department will continue to work to disrupt, investigate, and prosecute those who target and attack law enforcement and endanger the American people.”

FBI Director Christopher A. Wray said: “As alleged, three New York City Police Department officers were brutally assaulted in a jihad-inspired attack on New Year’s Eve while they were performing their duties to protect their city and those out celebrating the holiday.  Being a law enforcement officer requires brave individuals willing to put their lives on the line every day to keep others safe.  We are committed to holding those who would target law enforcement with violence fully accountable.”

FBI Assistant Director Michael J. Driscoll said: “As we allege today, Bickford deliberately planned and executed his violent attack against New York City Police Officers who were simply doing their job protecting the public.  Only the quick action of these brave officers prevented further harm.  The FBI's New York Joint Terrorism Task Force is unwavering in its mission to combat terrorism to keep our city safe, and we will bring any radicalized individual willing to commit violence to justice.”

NYPD Commissioner Keechant L. Sewell said: “An attack against New York City police officers is an attack against all of us – and today’s charges make it clear that such violence will be prosecuted to the fullest extent of the law.  Our NYPD family is thankful our heroic officers survived this premeditated ambush, and the entire city commends them for preventing further bloodshed during one of our nation’s largest public events.  Clearly, the threat of jihadist terrorism remains very real, and our country’s security begins with the dedicated local, state, and federal law enforcement officers who are committed to keeping us safe.  I applaud our NYPD investigators, our partners on the FBI’s New York Joint Terrorism Task Force, and the prosecutors in the U.S. Attorney’s Office for the Southern District of New York for their combined efforts on this important case.”

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

In the summer of 2022, BICKFORD, a 19-year-old U.S. citizen and resident of Maine, began accessing and consuming materials espousing radical Islamic ideology, including materials promoting the Taliban and reflecting the teachings of Abu Muhammad al-Maqdisi, a prominent radical Islamic cleric who was a spiritual mentor of al Qaeda.  Over the ensuing months, BICKFORD radicalized, devoting himself to violent Islamic extremism and waging jihad.

By November 2022, BICKFORD was interested in traveling to the Middle East to support the Taliban and took steps towards traveling to Afghanistan to ally himself with the Taliban and work with the Taliban to fight against governments that, in BICKFORD’s view, oppress Muslims.  BICKFORD dedicated himself to the mission of waging jihad against officials of governments that he believes are anti-Muslim, including the U.S. Government.  BICKFORD told a family member that he wanted to travel to the Middle East so that he could be a suicide bomber for his religion.  BICKFORD ultimately decided that he would not travel overseas, and instead would wage jihad against the U.S. Government within the United States.

To carry out his jihadist mission, BICKFORD traveled from Maine to New York City in late December.  On New Year’s Eve, BICKFORD went to Times Square for the purpose of killing U.S. Government officials, armed with a large, curved knife similar to a machete, known as a kukri, with a blade over one foot long.

Protecting the civilians who attend the annual New Year’s Eve celebration in Times Square requires and involves the coordination, collaboration, and mutual assistance of multiple federal and state law enforcement agencies, including the FBI and NYPD.  During this special event, the FBI and NYPD work together and assist each other in the performance of their respective duties, in a collective effort to ensure a safe Times Square New Year’s Eve celebration.

At approximately 10:10 p.m., at 52nd Street and Eighth Avenue, blocks away from the New Year’s Eve celebration in Times Square, BICKFORD attacked three NYPD officers, who were detailed to the joint federal-state law enforcement operation to protect the New Year’s Eve celebration.  The location of 52nd Street and Eighth Avenue was an access checkpoint at which spectators could gain entry to the events in Times Square, and both FBI and NYPD personnel were deployed in the area of the checkpoint, including the three officers whom BICKFORD attacked.  BICKFORD approached the NYPD officers, declared “Allahu Akbar” — an Arabic phrase meaning “God is great,” which other radical Islamic extremists have similarly proclaimed while carrying out terrorist attacks — and stabbed and struck the officers in the head with his kukri.  Before BICKFORD could attack more targets, one of the victim officers shot BICKFORD in the shoulder, stopping the attack, and he was taken into state custody.  BICKFORD wounded all three officers, who suffered lacerations and other injuries, and each officer had to be taken to a hospital for treatment.  

A bag that BICKFORD brought with him to the Times Square area was subsequently recovered by law enforcement from the scene of the attack.  BICKFORD’s bag contained, among other things, a book by al-Maqdisi promoting jihad and BICKFORD’s journal.  The al-Maqdisi book encourages followers, among other things, to wage jihad against disbelievers and governments ruled by disbelievers, and to use swords on the heads of disbelievers.  An entry in BICKFORD’s journal from December 31, 2022 — that is, the day of his attack — states that “this will likely be my last entry” and that BICKFORD believed his brother, a soldier in the U.S. military, had “joined the ranks of my enemy.”  A second bag that BICKFORD was carrying, also recovered by law enforcement near Times Square, contained a book espousing violent Islamic extremism, with certain portions highlighted, including the following: “Fight in the Name of Allah and in the Cause of Allah. Fight against those who do not believe in Allah. Wage a holy war.”

The kukri that BICKFORD used in the attack, depicted below, was recovered by law enforcement from the scene of the attack:

After being treated at a local hospital, during a subsequent Mirandized interview, BICKFORD stated, among other things, the following:

• BICKFORD decided not to travel overseas to wage jihad as originally planned, and instead to commit jihad in New York City.  In the days leading up to his New Year’s Eve attack, BICKFORD traveled from Maine to New York City.
• On New Year’s Eve, BICKFORD went to Times Square and walked around the area “trying to figure out the right time to kill.”  BICKFORD started reciting verses from the Quran in his head to “hype himself up” for his attack.
• BICKFORD identified an NYPD officer who was isolated from civilians and other officers, took out the kukri from his backpack, declared “Allahu Akbar,” and attacked the officer.
• After attacking that officer, BICKFORD charged at another officer and tried but failed to remove that officer’s firearm from the officer’s holster.  One of the officer victims then shot BICKFORD in the shoulder, stopping his attack.  
• When asked why he conducted the attack, BICKFORD stated that the officer was a man in uniform who had a weapon; all men of military age were his targets; no one can work for the U.S. Government and be a true Muslim because the U.S. Government supports Israel; and he wanted to kill as many of these targets as he could.
• BICKFORD intended to die in the attack, in an effort to achieve martyrdom.  BICKFORD believed his attack was unsuccessful, because he did not kill any officers, and he did not die himself.

*                *                *

BICKFORD, 19, of Wells, Maine, is charged in the Complaint with four counts of attempted murder of officers and employees of the U.S. Government and persons assisting them, each of which carries a maximum sentence of 20 years in prison.  The charges carry an aggregate potential sentence of 80 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 efforts of the FBI’s New York Joint Terrorism Task Force, which consists of investigators and analysts from the FBI, the NYPD, and over 50 other federal, state, and local agencies.

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

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

---

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

Trevor Thomas Bickford, 19, of Wells, Maine, has been charged with federal crimes in connection with Bickford’s efforts to wage jihad by killing U.S. Government officials and his knife attack on three NYPD officers in Times Square on New Year’s Eve. Bickford was charged by complaint with attempting to kill officers and employees of the U.S. Government and persons assisting them. Bickford is currently in state custody and will be transported to and presented in Manhattan federal court at a later date to face the federal charges filed in the Southern District of New York.

“As detailed in today’s complaint, we allege that the defendant plotted a jihad-inspired attack targeting U.S. government officials, and on December 31st, 2022, attacked three NYPD officers who were part of the joint federal-state law enforcement operation protecting the Times Square New Year’s Eve celebration,” said Attorney General Merrick B. Garland. “We are deeply grateful for the bravery of the officers who were injured in this horrible attack and who put their lives on the line every day to serve their communities. Together with our law enforcement partners at every level of government, the Justice Department will continue to work to disrupt, investigate, and prosecute those who target and attack law enforcement and endanger the American people.”

“On this past New Year’s Eve, revelers flocked to Times Square to ring in the New Year with friends and family.  But Trevor Bickford allegedly targeted the iconic yearly celebration to carry out a brazen act of violence and hatred in the name of jihad,” said U.S. Attorney Damian Williams for the Southern District of New York. “Bickford’s alleged attack in one of the most visited destinations in the world on its busiest night of the year ironically only served to spotlight the coordination, resolve and dedication of American law enforcement to guard the wellbeing of the public. We sincerely thank our law enforcement partners for their outstanding work and bravery, and especially wish a full and speedy recovery to the officers injured in this senseless attack.”

“As alleged, three New York City Police Department officers were brutally assaulted in a jihad-inspired attack on New Year’s Eve while they were performing their duties to protect their city and those out celebrating the holiday,” said FBI Director Christopher Wray. “Being a law enforcement officer requires brave individuals willing to put their lives on the line every day to keep others safe. We are committed to holding those who would target law enforcement with violence fully accountable.”

“As we allege today, Bickford deliberately planned and executed his violent attack against New York City Police Officers who were simply doing their job protecting the public,” said Assistant Director Michael J. Driscoll of the FBI New York Field Office. “Only the quick action of these brave officers prevented further harm. The FBI's New York Joint Terrorism Task Force is unwavering in its mission to combat terrorism to keep our city safe, and we will bring any radicalized individual willing to commit violence to justice.”

“An attack against New York City police officers is an attack against all of us – and today’s charges make it clear that such violence will be prosecuted to the fullest extent of the law,” said NYPD Commissioner Keechang L. Sewell. “Our NYPD family is thankful our heroic officers survived this premeditated ambush, and the entire city commends them for preventing further bloodshed during one of our nation’s largest public events.  Clearly, the threat of jihadist terrorism remains very real, and our country’s security begins with the dedicated local, state, and federal law enforcement officers who are committed to keeping us safe.  I applaud our NYPD investigators, our partners on the FBI’s New York Joint Terrorism Task Force, and the prosecutors in the U.S. Attorney’s Office for the Southern District of New York for their combined efforts on this important case.”

According to the allegations contained in the complaint charging the defendant:

In the summer of 2022, Bickford, a 19-year-old U.S. citizen and resident of Maine, began accessing and consuming materials espousing radical Islamic ideology, including materials promoting the Taliban and reflecting the teachings of Abu Muhammad al-Maqdisi, a prominent radical Islamic cleric who was a spiritual mentor of al Qaeda. Over the ensuing months, Bickford radicalized, devoting himself to violent Islamic extremism and waging jihad.

By November 2022, Bickford was interested in traveling to the Middle East to support the Taliban and took steps towards traveling to Afghanistan to ally himself with the Taliban and work with the Taliban to fight against governments that, in Bickford’s view, oppress Muslims. Bickford dedicated himself to the mission of waging jihad against officials of governments that he believes are anti-Muslim, including the U.S. Government. Bickford told a family member that he wanted to travel to the Middle East so that he could be a suicide bomber for his religion. Bickford ultimately decided that he would not travel overseas, and instead would wage jihad against the U.S. Government within the United States.

To carry out his jihadist mission, Bickford traveled from Maine to New York City in late December. On New Year’s Eve, Bickford went to Times Square for the purpose of killing U.S. Government officials, armed with a large, curved knife similar to a machete, known as a kukri, with a blade over one foot long.

Protecting the civilians who attend the annual New Year’s Eve celebration in Times Square requires and involves the coordination, collaboration, and mutual assistance of multiple federal and state law enforcement agencies, including the FBI and NYPD. During this special event, the FBI and NYPD work together and assist each other in the performance of their respective duties, in a collective effort to ensure a safe Times Square New Year’s Eve celebration.

At approximately 10:10 p.m., at 52nd Street and Eighth Avenue, blocks away from the New Year’s Eve celebration in Times Square, Bickford attacked three NYPD officers, who were detailed to the joint federal-state law enforcement operation to protect the New Year’s Eve celebration. The location of 52nd Street and Eighth Avenue was an access checkpoint at which spectators could gain entry to the events in Times Square, and both FBI and NYPD personnel were deployed in the area of the checkpoint, including the three officers whom Bickford attacked. Bickford approached the NYPD officers, declared “Allahu Akbar”—an Arabic phrase meaning “God is great,” which other radical Islamic extremists have similarly proclaimed while carrying out terrorist attacks—and stabbed and struck the officers in the head with his kukri. Before Bickford could attack more targets, one of the victim officers shot Bickford in the shoulder, stopping the attack, and he was taken into state custody. Bickford wounded all three officers, who suffered lacerations and other injuries, and each officer had to be taken to a hospital for treatment.

A bag that Bickford brought with him to the Times Square area was subsequently recovered by law enforcement from the scene of the attack. Bickford’s bag contained, among other things, a book by al-Maqdisi promoting jihad and Bickford’s journal. The al-Maqdisi book encourages followers, among other things, to wage jihad against disbelievers and governments ruled by disbelievers, and to use swords on the heads of disbelievers. An entry in Bickford’s journal from December 31, 2022—that is, the day of his attack—states that “this will likely be my last entry” and that Bickford believed his brother, a soldier in the U.S. military, had “joined the ranks of my enemy.” A second bag that Bickford was carrying, also recovered by law enforcement near Times Square, contained a book espousing violent Islamic extremism, with certain portions highlighted, including the following: “Fight in the Name of Allah and in the Cause of Allah. Fight against those who do not believe in Allah. Wage a holy war.”

The kukri that Bickford used in the attack, depicted below, was recovered by law enforcement from the scene of the attack:

After being treated at a local hospital, during a subsequent Mirandized interview, Bickford stated, among other things, the following:

• Bickford decided not to travel overseas to wage jihad as originally planned, and instead to commit jihad in New York City. In the days leading up to his New Year’s Eve attack, Bickford traveled from Maine to New York City.
• On New Year’s Eve, Bickford went to Times Square, and walked around the area “trying to figure out the right time to kill.” Bickford started reciting verses from the Quran in his head to “hype himself up” for his attack. Bickford identified an NYPD officer who was isolated from civilians and other officers, took out the kukri from his backpack, declared “Allahu Akbar,” and attacked the officer.
• After attacking that officer, Bickford charged at another officer, and tried but failed to remove that officer’s firearm from the officer’s holster. One of the officer victims then shot Bickford in the shoulder, stopping his attack.
• When asked why he conducted the attack, Bickford stated that the officer was a man in uniform who had a weapon; all men of military age were his targets; no one can work for the U.S. Government and be a true Muslim, because the U.S. Government supports Israel; and he wanted to kill as many of these targets as he could.
• Bickford intended to die in the attack, in an effort to achieve martyrdom. Bickford believed his attack was unsuccessful, because he did not kill any officers, and he did not die himself.

Bickford is charged with four counts of attempted murder of officers and employees of the U.S. Government and persons assisting them, each of which carries a maximum sentence of 20 years in prison. The charges carry an aggregate potential sentence of 80 years in prison.

The FBI’s New York Joint Terrorism Task Force, which consists of investigators and analysts from the FBI, the NYPD, and over 50 other federal, state, and local agencies is investigating the case.

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

A complaint 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 NIKHIL WAHI was sentenced by U.S. District Judge Loretta A. Preska to 10 months in prison for his participation in a scheme to commit insider trading in cryptocurrency assets by using confidential information from his brother, a former product manager at Coinbase Global, Inc. (“Coinbase”), about which crypto assets were scheduled to be listed on Coinbase’s exchanges.  WAHI previously pled guilty to one count of conspiracy to commit wire fraud.

U.S. Attorney Damian Williams said: “At a time when the cryptocurrency markets have been plagued by fear, uncertainty, and doubt, insider trading creates the impression that everything is rigged and that only people with secret advantages can make a real buck.  Today’s sentence makes clear that the cryptocurrency markets are not lawless.  There are real consequences to illegal insider trading, wherever and whenever it occurs.”

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

Beginning in approximately October 2020, NIKHIL WAHI obtained from his brother, an employee of Coinbase working on highly confidential crypto asset listings, secret tips about which crypto assets would be listed on Coinbase.  Using that insider information, NIKHIL WAHI used anonymous Ethereum blockchain wallets and accounts held under pseudonyms at centralized cryptocurrency exchanges to acquire those crypto assets shortly before Coinbase publicly announced that it was listing these crypto assets on its exchanges.  On multiple occasions following Coinbase’s public listing announcements, NIKHIL WAHI sold the crypto assets for a profit.

*                *                *

In addition to the prison sentence, WAHI, 27, of Seattle, Washington, was ordered to pay $892,500 in forfeiture.

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, along with Kristen Clarke, Assistant Attorney General for the Justice Department’s Civil Rights Division, announced today that the Justice Department has reached a key milestone in its settlement agreement with Meta Platforms, Inc. (“Meta”), formerly known as Facebook, Inc., requiring Meta to change its ad delivery system to prevent discriminatory advertising in violation of the Fair Housing Act (“FHA”).  As required by the settlement entered on June 27, 2022, resolving a lawsuit filed in the U.S. District Court for the Southern District of New York, Meta has now built a new system to address algorithmic discrimination.  Today, the parties informed the Court that they have reached agreement on the system’s compliance targets.  This development ensures that Meta will be subject to court oversight and regular review of its compliance with the settlement through June 27, 2026. 

U.S. Attorney Damian Williams said:  “This groundbreaking resolution sets a new standard for addressing discrimination through machine learning.  We appreciate that Meta agreed to work with us toward a resolution of this matter and applaud Meta for taking the first steps towards addressing algorithmic bias.  We hope that other companies will follow Meta’s lead in addressing discrimination in their advertising platforms.  We will continue to use all of the tools at our disposal to address violations of the Fair Housing Act.”

“This development marks a pivotal step in the Justice Department’s efforts to hold Meta accountable for unlawful algorithmic bias and discriminatory ad delivery on its platforms,” said Assistant Attorney General Kristen Clarke of the Justice Department’s Civil Rights Division. “The Justice Department will continue to hold Meta accountable by ensuring the Variance Reduction System addresses and eliminates discriminatory delivery of advertisements on its platforms.  Federal monitoring of Meta should send a strong signal to other tech companies that they too will be held accountable for failing to address algorithmic discrimination that runs afoul of our civil rights laws.” 

The United States’ complaint alleged, among other things, that Meta uses algorithms in determining which Meta users receive ads, including housing ads, and that those algorithms rely, in part, on characteristics protected under the FHA.  Specifically, the United States alleged that Meta feeds troves of user information into its ad delivery system, including information related to users’ FHA-protected characteristics such as sex and race, and uses that information in its personalization algorithms to predict which ad is most relevant to which user.  As the complaint alleged, Meta’s delivery algorithms introduce bias when delivering ads, resulting in a variance along sex and estimated race/ethnicity between the set of users who are eligible to see housing ads based on the advertiser’s targeted audience and the set of users who actually see the ad. 

Pursuant to the settlement, Meta has developed a new system—the Variance Reduction System (“VRS”)—to reduce the variances between the eligible audience and the actual audience.  The United States has concluded that the new system will substantially reduce the variances between the eligible and actual audiences along sex and estimated race/ethnicity in the delivery of housing advertisements.  The VRS will operate on all housing advertisements across Meta platforms, and the agreement requires Meta to meet certain compliance metrics in stages.  For example, by December 31, 2023, for the vast majority of housing ads on Meta platforms, Meta will reduce variances to less than or equal to 10% for 91.7% of those ads for sex and less than or equal to 10% for 81.0% of those ads for estimated race/ethnicity.  For more information on the operation of the VRS, read Meta’s technical paper.

As further provided in the settlement agreement, the parties have selected an independent, third-party reviewer, Guidehouse, Inc. (“Guidehouse”), to investigate and verify on an ongoing basis whether the VRS is meeting the compliance metrics agreed to by the parties.  Under the agreement, Meta must provide Guidehouse and the United States with regular compliance reports and make available any information necessary to verify compliance with the agreed-upon metrics.  The court will have ultimate authority to resolve any disputes over the information that Meta must provide. 

Finally, as also required by the settlement agreement, Meta has ceased delivering housing advertisements using the Special Ad Audience tool (which delivered ads to users who “look like” other users), and Meta will not provide any targeting options for housing advertisers that directly describe or relate to FHA-protected characteristics.

This agreement marks the first time that Meta will be subject to court oversight for its ad targeting and delivery system.

More information about the Civil Rights Division and the civil rights laws it enforces is available at www.justice.gov/crt.  More information about the U.S. Attorney’s Office for the Southern District of New York is available at www.justice.gov/usao-sdny.  Individuals who believe they have been victims of housing discrimination may submit a report to the U.S. Attorney’s Office for the Southern District of New York online at https://www.justice.gov/usao-sdny/civil-rights or by telephone at (212) 637-0840; may submit a report online to the Department of Justice atwww.civilrights.justice.gov; or may contact the Department of Housing and Urban Development at 1-800-669-9777 or through its website at www.hud.gov. 

The case is being handled by the Office’s Civil Rights Unit in the Civil Division.  Assistant U.S. Attorneys Ellen Blain, David J. Kennedy, and Christine S. Poscablo are in charge of the case.

Damian Williams, the United States Attorney for the Southern District of New York, announced the arrest in Spain of NESTOR NUÑEZ, a/k/a “Salvador Molina,” on December 28, 2022, on fraud charges and the surrender of RAMON PEREZ on January 6, 2023, on fraud and money laundering charges.  The Government is seeking NUÑEZ’s extradition from Spain.  PEREZ was presented earlier today before United States Magistrate Judge Sarah Netburn.  On December 14, 2022, U.S. Attorney Damian Williams announced criminal charges against FRANCISLEY DA SILVA, JUAN TACURI, and ANTONIA PEREZ HERNANDEZ in United States v. Francisley da Silva, et al., 22 Cr. 622 (AT).  Along with PEREZ and NUÑEZ, all of these defendants were promoters of the cryptocurrency Ponzi scheme known as Forcount.  The Silva matter has been assigned to United States District Judge Analisa Torres.

As alleged in the unsealed S2 Superseding Indictment and the unsealed S3 Superseding Indictment:[1]

 PEREZ defrauded Forcount’s victim-investors (“Victims”) and then sought to conceal his fraud by laundering Victim funds through shell companies and by making large personal expenditures, including on real estate.  

In or about 2018, at the direction of SILVA, NUÑEZ began presenting himself as Forcount’s CEO under the alias “Salvador Molina.”  In reality, NUÑEZ was an actor paid by SILVA to promote Forcount.

*                *                *

PEREZ, 40, of Orlando, Florida, is charged with one count of conspiracy to commit wire fraud, one count of wire fraud, and one count of conspiracy to commit money laundering, each of which carry a maximum sentence of 20 years in prison.

NUÑEZ, 64, of Madrid, Spain, is charged with one count of conspiracy to commit wire fraud and one count of wire fraud, each of which carry a maximum sentence of 20 years in prison.  

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

Mr. Williams praised the outstanding investigative work of HSI New York, HSI Madrid, the New York City Police Department, the New York City Sheriff’s Office, the Florida Department of Financial Services, and the Florida Office of Financial Regulation.  Mr. Williams also thanked the Securities and Exchange Commission, the Brazilian Federal Police, and the Spanish Guardia Civil for their assistance.  

The case is being handled by the Office’s Money Laundering and Transnational Criminal Enterprises Unit.  Assistant U.S. Attorney Benjamin A. Gianforti is in charge of this prosecution.

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

The United States Attorney’s Office for the Southern District of New York is committed to protecting the rights of crime victims.  If you believe you are a victim of the Forcount scheme, our Victim/Witness Unit can make sure that you are notified of important stages of these cases to help you exercise your rights.  In addition, our Victim/Witness Unit is available to answer questions you might have about these cases and can refer you to available resources.

Wendy Olsen Clancy

Victim/Witness Coordinator

United States Attorney’s Office

One St. Andrew’s Plaza

New York, New York 10007

(866) 874-8900

Wendy.Olsen@usdoj.gov

 

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

Damian Williams, the United States Attorney for the Southern District of New York, announced that JENNIFER SHAH was sentenced today by United States District Judge Sidney H. Stein to 78 months in prison for running a nationwide telemarketing fraud scheme.  SHAH previously pled guilty to one count of conspiracy to commit wire fraud in connection with telemarketing. 

U.S. Attorney Damian Williams said: “With today’s sentence, Jennifer Shah finally faces the consequences of the many years she spent targeting vulnerable, elderly victims.  These individuals were lured in by false promises of financial security, but in reality, Shah and her co-conspirators defrauded them out of their savings and left them with nothing to show for it.  This conviction and sentence demonstrate once again that we will continue to vigorously protect victims of financial fraud and hold accountable those who engage in fraudulent schemes.”

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

From at least 2012 until her arrest in March 2021, SHAH was an integral leader of a wide-ranging, nationwide telemarketing fraud scheme that victimized thousands of innocent people.  The scheme principally involved selling those victims so-called “business services” in connection with the victims’ purported online businesses (the “Business Opportunity Scheme”).  In particular, SHAH knowingly and intentionally facilitated the sale of “leads” — contact information for potential victims who had been identified as susceptible to the scheme’s lies — to sales floors that were perpetrating the Business Opportunity Scheme and, during the latter portion of her participation in the scheme, owned and operated one of the sales floors that was part of the scheme.

Many of SHAH’s victims were elderly or vulnerable.  Many of those people suffered significant financial hardship and damage.  At SHAH’s direction, victims were defrauded over and over again until they had nothing left.  She and her co-conspirators persisted in their conduct until the victims’ bank accounts were empty, their credit cards were at their limits, and there was nothing more to take.

SHAH was not deterred by the Federal Trade Commission’s investigations or enforcement actions, nor by learning that dozens of her co-conspirators had been arrested by federal law enforcement, pled guilty for their roles in the scheme, and that two were convicted at trial.  SHAH was not ignorant of these developments: she took a series of increasingly extravagant steps to conceal her criminal conduct from the authorities.  She directed others to lie, she put businesses and bank accounts in the name of others, she required payment in cash, she instructed others to delete text messages and electronic documents, she moved some of her operations overseas, and she tried to put computers and other evidence beyond the reach of investigators.  These efforts were not short-lived or narrow in scope.  She engaged in a yearslong, comprehensive effort to hide her continued role in the scheme.

*                *                *

In addition to the prison term, SHAH, 49, of Salt Lake City, Utah, was sentenced to five years of supervised release.  She was also ordered to forfeit $6,500,000, 30 luxury items, and 78 counterfeit luxury items, and to pay $6,645,251 in restitution.

Mr. Williams praised the outstanding investigative work of Homeland Security Investigations’ El Dorado Task Force.

This case is being handled by the Office’s Money Laundering and Transnational Criminal Enterprises Unit.  Assistant U.S. Attorneys Kiersten A. Fletcher, Benet J. Kearney, Robert B. Sobelman, and Sheb Swett are in charge of the prosecution. 

Damian Williams, the United States Attorney for the Southern District of New York, announced today that FILIPPO BERNARDINI pled guilty to one count of wire fraud in connection with a multi-year scheme to impersonate individuals involved in the publishing industry in order to fraudulently obtain more than one thousand prepublication manuscripts of novels and other forthcoming books.  The defendant pled guilty before U.S. Magistrate Judge Sarah Netburn.  The defendant is scheduled to be sentenced on April 5, 2023, before U.S. District Judge Colleen McMahon.

U.S. Attorney Damian Williams said: “Filippo Bernardini used his insider knowledge of the publishing industry to create a scheme that stole precious works from authors and menaced the publishing industry.  Through impersonation and phishing schemes, Bernardini was able to obtain more than a thousand manuscripts fraudulently.  I commend the career prosecutors of this Office as well as our law enforcement partners for writing the final chapter to Bernardini’s manuscript theft scheme.” 

According to statements and filings in federal court:

Beginning in at least August 2016 and continuing through his January 2022 arrest, BERNARDINI, who was based in London and worked in the publishing industry, impersonated agents, editors, and other individuals involved in publishing to fraudulently obtain prepublication manuscripts.  In carrying out this scheme, BERNARDINI created fake email accounts that were designed to impersonate real people employed in the publishing industry, including literary talent agencies, publishing houses, literary scouts, and others.  BERNARDINI created these accounts by registering more than 160 internet domains that were crafted to be confusingly similar to the real entities that they were impersonating, including only minor typographical errors that would be difficult for the average recipient to identify during a cursory review.  Over the course of this scheme, BERNARDINI impersonated hundreds of distinct people and engaged in hundreds of unique efforts to fraudulently obtain electronic copies of manuscripts that he was not entitled to.  BERNARDINI obtained more than a thousand manuscripts through fraud.

In addition, BERNARDINI engaged in a phishing scheme to surreptitiously gain access to a database maintained by a New York City-based literary scouting company (“Scouting Company-1”).  BERNARDINI created a webpage that impersonated Scouting Company-1’s website.  Then, in or about July 2020, BERNARDINI impersonated a Scouting Company-1 employee and emailed two individuals, directing them to BERNARDINI’s look-alike webpage and prompting the users to provide their usernames and passwords.  BERNARDINI’s webpage was programmed to automatically forward the input usernames and passwords to an email account controlled by BERNARDINI.  BERNARDINI obtained the login information of approximately 20 users.

*                *                *

FILIPPO BERNARDINI, 30, of London, United Kingdom, pled guilty to one count of wire fraud, which carries a maximum sentence of 20 years in prison.  As part of his guilty plea, BERNARDINI agreed to pay restitution of $88,000. 

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

Mr. Williams praised the 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. Attorney Daniel G. Nessim is in charge of the prosecution.

Damian Williams, the United States Attorney for the Southern District of New York, announced that JUAN CARLOS CASTRO GONZALEZ was sentenced yesterday to 40 months in prison in connection with his participation in COVID-19-related tax fraud and unemployment benefits fraud schemes that resulted in actual losses totaling over $570,000 and intended losses of over $3.3 million.  On April 6, 2022, CASTRO GONZALEZ pled guilty to conspiracy to commit wire fraud before U.S. District Judge Paul A. Engelmayer, who imposed the sentence.

U.S. Attorney Damian Williams said: “Juan Carlos Castro Gonzalez exploited the Government’s efforts to help individuals struggling to make ends meet during the COVID-19 pandemic in order to enrich himself and his co-conspirators.  Castro Gonzalez’s sentence shows that this Office and our law enforcement partners will work tirelessly to prosecute those who sought to commit pandemic relief fraud.”

According to the allegations in the Information to which the defendant pled guilty, other public filings, and statements made in public court proceedings:

From 2019 to 2021, CASTRO GONZALEZ participated in a conspiracy to commit wire fraud by defrauding government agencies.  Between July 2019 and August 2021, CASTRO GONZALEZ worked with others to obtain fraudulent tax refunds and Economic Impact Payments, which were authorized as part of the Coronavirus Aid, Relief, and Economic Security (“CARES”) Act, from the Internal Revenue Service (the “Tax Fraud Scheme”).  Between June 2020 and August 2021, CASTRO GONZALEZ worked with others to obtain CARES Act unemployment insurance (“UI”) benefits as a result of the ongoing COVID-19 pandemic (the “UI Benefits Fraud Scheme”).

With respect to the Tax Fraud Scheme, CASTRO GONZALEZ controlled several bank accounts under different identities.  These accounts were used by CASTRO GONZALEZ to deposit and receive, among other things, U.S. Treasury payments in the names of other individuals.  CASTRO GONZALEZ was observed on bank surveillance footage at several of these bank locations depositing U.S. Treasury checks into the accounts.  CASTRO GONZALEZ is responsible for $56,648.01 in losses to the Internal Revenue Service. 

With respect to the UI Benefits Fraud Scheme, CASTRO GONZALEZ verified CARES Act UI benefit applications to the New York Department of Labor (the “NY DOL”) that had been fraudulently submitted using the names and social security numbers of people who were unaware that such applications had been made using their personal information.  Once the NY DOL received and approved the fraudulent UI benefit applications, the funds were sent to specified bank accounts or to pre-paid cards, at least some of which were controlled and received by CASTRO GONZALEZ.  CASTRO GONZALEZ and his co-conspirators caused actual losses to the NYL DOL of $500,079 and intended losses of approximately $3,363,000.

*                *                *

In addition to his prison term, CASTRO GONZALEZ, 35, of the Bronx, New York, was ordered to pay restitution in the amount of $574,202.01 and to forfeit the same amount to the Government.

Mr. Williams praised the outstanding investigative work of the United States Department of Labor, Office of Inspector General; the Internal Revenue Service, Criminal Investigation; and the United States Postal Inspection Service. 

This case is being handled by the Office’s Complex Frauds and Cybercrime Unit.  Assistant U.S. Attorneys Olga I. Zverovich and Danielle M. Kudla are in charge of the prosecution.

Damian Williams, the United States Attorney for the Southern District of New York, announced today that COOPER MORGENTHAU, the former chief financial officer of two special purpose acquisition companies (“SPAC-1” and “SPAC-2”), pled guilty to one count of wire fraud in connection with a scheme to embezzle more than $5 million from the two companies.  The defendant pled guilty before U.S. District Judge Paul A. Engelmayer.

U.S. Attorney Damian Williams said: “Cooper Morgenthau, the former CFO of two SPACs, has admitted that he breached the trust that he owed to his public and private investors, stealing millions of dollars from them to trade meme stocks and cryptocurrencies.  This Office remains committed to rooting out fraud in the SPAC market and to protecting Main Street investors from abuses on Wall Street.”

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

Between in or about June 2021 and in or about August 2022, MORGENTHAU, who was the CFO of SPAC-1 and SPAC-2, embezzled more than $5 million from the two companies.   SPAC-1 had recently had its initial public offering, while SPAC-2 was raising money from private investors in preparation for its anticipated IPO.  MORGENTHAU used the embezzled funds to trade equities and options of so-called “meme stocks” and cryptocurrencies, losing almost all of the money that he stole.  To conceal and facilitate his embezzlement from SPAC-1, MORGENTHAU fabricated bank statements, which he provided to SPAC-1’s accountant and auditor; made and caused to be made material misstatements in SPAC-1’s public filings with the Securities and Exchange Commission (“SEC”); and transferred some of SPAC-2’s funds to SPAC-1 to cover up the funds he had misappropriated from SPAC-1. 

*                *                *

MORGENTHAU, 35, of Fernandina Beach, Florida, pled guilty to one count of wire fraud, which carries a maximum sentence of 20 years in prison.  As part of his guilty plea, MORGENTHAU agreed to forfeit $5,111,335 and to pay restitution of $5,111,335. 

The statutory maximum sentence is prescribed by Congress and provided here for informational purposes only, as any sentencing of the defendant will be determined by the judge.  MORGENTHAU is scheduled to be sentenced by Judge Engelmayer on April 25, 2023. 

Mr. Williams praised the outstanding work of the Federal Bureau of Investigation.  Mr. Williams further thanked the SEC for its assistance and cooperation in this investigation. 

This case is being handled by the Office’s Securities and Commodities Fraud Task Force and Money Laundering and Transnational Criminal Enterprises Unit.  Assistant U.S. Attorneys Joshua A. Naftalis and Anden Chow 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 extradition of SAMUEL BANKMAN-FRIED, a/k/a “SBF,” yesterday from the Bahamas.[1] 

Also unsealed are the guilty pleas of CAROLINE ELLISON, former CEO of Alameda Research, and GARY WANG, co-founder and former Chief Technology Officer of FTX.  ELLISON and WANG pled guilty before U.S. District Judge Ronnie Abrams on December 19, 2022, to charges arising from their participation in schemes to defraud FTX’s customers and investors, and related crimes, and are cooperating with the Government.

U.S. Attorney Damian Williams said: “Last week, we announced charges against Samuel Bankman-Fried for a sweeping fraud scheme that contributed to FTX’s collapse and for a campaign finance scheme that sought to influence public policy in Washington.  As I said last week, this investigation is very much ongoing, and it’s moving very quickly.  I also said that last week’s announcement would not be our last, and let me be clear once again, neither is today’s.” 

FBI Assistant Director Michael J. Driscoll said: “With the pleas announced today, Ms. Ellison and Mr. Wang admitted they were willing participants in schemes to defraud FTX.com's customers and backers out of their money.  The FBI will continue to seek justice for the victims of this case.  No matter how fraudsters dress it up or sell the scam, we will continue to make every effort to ensure those responsible for the scheme are held accountable in our criminal justice system.”

*                *                *

CAROLINE ELLISON, 28, is charged with and has pled guilty to two counts of conspiracy to commit wire fraud, each of which carry a maximum sentence of 20 years in prison; two counts of wire fraud, each of which carry a maximum sentence of 20 years in prison; one count of conspiracy to commit commodities fraud, which carries a maximum sentence of five years in prison; one count of conspiracy to commit securities fraud, which carries a maximum sentence of five years in prison; and one count of conspiracy to commit money laundering, which carries a maximum sentence of 20 years in prison.

GARY WANG, 29, is charged with and has pled guilty to one count of conspiracy to commit wire fraud, which carries a maximum sentence of 20 years in prison; one count of wire fraud, which carries a maximum sentence of 20 years in prison; one count of conspiracy to commit commodities fraud, which carries a maximum sentence of five years in prison; and one count of conspiracy to commit securities fraud, which carries a maximum sentence of five years in prison.

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

Mr. Williams praised the investigative work of the FBI and thanked the FBI for its partnership in the extradition of Mr. Bankman-Fried and its investigation of wrongdoing associated with Alameda Research and FTX.  Mr. Williams also thanked the Bahamas’ government as well as the United States Embassy in the Bahamas for their extraordinary efforts in the arrest and return of the defendant to the United States to face these charges.  He also expressed appreciation for the assistance of the Justice Department’s Office of International Affairs.

This case is being handled by the Office’s Securities and Commodities Fraud Task Force. Assistant U.S. Attorneys Nicolas Roos and Danielle Sassoon are in charge of the prosecution.  The Money Laundering and Transnational Criminal Enterprises Unit and Assistant U.S. Attorneys Samuel Raymond and Thane Rehn also contributed to the investigation.

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

 

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[1] The charges against BANKMAN-FRIED are merely accusations, and he is presumed innocent unless and until proven guilty.

Damian Williams, the United States Attorney for the Southern District of New York, and John Gay, the Inspector General of the Port Authority of New York and New Jersey (the “Port Authority”), announced the unsealing of an Indictment charging DANIEL ABAYEV and PETER LEYMAN with two counts of conspiracy to commit computer intrusions.  The Indictment charges that ABAYEV and LEYMAN hacked the electronic taxi dispatch system (the “Dispatch System”) at John F. Kennedy International Airport (“JFK”).  Taxi drivers are required to wait in a holding lot at JFK before they are dispatched to pick up a fare.  A computer system ensures that taxis are dispatched in the order in which they arrived.  ABAYEV and LEYMAN conspired with Russian nationals to hack the Dispatch System and move certain taxis to the front of the line, in exchange for payment.  ABAYEV and LEYMAN were arrested this morning in Queens, New York, and will be presented this afternoon before United States Magistrate Judge Gabriel W. Gorenstein.

U.S. Attorney Damian Williams said: “As alleged in the indictment, these two defendants — with the help of Russian hackers — took the Port Authority for a ride.  For years, the defendants’ hacking kept honest cab drivers from being able to pick up fares at JFK in the order in which they arrived.  Now, thanks to this Office’s teamwork with the Port Authority, these defendants are facing serious criminal charges for their alleged cybercrimes.”

Port Authority Inspector General John Gay said: “This sophisticated, internationally coordinated conspiracy allegedly targeted hard-working taxi drivers trying to earn an honest living.  The Port Authority has zero tolerance for bad actors violating the law at our facilities.  We thank Damian Williams and the Southern District for their partnership as we continue our relentless commitment to detecting and disrupting illegal behavior at our facilities across the region.”

As alleged in the Indictment:[1]

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

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

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

At various times between November 2019 and November 2020, ABAYEV and LEYMAN, working with others, successfully hacked the Dispatch System.  They used their unauthorized access to alter the Dispatch System and move specific taxis to the front of the line, thereby allowing drivers of those taxis to skip other taxi drivers waiting in the line.  ABAYEV and LEYMAN charged taxi drivers $10 each time they were advanced to the front of the line.  Taxi drivers learned that they could skip the taxi line by paying $10 to members of the Hacking Scheme through word of mouth, and members of the Hacking Scheme offered some taxi drivers waivers of the $10 fee in exchange for recruiting other taxi drivers to pay the $10 fee to skip the taxi line.  The Hacking Scheme also used large group chat threads in order to communicate with taxi drivers.  For example, when the Hacking Scheme had access to the Dispatch System for the day, a member of the Hacking Scheme would message the group chat threads, “Shop open.”  ABAYEV also sent messages to large groups of taxi drivers on the chat threads instructing them how to avoid detection by law enforcement when using trips purchased from the Hacking Scheme, such as the following:

DEAR  DRIVERS  !!!! PLEASE !!!!

Do not wait at the gas station in JFK

Please do not go around the CTH [Central Taxi Hold] Lot 

Please do not wait at Rockway av 

You have to be very very carefully

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

*                *                *

ABAYEV, 48, and LEYMAN, 48, both of Queens, New York, are each charged with two counts of conspiracy to commit computer intrusion.  The charges carry a maximum sentence of 10 years in prison. 

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

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

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

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

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

Damian Williams, the United States Attorney for the Southern District of New York, announced the conviction yesterday in Manhattan federal court of ABEL MONTILLA for his participation in a cocaine trafficking scheme between 2018 and 2021.  The jury convicted MONTILLA following a one-week trial before U.S. District Judge P. Kevin Castel.  Sentencing of MONTILLA is scheduled for March 22, 2023.

U.S. Attorney Damian Williams said: “The unanimous jury verdict holds Abel Montilla accountable for his role in a widespread cocaine trafficking organization that flooded the streets with four tons of cocaine.  Montilla was a coordinator of the drug trafficking organization who traveled around the country to manage the delivery of the organization’s cocaine-filled furniture.  He now faces the prospect of a lengthy prison sentence for his crime.”

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

Between 2018 and 2021, MONTILLA was a member of a drug trafficking organization (“DTO”) that engaged in a drug-trafficking scheme involving the concealment of cocaine inside custom-built furniture.  Between in or about September 2018 and June 2019, the DTO sent approximately 27 shipments of cargo from Puerto Rico to the continental United States.  The cocaine was concealed in more than approximately 70 custom cube-shaped coffee tables or other furniture.  The organization falsely represented that the cargo contained furniture, but that furniture in fact concealed hundred-kilogram quantities of cocaine.  In total, the trafficking organization shipped approximately 4,000 kilograms of cocaine, worth at least $120,000,000 on the street.  Eight of the organization’s shipments were sent to addresses in the Southern District of New York, including in Yonkers and the Bronx.  Those eight shipments contained a total of approximately 775 kilograms (1,704 pounds) of cocaine.

Photographs introduced into evidence during trial of furniture containing cocaine and seized cocaine are below:

 

MONTILLA was a Massachusetts-based coordinator of cocaine shipments who managed the recipients of the organization’s deliveries of cocaine shipments and the distribution of the cocaine concealed inside the furniture.  At times, MONTILLA drove straight through the night from Massachusetts to Florida to be present for a cocaine delivery, then flew or drove back to Massachusetts to handle additional cocaine deliveries there.  In total, MONTILLA coordinated at least a dozen drug shipments in Massachusetts and Florida, and at least twelve of the 27 shipments were sent to addresses affiliated with MONTILLA.

*                *                *

MONTILLA, 49, of Springfield, Massachusetts, was found guilty of conspiracy to distribute and possess with the intent to distribute narcotics, which carries a maximum sentence of life in prison and a mandatory minimum sentence of ten years in prison. 

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

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

Mr. Williams praised the outstanding investigative work of the Drug Enforcement Administration, the Bureau of Alcohol, Tobacco, Firearms, and Explosives, and the United States Postal Inspection Service in this investigation.

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

Damian Williams, the United States Attorney for the Southern District of New York, announced that ULADZIMIR DANSKOI, the CEO of an immigration services firm, and JULIA GREENBERG, an immigration attorney, were found guilty yesterday in Manhattan federal court of conspiracy to defraud the United States and conspiracy to commit immigration fraud following a two-week trial before United States District Judge J. Paul Oetken.

U.S. Attorney Damian Williams said: “Asylum is an incredibly important benefit designed to protect the world’s most vulnerable people.  The defendants, a CEO of an immigration services firm with offices in both Manhattan and Brooklyn and a licensed attorney, exploited that system for financial gain by knowingly peddling false claims and coaching clients to lie under oath.  Yesterday, a unanimous jury convicted them both for these crimes.”

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

A New York City immigration services firm, “Russian America,” 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, Russian America advised certain of their clients in 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 asylum application documents and affidavits,  often including fraudulent allegations of past persecution.  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.

ULADZIMIR DANSKOI and previously convicted codefendant Yury Mosha operated and maintained Russian America’s Brooklyn and Manhattan offices, respectively.  Each advised and aided their clients to seek asylum under fraudulent pretenses.  Among other things, DANSKOI advised a client, a confidential FBI source (the “Source”), to seek asylum on the fraudulent basis that the client was persecuted in Ukraine for being a gay male, when in fact DANSKOI fully understood that the Source was a heterosexual male who suffered no such persecution.  DANSKOI submitted the Source’s fraudulent asylum application and Affidavit, filed under penalty of perjury, to USCIS.

Meanwhile, Mosha encouraged a second client, a Government cooperator (the “Cooperator”), to establish and maintain online blogs that were critical of the client’s home country as a way to generate a false claim that, based on the client’s invented political opinion, it was unsafe for him to return to his native country.  Mosha also personally prepared and submitted the Cooperator’s asylum application, Affidavit, and related paperwork under penalty of perjury, knowing that these documents contained material falsehoods. 

When the Source and Cooperator needed to prepare for an interview, conducted under oath by a USCIS asylum officer, DANSKOI and Mosha connected each to JULIA GREENBERG, a New York immigration attorney, who coached both clients to lie to Asylum Officers and provided legal representation to these clients during immigration proceedings.  For example, GREENBERG, understanding that the Source was a heterosexual male who did not suffer persecution in his home country, prepared the Source for questioning by an Asylum Officer, advised the Source how to falsely answer certain anticipated questions from the Asylum Officer, and instructed the Source to dress and change the Source’s appearance in a manner that comported with GREENBERG’s vision of a gay male.

DANSKOI and Mosha also agreed to help certain Russian America clients obtain employment visas by creating fake leases and staging offices to create the impression to USCIS that these clients had legitimate jobs waiting for them in the United States.

*                *                *

DANSKOI, 55, and GREENBERG, 42, each originally from Belarus and currently residing in Staten Island, New York, were convicted of one count of conspiring to defraud the United States and conspiring to commit immigration fraud, which carries a maximum sentence of five years in prison.

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

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

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

 

Damian Williams, the United States Attorney for the Southern District of New York, and Michael J. Driscoll, Assistant Director in Charge of the New York Field Office of the Federal Bureau of Investigation (“FBI”), announced today the unsealing of an Indictment charging LAMOR WHITEHEAD with defrauding one of his parishioners out of part of her retirement savings, attempting to extort and defraud a businessman, and lying to the FBI.  WHITEHEAD was arrested this morning and will be presented in federal court today before United States Magistrate Judge Gabriel W. Gorenstein.  The case is assigned to United States District Judge Lorna G. Schofield.

U.S. Attorney Damian Williams said: “As we allege today, Lamor Whitehead abused the trust placed in him by a parishioner, bullied a businessman for $5,000, then tried to defraud him of far more than that, and lied to federal agents.  His campaign of fraud and deceit stops now.”

FBI Assistant Director Michael J. Driscoll said: “As we allege today, Whitehead carried out several duplicitous schemes in order to receive funds from his victims.  Additionally, when speaking with authorities, Whitehead consciously chose to mislead and lie to them.  If you are willing to attempt to obtain funds through false promises or threats, the FBI will ensure that you are made to face the consequences for your actions in our criminal justice system.”

According to the Indictment unsealed today in Manhattan federal court and publicly available information:[1]

LAMOR WHITEHEAD, who leads a church in Brooklyn, New York, has engaged in a  course of conduct in which he sought money and other things of value from victims on the basis of either threats or false promises that the victims’ investments would benefit the victims financially.  First, WHITEHEAD induced one of his parishioners to invest approximately $90,000 of her retirement savings with him but instead spent the investment on luxury goods and other personal purposes.  Second, WHITEHEAD extorted a businessman for $5,000, then attempted to convince the same businessman to lend him $500,000 and give him a stake in certain real estate transactions in return for favorable actions from the New York City government, which WHITEHEAD knew he could not obtain.  In addition, when speaking with FBI agents who were executing a search warrant, WHITEHEAD falsely claimed that he had no cellphones other than the phone he was carrying when, in fact, WHITEHEAD owned a second phone, which he regularly used to communicate — including to send a text message describing it as “my other phone” shortly after telling the agents he had no other phones.

*                *                *

WHITEHEAD, 45, of Paramus, New Jersey, is charged with two counts of wire fraud, each of which carries a maximum sentence of 20 years in prison; one count of extortion, which carries a maximum sentence of 20 years in prison; and one count of making material false statements, which carries a maximum sentence of five years in prison.

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

Mr. Williams praised the outstanding work of the FBI. 

The prosecution of this case is being handled by the Office’s Public Corruption Unit.  Assistant U.S. Attorneys Hagan Scotten, Celia V. Cohen, and Andrew Rohrbach are in charge of the prosecution.

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

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[1] As the introductory phrase signifies, the entirety of the Indictment and the descriptions 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 JOSHUA HALL was sentenced today by United Stated District Judge Gregory H. Woods to 20 months in prison for making threats to kill a member of the United States Congress and impersonating family members of the then-President of the United States on social media to fraudulently raise funds for a fictitious political organization.  HALL previously pled guilty to one count of making interstate communications with a threat to injure and one count of wire fraud.

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

Threat Offense

On August 29, 2022, HALL placed a series of telephone calls from in or around Yonkers, New York, to the California office of a member of the United States Congress (the “Congressman”).  During those telephone calls, HALL conveyed threats to kill the Congressman to at least three different members of the Congressman’s staff (“Staff Member-1,” “Staff Member-2,” and “Staff Member-3”). 

On a telephone call with Staff Member-1 and Staff Member-2, HALL stated, in substance and in part, that he had a lot of AR-15s; that he wanted to shoot the Congressman; that he intended to come to the Congressman’s office with firearms; and that if he saw the Congressman, he would kill him.  He further stated, in substance and in part, that he wanted to “beat the shit out of” the Congressman and that he would find the Congressman wherever he was and hurt him.  On a telephone call with Staff Member-3, HALL stated, in substance and in part, that he intended to come to the Congressman’s office to kill the Congressman with firearms. 

Fraud Offense

From September 2019 until December 2020, HALL defrauded hundreds of victims by making false representations in the course of raising funds for a purported political affinity organization (“the Fictitious Political Organization”) for the ostensible purpose of supporting the reelection of the individual who was at that time serving as President of the United States (“the President”).  However, the Fictitious Political Organization did not exist, and HALL used the funds for his own personal living expenses.

Central to the scheme was the impersonation by HALL of members of the President’s family, including the President’s minor child, among others, through his creation and use of social media accounts bearing those family members’ names and photographs.  HALL used those accounts to amass more than 100,000 followers on social media and to obtain media coverage, a public platform he then exploited to confer on himself and the Fictitious Political Organization a false imprimatur of close ties with the President’s family and to encourage victims to make monetary contributions to the Fictitious Political Organization.

In total, the scheme devised and executed by HALL yielded thousands of dollars from hundreds of victims located throughout the United States, including in the Southern District of New York. 

*                *                *

In addition to the prison term, HALL, 23, of Mechanicsburg, Pennsylvania, was sentenced to three years of supervised release.

Mr. Williams praised the outstanding investigative work of the Federal Bureau of Investigation and the United States Capitol Police and thanked the City of Yonkers Police Department for their assistance.

The case is being handled by the Office’s Public Corruption Unit and General Crimes Unit.  Assistant US Attorneys Robert B. Sobelman and Alexandra S. Messiter 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 Office of the Federal Bureau of Investigation (“FBI”), announced today the unsealing of an Indictment charging BEVELYN BEATTY WILLIAMS and EDMEE CHAVANNES (together, the “Defendants”) with violating the Freedom of Access to Clinic Entrances Act (the “FACE Act”) and conspiring to do the same in connection with a multi-year campaign to interfere with individuals seeking to obtain and provide lawful reproductive health services in New York and in several other states.  WILLIAMS and CHAVANNES surrendered today and will be presented in the United States District Court for the Eastern District of Tennessee.  The case is assigned to U.S. District Judge Jennifer L. Rochon. 

U.S. Attorney Damian Williams said: “As alleged, the defendants repeatedly attempted — including by using threats, and on at least one occasion, force — to prevent individuals from accessing their legal right to reproductive health services.  This Office will remain committed to ensuring that healthcare facilities, their staff, and those seeking to obtain reproductive health services can continue to do so without unlawful interference.”

FBI Assistant District in Charge Michael J. Driscoll said: “As we allege today, Ms. Williams and Ms. Chavannes violated the FACE Act by willfully interfering with individuals seeking to obtain or provide lawful reproductive health services.  In one instance, Ms. Williams injured a health-center employee while obstructing access to the reproductive health center.  The FBI will continue to investigate these types of allegations to ensure individuals who seek legal reproductive health services may do so without fear or intimidation.”

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

From at least in or about 2019 up to and including at least in or about 2022, WILLIAMS and CHAVANNES agreed to and did use unlawful means — including force, threats of force, and physical obstruction — to injure, intimidate, and interfere with individuals because those individuals were seeking to obtain lawful reproductive health services or were providing such services. 

As part of that agreement, on or about June 19, 2020, and June 20, 2020, WILLIAMS and CHAVANNES threatened and used force against patients and staff members at a reproductive health center located in lower Manhattan (the “Health Center”), and blocked patients and staff members from accessing the Health Center.  In one instance, WILLIAMS pressed her body against the door of the Health Center’s patient entrance and refused to move, preventing a Health Center volunteer from entering the Health Center.  As a Health Center staff member (“Victim-1”) attempted to open the door for the volunteer, WILLIAMS purposefully leaned against the door, crushing Victim-1’s hand.  Victim-1 yelled, “She’s crushing my hand,” but WILLIAMS remained against the door, trapping Victim-1’s hand and injuring it. 

At various times on June 19 and 20, 2020, WILLIAMS and CHAVANNES stood directly in front of the Health Center entrances.  WILLIAMS and CHAVANNES initially blocked the main entrance used by patients, causing the Health Center to have to divert patients to enter through the staff entrance.  WILLIAMS and CHAVANNES responded by moving in front of the staff entrance and directing others to do so as well.  In addition, on or about June 19, 2020, CHAVANNES threatened Victim-1 by leaning her body toward Victim-1 at close range, forcing Victim-1 against metal barricades, while yelling “do not touch me” within inches of Victim-1’s face.

WILLIAMS and CHAVANNES livestreamed some of their conduct on June 19 and 20, 2020, on a social media account.  On the livestream on June 19, 2020, WILLIAMS stated, in part, “This is going to be a wonderful day.  We are going to terrorize this place.  And I want the manager to hear me say that.  We are going to terrorize this place.  More people are coming.”  The following day, WILLIAMS stated, in part, “We gonna stand here and we ain’t moving.  We not moving.  We’re standing here, so I guess no women will be coming in for abortions today.  It’s a warzone.” 

In addition to the defendants’ conduct in Manhattan, New York, WILLIAMS and CHAVANNES’ unlawful agreement to use prohibited means to injure, intimidate, and interfere with individuals because those individuals were seeking to obtain or provide reproductive health services has extended to other locations, including Florida, Tennessee, Georgia, and Brooklyn, New York.  For example, in January 2022, WILLIAMS and CHAVANNES travelled to and were present outside a health center in Fort Myers, Florida, where they directed other individuals to block health center entrances.  In addition, in July 2022, WILLIAMS and CHAVANNES blocked patient access to a health center in Atlanta, Georgia, by standing inside the center’s vestibule and yelling threatening comments at individuals believed to be health center patients. 

*                *                *

WILLIAMS, 31, and CHAVANNES, 41, both of Ooltewah, Tennessee, are charged with conspiracy to violate the FACE Act, which carries a maximum sentence of five years in prison.  In addition, WILLIAMS is charged with violating the FACE Act through force, threats of force, and physical obstruction, resulting in bodily harm, which carries a maximum sentence of 10 years in prison.  CHAVANNES is charged with violating the FACE Act through threats of force and physical obstruction, which carries a maximum sentence of one year in prison. 

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

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

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

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

 

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

Damian Williams, the United States Attorney for the Southern District of New York, announced the convictions today in Manhattan federal court of GEORGE CONSTANTINE, a New York lawyer, and ANDREW DOWD, a New York orthopedic surgeon, for their participation in a massive trip-and-fall fraud scheme between 2013 and 2018.  The jury convicted CONSTANTINE and DOWD following a three-week trial before U.S. District Judge Sidney H. Stein.  Co-conspirators Marc Elefant, Sady Ribeiro, Adrian Alexander, Kerry Gordon, and Peter Kalkanis previously pled guilty before Judge Stein for their involvement in the same trip-and-fall fraud scheme.  Co-conspirators Bryan Duncan, Ryan Rainford, and Robert Locust were convicted at trial in May 2019 before Judge Stein for their participation in the same trip-and-fall fraud scheme.  Sentencing of CONSTANTINE and DOWD is scheduled for March 21, 2023. 

U.S. Attorney Damian Williams said: “Today’s unanimous jury verdict holds George Constantine, a lawyer, and Andrew Dowd, a doctor, accountable for their participation in a widespread fraud scheme that preyed upon poor, vulnerable, and at-times homeless individuals.  These individuals were recruited to stage trip-and-fall accidents and undergo medically unnecessary surgeries performed by Dowd that were designed to increase the value of fraudulent personal injury lawsuits filed by Constantine.  Constantine and Dowd abused their professional licenses, degrees, and titles to line their own pockets with millions of dollars, and they now face the prospect of lengthy prison sentences for their crimes.”

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

Between 2013 and 2018, CONSTANTINE and DOWD,  among others, engaged in an extensive fraud scheme, in which individuals (the “Patients”) were recruited to stage trip-and-fall accidents and then undergo medically unnecessary surgeries in order to increase the value of the fraudulent personal injury lawsuits that were filed on their behalf against the owners of the accident sites and/or insurance companies of the owners of the accident sites (the “Victims”).  During the course of the fraud scheme, CONSTANTINE and DOWD, together with others known and unknown, attempted to defraud the Victims of more than $31 million.

CONSTANTINE and DOWD relied upon a team of “runners” who were paid cash kickbacks by CONSTANTINE to recruit the Patients to stage or falsely claim to have suffered trip-and-fall accidents at particular locations throughout the New York City area.  Common accident sites used during the fraud scheme included cellar doors, cracks in concrete sidewalks, and purported “potholes” in front of commercial establishments, such as gas stations, diners, and other businesses.  

After their staged accidents, the Patients were directed to go to the hospital to obtain discharge papers and then were brought to CONSTANTINE’s office, by the carloads, where they met with CONSTANTINE briefly, after which CONSTANTINE would uniformly accept their case.  CONSTANTINE failed to ask even the most basic questions during the intake process, including the locations of the purported accidents, and yet, would file fraudulent lawsuits, under penalty of perjury, on behalf of the Patients against the Victims.  During the course of the scheme, CONSTANTINE filed nearly 200 fraudulent lawsuits and earned more than $5 million dollars in settlement fees from these fraudulent cases.

Following the Patients’ meeting with CONSTANTINE, the Patients were driven to various medical appointments, including visits with chiropractors, physical therapists, and to obtain MRIs, all of which was designed to justify the surgical procedures on their knees, shoulders, and backs that Patients were required to have as part of the scheme. 

The Patients were then driven to meet with DOWD, an orthopedic surgeon, who would perform arthroscopic knee and shoulder surgeries on Patients within one to two weeks of first meeting the Patients.  DOWD paid hundreds of thousands of dollars in kickbacks for these Patient referrals.  DOWD performed no physical exams on the Patients and fabricated his medical reports to make it seem like the Patients were injured, when in reality they were not.  To incentivize the Patients to get surgery, the Patients were paid approximately $1,000 after each surgery.  During the course of the scheme, DOWD performed nearly 300 medically unnecessary surgeries and earned more than $3.2 million dollars.  DOWD received approximately $10,000 per surgery. 

The surgeries, as well as the other medical procedures, were funded by litigation funding companies, including a funding company owned by co-conspirator Adrian Alexander, even when the Patient maintained medical coverage through an insurance company or a government-subsidized program.  The funding companies also paid the fraud scheme organizers and participants referral fees, typically $1,000 to $2,500, for each Patient who signed a funding agreement.  In exchange for funding Patients’ medical and legal costs, the funding companies charged the Patients high interest rates.  The interest rates were so high that oftentimes the majority of the proceeds that were awarded in the fraudulent lawsuits were paid to the Funding Companies, CONSTANTINE, and other scheme participants, with the Patients receiving a much smaller percentage of the remaining recovery.

The Patients were overwhelmingly poor – individuals desperate enough to submit to surgeries in exchange for the small payments they would receive after surgery.  It was common for the Patients to ask for food or money when they would appear for their intake meetings with CONSTANTINE.  Patients were recruited from homeless shelters and often suffered from drug and alcohol addiction as well.

*                *                *           

CONSTANTINE, 60, of Plainview, New York, and DOWD, 67, of Miller Place, New York, were found guilty of conspiracy to commit mail and wire fraud, mail fraud, and wire fraud, each of which carries a maximum term of 20 years in prison.  DOWD was also found guilty of additional counts of conspiracy to commit mail and wire fraud, mail fraud, and wire fraud. 

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 the judge.

Mr. Williams praised the outstanding investigative work of the New York Field Office of the Federal Bureau of Investigation.  Mr. Williams also thanked the National Insurance Crime Bureau for their assistance in the investigation.

This case is being handled by the Office’s Complex Frauds and Cybercrime Unit.  Assistant U.S. Attorneys Nicholas Folly, Danielle Kudla, Alexandra Rothman, and Nicholas Chiuchiolo 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 Office of the Federal Bureau of Investigation (“FBI”), announced charges against EFREM ZELONY-MINDELL for attempted enticement of one minor boy in Manhattan, New York, and possession and distribution of child pornography.  ZELONY-MINDELL was arrested this morning and will be presented in Manhattan federal court today before U.S. Chief Magistrate Judge James L. Cott.

U.S. Attorney Damian Williams said: “Zelony-Mindell allegedly attempted to engage in sexual activity with a nine-year-old boy.  The protection of children from predation remains of critical importance to this Office, and we will continue to use our resources and work with our law enforcement partners to bring offenders to justice.”

FBI Assistant Director Michael J. Driscoll said: “As alleged, Mr. Zelony-Mindell’s actions are nearly unfathomable.  Through a series of conversations with undercover FBI agents conducted on encrypted messaging platforms, he stated his desire to have sex with minor children, and he ultimately met with one of the agents who he believed would provide him an opportunity to do so.  Today’s action should serve as a reminder to anyone who seeks to prey on children - the FBI Human Trafficking and Child Exploitation Task Force and our law enforcement partners will continue to aggressively pursue you and hold you accountable.”

According to the allegations in the Complaint charging ZELONY-MINDELL:[1]

On or about April 29, 2022, an individual identified to be ZELONY-MINDELL initiated a series of conversations with an undercover FBI Special Agent (“UC-1”) on an encrypted messaging service.  In these conversations, ZELONY-MINDELL repeatedly expressed, in graphic and unambiguous terms, his desire to engage in sexual activity with minor children and sent UC-1 numerous images and videos containing child pornography. 

On or about May 9, 2022, UC-1 sent ZELONY-MINDELL, over the encrypted messaging service, the username of a second undercover FBI Special Agent (“UC-2”), posing as the father of a nine-year-old boy.  ZELONY-MINDELL contacted UC-2 over the encrypted messaging service the same day and made clear that he was interested in having sex with the nine-year-old child.  Subsequently, ZELONY-MINDELL and UC-2 had numerous communications, including over the encrypted messaging service, by text message, and over the phone.  During these conversations, ZELONY-MINDELL made clear that he wanted to engage in sexual activity, including specifically anal sex, with UC-2’s purported child.  When told by UC-2 that the child would be “knocked out a little bit” on sleep medication during the planned sexual activity, ZELONY-MINDELL agreed to have sex with the drugged child.       

UC-2 and ZELONY-MINDELL arranged to meet at on a street corner in lower Manhattan on the morning of December 16, 2022, with the understanding that they would return to UC-2’s apartment afterward and ZELONY-MINDELL would then engage in sexual activity with the child.  On the morning in question, ZELONY-MINDELL met a third FBI Special Agent (“UC-3”) at the agreed-upon location, at which time law enforcement arrested ZELONY-MINDELL. 

*                *                *

ZELONY-MINDELL, 35, of Fayetteville, Arkansas, is charged with one count of attempted enticement of a minor to engage in illegal sexual activity, which carries a mandatory minimum sentence of 10 years in prison and a maximum sentence of life in prison; one count of distribution of child pornography, which carries a mandatory minimum sentence of five years in prison and a maximum sentence of 20 years in prison; and one count of possession of child pornography, which carries a maximum sentence of 20 years in prison.

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

Mr. Williams praised the outstanding investigative work of the FBI, and, in particular, the members of the Human Trafficking and Child Exploitation Task Force. 

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

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

 

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

Damian Williams, the United States Attorney for the Southern District of New York, announced today that KARL SEBASTIAN GREENWOOD, who co-founded OneCoin with RUJA IGNATOVA, a/k/a “the Cryptoqueen,” pled guilty today in Manhattan federal court to wire fraud and money laundering charges in connection with his participation in the massive OneCoin fraud scheme.  OneCoin, which began operations in 2014 and was based in Sofia, Bulgaria, marketed and sold a fraudulent cryptocurrency by the same name through a global multi-level-marketing (“MLM”) network.  As a result of misrepresentations that GREENWOOD, IGNATOVA, and others made about OneCoin, victims invested over four billion dollars worldwide in the fraudulent cryptocurrency.  Today, District Judge Edgardo Ramos accepted GREENWOOD’s guilty plea.  IGNATOVA, who was added to the Federal Bureau of Investigation’s Top Ten Most Wanted List in June 2022, remains at large.

U.S. Attorney Damian Williams said: “As a founder and leader of OneCoin, Karl Sebastian Greenwood operated one of the largest international fraud schemes ever perpetrated.  Greenwood and his co-conspirators, including fugitive Ruja Ignatova, conned unsuspecting victims out of billions of dollars, claiming that OneCoin would be the ‘Bitcoin killer.’  In fact, OneCoins were entirely worthless.  Greenwood’s lies were designed with one goal, to get everyday people all over the world to part with their hard-earned money — real money — and to line his own pockets to the tune of hundreds of millions of dollars.  This guilty plea by the co-founder of OneCoin caps a week at SDNY that sends a clear message that we are coming after all those who seek to exploit the cryptocurrency ecosystem through fraud, no matter how big or sophisticated you are.”

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

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

IGNATOVA served as OneCoin’s top leader until her disappearance from public view, in October 2017.  GREENWOOD was OneCoin’s “global master distributor” and the leader of the MLM network through which the fraudulent cryptocurrency was marketed and sold.  In a video posted online, IGNATOVA attributed to GREENWOOD the idea of marketing and selling OneCoin through an MLM network structure.  GREENWOOD earned approximately €20 million a month in his role as the top MLM distributor of OneCoin.

GREENWOOD and IGNATOVA conceived of and built the OneCoin business fully intending to use it to defraud investors.  For example, in the summer of 2014, when GREENWOOD and IGNATOVA were developing the concept for OneCoin, they referred to the cryptocurrency in email correspondence as “trashy coin.”  On June 11, 2014, IGNATOVA wrote to GREENWOOD concerning the OneCoin business plan, stating in part:

It might not be [something] really clean or that I normally work on or even can be proud of (except with you in private when we make the money) – but . . . I am especially good in this very borderline cases [sic], where the things become gray - and you as the magic sales machine - and me as someone who really can work with numbers, legal and back you up in a good and professional way - we could really make it big - like MLM meets bitch of wall street ;-)

In an August 9, 2014, email between GREENWOOD and IGNATOVA, IGNATOVA described her thoughts on the “exit strategy” for OneCoin.  The first option that IGNATOVA listed was, “Take the money and run and blame someone else for this . . . .”  And in a September 11, 2016, exchange with IGNATOVA’s brother, Konstantin Ignatov, GREENWOOD referred to OneCoin investors stating, “These ppl are idiots,” to which Ignatov responded, “as you told me, the network would not work with intelligent people ;)”

As a result of misrepresentations made by GREENWOOD, IGNATOVA, and other OneCoin representatives, victims throughout the world wired investment funds to OneCoin-controlled bank accounts in order to purchase OneCoin packages.  OneCoin falsely claimed that the value of OneCoin was based on market supply and demand, when in fact, the value of the cryptocurrency was simply set by OneCoin itself.  For example, on June 9, 2014, in an email sent by IGNATOVA to a representative of a blockchain development company, copying GREENWOOD, IGNATOVA stated, “we are building our own cryptocurrency - and would like to set up an internal exchange service for them.  We would like to be able to set the price manually and automatically and also control the traded volume.”  On March 21, 2015, IGNATOVA wrote an email to GREENWOOD, in which IGNATOVA stated, “We can manipulate the exchange by simulating some volatility and intraday pricing.”  (bold in original).  And in an August 1, 2015, email, IGNATOVA wrote to GREENWOOD, and included as part of a section of the email entitled “Goals”: “6. Trading coin, stable exchange, always close on a high price end of day open day with high price, build confidence - better manipulation so they are happy.”  The purported value of a OneCoin grew steadily from €0.50 to approximately €29.95 per coin.  The purported price of OneCoins never decreased in value.

GREENWOOD and other OneCoin leaders also claimed that the OneCoin cryptocurrency was “mined” using mining servers maintained and operated by the company.  In fact, OneCoins were never mined using computer resources.  For example, in an email to IGNATOVA dated August 11, 2014, GREENWOOD proposed, “Get members to think that they are mining their OneCoin via crunching (exchanging) tokens for OneCoin.  This storey [sic] is good as ppl will then not go super crazy and just try and sell tokens all the time.”  GREENWOOD emailed IGNATOVA the following day, writing, “The concept of converting tokens into OneCoin is an important phase for validity and truth behind the OneCoin.  The so called ‘mining’ of coins is a concept that is very familiar in the industry and a story we can sell to the members.”  IGNATOVA then wrote to GREENWOOD, “We are not mining actually - but telling people shit,” to which GREENWOOD responded, “how can this be investigated and found out?” and “Can any member (trying to be clever) find out that we actually are not investing in machines to mine but it is merely a piece of software doing this for us?”

GREENWOOD and other OneCoin leaders further claimed that OneCoin maintained a private “blockchain,” or a digital ledger identifying OneCoins and recording historical transactions.  But OneCoin lacked a true blockchain, that is, a public and verifiable blockchain. Indeed, by approximately March 2015, IGNATOVA and GREENWOOD had started allocating to OneCoin members coins that did not even exist in OneCoin’s purported private blockchain, referring to those coins as “fake coins.”

GREENWOOD and IGNATOVA promoted OneCoin, including at official OneCoin events all over the globe.  One such event, called “Coin Rush,” was held at Wembley Arena in London on June 11, 2016.  Thousands of OneCoin members attended Coin Rush.  During the event, GREENWOOD introduced IGNATOVA to the crowd, stating in part: “This is the creator, the mastermind, the founder of cryptocurrency, of OneCoin . . . Now, this will be the biggest welcoming on stage that we’ve ever done in history.”  Then, to the tune of Alicia Keys’s “Girl on Fire,” and surrounded by actual onstage fireworks, IGNATOVA strode onto the Wembley Arena stage wearing a red ball gown.  She proceeded to repeatedly and favorably compare her fraudulent cryptocurrency to Bitcoin, stating, among other things, “OneCoin . . . is supposed to be the Bitcoin killer” and “In two years, nobody will speak about Bitcoin anymore.”

On July 4, 2015, a federal holiday commemorating the independence of the United States, IGNATOVA announced the official opening of the United States market for OneCoin.  In early July 2015, GREENWOOD sent IGNATOVA an email stating in part, “I thought this could go out tonight, problem is I don’t have the access to send out to the members,” and attaching a document which announced a July 4, 2015, online webinar hosted by IGNATOVA and others to mark the official opening of the United States market for OneCoin.  Thereafter, on July 4, 2015, IGNATOVA participated in an online webinar, later posted to YouTube.com, in which IGNATOVA announced the official opening of the United States market for OneCoin.  During the webinar, IGNATOVA said, among other things, “[I]f we want to go and catch Bitcoin, we never can do this without being strong in the U.S. and without being part of the community.  So, um, this is actually why I am so excited about the U.S. as the market.  It’s something that is about prestige.  It’s a huge market.  And, um, it is, I think, a place of innovation, of Wall Street, a place where we have to be if we want to be big.”  Many victims in the United States invested in fraudulent OneCoin cryptocurrency packages, including residents of the Southern District of New York.

GREENWOOD was arrested at his residence on the island of Koh Samui, Thailand, in July 2018, and was extradited to the United States to face fraud and money laundering charges in October 2018.  GREENWOOD has been detained since his arrest in July 2018.

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

*                *                *

GREENWOOD, 45, a citizen of Sweden and the United Kingdom, pled guilty to one count of conspiracy to commit wire fraud, which carries a maximum potential sentence of 20 years in prison, one count of wire fraud, which carries a maximum potential sentence of 20 years in prison, and one count of conspiracy to commit money laundering, which carries a maximum potential sentence of 20 years in prison. 

The maximum potential sentences are prescribed by Congress and are provided here for informational purposes only, as the sentencing of the defendant will be determined by a judge.  Sentencing before Judge Ramos is scheduled for April 5, 2023.

Mr. Williams praised the outstanding investigative work of the Internal Revenue Service-Criminal Investigation and the Federal Bureau of Investigation, which jointly conducted this investigation with Special Agents from the U.S. Attorney’s Office.  Mr. Williams also thanked the Royal Thai Police for their assistance in the arrest of GREENWOOD.

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

The case is being prosecuted by the Office’s Complex Frauds and Cybercrime Unit. Assistant U.S. Attorneys Christopher J. DiMase, Nicholas Folly, Juliana N. Murray, and Kevin Mead, and Special Assistant U.S. Attorney Julieta V. Lozano of the New York County District Attorney’s Office, are in charge of the prosecution.

 

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

Damian Williams, the United States Attorney for the Southern District of New York, and Michael J. Driscoll, Assistant Director in Charge of the New York Office of the Federal Bureau of Investigation (“FBI”), announced today the unsealing of a Superseding Indictment charging TAJ EVERLY, a former correction officer at Green Haven Correctional Facility (“Green Haven”), and ROSITA ROSSY, a former sergeant at the same facility, in connection with EVERLY’s May 28, 2020, assault of an inmate at Green Haven. 

In October 2022, EVERLY was charged in a one-count indictment alleging that he falsified records in connection with the May 28, 2020, assault.  The Superseding Indictment – in addition to charging EVERLY with falsifying records – charges EVERLY with deprivation of rights under color of law and charges ROSSY with falsifying records, witness tampering, and conspiracy to falsify records.    

ROSSY was arrested this morning and was presented before Magistrate Judge Andrew E. Krause.  EVERLY is released on bail and will be arraigned on the Superseding Indictment at a later date.  The case is assigned to U.S. District Judge Nelson S. Román.

U.S. Attorney Damian Williams said: “Correction Officer Taj Everly allegedly assaulted an inmate in his charge.  Instead of upholding his duty to guard and protect that inmate, he deprived him of a constitutional right to be free from excessive force.  Afterwards, Everly and his supervisor, Sergeant Rosita Rossy, attempted to cover up the assault by falsifying their reports, and in Rossy’s case, directing other correction officers under her supervision to do the same.  Today’s Superseding Indictment underscores our Office’s unwavering commitment to protecting the civil rights of all individuals, including those repaying their debt to society in prison.”

FBI Assistant Director in Charge Michael J. Driscoll said: “As previously alleged, Mr. Everly violated his oath to conceal his malicious actions – actions we allege today deprived the victim of his constitutional rights.  We further allege Ms. Rossy made false reports – and instructed correctional officers she supervised to make similarly false reports – in a concerted effort to conceal Mr. Everly’s actions.  The FBI will continue to work to ensure those in positions of trust who misuse their authority are made to face the consequences of their abuses in the criminal justice system.”  

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

On May 28, 2020, EVERLY, who was then a correction officer at Green Haven, located in Stormville, New York, assaulted an inmate in the care and custody of the New York State Department of Corrections and Community Supervision (“DOCCS”) (“Inmate-1).  As Inmate-1 exited a room at Green Haven, EVERLY approached Inmate-1 and, without provocation, punched Inmate-1, causing both EVERLY and Inmate-1 to fall to the ground.  EVERLY’s actions deprived Inmate-1 of his constitutional right to be free from excessive force amounting to cruel and unusual punishment.

After the assault, EVERLY, ROSSY, and other correction officers prepared reports describing the incident.  In EVERLY’s report (the “Everly Report”), EVERLY falsely stated that Inmate-1 had first punched him and that EVERLY responded with force.  Despite receiving information from multiple correction officers that contradicted EVERLY’s statements, ROSSY also prepared a report that mirrored the statements made in the Everly Report.  ROSSY further directed at least two other correction officers — both of whom reported to ROSSY — to prepare similarly false and misleading reports.

*                *                *

EVERLY, 32, of Cortlandt Manor, New York, is charged with one count of deprivation of rights under color of law, which carries a maximum sentence of 10 years in prison, and one count of falsifying records in connection with a federal investigation, which carries a maximum sentence of 20 years in prison.

ROSSY, 49, of Monticello, New York, is charged with one count of falsifying records in connection with a federal investigation, which carries a maximum sentence of 10 years in prison, two counts of witness tampering, which each carry a maximum sentence of 20 years in prison, and one count of conspiracy to falsify records, which carries a maximum sentence of five years in prison.

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

Mr. Williams praised the outstanding investigative work of the FBI and the DOCCS Office of Special Investigations. 

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

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

 

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

Damian Williams, the United States Attorney for the Southern District of New York, announced that BATISE BOYCE was sentenced to 15 years in prison by U.S. District Judge Lewis J. Liman.  BOYCE pled guilty on September 8, 2022, to one count of possessing a firearm after having previously been convicted of a felony and one count of possessing a firearm in a school zone.

U.S. Attorney Damian Williams said:  “Today’s sentence demonstrates the importance and success of the Triggerlock program in bringing together state, local, and federal law enforcement to ensure that repeat firearm offenders receive appropriate sentences for their crimes.  I greatly appreciate our law enforcement partners as they work with us to ensure that deadly firearms and violent offenders stay off the streets of our communities.”

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

BOYCE, 45, of the Bronx, New York, possessed an illegal semiautomatic handgun from at least August 2, 2020, until November 6, 2020, when he was arrested with the gun by officers of the New York City Police Department.  Prior to possessing the gun, BOYCE had been convicted of at least six prior felonies, including robbery, an assault with a firearm, and a slashing attack with a knife.  On August 2, 2020, BOYCE used the gun to shoot a victim in the head, although the victim fortunately survived.  The next night, during an argument, BOYCE struck a second victim in the face with the gun, causing him to bleed, then shot the victim in the back as he attempted to walk away.  One of the victim’s legs was amputated as a result.

*                *                *

Mr. Williams praised the outstanding work of the New York City Police Department. 

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

Damian Williams, the United States Attorney for the Southern District of New York, announced that AMARA CHERIF, a/k/a “Bamba Issiaka,” a citizen of Guinea, was sentenced to 57 months for conspiring to traffic in millions of dollars in rhinoceros horns and elephant ivory, both endangered wildlife species, which involved the illegal poaching of more than approximately 35 rhinoceros and more than 100 elephants.  The sentence was imposed by U.S. District Judge Gregory H. Woods.  CHERIF’s co-conspirators, MOAZU KROMAH, a/k/a “Ayoub,” a/k/a “Ayuba,” a/k/a “Kampala Man,” a citizen of Liberia, and MANSUR MOHAMED SURUR, a/k/a “Mansour,” a citizen of Kenya, were previously sentenced to prison terms of 63 months and 54 months, respectively, by Judge Woods.

U.S. Attorney Damian Williams said: “Amara Cherif, Moazu Kromah, and Mansur Mohamed Surur decided that their profit was more important than the protected wildlife and natural resources that they chose to traffic, and two endangered species suffered because of that repugnant decision.  These sentences show that this Office takes seriously our responsibility to use every tool at our disposal to do our part in reducing threats to the survival of endangered animals by bringing their poachers and traffickers to justice.”

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

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

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

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

On or about March 16, 2018, law enforcement agents intercepted a package containing a black rhinoceros horn sold by the defendants that was intended for a buyer represented to be in Manhattan.  From in or about March 2018 through in or about May 2018, the defendants offered to sell additional rhinoceros horns of varying weights, including horns weighing up to approximately seven kilograms.  On or about July 17, 2018, law enforcement agents intercepted a package containing two rhinoceros horns weighing over five kilograms sold by the defendants that were intended for a buyer represented to be in Manhattan.

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

KROMAH was arrested in Uganda on June 12, 2019, and expelled to the United States on June 13, 2019.  CHERIF was arrested in Senegal on June 7, 2019, and extradited to the United States on April 2, 2020.  SURUR was arrested in Kenya on July 29, 2020, and extradited to the United States on January 25, 2021.  The defendants have been detained since their arrest and arrival in this country.

*                *                *

KROMAH, 52, of Liberia; CHERIF, 57, of Guinea; and SURUR, 62, of Kenya, each pled guilty to one count of conspiracy to commit wildlife trafficking.  In addition, KROMAH and CHERIF both pled guilty to two counts of wildlife trafficking, and SURUR also pled guilty to one count of conspiracy to distribute and possess with intent to distribute one kilogram or more of heroin.

Mr. Williams praised the outstanding investigative work of the U.S. Fish and Wildlife Service and the U.S. Drug Enforcement Administration, and he thanked law enforcement authorities and conservation partners in Uganda and Kenya, including the Uganda Wildlife Authority, the Uganda Office of the Director of Public Prosecution, the Uganda Police Force, the Kenya Directorate of Criminal Investigations, and the Kenyan Office of the Director of Public Prosecutions, for their assistance in this investigation.  Mr. Williams also thanked the U.S. Department of State and the U.S. Department of Justice’s Office of International Affairs for their assistance.

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

Damian Williams, the United States Attorney for the Southern District of New York, and Ivan J. Arvelo, the Special Agent in Charge of the New York Field Office of the Department of Homeland Security (“HSI”), announced charges in two separate Indictments against the founders and promoters of two cryptocurrency Ponzi schemes known as IcomTech and Forcount (and later known as Weltsys).  United States v. David Carmona, et al., 22 Cr. 551 (JLR), charges DAVID CARMONA, MARCO RUIZ OCHOA, MOSES VALDEZ, JUAN ARELLANO, DAVID BREND, and GUSTAVO RODRIGUEZ with conspiracy to commit wire fraud based on their involvement with IcomTech from in or about mid-2018 until in or about the end of 2019.  United States v. Francisley da Silva, et al., S1 22 Cr. 622 (AT), charges FRANCISLEY DA SILVA, JUAN TACURI, and ANTONIA PEREZ HERNANDEZ with conspiracy to commit wire fraud and wire fraud based on their involvement with Forcount from in or about mid-2017 until at least in or about the end of 2021.  SILVA and TACURI are also charged with conspiracy to commit money laundering, and HERNANDEZ is also charged with making false statements.

U.S. Attorney Damian Williams said: “With these two indictments, this Office is sending a message to all cryptocurrency scammers: We are coming for you.  Stealing is stealing, even when dressed up in the jargon of cryptocurrency.  Thanks to the efforts of federal, state, and international law enforcement, IcomTech and Forcount’s founders and promoters are being held to account.”

HSI Special Agent in Charge Ivan J. Arvelo said: “The excitement around cryptocurrency and the potential to make huge profits attracted would-be investors to the alleged schemes run by the individuals indicted today.  With high end clothes and cars, these individuals are alleged to have presented a life of luxury to potential investors, but instead of a lucrative investment opportunity, the victims were fleeced of their savings and left with nothing to show for it.   Homeland Security Investigations works tirelessly to uncover financial crimes and bring perpetrators to justice.”

As alleged in the Indictments:[1]

IcomTech and Forcount were both purported cryptocurrency mining and trading companies that promised to earn their respective victim-investors (“Victims”) profits in exchange for their purchase of purported cryptocurrency-related investment products.  The founders and promoters of each scheme falsely promised their respective Victims, among other things, that profits from the companies’ cryptocurrency trading and mining would result in guaranteed daily returns on Victims’ investments and the doubling of those investments within six months.  In reality, neither company was engaging in cryptocurrency trading or mining, and the founders and promoters of both schemes were using Victim funds to pay other Victims, to further promote the schemes, and to enrich themselves.

Both the IcomTech and Forcount defendants fraudulently induced their victims to invest in sham cryptocurrency activities using similar methods.  The founders and promoters of the two schemes traveled throughout the United States and internationally where they hosted lavish expos and small community presentations aimed at luring Victims to invest in the schemes, including in the Southern District of New York.  During larger-scale events, the schemes’ promoters would present the schemes’ investment products and compensation plan, encourage Victims to invest as a means of achieving financial freedom, and boast about the amount of money they were earning.  The schemes’ promoters often showed up at larger-scale events in expensive cars and wearing luxury clothing as a way of exhibiting their purportedly legitimate success from the schemes.  The atmosphere of these events was festive and designed to generate excitement about the schemes.

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

At least as early as August 2018 with respect to the IcomTech scheme, and in or about April 2018 with respect to the Forcount scheme, Victims who attempted to withdraw money from their online portal accounts had difficulty doing so and, when they complained to promoters, they were met with excuses, delays, and hidden fees, if they were able to make any withdrawals at all.  Despite these complaints, IcomTech and Forcount’s promoters, including the defendants, continued to promote their respective fraudulent schemes and accept Victims’ investments.  As complaints mounted in both schemes, IcomTech and Forcount both began offering proprietary crypto-tokens for sale as a means of injecting liquidity into the schemes.  Promoters of the schemes claimed that these tokens, known as “Icoms” in the IcomTech scheme and “Mindexcoin” in the Forcount scheme, would eventually be worth a significant amount of money when they were accepted by companies for payment for goods and services.  This was false.  In reality, they were essentially worthless and resulted in further financial loss to Victims.  By in or about the end of 2019 with respect to IcomTech, and in or about 2021 with respect to Forcount, the schemes had stopped making payments to Victims and their chief promoters, including the defendants, stopped promoting the schemes, and, in some instances, stopped responding to Victims’ complaints altogether.

In addition to promoting the Forcount scheme, SILVA and TACURI also sought to conceal their fraud by laundering Victim funds through shell companies and making large personal expenditures on things like real estate and bulk cellphone purchases.  On or about June 27, 2022, law enforcement officers with HSI stopped and interviewed HERNANDEZ as she was returning to the United States from Mexico.  During the interview, HERNANDEZ falsely denied, among other things, being a Forcount promoter, recruiting investors, and taking money from them.

On November 8, 2022, United States v. David Carmona, et al., 22 Cr. 551 (JLR), was unsealed.  As alleged in the Carmona indictment, CARMONA was the founder of IcomTech; OCHOA, VALDEZ, ARELLANO, and BREND were promoters of the scheme; and RODRIGUEZ was hired by CARMONA to build and maintain IcomTech’s website and online portal.  On November 8, 2022, CARMONA was arrested in Queens, New York, and presented before United States Magistrate Judge Sarah L. Cave of the Southern District of New York; OCHOA was arrested in the District of New Hampshire; VALDEZ, ARELLANO, and RODRIGUEZ were arrested in the Central District of California; and BREND was arrested in the Middle District of Florida.  The Carmona matter has been assigned to United States District Judge Jennifer L. Rochon.

On December 14, 2022, United States v. Francisley da Silva, et al., S1 Cr. 622 (AT), was unsealed.  As alleged in the Silva indictment, SILVA was the founder of Forcount and TACURI and HERNANDEZ were promoters of the scheme.  On December 14, 2022, TACURI was arrested in the Southern District of Florida.  SILVA, a Brazilian national, has been in custody in Brazil since on or about November 3, 2022.  HERNANDEZ remains at large.  The Silva matter has been assigned to United States District Judge Analisa Torres.

*                *                *

A chart containing the names of the defendants who were charged today and the charges and maximum penalties they face is attached.  The statutory maximum penalties are prescribed by Congress and are provided here for informational purposes only, as any sentencings of the defendants would be determined by a judge.

Mr. Williams praised the outstanding investigative work of HSI, particularly HSI New York El Dorado Task Force/Securities Investigations Group, HSI Brasilia, HSI Tampa, and HSI Orlando; the New York City Police Department; the New York City Sheriff’s Office; the Bureau of Insurance Fraud, Property, and Casualty in the Division of Investigative and Forensic Services of the Florida Department of Financial Services; and the Florida Office of Financial Regulation.  Mr. Williams also thanked the Securities and Exchange Commission, the Commodity Futures Trading Commission, and the Brazilian Federal Police for their assistance.  

The case is being handled by the Office’s Money Laundering and Transnational Criminal Enterprises Unit.  Assistant U.S. Attorneys Benjamin A. Gianforti and Cecilia Vogel are in charge of the prosecution of the Carmona matter.  AUSA Gianforti is also in charge of the prosecution of the Silva matter.

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

The United States Attorney’s Office for the Southern District of New York is committed to protecting the rights of crime victims.  If you believe you are a victim of the IcomTech and/or Forcount schemes, our Victim/Witness Unit can make sure that you are notified of important stages of these cases to help you exercise your rights.  In addition, our Victim/Witness Unit is available to answer questions you might have about these cases and can refer you to available resources.

Wendy Olsen Clancy

Victim/Witness Coordinator

United States Attorney’s Office

One St. Andrew’s Plaza

New York, New York 10007

(866) 874-8900

Wendy.Olsen@usdoj.gov

 

United States v. David Carmona, et al., 22 Cr. 551 (JLR)

Defendant

Age

Charges

Maximum Penalties

DAVID CARMONA,

Queens, NY

39

Count 1: Conspiracy to commit wire fraud

20 years in prison

MARCO RUIZ OCHOA,

Nashua, NH

34

Count 1: Conspiracy to commit wire fraud

20 years in prison

MOSES VALDEZ,

Hesperia, CA

26

Count 1: Conspiracy to commit wire fraud

20 years in prison

JUAN ARELLANO,

Chino, CA

46

Count 1: Conspiracy to commit wire fraud

20 years in prison

DAVID BREND,

Tampa, FL

48

Count 1: Conspiracy to commit wire fraud

20 years in prison

GUSTAVO RODRIGUEZ,

North Hollywood, CA

46

Count 1: Conspiracy to commit wire fraud

20 years in prison

United States v. Francisley da Silva, et al., S1 22 Cr. 622 (AT)

FRANCISLEY DA SILVA, Curitiba, Brazil

37

Count 1: Conspiracy to commit wire fraud

 

Count 2: Wire fraud

 

Count 3: Conspiracy to commit money laundering

20 years in prison

 

20 years in prison

 

20 years in prison

JUAN TACURI,

Orlando, FL

44

Count 1: Conspiracy to commit wire fraud

 

Count 2: Wire fraud

 

Count 3: Conspiracy to commit money laundering

20 years in prison

 

20 years in prison

 

20 years in prison

ANTONIA PEREZ HERNANDEZ,

Tampa, FL

47

Count 1: Conspiracy to commit wire fraud

 

Count 2: Wire fraud

 

Count 4: False statements

20 years in prison

 

20 years in prison

 

Five years in prison

 

---

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

Damian Williams, the United States Attorney for the Southern District of New York, announced that TATIANA BENJAMIN and HEAVEN WEST pled guilty to defrauding New York City’s COVID-19 Hotel Room Isolation Program.  BENJAMIN pled guilty yesterday to conspiracy to commit wire fraud, while WEST pled guilty today to wire fraud.  Both defendants pled guilty before United States Magistrate Judge James L. Cott.  Both defendants’ case is assigned to United States District Judge Lewis A. Kaplan.

U.S. Attorney Damian Williams said: “As they admitted today, the defendants abused a program designed to provide shelter to the sick and needy during the height of the COVID-19 pandemic.  In connection with the fraud, Tatiana Benjamin even purchased the personal identifying information of several medical professionals.  For their brazen misconduct, the defendants now face possible prison time.”

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

From approximately April 2020 through July 2020, the defendants defrauded the COVID-19 Hotel Room Isolation Program (the “Program”).  In response to the COVID-19 pandemic, New York City created the Program.  Funded by New York City and the Federal Emergency Management Agency, the Program provided free hotel rooms for qualifying individuals throughout New York City.  The Program was open to (a) healthcare workers who needed to isolate because of exposure to COVID-19; (b) patients who had tested positive for COVID-19; (c) individuals who believed, based on their symptoms, that they were infected with COVID-19; and (d) individuals who lived with someone who contracted COVID-19.  As stated on the City’s website describing the Program, such individuals “may qualify to self-isolate in a hotel, free of charge, for up to 14 days if you do not have a safe place to self-isolate.”  Those who wished to book a hotel room through the Program could either call a phone number or use an online hotel booking platform. 

BENJAMIN and WEST defrauded the Program in several respects.  First, BENJAMIN and WEST each secured free Program hotel rooms for themselves by falsely claiming to be a respiratory therapist and a hospital employee, respectively.  Second, BENJAMIN and WEST each sold fraudulently obtained hotel rooms to customers who were ineligible for the Program.  Third, BENJAMIN purchased inside information from co-defendant Chanette Lewis, who worked at a call center that handled phone calls and certain reservations for the Program for several months in 2020.  Lewis was hired specifically for the Program, which gave her access to legitimate healthcare workers’ identifying information.  Lewis sold BENJAMIN, for $800, personal identifying information of at least five healthcare professionals, as well as certain “codes” to use when booking hotel reservations through the Program, such as an employee ID number and license number. 

BENJAMIN and WEST used Facebook to advertise the sale of fraudulently obtained Program hotel rooms and to communicate directly with customers.  For example, BENJAMIN told a Facebook user, “Friend at 311 gave me the juice for the hotel so I been booking ppl rooms,” and when WEST was asked whether she had “rooms” available, she replied, “Nah I dead don’t bro / All essential hotels are clipped” and added, “They finding out we was scamming the system lol.” 

*                *                *

BENJAMIN, 28, of Brooklyn, New York, pled guilty to one count of conspiracy to commit wire fraud, which carries a maximum sentence of 20 years in prison.  Under the terms of her plea agreement, BENJAMIN has agreed to forfeit $51,088 and to pay restitution of $294,624. 

WEST, 22, of Atlanta, Georgia, pled guilty to one count of wire fraud, which carries a maximum sentence of 20 years in prison.  Under the terms of her plea agreement, WEST has agreed to forfeit $23,684 and to pay restitution of $59,644.

The maximum potential sentences in this case are prescribed by Congress and are provided here for informational purposes only, as any sentencing of the defendants will be determined by the judge.  The defendants are both scheduled to be sentenced by Judge Kaplan on May 18, 2023, at 3:00 p.m.

Two co-defendants previously pled guilty: Tatiana Daniel previously pled guilty to conspiracy to commit wire fraud and is scheduled to be sentenced by Judge Kaplan on March 29, 2023, at 2:30 p.m.  Chanette Lewis previously pled guilty to two counts of conspiracy to commit wire fraud and is scheduled to be sentenced by Judge Kaplan on May 18, 2023, at 3:00 p.m.

Mr. Williams praised the outstanding efforts of agents, investigators, and analysts from the New York City Department of Investigation (“DOI”), DOI - NYCHA Office of the Inspector General, the New York Regional Office of the U.S. Department of Labor – Office of Inspector General (“DOL-OIG”), and the U.S. Attorney’s Office for the Southern District of New York.  Mr. Williams also thanked the New York/New Jersey High Intensity Drug Trafficking Area Intelligence Analysts for their support and assistance in this investigation.  He also expressed gratitude to the New York City Police Department, the New York State Department of Labor, and the DOL-OIG Atlanta Regional Office for their assistance.

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

Damian Williams, the United States Attorney for the Southern District of New York, announced that DIMETRI MOSELEY was sentenced today to 25 years in prison for his participation in the activities of a Poughkeepsie street gang, including the 2012 murder of Caval Haylett and the distribution of heroin.  MOSELEY had previously pled guilty to participation in racketeering and narcotics distribution conspiracies and had admitted that he was one of two shooters involved in Haylett’s murder.  U.S. District Judge Nelson S. Román, imposed today’s sentence.

MOSELEY was one of 31 members and associates of two rival street gangs who were charged in two separate cases – United States v. Ronald Johnson et al., 17 Cr. 505 (VB) and United States v. Douglas Owen et al., 17 Cr. 506 (NSR) – with racketeering conspiracy, narcotics conspiracy, and firearms offenses.  All 31 of those defendants, who were members and associates of two gangs referred to as “Uptown,” and “Downtown,” have now pled guilty to federal charges and been sentenced.

U.S. Attorney Damian Williams said: “This case demonstrates our commitment to dismantling violent gangs who threaten our New York neighborhoods through drug trafficking and the guns and physical violence that often accompanies it.  I applaud the extensive effort of our law enforcements partners to rid our streets of these dangers and bring these defendants to justice.”

According to the allegations in the charging documents and statements made in court filings and during court proceedings:

The FBI’s Hudson Valley Safe Streets Task Force, the City of Poughkeepsie Police Department, and the Dutchess County Special Narcotics Unit conducted a joint investigation into the gang war between Uptown and Downtown, which led to multiple fatal and non-fatal shootings between 2012 and 2017 in the City of Poughkeepsie.

Uptown is a criminal organization whose members referred to themselves by, and were known by, several different names.  Those names include the “Spready Gang,” the “400 Savages,” the “Boogotti Boys,” the “Young Bosses” or “YB’s,” and the “Mob Stars.”  Uptown gang members referred to themselves by different combinations of these names, all of which referred to the same criminal enterprise: the Uptown street gang.  Uptown is based within the eastern portion of Poughkeepsie, from east of Hamilton Street to the city line and, more specifically, within the Hudson Gardens housing development (commonly referred to as the “Bricks”).  Uptown gang members and associates control the narcotics trade within the Bricks, distributing heroin, crack cocaine, and marijuana, primarily.  Uptown gang members stored shared guns in various locations known to gang members to protect the narcotics business, to protect each other from rival gangs, and to strike against rival gangs.  The case of United States v. Douglas Owens et al. charged 13 members and associates of Uptown, including its leaders: DOUGLAS OWENS, a/k/a “Born Truth,” and JIHAD WILLIAMS, a/k/a “Goodie.”

Downtown, like Uptown, is the name of a large-scale criminal organization that went by many different names.  Those names include the “420 Boys,” “L-Block,” “Most Hated,” “Mobile Mafia,” “Hamo Gang,” the “Young Gunnas,” or “YG’s,” the “C-Eazy Gang,” and the “Bully Hard Hunna” faction of the Bloods street gang.  Despite the existence of several different names, each one referred to the same criminal enterprise: the Downtown street gang.  Downtown’s base of operations was located in the western portion of Poughkeepsie, from west of Hamilton Street to the Hudson River and, particularly, within the Martin Luther King and Rip Van Winkle housing developments (commonly referred to as the “Ville” and “Rip,” respectively).  Downtown gang members and associates controlled the narcotics trade within the Ville, Rip, and the surrounding area, also distributing resale amounts of heroin, crack cocaine, and marijuana, primarily.  Downtown gang members also stored their shared firearms in different locations known to members and associates.  This allowed Downtown gang members to arm themselves quickly when confronted by rivals and to protect each other and their narcotics business.  The case of United States v. Ronald Johnson et al. charged 18 members and associates of Downtown, including its leaders: RONALD JOHNSON, a/k/a “Top Gun,” and CARLOS OCASIO, a/k/a “Leak,” a/k/a “Pimp.”

In addition to countless non-fatal acts of violence against rival gang members and innocent victims, the rivalry between Uptown and Downtown has led to the following murders, among others:

• The murder of Downtown gang member Daquell LeBlanc, a/k/a “Hamo,” who was killed by a single gunshot wound to the chest at the age of 16 in the vicinity of Main Street, between Academy and North Hamilton Streets on or about December 23, 2012; and
• The murder of Caval Haylett, an innocent bystander and local high school basketball star, who was killed by a single gunshot wound to the head at the age of 18 while attending a barbeque in the vicinity of Winnikee Avenue and Harrison Street on or about March 9, 2016.  

*                *                *

All 31 of the charged defendants have pled guilty and been sentenced, as set forth below.  Charts identifying each defendant, the charges of conviction, and the sentences imposed are below.

Mr. Williams praised the outstanding work of the FBI’s Hudson Valley Safe Streets Task Force, the City of Poughkeepsie Police Department, the Dutchess County Sheriff’s Office, the Dutchess County Drug Task Force, and the Dutchess County District Attorney’s Office.

This case is being handled by the Office’s White Plains Division.  Assistant U.S. Attorneys Christopher J. Clore, Maurene Comey, and Emily Deininger are in charge of the prosecution.

United States v. Douglas Owens et al., 17 Cr. 406 (NSR)

DEFENDANT

CHARGE OF CONVICTION

SENTENCE

DOUGLAS OWENS

Racketeering Conspiracy

90 Months

JIHAD WILLIAMS

Racketeering Conspiracy

180 Months

NICHOLAS HARRIS

Racketeering Conspiracy, Conspiracy to Distribute Heroin

240 Months

DIMETRI MOSELEY

Racketeering Conspiracy, Conspiracy to Distribute Heroin

300 Months

JAHQUEZ HILL

Racketeering Conspiracy, Conspiracy to Distribute Crack Cocaine

240 Months

MARKEL GREEN

Racketeering Conspiracy, Conspiracy to Possess a Stolen Firearm

240 Months

RAHEIM MILLER

Racketeering Conspiracy, Conspiracy to Possess a Stolen Firearm

216 Months

CHRISTIAN BLADES

Racketeering Conspiracy

98 Months

ASHANTI BUNN

Racketeering Conspiracy

114 Months

RAYSHAWN CASANOVA

Possession of a Firearm in Furtherance of a Crime of Violence

60 Months

TREQUON DANCY

Racketeering Conspiracy

27 Months

RASHMI RUPARELIA

Conspiracy to Distribute Crack Cocaine, Possession of a Firearm in Furtherance of Narcotics Trafficking

75 Months

United States v. Ronald Johnson et al., 17 Cr. 505 (VB)

DEFENDANT

CHARGE OF CONVICTION

PRISON SENTENCE

RONALD JOHNSON

Racketeering Conspiracy

82 Months*

SAVON BAGBY

Racketeering Conspiracy

50 Months

NATQUAN CATTS

Racketeering Conspiracy

48 Months

JAHQUEZ COLEMAN

Racketeering Conspiracy

21 Months*

WALTER COLEMAN

Racketeering Conspiracy

30 Months*

CHEVEZ DERELLO

Racketeering Conspiracy

52 Months

LEONARD DERELLO

Racketeering Conspiracy

30 Months*

TYRECK DOUGLAS

Racketeering Conspiracy, Possession of a Firearm in Furtherance of a Crime of Violence

92 Months*

ERVING FERZAN

Racketeering Conspiracy

46 Months*

RAKEE JOHNSON

Conspiracy to Distribute Heroin

42 Months

GLORIOUS LANDRUM

Conspiracy to Distribute Heroin

45 Months

COREY LATIMER

Racketeering Conspiracy, other violations

Time Served

ANTOINNE MCKINNON

Racketeering Conspiracy, Conspiracy to Distribute Marijuana

Time Served

WAYNE MORGAN

Racketeering Conspiracy

Time Served

CARLOS OCASIO

Conspiracy to Distribute Heroin

120 Months

GORDON RIDDICK

Possession of a Firearm in Furtherance of Narcotics Trafficking

60 Months

KEENAN WATTS

Racketeering Conspiracy

24 Months

KWAMENE WILLIAMS

Conspiracy to Distribute Heroin

40 Months

*Sentence included a downward adjustment to account for a prison term served, or being served, on related state charges.

Damian Williams, the United States Attorney for the Southern District of New York, announced that Lithuanian national STANISLAV TUNKEVIC pled guilty today in Manhattan federal court to conspiracy to commit bank fraud in connection with a scheme to launder fraud proceeds derived from an online vehicle sale scam that generated at least $5.3 million from dozens of defrauded consumers.  TUNKEVIC pled guilty before U.S. District Judge Analisa Torres.

U.S. Attorney Damian Williams said: “Tunkevic and his co-defendants have admitted to getting paid to use fake documents and shell companies to open bank accounts in order to receive criminal proceeds.  Without their knowing involvement, online fraudsters would not be able to profit from their illegal schemes.  Tunkevic and his co-defendants will now face prison terms and be required to forfeit their ill-gotten gains.”

As alleged in the Complaint and the Indictments and based on statements made in court:    

At various times from at least March 2019 through approximately March 2021, TUNKEVIC and co-defendants KAROL KAMINSKI, ARTURAS GILYS, and SVETLANA VAIDOTIENE were Lithuanian nationals who were recruited in Lithuania to travel to New York City in order to participate in a money laundering operation based in Brooklyn.  The operation was coordinated in New York City by co-defendant NATALIA KORZHA and also involved her son and co-defendant VLADISLAV NECEAEV.  Under the direction of KORZHA, NECEAEV, TUNKEVIC, KAMINSKI, GILYS, VAIDOTIENE, and other co-conspirators opened numerous bank accounts in the name of shell companies for the purpose of laundering money stolen from consumers who were trying to buy vehicles online.  In exchange, the defendants received a cut of the victims’ money. 

Other members of the conspiracy, pretending to represent car dealerships, advertised vehicles that they did not own and were not authorized to sell on fake websites with domain names that sounded like legitimate car dealerships or through online marketplaces like Craigslist and eBay.  Victims who responded to those advertisements and negotiated a purchase price were instructed by the purported sellers to wire payment to accounts that NECEAEV, KAMINSKI, TUNKEVIC, GILYS, VAIDOTIENE, and other co-conspirators opened.  Once the payments cleared, the defendants quickly withdrew the funds before the victims realized they had been defrauded.  The victims never received the vehicles they thought they had bought or any refunds from the fake sellers.  In total, dozens of victims were defrauded of a total of at least $5.3 million. 

*                *                *

TUNKEVIC, 48, of Vilnius, Lithuania, pled guilty to one count of conspiracy to commit bank fraud and agreed to pay forfeiture and restitution in the amount of $405,000.  TUNKEVIC is scheduled to be sentenced by Judge Torres on March 15, 2023.

KORZHA, 50, of Brooklyn, New York, pled guilty to one count of conspiracy to commit bank fraud on May 4, 2022.  She was sentenced by Judge Torres on September 7, 2022, to 48 months in prison and was ordered to pay forfeiture and restitution in the amount of $5,386,538.

NECEAEV, 29, of Brooklyn, New York, pled guilty to one count of conspiracy to commit bank fraud on March 14, 2022.  He was sentenced by Judge Torres on September 7, 2022, to 18 months in prison and was ordered to pay forfeiture and restitution in the amount of $458,300.

KAMINSKI, 32, of Vilnius, Lithuania, pled guilty to one count of conspiracy to commit bank fraud on November 9, 2022, and agreed to pay forfeiture and restitution in the amount of $338,700.  KAMINSKI is scheduled to be sentenced by Judge Torres on March 15, 2023.

GILYS, 41, of Vilnius, Lithuania, pled guilty to one count of conspiracy to commit bank fraud on November 15, 2022, and agreed to pay forfeiture and restitution in the amount of $321,700.  GILYS is scheduled to be sentenced by Judge Torres on March 15, 2023.

VAIDOTIENE, 55, of Vilnius, Lithuania, pled guilty to one count of conspiracy to commit bank fraud on September 20, 2022, and agreed to pay forfeiture and restitution in the amount of $271,000.  VAIDOTIENE is scheduled to be sentenced by Judge Torres on January 18, 2023.

The offense of conspiracy to commit bank fraud carries a maximum sentence of 30 years in prison and a maximum fine of $1,000,000.  The crime of conspiracy to commit money laundering carries a maximum sentence of 20 years in prison and a maximum fine of $500,000 or twice the value of the property involved in the transaction.

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

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

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

Damian Williams, the United States Attorney for the Southern District of New York, announced today that JAMES THOMAS, a/k/a “Spazz,” was sentenced to 120 months in prison for his leadership of a gun trafficking conspiracy that was responsible for the illegal purchase and trafficking of approximately 89 firearms from at least in or around August 2020 up to and including April 2021.  THOMAS pled guilty to one count of interstate travel with intent to engage in gun trafficking on May 20, 2022, before U.S. District Judge Sidney H. Stein, who imposed today’s sentence. 

U.S. Attorney Damian Williams said: “James Thomas participated in the trafficking of dozens of guns to New York, and some of the guns that he trafficked can directly be tied to violent crimes.  Thomas exacerbated the scourge of gun crime in New York, and for that he is rightly facing a lengthy prison sentence.”

According to public filings and statements made in court:

From at least in or around August 2020 up to and including April 2021, the defendants used Georgia-resident DUVAUGHN WILSON, a/k/a “Dupree,” as a straw purchaser to buy at least 87 firearms from at least six federal firearms licensees (“FFLs”) in Georgia.  Over the course of the scheme, during which WILSON completed approximately 30 different transactions, WILSON attested that he was the true purchaser of the firearms, when in fact, he was buying the guns on behalf of the defendants, who in turn illegally resold many of the guns to others.

Prior to purchases, the defendants coordinated with WILSON to place orders for specific firearms and pay for the weapons using cash, mobile banking applications, and through wire payments.  When communicating about the firearms, the defendants used coded language, referring to the weapons as “tvs,” “knocks,” and “situations.”  In some instances, the defendants referred to the caliber or model of a firearm by referencing the jersey numbers of famous athletes.

After purchasing the weapons, WILSON transferred the firearms to defendants JAMES THOMAS, a/k/a “Spazz,” COURTNEY SCHLOSS, a/k/a “Bway” a/k/a “Balenci,” and others who sold some of the guns in Georgia and transported other firearms, primarily by bus, to New York for resale.  In many instances, the guns were transferred to members of the Brooklyn-based “Blixky Gang” — a group comprised primarily of aspiring rappers.  Some of these guns later appeared in music videos filmed by members of the Blixky Gang.  The videos, which include some of the defendants, show Blixky Gang members brandishing loaded firearms and displaying stacks of cash.

On some occasions, law enforcement successfully interdicted firearms being transported by the defendants before they reached New York.  For example, in November 2020, law enforcement in South Carolina stopped a bus in Wellford, South Carolina, from which they seized five firearms, four pistol magazines, a high capacity .40 caliber magazine, and a nine-millimeter drum magazine — all of which was being transported by the defendants in a single backpack.

Law enforcement seized other firearms purchased in Georgia by WILSON in New York City.  On at least two occasions, in the wake of violent crimes, the New York City Police Department (“NYPD”) seized firearms trafficked to New York as part of this scheme.  As alleged, in February 2021, the NYPD seized a gun that WILSON had bought after a fleeing suspect discharged it at responding officers in the Bronx.  In April 2021, following a shooting in the Bronx, the NYPD seized another pistol purchased by WILSON.

*                *                *

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

Eight of THOMAS’s co-defendants were previously sentenced in this case.  A chart containing the names and imposed sentences is set forth below.

Mr. Williams praised the outstanding investigative work of the Bureau of Alcohol, Tobacco, Firearms, and Explosives (“ATF”) and NYPD, in particular, the Joint Firearms Task Force, which is composed of agents and officers of the ATF and the NYPD.  

The prosecution of this case is being handled by the Office’s General Crimes Unit.  Assistant U.S. Attorneys Ashley C. Nicolas and Matthew J. King are in charge of the prosecution.

Name

Sentence

COURTNEY SCHLOSS, a/k/a “Bway,” a/k/a “Balenci”

120 months in prison; three-year term of supervised release

DUVAUGHN WILSON, a/k/a “Dupree”

48 months in prison; three-year term of supervised release

KEN ALEXANDER, a/k/a “Ryu”

37 months in prison; two-year term of supervised release

ARGAM TAJ, a/k/a “Sour”

60 months in prison; two-year term of supervised release

SAMUEL TAJ, a/k/a “Sosa”

48 months in prison; three-year term of supervised release

CHRISTOPHER MACHADO, a/k/a “Chris Elite”

36 months in prison; two-year term of supervised release

ANTONIO EADDY, a/k/a “Storm”

24 months in prison; three-year term of supervised release

HARLIE RAMOS, a/k/a “White Girl”

18 months in prison; three-year term of supervised release

Damian Williams, the United States Attorney for the Southern District of New York, and Michael J. Driscoll, the Assistant Director in Charge of the New York Field Office of the Federal Bureau of Investigation (“FBI”), announced today that LAWRENCE BILLIMEK, a trader at a major financial services organization (the “Employer’), and ALAN WILLIAMS, a retired financial professional and active day-trader, were charged in an indictment in Manhattan federal court with securities fraud and wire fraud in connection with an extensive insider trading scheme, in which they stole confidential information about the trade orders of the Employer in order to conduct over a thousand timely, profitable securities trades in the same stocks as the Employer.  BILLIMEK attempted to hide his conduct by using prepaid, unregistered “burner” phones, and WILLIAMS sent millions of dollars back to BILLIMEK for sharing the confidential information.  BILLIMEK was arrested today in the Western District of Texas and WILLIAMS was arrested in the District of Oregon.

U.S. Attorney Damian Williams said: “By stealing confidential trade information from a major financial services organization, Lawrence Billimek betrayed the trust and confidence of his employer and schemed with Alan Williams to make tens of millions of dollars of illegal profit.  Billimek and Williams tried to cover their tracks by using burner phones and secret payments, but their scheme has now been laid bare.”

FBI Assistant Director in Charge Michael J. Driscoll said: “As alleged, the defendants engaged in a years-long scheme in which Mr. Billimek obtained information regarding his employer’s intent to make relatively large trades in certain stocks.  In turn, this allowed Mr. Williams to trade in the same stocks in advance and realize substantial ill-gotten profits.  These types of insider-trading schemes satisfy the greedy ambitions of nefarious actors at the expense of average investors.  The FBI remains steadfast in our efforts to ensure our financial markets are a level playing field for all by bringing to justice those who would seek to illegally exploit them.”

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

LAWRENCE BILLIMEK has been employed at the Employer since approximately 2012.  The Employer is a major financial services organization that provides asset management services with over $200 billion in assets.  ALAN WILLIAMS spent years working as a trader in the financial services industry.  WILLIAMS is currently retired but is an active day-trader. 

The Front Running Scheme

Based on his position as a trader at the Employer, BILLIMEK had access to the trade information and trade orders of the Employer.  Like most large asset managers, the Employer had rules and regulations concerning employees’ personal trading, including requirements about the confidentiality of client information and prohibitions against insider trading and personal trading in the same securities as the Employer.  Because of the size of the Employer’s trade orders, trades by the Employer often caused temporary movements in the price of the securities they traded.  For example, if the Employer engaged in a large purchase of stock, the increased demand could cause a rise in the stock price, and if the Employer engaged in a large sale of stock, the increased supply could cause a drop in the stock price.  Because BILLIMEK had access to the Employer’s trade orders, he knew in advance when a particular stock price would move up or down based on that trading.

WILLIAMS was an active day trader through at least two retail brokerage accounts.  From at least 2016 through 2022, after obtaining information about the Employer’s upcoming trading activity from BILLIMEK, WILLIAMS bought or sold the same securities that the Employer would be buying or selling in order to profit through the subsequent movement of the stock that would occur along with the Employer’s trading.  WILLIAMS would then exit those positions once the Employer’s trading was underway or complete, often within minutes.  For example, if WILLIAMS learned from BILLIMEK that the Employer would be buying a particular stock, WILLIAMS purchased that stock beforehand.  Then, as the Employer made relatively large purchases, the stock price would increase and WILLIAMS would sell those same stock, on the same day, at a profit. 

BILLIMEK and WILLIAMS engaged in these front-running trades on at least over a thousand occasions between 2016 and 2022.  In order to hide their communication throughout the scheme, BILLIMEK used prepaid, unregistered “burner” phones to provide confidential information as well as trading instructions to WILLIAMS.  In total, WILLIAMS’ trading based on the confidential trade information from BILLIMEK generated tens of millions of dollars in profits, and WILLIAMS shared millions of dollars of those profits with BILLIMEK through checks and wire transfers.  At times, BILLIMEK also provided false and misleading information to financial institutions about the purpose and nature of those transfers, including referring to them as gifts.

*                      *                      *

LAWRENCE BILLIMEK, 51, of Hailey, Idaho, and ALAN WILLIAMS, 77, of West Linn, Oregon, are each charged with one count of conspiracy to commit securities fraud and wire fraud, one count of securities fraud, and one count of wire fraud, which carry a total maximum sentence of 45 years in prison. 

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

Mr. Williams praised the work of the FBI.  Mr. Williams further thanked the Office of United States Securities and Exchange Commission for their cooperation and assistance in this investigation. 

This case is being handled by the Office’s Securities and Commodities Fraud Task Force.  Assistant U.S. Attorneys Jason Richman and Daniel Tracer are in charge of the prosecution.  

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

 

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

Damian Williams, the United States Attorney for the Southern District of New York, Frank A. Tarentino III, Special Agent in Charge of the New York Office of the Drug Enforcement Administration (“DEA”), and Keechant L. Sewell, Commissioner of the New York City Police Department (“NYPD”), announced the unsealing today of a Superseding Indictment charging Boss Terrell, a/k/a “Sauce,” Yaurel Centeno, a/k/a “Flex,” Lydell Seymore, a/k/a “Bugout,” Darrell Spencer, a/k/a “Rell,” Isaiah Thomas, a/k/a “Zay,” a/k/a “Chicago,” Jacob Baker, Tyshawn Brogdon, a/k/a “Shawn,” Rasheed Chapman, a/k/a “Ra,” Mamadou Diallo, a/k/a “Haji,” a/k/a “Aladje,” Antwan Mosley, a/k/a “Ant,” and Noel Carr, a/k/a “Noey,” with racketeering conspiracy and other crimes related to their membership in “WashSide” or “Wash,” a street gang based in the Bronx, New York.  TERRELL, CENTENO, and SPENCER were also charged with the murder of Tyrone Almodovar, who was shot to death on June 26, 2020, in the Morrisania neighborhood in the South Bronx.  TERRELL, THOMAS, BAKER, CHAPMAN, MOSLEY, and CARR were further charged with multiple other violent crimes in aid of racketeering, including attempted murder and assault with a dangerous weapon, arising from three further shootings and one slashing similarly committed in the South Bronx between July 2020 and August 2022.  CENTENO, SEYMORE, THOMAS, BROGDON, and DIALLO were also charged for their role in committing four robberies, two of which were carjackings.  The case is assigned to United States District Judge Jesse M. Furman.

TERRELL was already in custody in connection with charges contained in a previous indictment in this case.  SEYMORE is in federal custody in connection with charges filed in another case in Manhattan federal court.  CENTENO and DIALLO are in federal custody serving prison sentences in connection with prior federal cases in this District.  THOMAS and CARR are in state custody and will be transferred into federal custody.  SPENCER, BROGDON, CHAPMAN, and MOSLEY were arrested this morning in the South Bronx and East Harlem and are expected to be presented later today before Chief United States Magistrate Judge James L. Cott.  BAKER is a fugitive.  

U.S. Attorney Damian Williams said: “The members of ‘Wash,’ as alleged in today’s charges, terrorized neighborhoods in the Bronx and beyond by killing, shooting, slashing, and robbing other people.  Through these charges, we will hold Wash’s members accountable not only for the murder of Tyrone Almodovar, but for countless other crimes they committed in New York City and other states across the country.”

DEA Special Agent in Charge Frank A. Tarentino III said: “Gang violence and drug trafficking are plagues to New Yorkers quality of life.  The gang members charged today spread violence, terror, and dangerous drugs like Spice/K2 and crack cocaine throughout our city streets.  Thanks to the tenacity of the New York City Police Department, members of DEA’s Group D-22, and U.S. Attorney’s Office for the Southern District of New York, eleven members of the “Wash” Gang are facing the consequences of their alleged crimes.”  

NYPD Commissioner Keechant L. Sewell said: “Today, New York City is safer because of the dedicated efforts of our NYPD investigators and our law enforcement partners.  This case is further proof that the deadly combination of gangs, guns, and drugs will never be tolerated in our city, and that the NYPD will always work to hold every violent offender accountable for their actions.  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 everyone else who contributed to this important investigation.”

According to the allegations in the Superseding Indictment filed today in federal court and statements previously made on the record in this case and related matters:[1]

From at least 2015 to 2022, the members of “WashSide” or “Wash,” a criminal enterprise based in the Bronx, New York, committed multiple acts of violence against members of rival street gangs and others.   To make money for the gang, protect the gang’s territory, and promote the gang’s standing, members of Wash engaged in, among other things, armed robberies and carjackings, drug trafficking, wire fraud, and violence, including murder, attempted murder, and assaults with dangerous weapons.  The members of Wash also travelled outside New York City and New York State, robbing and stealing from stores across the Northeast and in other states.  In social media posts, the members of Wash celebrated all of the above criminal conduct. 

For years, Wash engaged in disputes with rival crews in the South Bronx, which resulted in numerous acts of violence.  Among these were the following:

• The murder of Tyrone Almodovar after a car chase in the Bronx on June 26, 2020, in which TERRELL, SEYMORE, CENTENO and SPENCER all participated;
• TERRELL shot at rival gang members on July 29, 2020;
• THOMAS and MOSLEY participated in a drive-by shooting that targeted rival gang members but injured two innocent bystanders on August 21, 2021; and
• BAKER and CHAPMAN participated in another shooting that similarly resulted in an innocent bystander being struck on August 19, 2022.

*                *                *

A chart containing the names of the defendants who were charged today and the charges and minimum and maximum penalties they face is attached.  The statutory minimum and maximum penalties are prescribed by Congress and are provided here for informational purposes only, as any sentencings of the defendants would be determined by a judge.

Mr. Williams praised the outstanding investigative work of the NYPD and DEA and also thanked the Bureau of Alcohol, Tobacco, Firearms, and Explosives as well as the Bronx County District Attorney’s Office for their assistance in this case.

This case is being handled by the Office’s Violent and Organized Crime Unit.  Assistant U.S. Attorneys Courtney L. Heavey and Thomas John Wright are in charge of the prosecution.

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

 

Defendant

 

 

Age

 

Charges

 

Minimum and Maximum Penalties

Boss Terrell,

a/k/a “Sauce”

22

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

Mandatory life in prison or death

YAUREL CENTENO,

a/k/a “Flex”

21

Racketeering Conspiracy, Conspiracy to Commit Murder in Aid of Racketeering, Murder in Aid of Racketeering, Use of a Firearm Resulting in Death, Robbery

Mandatory life in prison or death

Lydell Seymore,

a/k/a “Bugout”

19

Racketeering Conspiracy, Carjacking, Robbery, Use of a Firearm for Carjacking and Robbery

 

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

Darrell Spencer,

a/k/a “Rell”

25

Racketeering Conspiracy, Conspiracy to Commit Murder in Aid of Racketeering, Murder in Aid of Racketeering, Use of a Firearm Resulting in Death

Mandatory life in prison or death

Isaiah Thomas,

a/k/a “Zay,”

a/k/a “Chicago”

24

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

Maximum of life in prison; mandatory minimum 17 years to run consecutive to any other sentence

Jacob Baker

18

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

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

Tyshawn Brogdon,

a/k/a “Shawn”

20

Racketeering Conspiracy, Carjacking, Robbery, Use of a Firearm for Carjacking and Robbery, Wire Fraud Conspiracy, Aggravated Identity Theft

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

Rasheed Chapman,

a/k/a “Ra”

19

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

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

Mamadou Diallo,

a/k/a “Haji,” a/k/a “Aladje”

23

 

Racketeering Conspiracy, Carjacking, Robbery, Use of a Firearm for Carjacking and Robbery

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

Antwan Mosley,

a/k/a “Ant”

21

 

Racketeering Conspiracy, Attempted Murder and Assault with a Dangerous Weapon in Aid of Racketeering, Use of a Firearm for Attempted Murder and Assault with a Dangerous Weapon, Wire Fraud Conspiracy, Aggravated Identity Theft

Maximum of life in prison; mandatory minimum 12 years to run consecutive to any other sentence

Noel Carr,

a/k/a “Noey,”

22

Racketeering Conspiracy, Assault with a Dangerous Weapon in Aid of Racketeering, Wire Fraud Conspiracy, Aggravated Identity Theft

Maximum of 62 years in prison; mandatory minimum two years to run consecutive to any other sentence

 

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[1] As the introductory phrase signifies, the entirety of the text of 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.

Damian Williams, the United States Attorney for the Southern District of New York, Merrick B. Garland, the United States Attorney General, and Michael J. Driscoll, the Assistant Director in Charge of the New York Field Office of the Federal Bureau of Investigation (“FBI”), announced today the unsealing of an Indictment charging SAMUEL BANKMAN-FRIED, a/k/a “SBF,” with conspiracy to commit wire fraud, wire fraud, conspiracy to commit commodities fraud, conspiracy to commit securities fraud, conspiracy to commit money laundering, and conspiracy to defraud the Federal Election Commission and commit campaign finance violations.  The charges in the Indictment arise from an alleged wide-ranging scheme by the defendant to misappropriate billions of dollars of customer funds deposited with FTX, the international cryptocurrency exchange founded by the defendant, and mislead investors and lenders to FTX and to Alameda Research, the cryptocurrency hedge fund also founded by the defendant.  BANKMAN-FRIED was arrested yesterday in the Bahamas on these charges and will be presented before a Bahamian magistrate judge today.

U.S. Attorney Damian Williams said: “One month ago, FTX collapsed, causing billions of dollars in losses to its customers, lenders, and investors.  Now, a federal grand jury in New York has indicted the former founder and chief executive officer of FTX and charged him with crimes related to the phenomenal downfall of that one-time cryptocurrency exchange, including fraud on customers, investors, lenders, and our campaign finance system.  As today’s charges make clear, this was not a case of mismanagement or poor oversight, but of intentional fraud, plain and simple.” 

Attorney General Merrick B. Garland said: “The Justice Department has filed charges alleging that Samuel Bankman-Fried perpetrated a range of offenses in a global scheme to deceive and defraud customers and lenders of FTX and Alameda, the defendant’s crypto hedge fund, as well as a conspiracy to defraud the United States government.  We allege that the defendant conspired to defraud customers by misappropriating their deposits; to defraud lenders; to commit securities fraud and money laundering; and to violate campaign finance laws. As this indictment demonstrates, the U.S. Department of Justice will aggressively investigate and prosecute alleged criminal wrongdoing in the financial system and violations of federal elections laws.  We will continue to work to ensure U.S. capital markets operate honestly and with the integrity that investors, lenders, and the American people are entitled to.”  

FBI Assistant Director Michael J. Driscoll said: “As the indictment today alleges, Bankman-Fried knowingly defrauded the customers of FTX.com through the misappropriation of the customer deposits to pay expenses and debts of a different company he also owned as well as make other investments.  If you deceive and defraud your customers, the FBI will be persistent in our efforts to bring you to justice.”

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

SAMUEL BANKMAN-FRIED was the founder and chief executive officer of FTX, an international cryptocurrency exchange.  Since 2019, the defendant and his co-conspirators perpetrated a scheme to defraud customers of FTX by misappropriating billions of dollars of those customers’ funds.  As alleged, the defendant used billions of dollars of FTX customer funds for his personal use, to make investments and millions of dollars of political contributions to federal political candidates and committees, and to repay billions of dollars in loans owed by Alameda Research, a cryptocurrency hedge fund also founded by the defendant.  BANKMAN-FRIED also allegedly defrauded lenders to Alameda Research and equity investors in FTX by concealing his misuse of customer deposits in financial information that was provided to them.  

SAMUEL BANKMAN-FRIED and his co-conspirators made millions of dollars in political contributions funded by Alameda Research to federal political candidates and committees in advance of the 2022 election.  To conceal the fact that those contributions were paid for using funds from a corporation and to evade contribution limits and reporting requirements, BANKMAN-FRIED caused contributions to be reported in the names of co-conspirators rather than in the name of the true source of the funds.

*                *                *

SAMUEL BANKMAN-FRIED, 30, of Stanford, California, is charged with two counts of wire fraud conspiracy, two counts of wire fraud, and one count of conspiracy to commit money laundering, each of which carries a maximum sentence of 20 years.  He is also charged with conspiracy to commit commodities fraud, conspiracy to commit securities fraud, and conspiracy to defraud the United States and commit campaign finance violations, each of which carries a maximum sentence of five years.    

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.  He also expressed appreciation for the assistance of the Justice Department’s Office of International Affairs, National Cryptocurrency Enforcement Team, Public Integrity Section, and the Drug Enforcement Administration, as well as that of the Securities and Exchange Commission and the Commodity Futures Trading Commission, both of which separately initiated civil proceedings against the defendant today.  Mr. Williams further thanked the Bahamas Office of the Attorney-General & Ministry of Legal Affairs as well as the Royal Bahamas Police Force for their assistance.

This case is being handled by the Office’s Securities and Commodities Fraud Task Force. Assistant U.S. Attorneys Nicolas Roos and Danielle Sassoon are in charge of the prosecution.  The Money Laundering and Transnational Criminal Enterprises Unit and Assistant U.S. Attorneys Samuel Raymond and Thane Rehn also contributed to the investigation.

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 entirety of the text of the Indictment, and the description of the Indictment set forth herein, constitute only allegations, and every fact described should be treated as an allegation.

Damian Williams, the United States Attorney for the Southern District of New York, announced today that ROBERT SHANNON, a/k/a “Tank,” was sentenced to 260 months in prison today for his participation in a large-scale narcotics trafficking operation that sold kilogram quantities of fentanyl, heroin, and cocaine and for possessing firearms to protect the drug operation.  SHANNON was convicted following a week-long jury trial in August 2022 before U.S. District Judge John P. Cronan, who imposed today’s sentence.  On November 9, 2022, Judge Cronan sentenced co-defendant KAREEM RODERIQUE, a/k/a “Ernest Tucker,” to 200 months in prison.

U.S. Attorney Damian Williams said: “The sentence today reaffirms our judicial system’s unflinching commitment to hold narcotics traffickers accountable.  Fentanyl, heroin, and cocaine promote violence, ruin lives, and destroy communities.  These defendants sought to profit from trafficking significant quantities of these horrific drugs, using firearms to protect their operation, and were justly punished for their crimes.”

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

SHANNON, RODERIQUE, co-defendant NIKIA KING, and others ran a large-scale narcotics operation out of a narcotics mill and stash house in East Orange, New Jersey, while obtaining drug supplies and conducting a narcotics deal in the Southern District of New York.  The defendants obtained large quantities of fentanyl, heroin, and cocaine and utilized their stash house to mix, bag up, and prepare the drugs to sell to other drug dealers, who sold the drugs in the community.  The defendants also obtained and kept two loaded firearms in the stash house to protect their drugs and supplies. 

On October 27, 2020, law enforcement agents arrested RODERIQUE in the Bronx as he was attempting to purchase five kilograms of cocaine for the drug trafficking operation.  Later that night, law enforcement agents arrived at the East Orange stash house as SHANNON and KING were exiting the residence.  Shannon was carrying a weighted black bag from the residence to his car, where he was arrested.  Inside of the vehicle, law enforcement agents recovered the weighted bag, which Shannon had attempted to hide behind the car’s dashboard.  The black bag contained over 1,000 individual glassines envelopes of fentanyl and an additional bag contained over 1,000 doses of powdered fentanyl.  Law enforcement agents searched the East Orange stash house — which was protected by security cameras and a reinforced door.  Inside the stash house, law enforcement agents found approximately three kilograms of fentanyl, heroin, black tar heroin, narcotics cutting agent, cash, and two loaded firearms.  Agents also discovered narcotics trafficking supplies and equipment used to weigh, package, and sell fentanyl, heroin, and cocaine on the street, such as a large freestanding kilogram press, numerous grinders and blenders, and worktables. 

*                *                *

SHANNON was convicted after trial of narcotics conspiracy and using and carrying firearms during and in relation to, or possessing firearms in furtherance of, the narcotics conspiracy.  As part of the same case, RODERIQUE previously pled guilty in March 2022 before Judge Cronan to narcotics conspiracy, and co-defendant KING previously pled guilty in May 2022 before Judge Cronan to narcotics conspiracy.  KING was sentenced by Judge Cronan to 60 months in prison in October 2022. 

In addition to the prison terms, Judge Cronan sentenced SHANNON, 46, of Jersey City, New Jersey, to five years of supervised release; RODERIQUE, 39, of Raleigh, North Carolina, to five years of supervised release; and KING, 44, of Newark, New Jersey, to five years of supervised release.

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

The prosecution of this case is being handled by the Office’s Narcotics Unit.  Assistant U.S. Attorneys Michael R. Herman, Brandon D. Harper, and Jared Lenow, with the assistance of Paralegal Specialist Samuel Dobro, are in charge of the prosecution.

A federal grand jury in Manhattan returned an indictment today charging Samuel Bankman-Fried, aka SBF, 30, of Stanford, California, with conspiracy to commit wire fraud, wire fraud, conspiracy to commit commodities fraud, conspiracy to commit securities fraud, conspiracy to commit money laundering, and conspiracy to defraud the Federal Election Commission and commit campaign finance violations. 

The charges in the indictment arise from an alleged wide-ranging scheme by Bankman-Fried to misappropriate billions of dollars of customer funds deposited with FTX, the international cryptocurrency exchange founded by Bankman-Fried, and mislead investors and lenders to FTX and to Alameda Research, the cryptocurrency hedge fund also founded by Bankman-Fried. Bankman-Fried was arrested yesterday in the Bahamas on these charges and will be presented before a Bahamian magistrate judge today.

“The Justice Department has filed charges alleging that Samuel Bankman-Fried perpetrated a range of offenses in a global scheme to deceive and defraud customers and lenders of FTX and Alameda, the defendant’s crypto hedge fund, as well as a conspiracy to defraud the United States government,” said Attorney General Merrick B. Garland. “We allege that the defendant conspired to defraud customers by misappropriating their deposits; to defraud lenders; to commit securities fraud and money laundering; and to violate campaign finance laws. As this indictment demonstrates, the U.S. Department of Justice will aggressively investigate and prosecute alleged criminal wrongdoing in the financial system and violations of federal elections laws. We will continue to work to ensure U.S. capital markets operate honestly and with the integrity that investors, lenders, and the American people are entitled to.”  

“One month ago, FTX collapsed, causing billions of dollars in losses to its customers, lenders, and investors,” said U.S. Attorney Damian Williams for the Southern District of New York. “Now, a federal grand jury in New York has indicted the former founder and chief executive officer of FTX and charged him with crimes related to the phenomenal downfall of that one-time cryptocurrency exchange, including fraud on customers, investors, lenders, and our campaign finance system. As today’s charges make clear, this was not a case of mismanagement or poor oversight, but of intentional fraud, plain and simple.” 

“As the indictment today alleges, Bankman-Fried knowingly defrauded the customers of FTX.com through the misappropriation of the customer deposits to pay expenses and debts of a different company he also owned as well as make other investments,” said Assistant Director Michael J. Driscoll of the FBI New York Field Office. “If you deceive and defraud your customers, the FBI will be persistent in our efforts to bring you to justice.”

According to the indictment, Bankman-Fried was the founder and chief executive officer of FTX, an international cryptocurrency exchange. Since 2019, Bankman-Fried and his co-conspirators perpetrated a scheme to defraud customers of FTX by misappropriating billions of dollars of those customers’ funds. Bankman-Fried allegedly used billions of dollars of FTX customer funds for his personal use, to make investments and millions of dollars of political contributions to federal political candidates and committees, and to repay billions of dollars in loans owed by Alameda Research, a cryptocurrency hedge fund also founded by the Bankman-Fried. Bankman-Fried also allegedly defrauded lenders to Alameda Research and equity investors in FTX by concealing his misuse of customer deposits in financial information that was provided to them.  

Bankman-Fried and his co-conspirators made millions of dollars in political contributions funded by Alameda Research to federal political candidates and committees in advance of the 2022 election. To conceal the fact that those contributions were paid for using funds from a corporation and to evade contribution limits and reporting requirements, Bankman-Fried caused contributions to be reported in the names of co-conspirators rather than in the name of the true source of the funds.

Bankman-Fried is charged with two counts of wire fraud conspiracy, two counts of wire fraud, and one count of conspiracy to commit money laundering, each of which carries a maximum sentence of 20 years in prison. He is also charged with conspiracy to commit commodities fraud, conspiracy to commit securities fraud, and conspiracy to defraud the United States and commit campaign finance violations, each of which carries a maximum sentence of five years in prison. A federal district court judge will determine any sentence after considering the U.S. Sentencing Guidelines and other statutory factors.

U.S. Attorney General Merrick B. Garland, U.S. Attorney Damian Williams for the Southern District of New York, and Assistant Director in Charge Michael J. Driscoll of the FBI New York Field Office made the announcement.

The FBI is investigating the case with the assistance of the Justice Department’s Office of International Affairs, National Cryptocurrency Enforcement Team, Public Integrity Section, and the DEA, as well as that of the Securities and Exchange Commission and the Commodity Futures Trading Commission, both of which separately initiated civil proceedings against Bankman-Fried today. The Bahamas Office of the Attorney-General & Ministry of Legal Affairs as well as the Royal Bahamas Police Force also provided assistance. The Money Laundering and Transnational Criminal Enterprises Unit and Assistant U.S. Attorneys Samuel Raymond and Thane Rehn for the Southern District of New York also contributed to the investigation.

The U.S. Attorney’s Office for the Southern District of New York’s Securities and Commodities Fraud Task Force is handling the case. Assistant U.S. Attorneys Nicolas Roos and Danielle Sassoon for the Southern District of New York are prosecuting the case.

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

Danske Bank A/S (Danske Bank), a global financial institution headquartered in Denmark, pleaded guilty today and agreed to forfeit $2 billion to resolve the United States’ investigation into Danske Bank’s fraud on U.S. banks.

According to court documents, Danske Bank defrauded U.S. banks regarding Danske Bank Estonia’s customers and anti-money laundering controls to facilitate access to the U.S. financial system for Danske Bank Estonia’s high-risk customers, who resided outside of Estonia – including in Russia. The Justice Department will credit nearly $850 million in payments that Danske Bank makes to resolve related parallel investigations by other domestic and foreign authorities.

“Today’s guilty plea by Danske Bank and two-billion-dollar penalty demonstrate that the Department of Justice will fiercely guard the integrity of the U.S. financial system from tainted foreign money – Russian or otherwise,” said Deputy Attorney General Lisa O. Monaco. “Whether you are a U.S. or foreign bank, if you use the U.S. financial system, you must comply with our laws. We expect companies to invest in robust compliance programs – including at newly acquired or far-flung subsidiaries – and to step up and own up to misconduct when it occurs. Failure to do so may well be a one-way ticket to a multi-billion-dollar guilty plea.”

“Danske Bank lied to U.S. banks about its deficient anti-money laundering systems, inadequate transaction monitoring capabilities, and its high-risk, offshore customer base in order to gain unlawful access to the U.S. financial system,” said Assistant Attorney General Kenneth A. Polite, Jr. of the Justice Department’s Criminal Division. “Today, Danske Bank accepted responsibility for defrauding U.S. financial institutions and funneling billions of dollars in suspicious and criminal transactions through the United States. As part of its guilty plea, Danske Bank will forfeit over $2 billion and implement significant changes to its compliance program and AML controls. This coordinated resolution with the Securities and Exchange Commission (SEC) and Danish authorities sends a clear message that the Department of Justice stands ready to work with our partners around the world to investigate corporate wrongdoing and hold bad actors accountable for their criminal conduct.” 

“For years, Danske Bank lied and deceived U.S. banks to pump billions of dollars of suspicious and criminal funds through the U.S. financial system,” said U.S. Attorney Damian Williams for the Southern District of New York. “In doing so, Danske Bank, the largest bank in Denmark, deliberately disregarded U.S. law of which it is well aware, facilitated the laundering of criminal and suspicious proceeds through the United States, and placed the U.S. financial network at risk, all in the name of its bottom line. The bank is now being held to account. For its years-long criminal conduct, today Danske Bank pleaded guilty to conspiring to commit bank fraud, will forfeit over $2 billion, and will implement and maintain a revamped compliance program and AML controls. Banks and other financial institutions around the world should heed this message: If you want to use the U.S. financial system, you must play by the rules. If you don’t, we will hold you accountable.”

“Danske Bank’s guilty plea for defrauding U.S. banks should serve as a stark warning to others that we will uncover the truth and deliver accountability,” said FBI Deputy Director Paul Abbate. “The FBI, working with international partners, will vigorously investigate any institution, wherever based, which is engaged in manipulating U.S. financial systems to enable money laundering. The FBI remains committed to safeguarding our national and economic security from threats which could cause harm to American institutions.”

According to admissions and court documents, between 2008 and 2016, Danske Bank offered banking services through its branch in Estonia, Danske Bank Estonia. Danske Bank Estonia had a lucrative business line serving non-resident customers known as the NRP. Danske Bank Estonia attracted NRP customers by ensuring that they could transfer large amounts of money through Danske Bank Estonia with little, if any, oversight. Danske Bank Estonia employees conspired with NRP customers to shield the true nature of their transactions, including by using shell companies that obscured actual ownership of the funds. Access to the U.S. financial system via the U.S. banks was critical to Danske Bank and its NRP customers, who relied on access to U.S. banks to process U.S. dollar transactions. Danske Bank Estonia processed $160 billion through U.S. banks on behalf of the NRP.

U.S. banks required Danske Bank and Danske Bank Estonia to provide information to open and maintain accounts, including information related to anti-money laundering (AML) controls, transaction monitoring, and customers. Danske Bank knew that the U.S. banks expected honest, complete, and accurate responses and that the U.S. banks would not maintain, or open, U.S. dollar accounts for Danske Bank Estonia without the required information. 

By at least February 2014, as a result of internal audits, information from regulators, and an internal whistleblower, Danske Bank knew that some NRP customers were engaged in highly suspicious and potentially criminal transactions, including transactions through U.S. banks. Danske Bank also knew that Danske Bank Estonia’s anti-money laundering program and procedures did not meet Danske Bank’s standards and were not appropriate to meet the risks associated with the NRP. Instead of providing the U.S. banks with truthful information, Danske Bank lied about the state of Danske Bank Estonia’s AML compliance program, transaction monitoring capabilities, and information regarding Danske Bank Estonia’s customers and their risk profile.

Today, Danske Bank pleaded guilty to one count of conspiracy to commit bank fraud. Under the terms of the plea agreement, the company has agreed to criminal forfeiture of $2.059 billion. Danske Bank will also enter into separate criminal or civil resolutions with domestic and foreign authorities and the department will credit approximately $850 million in payments the bank makes to the SEC and the Danish authorities.

The department reached its resolution with Danske Bank based on a number of factors, including the nature, seriousness, and pervasiveness of the offense conduct. This included a bank fraud conspiracy in which Danske Bank misled U.S. banks in order to maintain and in one case open U.S. dollar accounts through which Danske Bank processed $160 billion for its non-resident customers; the bank’s failure to voluntarily and timely disclose the conduct to the department; the state of Danske Bank’s compliance program and the progress of its remediation; the bank’s resolutions with other domestic and foreign authorities, including the imposition of an independent expert by Danish authorities; and the bank’s continued cooperation with the department’s ongoing investigation. Danske Bank received full credit for cooperation and remediation because it provided full cooperation with the investigation and demonstrated recognition and affirmative acceptance of responsibility for its criminal conduct, including by, among other things, providing substantial information from its internal investigation, voluntarily and expediently producing a significant amount of documents located outside the United States in ways that did not implicate foreign data privacy laws, making foreign witnesses available for interviews, collecting and producing voluminous evidence and information including with translations where necessary, and providing detailed analysis of complex, cross-border transactions. Danske Bank has also enhanced and committed to continue improving its compliance programs and has agreed to the appointment of an independent expert selected by its regulator.

Additionally, the SEC announced a separate settlement with Danske Bank today in connection with a related, parallel proceeding. Under the terms of that resolution, Danske Bank agreed to pay approximately $413 million, which includes a civil monetary penalty of $178.6 million, as well as disgorgement that will be credited to any such payments made to the Danish authorities or the department in connection with Danske Bank’s guilty plea.

The FBI is investigating the case.

Trial Attorneys Margaret A. Moeser and Patrick B. Gushue of the Criminal Division’s Money Laundering and Asset Recovery Section (MLARS) and Assistant U.S. Attorneys Tara M. La Morte and Sheb Swett for the Southern District of New York are prosecuting the case. The Justice Department’s Office of International Affairs provided critical assistance in this case. 

The department appreciates the significant assistance provided by the SEC and the authorities in Denmark. The department further appreciates the assistance provided by authorities in Estonia in response to multiple Mutual Legal Assistance requests.

MLARS’ Bank Integrity Unit investigates and prosecutes complex, multi-district, and international criminal cases involving financial institutions. The unit’s prosecutions focus on banks and other financial institutions, including their officers, managers, and employees, whose actions threaten the integrity of the individual institution or the wider financial system.

Damian Williams, the United States Attorney for the Southern District of New York, Lisa O. Monaco, the Deputy Attorney General of the United States, 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 Office of the Federal Bureau of Investigation (“FBI”), announced that Danske Bank A/S (“Danske Bank”), a global financial institution headquartered in Denmark, pled guilty today and agreed to forfeit $2 billion to resolve the United States’ investigation into Danske Bank’s fraud on U.S. banks.  

According to court documents, Danske Bank defrauded U.S. banks regarding Danske Bank Estonia’s customers and anti-money laundering controls to facilitate access to the U.S. financial system for Danske Bank Estonia’s high-risk customers, who resided outside of Estonia – including in Russia.  The Justice Department will credit nearly $850 million in payments that Danske Bank makes to resolve related parallel investigations by other domestic and foreign authorities.

U.S. Attorney Damian Williams said: “For years, Danske Bank lied and deceived U.S. banks to pump billions of dollars of suspicious and criminal funds through the U.S. financial system.  In doing so, Danske Bank, the largest bank in Denmark, deliberately disregarded U.S. law, of which it is well aware, facilitated the laundering of criminal and suspicious proceeds through the United States, and placed the U.S. financial network at risk, all in the name of its bottom line.  The Bank is now being held to account.  For its years-long criminal conduct, today Danske Bank pled guilty to conspiring to commit bank fraud, will forfeit over $2 billion, and will implement and maintain a revamped compliance program and AML controls.  Banks and other financial institutions around the world should heed this message:  If you want to use the U.S. financial system, you must play by the rules.  If you don’t, we will hold you accountable.”

Deputy Attorney General Lisa O. Monaco said: “Today’s guilty plea by Danske Bank and two-billion-dollar penalty demonstrate that the Department of Justice will fiercely guard the integrity of the U.S. financial system from tainted foreign money—Russian or otherwise.  Whether you are a U.S. or foreign bank, if you use the U.S. financial system, you must comply with our laws.  We expect companies to invest in robust compliance programs—including at newly acquired or far-flung subsidiaries—and to step up and own up to misconduct when it occurs.  Failure to do so may well be a one-way ticket to a multi-billion-dollar guilty plea.”

Assistant Attorney General Kenneth A. Polite Jr. said: “Danske Bank lied to U.S. banks about its deficient anti-money laundering systems, inadequate transaction monitoring capabilities, and its high-risk, offshore customer base in order to gain unlawful access to the U.S. financial system.  Today, Danske Bank accepted responsibility for defrauding U.S. financial institutions and funneling billions of dollars in suspicious and criminal transactions through the United States.  As part of its guilty plea, Danske Bank will forfeit over $2 billion and implement significant changes to its compliance program and AML controls.  This coordinated resolution with the Securities and Exchange Commission (SEC) and Danish authorities sends a clear message that the Department of Justice stands ready to work with our partners around the world to investigate corporate wrongdoing and hold bad actors accountable for their criminal conduct.” 

FBI Assistant Director in Charge Michael J. Driscoll said: “As the guilty plea today demonstrates, Danske knowingly defrauded United States based banks as part of an elaborate scheme to enable money laundering from Russia.   Despite knowing that transactions of their customers were suspicious and possibly criminal, Danske initially concealed and lied to the U.S. banks.  The FBI and our law enforcement partners are committed to ensuring that foreign financial institutions wishing to do business in our system maintain compliance with the rules and regulations of the United States financial system.  Those institutions who try to evade these regulations will be held accountable in the criminal justice system.”

According to admissions and court documents:

Between 2008 and 2016, Danske Bank offered banking services through its branch in Estonia, Danske Bank Estonia.  Danske Bank Estonia had a lucrative business line serving non-resident customers known as the NRP.  Danske Bank Estonia attracted NRP customers by ensuring that they could transfer large amounts of money through Danske Bank Estonia with little, if any, oversight.  Danske Bank Estonia employees conspired with NRP customers to shield the true nature of their transactions, including by using shell companies that obscured actual ownership of the funds.  Access to the U.S. financial system via the U.S. banks was critical to Danske Bank and its NRP customers, who relied on access to U.S. banks to process U.S. dollar transactions.  Danske Bank Estonia processed $160 billion through U.S. banks on behalf of the NRP.

U.S. banks required Danske Bank and Danske Bank Estonia to provide information to open and maintain accounts, including information related to anti-money laundering (“AML”) controls, transaction monitoring, and customers.  Danske Bank knew that the U.S. banks expected honest, complete, and accurate responses and that the U.S. banks would not maintain, or open, U.S. dollar accounts for Danske Bank Estonia without the required information. 

By at least February 2014, as a result of internal audits, information from regulators, and an internal whistleblower, Danske Bank knew that some NRP customers were engaged in highly suspicious and potentially criminal transactions, including transactions through U.S. banks. Danske Bank also knew that Danske Bank Estonia’s anti-money laundering program and procedures did not meet Danske Bank’s standards and were not appropriate to meet the risks associated with the NRP.  Instead of providing the U.S. banks with truthful information, Danske Bank lied about the state of Danske Bank Estonia’s AML compliance program, transaction monitoring capabilities, and information regarding Danske Bank Estonia’s customers and their risk profile.

To resolve the investigation, Danske Bank pled guilty to one count of conspiracy to commit bank fraud.  Under the terms of the plea agreement, the company has agreed to criminal forfeiture of $2.059 billion.  Danske Bank will also enter into separate criminal or civil resolutions with domestic and foreign authorities, and the Department will credit approximately $850 million in payments the bank makes to the Securities and Exchange Commission (“SEC”) and the Danish authorities.

The Department reached its resolution with Danske Bank based on a number of factors, including the nature, seriousness, and pervasiveness of the offense conduct.  This included a bank fraud conspiracy in which Danske Bank misled U.S. banks in order to maintain, and in one case open, U.S. dollar accounts through which Danske Bank processed $160 billion for its non-resident customers; the bank’s failure to voluntarily and timely disclose the conduct to the Department; the state of Danske Bank’s compliance program and the progress of its remediation; the bank’s resolutions with other domestic and foreign authorities; and the bank’s continued cooperation with the Department’s ongoing investigation.  Danske Bank received full credit for cooperation and remediation because it provided full cooperation with the investigation and demonstrated recognition and affirmative acceptance of responsibility for its criminal conduct, including by, among other things, providing substantial information from its internal investigation, voluntarily and expediently producing a significant amount of documents located outside the United States in ways that did not implicate foreign data privacy laws, making foreign witnesses available for interviews, collecting and producing voluminous evidence and information, including with translations where necessary, and providing detailed analysis of complex, cross-border transactions.  Danske Bank has also enhanced and committed to continue improving its compliance programs and has agreed to the appointment of an independent expert selected by its regulator.

Additionally, the SEC announced a separate settlement with Danske Bank today in connection with a related, parallel proceeding. Under the terms of that resolution, Danske Bank agreed to pay approximately $413 million, which includes a civil monetary penalty of $178.6 million, as well as disgorgement that will be credited to any such payments made to the Danish authorities or the department in connection with Danske Bank’s guilty plea.

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The case is being handled by the Office’s Money Laundering & Transnational Criminal Enterprises Unit in partnership with the Criminal Division’s Money Laundering and Asset Recovery Section.  Assistant U.S. Attorneys Tara M. La Morte and Sheb Swett and Trial Attorneys Margaret A. Moeser and Patrick B. Gushue are prosecuting this case. 

Mr. Williams praised the investigative work of the FBI and the significant assistance provided by the Criminal Division’s Office of International Affairs, the SEC, and the authorities in Denmark.  Mr. Williams also expressed his gratitude for the assistance provided by authorities in Estonia in response to Mutual Legal Assistance requests.

Damian Williams, the United States Attorney for the Southern District of New York, and Raymond A. Tierney, District Attorney for Suffolk County, announced today that 11 former union officials — JAMES CAHILL, former President of the New York State Building and Construction Trades Council, CHRISTOPHER KRAFT, PATRICK HILL, MATTHEW NORTON, WILLIAM BRIAN WANGERMAN, KEVIN MCCARRON, JEREMY SHEERAN, a/k/a “Max,” ANDREW MCKEON, ROBERT EGAN, SCOTT ROCHE, and ARTHUR GIPSON — have pled guilty to charges stemming from their acceptance of bribes and illegal cash payments from a construction contractor (“Employer-1”) from in or about October 2018 to in or about October 2020 while the defendants were serving as union officers.  MCCARRON and EGAN pled guilty earlier today before United States District Judge Colleen McMahon to violating the Taft-Hartley Act, and the remaining defendants previously pled guilty either to honest services fraud conspiracy or to violating the Taft-Hartley Act.  Each defendant has or will be sentenced by Judge McMahon in Manhattan federal court.

U.S. Attorney Damian Williams said: “The defendants exploited their union positions and hard-working union members to feed their own greed.  They accepted bribes to corruptly favor non-union employers and influence the construction trade in New York.  The convictions in this case reflect our continuing commitment to root out corruption and bring to justice those who abuse positions of power out of personal greed.  I thank the Suffolk County District Attorney’s Office for their partnership in this case.” 

Suffolk County District Attorney Raymond A. Tierney said: “These convictions highlight a shocking level of corruption among powerful labor officials in New York State.  Through their greed and self-dealing, these defendants betrayed the hard-working members of their respective unions, and undermined the protections meant to be afforded by organized labor.  While their members were performing difficult work at job sites throughout the region, these defendants sold out their membership by accepting bribes and cash payments in restaurant bathrooms.  My Office will continue to uncover and prosecute corruption of all kinds, including that committed by union officials.  I would like to thank the U.S. Attorney's Office for the Southern District of New York for partnering with my Office on these cases, and for bringing these prosecutions to a successful conclusion."

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

JAMES CAHILL was the President of the New York State Building and Construction Trades Council (the “NYS Trades Council”), which represents over 200,000 unionized construction workers, a member of the Executive Council for the New York State American Federation of Labor and Congress of Industrial Organizations (the “NYS AFL-CIO”), and formerly a union representative of the United Association of Journeymen and Apprentices of the Plumbing and Pipefitting Industry of the United States and Canada (the “UA”).  During the charged conspiracy, CAHILL accepted approximately $44,500 in bribes from Employer-1, and as part of his guilty plea, CAHILL acknowledged having previously accepted at least approximately $100,000 of additional bribes from Employer-1 in connection with CAHILL’s union positions.

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

All 11 defendants accepted cash from Employer-1 — usually stuffed in envelopes that Employer-1 handed off inside the restrooms of restaurants.  During the meetings at which the payments were made, Employer-1 repeatedly requested favorable action from Local 638 and/or Local 200 including the following: (1) that the relevant union would support Employer-1’s bids on various projects, (2) that the union would consider signing Employer-1 to labor agreements that Employer-1 regarded to be favorable (including agreements that would pay union workers lower rates than their experience merited), and (3) that the union would permit Employer-1 to falsely claim to developers that Employer-1 employed union workers.  JAMES CAHILL was the leader of the conspiracy and introduced Employer-1 to many of the other defendants, while advising Employer-1 that Employer-1 could reap the benefits of being associated with the unions without actually signing union agreements or employing union workers. 

Employer-1 contracted to work on — or would bid on — projects that could have otherwise employed union workers belonging to Local 638 and/or Local 200.  At the time Employer-1 was bribing the defendants, Employer-1’s business employed workers who were not members of Local 638 and/or Local 200 but would have been eligible for membership.

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A chart containing the names, offenses of conviction, maximum penalties for the defendants, and sentencing dates for each is set forth below.  The maximum potential sentences in this case are prescribed by Congress and are provided here for informational purposes only, as any sentencing of the defendants will be determined by the judge.

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

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

Defendant

Offense of Conviction

Max. Penalty

Date of Sentencing

JAMES CAHILL

Honest Services Fraud Conspiracy

 

20 years in prison

March 7, 2023, at 4:00 p.m.

CHRISTOPHER KRAFT

Honest Services Fraud Conspiracy

 

20 years in prison

December 12, 2022, at 4:00 p.m.

PATRICK HILL

Honest Services Fraud Conspiracy

 

20 years in prison

December 19, 2022, at 2:00 p.m.

MATTHEW NORTON

Taft-Hartley Act Violation (Felony)

 

Five years in prison

December 13, 2022, at 11:00 a.m.

WILLIAM BRIAN WANGERMAN

Taft-Hartley Act Violation (Felony)

 

Five years in prison

January 30, 2023, at 4:00 p.m.

KEVIN MCCARRON

Taft-Hartley Act Violation (Misdemeanor)

 

12 months

in prison

March 14, 2023, at 2:00 p.m.

JEREMY SHEERAN

Taft-Hartley Act Violation (Felony)

 

Five years in prison

January 13, 2023, at 2:00 p.m.

ANDREW MCKEON

Taft-Hartley Act Violation (Felony)

 

Five years in prison

January 18, 2023, at 2:00 p.m.

ROBERT EGAN

Taft-Hartley Act Violation (Felony)

 

Five years in prison

March 14, 2023, at 12:00p.m.

SCOTT ROCHE

Taft-Hartley Act Violation (Misdemeanor)

 

12 months

in prison

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

ARTHUR GIPSON

Taft-Hartley Act Violation (Felony)

 

Five years in prison

March 9, 2023, at 2:30 p.m.

Damian Williams, the United States Attorney for the Southern District of New York, announced that RALPH BERRY was sentenced today to life in prison for the June 2000 fatal shooting of innocent bystander Caprice Jones in the Bronx, New York.  Jones was left paralyzed from the shooting and died from his injuries 10 years later, in November 2010.  BERRY was convicted following a jury trial on September 30, 2021, before then-U.S. District Judge Alison J. Nathan.  Judge Nathan, now a U.S. Circuit Judge sitting by designation in Manhattan federal court, imposed today’s sentence.  

U.S. Attorney Damian Williams said:  “Ralph Berry callously ordered the shooting of a rival drug dealer that resulted in the senseless murder of Caprice Jones.  Jones was simply enjoying a Father’s Day barbecue when his life was changed forever.  As a result of Berry’s actions, Jones was left paralyzed and ultimately died from his injuries 10 years later.  Berry has now been sentenced to spend the rest of his life in prison.”  

According to the Indictment and evidence presented at trial:

In the summer of 2000, BERRY was the head of a violent drug crew that operated in the McKinley Housing Development in the Bronx.  On June 21, 2000, BERRY ordered one of his subordinates to shoot a rival drug dealer with whom BERRY had been feuding over drug territory.  That subordinate followed BERRY’s order and fired multiple shots into a Father’s Day barbecue being held on the McKinley Houses basketball courts.  Caprice Jones, an innocent bystander who was not involved in the drug dispute, was struck in the spine by one of the bullets.  The gunshot injury Jones sustained that day left him paralyzed from the waist down and ultimately caused his death ten years later, in November 2010, at the age of 42.

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In addition to the prison term, BERRY, 55, of the Bronx, New York, was sentenced to five years’ supervised release and a $200 mandatory special assessment.

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

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

Damian Williams, the United States Attorney for the Southern District of New York, announced that defendant JASON SERVIS pled guilty today for his role in the distribution of adulterated and misbranded drugs intended for administration on racehorses he trained, in connection with the charges filed in United States v. Navarro et al., 20 Cr. 160 (MKV).  SERVIS pled guilty before U.S. District Judge Mary Kay Vyskocil.  SERVIS will be sentenced by Judge Vyskocil on May 18, 2023.

U.S. Attorney Damian Williams said: “Servis’ conduct represents corruption at the highest levels of the racehorse industry.  As a licensed racehorse trainer, Servis was bound to protect the horses under his care and to comply with racing rules designed to ensure the safety and well-being of horses and protect the integrity of the sport.  Servis abdicated his responsibilities to the animals, to regulators, and to the public.  This latest conviction demonstrates the commitment of this Office and of our partners at the FBI to the prosecution and investigation of corruption, fraud, deceit, and endangerment in the racehorse industry.”

According to the allegations contained in the Superseding Indictment, the Superseding Information charging SERVIS, prior charging instruments and other filings in this case, and statements during court proceedings:

The charges in the Navarro case arise from an investigation of widespread schemes by racehorse trainers, veterinarians, performance enhancing drug (“PED”) distributors, and others to manufacture, distribute, and receive adulterated and misbranded PEDs and to secretly administer those PEDs to racehorses competing at all levels of professional horseracing.  By evading PED prohibitions and deceiving regulators and horse racing officials, participants in these schemes sought to improve race performance and obtain prize money from racetracks throughout the United States and other countries, including in New York, New Jersey, Florida, Kentucky, and Saudi Arabia, all to the detriment and risk of the health and well-being of the racehorses.  Trainers, like SERVIS, who participated in the schemes stood to profit from the success of racehorses under their control by earning a share of their horses’ winnings and by improving their horses’ racing records, thereby yielding higher trainer fees and increasing the number of racehorses under their control.

SERVIS ordered hundreds of bottles of the drug “SGF-1000,” which was compounded and manufactured in unregistered facilities and contained growth factors that the defendant believed to be undetectable through regular drug screens.  Virtually all the horses in SERVIS’ barn received that drug, including the thoroughbred racehorse “Maximum Security,” who crossed the finish line first at the 2019 Kentucky Derby.  SGF-1000 was an intravenous drug promoted as, among other things, a vasodilator capable of promoting stamina, endurance, and lower heart rates in horses through the purported action of “growth factors.”  SERVIS approved veterinary bills to racehorse owners that contained concealed charges for SGF-1000, which were falsely billed under the line item “Acupuncture & Chiropractic.”  In September 2019, the New York State Gaming Commission released an advisory stating that SGF-1000 was prohibited under the racing rules and had been prohibited since 2012.  SERVIS continued to allow the administration of that drug on the horses he trained up until his arrest in March 2020.

Horses trained by SERVIS were regularly administered the prescription drug “Clenbuterol” with no valid prescription, which was part of a deliberate effort to conceal that conduct from racing regulators and avoid mandatory reporting requirements.

SERVIS further obtained and transported a misbranded version of “Clenbuterol,” which he obtained from convicted co-defendant JORGE NAVARRO.

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Mr. Williams praised the outstanding investigative work of the Federal Bureau of Investigation New York Office’s Eurasian Organized Crime Task Force and its support of the Bureau’s Integrity in Sports and Gaming Initiative.  Mr. Williams also thanked the Food and Drug Administration for their assistance.

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

Damian Williams, the United States Attorney for the Southern District of New York, announced today that SUNI MUNSHANI, the former Chief Executive Officer of a Connecticut-based technology company (the “Victim Company”), pled guilty today in Manhattan federal court in connection with a scheme to defraud the Victim Company of millions of dollars.  Pursuant to his plea agreement with the Government, MUNSHANI agreed to pay $10,485,043 in restitution to the Victim Company.  District Judge Jed S. Rakoff accepted the defendant’s guilty plea. 

U.S. Attorney Damian Williams said: “Not even a year into his appointment as CEO, Suni Munshani began betraying his employer’s trust and breaking the law, stealing millions of dollars to line his pockets.  Company executives are given significant amounts of power, but today’s plea should send the message that this Office will be ready to act if an executive chooses to abuse that power.”

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

Between 2011 and 2019, SUNI MUNSHANI was the CEO of the Victim Company, which provided data security services to its clients.  Within six months of his appointment as CEO, MUNSHANI and others began an approximately nine-year scheme to defraud the Victim Company.  During the scheme, MUNSHANI created an email account associated with a purported third-party contractor controlled by MUNSHANI and used that email account to correspond with the Victim Company and to obtain payments from the Victim Company totaling at least approximately $3 million dollars for services that were never provided to the Victim Company.  He also caused the Victim Company to issue a $3.5 million check for a purported tax liability, which check MUNSHANI then deposited into an unauthorized bank account created by MUNSHANI in the name of the Victim Company.  

In addition, MUNSHANI defrauded the Victim Company through fraudulent licensing and reseller agreements between the Victim Company and two other companies (the “Licensing Company” and the “Reseller Company,” respectively).  Among other things, MUNSHANI instructed another individual to set up the Reseller Company “in the same way as [the Licensing Company],” and then helped create and submit fraudulent invoices from the Reseller Company to the Victim Company.

*                *                *

MUNSHANI, 61, of Easton, Connecticut, pled guilty to one count of conspiracy to commit wire fraud, which carries a maximum sentence of five years in prison. 

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

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

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