Southern District of New York

Damian Williams, the United States Attorney for the Southern District of New York,  Andrew C. Adams, Task Force KleptoCapture Director, Michael J. Driscoll, the Assistant Director-in-Charge of the New York Office of the Federal Bureau of Investigation (“FBI”), and Matthew S. Axelrod, Assistant Secretary of Commerce for Export Enforcement, announced today that the United States of America has been authorized to seize a Boeing 787-8 aircraft and a Gulfstream G650ER aircraft owned and/or controlled by Russian oligarch Roman Abramovich, pursuant to a seizure warrant from the U.S. District Court for the Southern District of New York, which found that the airplanes are subject to seizure and forfeiture based on probable cause of violations of the Export Control Reform Act (“ECRA”) and the recent sanctions issued against Russia.

U.S. Attorney Damian Williams said:  “Today’s affidavit and warrant demonstrate the Southern District’s commitment to bring to bear every legal tool available for enforcement of sanctions and export controls imposed in response to Russia’s illegal war in Ukraine.  Our international partners — nations devoted to the rule of law — far outnumber those jurisdictions where these aircraft can safely hide, and our investigation of illegal exports in violation of U.S. law will continue unabated.”

Task Force KleptoCapture Director Andrew C. Adams said:  “Today’s action reflects the global scope of the United States’ response to illegal Russian aggression in Ukraine.  While we seek to execute on these warrants, the Task Force eagerly anticipates working with international partners to uphold the rule of law and reminds members of the aviation, insurance, and financial industries that these aircraft constitute tainted property under active investigation by the United States.”

FBI Assistant Director Michael J. Driscoll said:  “These wealthy Russian oligarchs have helped foster an environment that enabled Russia to pursue its deadly war in Ukraine.  The seizure of their valuable possessions, including these two aircraft, is just one way the U.S government holds accountable those who break U.S. laws and support Russia in its attempt to conquer a sovereign nation.  Our work has only just begun and we won't back away.”

Assistant Secretary of Commerce for Export Enforcement Matthew S. Axelrod:  “The Commerce Department has put in place unprecedented export controls in response to Russia’s illegal war against Ukraine.  Today’s action, and our recent changes to make such actions public when brought, provides notice to the world of our commitment to enforce those controls aggressively in a transparent way, consistent with our commitment to the rule of law.”

According to the seizure warrant and affidavit sworn out today:[1]

In response to Russia’s invasion of Ukraine, the U.S. Department of Commerce’s Bureau of Industry and Security (“BIS”) issued various sanctions against Russia that impose export controls and license requirements to protect U.S. national security and foreign policy interests.  These Russia sanctions include expanded prohibitions on the export, reexport, or in-country transfer of U.S.-manufactured aircraft and aircraft parts and components to or within Russia without a BIS license, and eliminate the availability of any license exception for aircraft owned or controlled, or under charter or lease, by Russia or a Russian national.

The Boeing and the Gulfstream each were reexported to Russia (i.e., flown from a foreign country to Russia) in violation of the ECRA and regulations issued thereunder, including the recent Russia sanctions.  The Boeing was flown to Russia on March 4, 2022 without a BIS license and without a license exception, and is now in the United Arab Emirates.  The Gulfstream was flown to Russia on March 12 and 15, 2022 without a BIS license and without a license exception, and remains in Russia.  The Boeing and Gulfstream are owned and/or controlled by Roman Abramovich, a Russia national, through a series of shell companies in Cyprus, Jersey, and the British Virgin Islands. 

The Boeing (pictured below), bearing tail number P4-BDL and manufacturer serial number 37306, is believed to be worth approximately $350 million.

 

The Gulfstream (pictured below), bearing tail number LX-RAY and manufacturer serial number 6417, is believed to be worth approximately $60 million. 

 

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Mr. Williams praised the outstanding work of the FBI and BIS.  In a charging letter that separately issued today, BIS initiated administrative proceedings against Roman Abramovich, seeking penalties of up to twice the value of the Boeing and the Gulfstream.  Mr. Williams further thanked the Justice Department’s National Security Division and Office of International Affairs, the U.S. Treasury Department’s Office of Foreign Assets Control, and Her Majesty’s Attorney General for the Bailiwick of Jersey for their assistance in this investigation. 

This case is being handled by the Office’s Money Laundering and Transnational Criminal Enterprises Unit and National Security and International Narcotics Unit.  Assistant United States Attorneys Joshua A. Naftalis, Anden Chow, Michael D. Lockard, and Kaylan E. Lasky are in charge of the investigation. 

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

 

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[1]   The burden to prove forfeitability in a forfeiture proceeding is upon the government.

Damian Williams, the United States Attorney for the Southern District of New York, announced today the arrest of BRIAN REED.  REED is charged with communicating online with an individual he believed to be a 13-year-old girl and attempting to meet the girl to engage in sexual activities and with engaging in that offense while a registered sex offender.  REED was presented today before U.S. Magistrate Judge Andrew E. Krause in White Plains federal court and detained.

U.S. Attorney Damian Williams said:  “This case underlines the urgent need for law enforcement to continue its efforts to protect children from those who prey on them. As this arrest shows, we will use every tool available to law enforcement to investigate and prosecute those who sexually exploit children.” 

According to the allegations in the Complaint[1] filed on May 31, 2022 in White Plains federal court:

On May 25, 2022 and May 26, 2022, an investigator with the Rockland County District Attorney’s Office (“Investigator-1”), who was posing as a 13-year-old girl on various online social media platforms, communicated via text with BRIAN REED.  REED asked Investigator-1 for sexually explicit photos and indicated that he wanted to meet with her for the purpose of having sex.

During the communications with REED, Investigator-1 referred on multiple occasions to the fact that she was 13 years old and also told REED that “im a virgin still.” REED  responded, “Thats ok.”  REED told Investigator-1 that he wanted to speak by phone and Investigator-1 spoke to REED by phone on a number of occasions.  During their calls, REED and Investigator-1 discussed meeting in person and REED described in detail various sexual activities that he wanted to engage in with Investigator-1.   REED said he was excited to meet her and that he could “teach [her] some things.”  REED made a plan to meet Investigator-1 at a park in Rockland County, New York.

On May 26, 2022, at approximately 11:35 p.m., REED arrived at a parking lot near the agreed-upon meeting spot and parked his car. As he began to walk toward Investigator-1, who was waiting at the meeting spot, REED was arrested.  Following his arrest, REED was interviewed and he admitted, among other things, that he communicated with an individual he believed was 13 years old and made a plan to meet her so that he could have sex with her. In addition, REED stated that he had been convicted of a sex offense and was a registered sex offender.  On May 27, 2022, BRIAN REED, the defendant, was charged in Clarkstown Justice Court with Attempted Rape in the 2nd Degree and Disseminating Indecent material to minors.

On October 17, 2016, REED was convicted in Morris County Superior Court, New Jersey, of Endangering the Welfare of a Child Through Sexual Conduct and sentenced to three years in prison.  REED was required to register as a sex offender upon his release from prison. 

There may be other victims of this alleged conduct.  If you have information to report, contact the Federal Bureau of Investigation through its toll-free Tip Line at 1-800-CALL-FBI

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REED, 33 of Sussex, New Jersey is charged with one count of attempted enticement of a minor, which carries a minimum sentence of 10 years in prison and a maximum sentence of life in prison, and one count of committing the offense of attempted enticement while a registered sex offender, which carries a minimum sentence of 10 years to be imposed consecutively to any sentence of imprisonment imposed for the attempted enticement.

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

Following today’s presentment, Judge Krause ordered that BRIAN REED be detained.

Mr. Williams praised the efforts of the Federal Bureau of Investigation, Homeland Security Investigations, the Rockland County District Attorney’s Office, Rockland County District Attorney’s Office Special Investigations Unit, Rockland County District Attorney’s Office Special Victims Unit, Town of Clarkstown Police Department, and the Westchester County Safe Streets Task Force, which is comprised of special agents and task force officers from the FBI, U.S. Probation, New York State Police, New York State Department of Corrections and Community Supervision, Putnam County Sheriff's Office, Westchester County DAs Office, Rockland County DAs Office, NYPD, Westchester County PD, and the Yonkers, New Rochelle, Mount Vernon, Greenburgh, White Plains, Peekskill, Ramapo, and Clarkstown Police Departments. He added that the investigation is ongoing.         

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

 

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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, and Michael J. Driscoll, the Assistant Director-in-Charge of the New York Office of the Federal Bureau of Investigation (“FBI”), announced the unsealing of an indictment charging ANTHONY SIROTKA, the former chief administrative officer of a FTE Networks, Inc. (“FTE”), along with the company’s former chief executive officer, Michael Palleschi and former chief financial officer, David Lethem, with conspiracy, securities fraud, wire fraud, improperly influencing the conduct of an audit and aggravated identity theft.  These charges stem from a years-long scheme to inflate FTE’s revenue and to conceal liabilities and expenses.  SIROTKA was arrested this morning and was presented today in Manhattan federal court.  Palleschi and Lethem were previously arrested based on an indictment charging them with the same crimes.

U.S. Attorney Damian Williams said:  “As alleged, Anthony Sirotka conspired with his co-defendants to lure investors with false claims about FTE’s financial condition and to make the company appear more profitable than it was.  Sirotka helped to deceive FTE’s auditors and the investing public, and now faces serious criminal charges for his alleged conduct.”

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

FTE was a telecommunications company based in Naples, Florida and Manhattan.  As of December 2017, its stock traded on the NYSE American market.  SIROTKA served as the company’s Chief Administrative Officer, Senior Vice President of Business Development, and Chief Business Development Officer.  Together with Palleschi and Lethem, among other things, SIROTKA caused FTE to recognize more than $13 million in fraudulent revenue.  This fraudulent revenue included more than $10 million in “unbilled” revenue that the defendants represented FTE had earned from services it had supposedly provided to a large customer that would not yet accept bills for those services.  FTE never provided any such services.  In addition, the defendants caused FTE to recognize approximately $2.6 million as an account receivable for which there was no support.  When FTE’s auditors said that the account receivable should be written off, SIROTKA and his co-conspirators created a fake email from a representative of the customer saying that the customer would “expedite payments” for more than $1.5 million for projects completed by FTE in 2016 and 2017.  The defendants caused this fake email to be sent to FTE’s auditors so that FTE could continue to recognize the receivable. 

As a result of the defendants’ fraudulent recognition of revenue, FTE’s financial statements overstated the company’s accounts receivable by between 18% and 120% for each of the quarters in 2017 and 2018 and by approximately 477% for 2016.

In a separate action, the United States Securities and Exchange Commission (“SEC”) filed civil charges against SIROTKA.  The SEC previously filed civil charges against Palleschi and Lethem.

*                *                *

SIROTKA, 55, of New York, New York, is charged with one count of conspiring to commit securities fraud, wire fraud, making false statements in SEC filings and improperly influencing the conduct of audits, which carries a maximum sentence of five years in prison; one count of securities 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 improperly influencing the conduct of audits, which carries a maximum sentence of 20 years in prison; and one count of aggravated identity theft, which carries a mandatory minimum term of two years in prison. 

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

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

This case is being handled by the Office’s Securities and Commodities Fraud Task Force. Assistant U.S. Attorneys James McMahon and Daniel Loss 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.

 

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[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, announced that SADICK EDUSEI KISSI was convicted today of three criminal counts he was charged with for his participation in a conspiracy based in the Republic of Ghana (“Ghana”) involving the theft of more than one million dollars.  KISSI was convicted after a jury trial before U.S. District Judge Paul A. Crotty which lasted approximately one week.  KISSI was previously arrested on February 5, 2021.  

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

From in or about 2014 through in or about February 2020, a criminal enterprise (the “Enterprise”) based in Ghana committed a series of romance scams against individuals and businesses located across the United States, including in the Southern District of New York.  The Enterprise conducted the romance scams by using electronic messages sent via email, text messaging, or online dating websites that deluded victims, many of whom were vulnerable older men and women who lived alone, into believing the victim was in a romantic relationship with a fake identity assumed by members of the Enterprise.  Once members of the Enterprise had gained the trust of the victims using the fake identity, they used false pretenses to cause the victims to wire money to bank accounts the victims believed were controlled by their romantic interests, when in fact the bank accounts were controlled by members of the Enterprise like KISSI. 

KISSI received money sent by victims of the Enterprise under false pretenses into personal bank accounts located in the Bronx, New York.  The defendant also received criminal proceeds from other U.S.-based members of the Enterprise by cash deliveries.  Once KISSI received these funds, he took out a percentage fee and then withdrew, transported, and laundered those criminal proceeds to other members of the Enterprise, in order to send those funds abroad to Ghana. 

From in or about 2015 through in or about 2020, KISSI controlled more than eight bank accounts that had deposits that totaled over approximately $1 million during that time period.  A substantial portion of the deposits consisted of large wire transfers and check or cash deposits from U.S.-based individuals and entities that were victims of schemes of the Enterprise.   

*                *                *

KISSI, 25, of Dickinson, North Dakota, was convicted by a jury of one count of conspiracy to commit money laundering, which carries a maximum sentence of 20 years in prison; one count of receipt of stolen money, which carries a maximum sentence of 10 years in prison; and one count of conspiracy to receive stolen money, which carries a maximum sentence of five years in prison.  KISSI was also acquitted of one count of conspiring to commit wire fraud.

KISSI will be sentenced before Judge Crotty at a later date.

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

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

The prosecution of this case is being handled by the Office’s Complex Frauds and Cybercrime Unit.  Assistant United States Attorneys Katherine C. Reilly, Mitzi Steiner, and Sagar Ravi are in charge of the prosecution.

Damian Williams, the United States Attorney for the Southern District of New York, announced that MICHAEL AVENATTI was sentenced today in Manhattan federal court by United States District Judge Jesse M. Furman to 48 months in prison for fraud and aggravated identity theft.  AVENATTI was previously found guilty on February 4, 2022, following a two-week jury trial.

U.S. Attorney Damian Williams said:  “Lawyers have a duty to be loyal and advocates for their clients.  Far from being a loyal advocate for his client, Michael Avenatti stole his client’s identity and her money in order to line his own pockets.  Now, Avenatti will serve a substantial prison sentence for his brazen crimes and betrayal of his client.”

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

AVENATTI met Stormy Daniels in February 2018, when she was seeking an attorney to assist her with respect to a non-disclosure agreement that she had earlier signed with President Donald Trump.  Daniels later signed a book deal to publish her memoir, and AVENATTI, pretending to act as her attorney and in her interests, stole a portion of the advance on that deal by directing her literary agent to send the money to a bank account AVENATTI controlled. 

Specifically, AVENATTI stole two installments of Daniels’ book advance, totaling $297,500.  AVENATTI sent to Daniels’ literary agent a fraudulent and unauthorized letter purporting to be from Daniels and appearing to bear her signature, which directed that future payments be sent to a bank account controlled by AVENATTI.  In fact, AVENATTI wrote the letter himself, never received authorization from Daniels, and caused Daniels’ signature to be copied and pasted from another document onto the letter without her consent.

After transmitting the fraudulent letter to Daniels’ literary agent, AVENATTI received an installment of Daniels’ advance, worth $148,750, and promptly spent the money to satisfy his own personal and business expenses.  When Daniels began inquiring of AVENATTI as to why she had not received the payment, AVENATTI lied to Daniels, telling her that her publisher had not made the payment.  Approximately one month after diverting the payment, after Daniels threatened to go directly to her publisher about the missing payment, AVENATTI obtained a personal loan to pay $148,750 to Daniels, so that Daniels would not realize that AVENATTI had previously taken and used Daniels’ money.

A short time later, AVENATTI pressured the publisher to make the next installment payment early, purportedly at Daniels’ request though in truth without her awareness.  AVENATTI soon received that installment, another payment of $148,750, which he again spent for his own purposes.  For months after he had stolen this installment, Daniels repeatedly asked AVENATTI about the missing payment and, after he again falsely claimed that the publisher had not made the payment, asked that AVENATTI, as her lawyer, assist her in obtaining the book payment.  AVENATTI continued to lie and claim that he was fighting with the publisher on her behalf when, as he knew, the publisher had made the payment early, but that he had stolen it.  At the same time, further to avoid discovery of his scheme, AVENATTI, purporting to act as Daniels’ attorney, told her publisher and literary agent not to respond to direct requests for information from Daniels.

*                *                *

In addition to the prison sentence, AVENATTI, 51, of Los Angeles, California, was sentenced to three years of supervised release, as well as restitution and forfeiture.  AVENATTI is currently serving a thirty-month sentence for extorting NIKE, Inc., imposed by Judge Paul G. Gardephe in United States v. Avenatti, 19 Cr. 373.  Thirty months of imprisonment in this case were imposed consecutively with AVENATTI’s other sentence, and the remainder will run concurrently.

Mr. Williams praised the work of the Federal Bureau of Investigation and the Special Agents of the United States Attorney’s Office for the Southern District of New York.

The cases are being handled by the Office’s Public Corruption Unit.  Assistant United States Attorneys Matthew Podolsky, Robert B. Sobelman, and Andrew A. Rohrbach 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 Office of the Federal Bureau of Investigation (“FBI”), announced that MORDECHAY MALKA and MATITYAU MALKA were convicted in White Plains federal court of kidnapping following a three-week jury trial.  The defendants, members of an extremist Jewish sect called Lev Tahor, participated in a scheme to kidnap a 14-year-old girl (“Minor-1”) and a 12-year-old boy (“Minor-2”) from their mother in Woodridge, New York in December 2018.  The kidnappers then smuggled the children across the U.S. border to Mexico, where they reunited Minor-1 with her adult “husband,” who she had religiously “married” when she was 13 years old.  After the children were recovered and returned to their mother, the defendants and their co-conspirators tried to kidnap the children a second time in March 2019.  Two co-conspirators, Nachman Helbrans and Mayer Rosner, were previously convicted of kidnapping and sexual exploitation charges in connection with this case after an October 2021 trial and have each been sentenced to 12 years in prison. 

According to the allegations contained in the Superseding Indictment, other court filings, and the evidence presented at trial:

MORDECHAY MALKA and MATITYAU MALKA are U.S. citizens and members of Lev Tahor, an extremist Jewish sect that has been located in several different jurisdictions, including New York, Israel, Canada, Mexico, and Guatemala.  In or about October 2018, the mother of Minor-1 and Minor-2 escaped from Lev Tahor’s compound in Guatemala and arrived in the United States in early November 2018.  Also in November 2018, a Brooklyn family court granted her sole custody of the children and prohibited the children’s father, a leader within Lev Tahor, from communicating with the children.

After the mother fled and settled in New York with her children, MORDECHAY MALKA and other Lev Tahor members devised a plan to return Minor-1 and Minor-2 to the Lev Tahor community.  Then, in December 2018, the kidnappers took the children in the middle of the night from a home in upstate New York and transported them through various states and, eventually, to Mexico.  MORDECHAY MALKA and his co-conspirators used disguises, aliases, drop phones, fake travel documents, an encrypted application, and a secret pact to execute on their kidnapping plan.  At the time of the kidnapping, Lev Tahor leadership was seeking asylum for the entire Lev Tahor community in the Islamic Republic of Iran. 

Following a three-week search involving hundreds of local, federal, and international law enforcement officers, Minor-1 and Minor-2 were recovered in Mexico and returned to their mother in New York. 

Then, in March 2019, members of Lev Tahor again tried to kidnap the children.  The leader of Lev Tahor, Nachman Helbrans, attempted another kidnapping of the children while incarcerated in Westchester, New York.  MATITYAU MALKA acted as the operative on the ground to execute the attempted kidnapping.

*                *                *

MORDECHAY MALKA, 27, of Guatemala, and MATITAU MALKA, 30, of Guatemala, were convicted of one count of conspiring to commit international parental kidnapping, to unlawfully use a means of identification, and to enter by false pretenses the secure area of an airport, which carries a maximum sentence of five years in prison.  MORDECHAY MALKA was also convicted of two counts of international parental kidnapping, which carries a maximum sentence of three years in prison for each count.  MATITYAU MALKA was also convicted of one count of attempted international parental kidnapping, which carries a maximum sentence of three years in prison for each count. 

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 work of the FBI, United States Customs and Border Protection, the Department of State, the Transportation Security Administration, the New York State Police, the Rockland County Sheriff’s Department, the Sullivan County District Attorney’s Office, the Village of Spring Valley Police Department, Special Agents with the U.S. Attorney’s Office for the Southern District of New York, and our law enforcement partners in Mexico, Guatemala, Canada, and Israel.

This case is being handled by the Office’s White Plains Division.  Assistant United States Attorneys Sam Adelsberg, Jamie Bagliebter, Jim Ligtenberg, and Daniel Tracer, and paralegal specialist Shannon Becker, are in charge of the prosecution. 

Damian Williams, the United States Attorney for the Southern District of New York, announced today the arrest of TONG HYON SUH, a/k/a “Jason Suh.”  SUH is charged with communicating online with an individual he believed to be a 14-year-old girl and attempting to meet the girl to engage in sexual activities and record the activities.  SUH was presented today before U.S. Magistrate Judge Andrew E. Krause in White Plains federal court and detained.

U.S. Attorney Damian Williams said:  “Suh’s behavior is the nightmare of every parent. He attempted to exploit the most vulnerable in our society. This case underlines the urgent need for law enforcement to continue its efforts to protect children from those who prey on them.”

According to the allegations in the Complaint[1] filed yesterday in White Plains federal court:

Beginning on April 24, 2022, a detective with the Greenwich Police Department (“Detective-1”), who was posing as a 14-year-old girl named “Megan,” communicated via the social platform, Kik, with TONG HYON SUH, a/k/a “Jason Suh.” During the communications, SUH, who was using the Kik user name “suhjason,” identified himself as a 45-year-old Korean male living in New York City and indicated that he wanted to meet with “Megan” for the purpose of having sex.  Detective-1 told SUH that she was a 14-year-old female from Connecticut. During the communications, SUH sent various photos of himself showing his face.

During their communications, which occurred from April 24, 2022 to May 27, 2022, among other things, SUH told Detective-1 that he “find[s] the age gap hot tbh” and “tbh on the down low I want a young submissive sl*t.” SUH requested pictures from “Megan.” For example, he told her, “So sneak in a bathroom break pic. I love a good sl*t.”

On April 26, 2022, SUH discussed meeting in person. He asked “Megan” for some “sl*tty pics” that she could “delete after taking.” During the communications, SUH referenced other teenage girls with whom he had engaged in sexual activity.  On or about May 2, 2022, SUH told “Megan” that he wanted to film them engaging in sexual acts and he continued to request pictures. 

On or about May 20, 2022, an FBI Special Agent acting in an undercover capacity as “Megan,” spoke to SUH by phone.  During the call, SUH identified himself as “Daddy” and “Jason.”  SUH stated that he was born in 1977, is a New York attorney with an office in the Bronx, and has been a lawyer since he was 26 years old.

SUH and “Megan” spoke again on May 24, 2022.  SUH and “Megan” discussed meeting and SUH said he would rent a residence and take the train to Greenwich, Connecticut. He said that he would use a ride service to pick “Megan” up at her house, and then they would travel together to the rented residence, where they would engage in sexual activity and smoke marijuana. During the conversation, “Megan” requested that SUH bring condoms, lollipops and marijuana, and wear a suit. “Megan” gave SUH an address in Greenwich, Connecticut and told him that she lived in an apartment located at that address.

After the May 24, 2022 phone call, SUH told “Megan” that they should meet on Friday, May 27, 2022. SUH said that he and “Megan” would use a ride service to go to the residence he rented in Stamford, Connecticut.

A public database for New York attorney registration information indicates that a “TONG-HYON SUH” is registered as an active attorney in New York with a business address in the Bronx. Additionally, the database indicates that “TONG-HYON SUH” was admitted to the New York bar on or about November 19, 2003.

On May 27, 2022, at approximately 3:31 p.m., TONG HYON SUH, a/k/a “Jason Suh,”  arrived at the Metro North train station in Greenwich, Connecticut on a northbound Metro North train after passing through Westchester County.  SUH was wearing a suit and carrying a black briefcase and a red and white shopping bag. Law enforcement observed SUH enter the rear passenger seat of a black Toyota Highlander and depart the train station.

At approximately 3:50 p.m., TONG HYON SUH, a/k/a “Jason Suh,” the defendant, arrived at the address provided by “Megan.”  When SUH entered the building located at that address, detectives with the Greenwich Police Department arrested him. After SUH’s arrest, the detectives retrieved a black briefcase and a red and white shopping bag from the vehicle in which SUH was riding.  An inventory search of the briefcase and bag revealed that they contained, among other things, a laptop computer, a thumb drive, sneakers, matches, marijuana, toiletries, clothing, an unopened package of lollipops, and six condoms.

Following his arrest, TONG HYON SUH, a/k/a “Jason Suh,” was charged in Stamford Superior Court.

There may be other victims of this alleged conduct.  If you have information to report, contact the Federal Bureau of Investigation through its toll-free Tip Line at 1-800-CALL-FBI

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SUH, 45 of Bronx, New York, is charged with one count of attempted sexual exploitation of a minor, which carries a minimum sentence of 15 years in prison and a maximum sentence of 30 years in prison, and one count of attempted enticement of a minor, which carries a minimum sentence of 10 years in prison and a maximum sentence of life in prison. 

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

Following today’s presentment, Judge Krause ordered that SUH be detained.

Mr. Williams praised the efforts of the Federal Bureau of Investigation, Connecticut State’s Attorneys Office, Greenwich Police Department, and the Westchester County Safe Streets Task Force, which is comprised of special agents and task force officers from the FBI, U.S. Probation, New York State Police, New York State Department of Corrections and Community Supervision, Putnam County Sheriff's Office, Westchester County DAs Office, Rockland County DAs Office, NYPD, Westchester County PD, and the Yonkers, New Rochelle, Mount Vernon, Greenburgh, White Plains, Peekskill, Ramapo, and Clarkstown Police Department. He added that the investigation is ongoing.  

The prosecution is being handled by the Office’s White Plains Division.  Assistant United States Attorneys Jennifer N. Ong and Marcia S. Cohen are in charge of the prosecution.  

 

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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 MANSUR MOHAMED SURUR, a/k/a “Mansour,” a Kenyan citizen, pled guilty to conspiring to traffic 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.  SURUR also pled guilty to conspiring to distribute heroin to a buyer located in the United States.

Two of SURUR’s co-defendants, MOAZU KROMAH, a/k/a “Ayoub,” a/k/a “Ayuba,” a/k/a “Kampala Man,” a citizen of Liberia, and AMARA CHERIF, a/k/a “Bamba Issiaka,” a citizen of Guinea, previously pled guilty on March 30, 2022, and April 27, 2022, respectively to conspiring to traffic in rhinoceros horns and elephant ivory, as well as substantive charges of trafficking in rhinoceros horns.  The remaining defendants, BADRU ABDUL AZIZ SALEH, a/k/a “Badro,” and ABDI HUSSEIN AHMED, a/k/a “Abu Khadi,” are both citizens of Kenya.  SALEH is in custody in Kenya based on a U.S. extradition request, and AHMED remains a fugitive.  The U.S. Department of State has offered a reward of up to $1,000,000 for information leading to his arrest and/or conviction, and any information may be provided to FWS_TIPS@fws.gov or by calling 1-844-FWS-TIPS.  

U.S. Attorney Damian Williams said:  “The protection of endangered wildlife and natural resources is a crucial and important priority for my Office.  These defendants were responsible for furthering an industry that illegally slaughters species protected by international agreements around the world.  One of these defendants also engaged in a narcotics conspiracy involving a large quantity of heroin.  Thanks to the tireless efforts of the U.S. Fish and Wildlife Service and the Drug Enforcement Administration, these defendants have now pled guilty to the serious and destructive crimes they committed.”

According to the charging and other documents filed in the case, as well as statements made during the plea and other 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, SURUR, and others 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 rhinoceros horns and elephant ivory for delivery to foreign buyers, including certain rhinoceros horns to a buyer represented to be in Manhattan, in packaging that concealed the horns 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 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 previously was expelled to the United States from Uganda, while CHERIF and SURUR were extradited from Senegal and Kenya, respectively.  The defendants have been detained since their arrest and arrival in this country.

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KROMAH, 52; CHERIF, 57; and SURUR, 62, each pled guilty to one count of conspiracy to commit wildlife trafficking, which carries a maximum sentence of five years in prison.  In addition, KROMAH and CHERIF both pled to two counts of wildlife trafficking, each of which carries a maximum sentence of five years in prison, and SURUR also pled guilty to one count of conspiracy to distribute and possess with intent to distribute one kilogram or more of heroin, which carries a maximum sentence of life in prison. 

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

Mr. Williams praised the outstanding investigative work of the 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 United States 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 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 NATHANIEL CHASTAIN, a former product manager at Ozone Networks, Inc. d/b/a OpenSea (“OpenSea”), with wire fraud and money laundering in connection with a scheme to commit insider trading in Non-Fungible Tokens, or “NFTs,” by using confidential information about what NFTs were going to be featured on OpenSea’s homepage for his personal financial gain.  CHASTAIN was arrested this morning in New York, New York and will be presented today in the United States District Court for the Southern District of New York.

U.S. Attorney Damian Williams said:  “NFTs might be new, but this type of criminal scheme is not.  As alleged, Nathaniel Chastain betrayed OpenSea by using its confidential business information to make money for himself.  Today’s charges demonstrate the commitment of this Office to stamping out insider trading – whether it occurs on the stock market or the blockchain.”

FBI Assistant Director-in-Charge Michael J. Driscoll said:  “In this case, as alleged, Chastain launched an age-old scheme to commit insider trading by using his knowledge of confidential information to purchase dozens of NFTs in advance of them being featured on OpenSea’s homepage. With the emergence of any new investment tool, such as blockchain supported non-fungible tokens, there are those who will exploit vulnerabilities for their own gain. The FBI will continue to aggressively pursue actors who choose to manipulate the market in this way.”

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

This case concerns insider trading in NFTs on OpenSea, the largest online marketplace for the purchase and sale of NFTs. In violation of the duties of trust and confidence he owed to his employer, OpenSea, CHASTAIN exploited his advanced knowledge of what NFTs would be featured on OpenSea’s homepage for his personal financial gain.

As part of his employment, CHASTAIN was responsible for selecting NFTs to be featured on OpenSea’s homepage. OpenSea kept confidential the identity of featured NFTs until they appeared on its homepage. After an NFT was featured on OpenSea’s homepage, the price buyers were willing to pay for that NFT, and for other NFTs made by the same NFT creator, typically increased substantially.

From at least in or about June 2021 to at least in or about September 2021, CHASTAIN used OpenSea’s confidential business information about what NFTs were going to be featured on its homepage to secretly purchase dozens of NFTs shortly before they were featured. After those NFTs were featured on OpenSea, CHASTAIN sold them at profits of two- to five-times his initial purchase price. To conceal the fraud, CHASTAIN conducted these purchases and sales using anonymous digital currency wallets and anonymous accounts on OpenSea.

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CHASTAIN, 31, of New York, New York is charged with one count of wire fraud and one count of money laundering, each of which carries a maximum sentence of 20 years in prison. 

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

Mr. Williams praised the outstanding work of the FBI. Mr. Williams also thanked the National Cryptocurrency Enforcement Team for their assistance in the investigation. 

This case is being handled by the Office’s Securities and Commodities Fraud Task Force. Assistant U.S. Attorneys Thomas S. Burnett and Nicolas Roos 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 in this release constitute only allegations, and every fact described should be treated as an allegation.

Damian Williams, the United States Attorney for the Southern District of New York, announced today that EPHRAIM JOSEPH ULLMANN pled guilty to conspiracy to commit wire fraud in connection with a scheme to defraud victims by telling them that they could obtain large loans or letters of credit if they provided up-front investments as collateral for the loans. In reality, there were no loans available and the victims were defrauded of more than $3 million that they invested in reliance on ULLMANN’s false statements. ULLMANN pled guilty before U.S. District Judge Richard M. Berman.

U.S. Attorney Damian Williams said:  “Ephraim Ullmann admitted to participating in a scheme to defraud victims of millions of dollars by making false statements about fictional opportunities to obtain loans and letters of credit. As a result of his guilty plea, Ullmann will now face a term of imprisonment. Our Office will continue to work with our law enforcement partners to investigate and prosecute those who defraud investors with false promises and lies.”

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

From at least in or about November 2014 through at least in or about 2020, ULLMANN participated in a scheme to defraud investors by falsely telling them that they could obtain letters of credit or loans if they provided initial funds as collateral for the loans. ULLMANN told one group of victims who had started a home building company that he had been hired by an American Indian tribe to use tribal bonds as collateral to obtain large loans for companies seeking financing. ULLMANN told these victims to send hundreds of thousands of dollars to a bank account he provided them, which he described as “seed capital” to obtain the tribal bond-backed loan. In reality, ULLMANN had not been hired by the tribe and there was no loan available for the victims. ULLMANN also sent multiple forged bank documents to the victims to deceive them into thinking that the promised financing was being provided.

In addition to the tribal bond scheme, ULLMANN told a separate group of victims who were involved with starting a new oil company that he could obtain a multi-million dollar letter of credit for the company if the victims provided initial funding. In reality, there was no letter of credit available, and the victims were fraudulently induced to wire millions of dollars to bank accounts identified by ULLMANN and his co-conspirators.

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ULLMANN, 58, of New York, New York, pled guilty to one count of conspiracy to commit wire fraud, which carries a maximum term of 20 years in prison, and agreed to restitution of $3,032,000.

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 outstanding investigative work of the Federal Bureau of Investigation.

The prosecution is being handled by the Office’s Money Laundering and Transnational Criminal Enterprises Unit.  Assistant United States Attorney Thane Rehn is in charge of the prosecution. 

Damian Williams, the United States Attorney for the Southern District of New York, announced today the conviction of EDWARD SHIN, then-CEO of a Pennsylvania-based bank (the “Bank”), for taking bribes in connection with the Bank’s issuance of loans that were guaranteed by the United States Small Business Administration (“SBA”).  SHIN was arrested in May of 2019 and charged with taking bribes by siphoning off a portion of commissions on SBA-guaranteed loans and causing the Bank to issue SBA-guaranteed and commercial loans to companies in which SHIN had a secret interest.  The charges are the culmination of a joint investigation by the Federal Deposit Insurance Corporation – Office of Inspector General (“FDIC-OIG”), Homeland Security Investigations (“HSI”), the SBA Office of the Inspector General (“SBA-OIG”), and the Office of the Special Inspector General for the Troubled Asset Relief Program (“SIGTARP”).  SHIN was convicted on all counts of the indictment in Manhattan federal court before U.S. District Judge John P. Cronan.

According to the allegations in the Criminal Complaint, Indictment, and statements made during trial in Manhattan federal: 

The SBA helps Americans start, build, and grow businesses by guaranteeing certain loans made by banks to help those businesses succeed.  Between 2009 and 2013, the Bank offered a range of financial products, including SBA-guaranteed loans to small businesses in the New York-New Jersey area, which the Bank could extend only on the condition that all aspects of those loans complied with SBA regulations and SBA’s standard operating procedures.  In particular, SBA regulations and procedures prohibited bank officers, including SHIN, from receiving any payments in connection with SBA-backed loans and prohibited banks from extending such loans to any institution in which a bank officer held an interest.

Notwithstanding these regulations, SHIN, then the CEO of the Bank, secretly solicited and received bribe payments in connection with SBA-guaranteed loans issued by the Bank and caused the Bank to extend SBA-guaranteed and commercial loans to companies in which SHIN had secret ownership interests.  Specifically, when the Bank issued business loans that did not involve the use of any actual broker, SHIN nonetheless arranged to have his longtime friend, a real estate and loan broker (the “Broker”), inserted unnecessarily into the transaction solely to generate a broker fee that could be shared with SHIN; in fact, the Broker did no actual work to earn a commission on those transactions, but split the “broker’s fee” with SHIN as an illegal kickback.

SHIN also arranged for the Bank to issue SBA-guaranteed loans to businesses in which he secretly retained an ownership interest, in violation of SBA regulations and procedures.  For example, in or about June 2010, the Bank issued an SBA-guaranteed loan for approximately $950,000 to a business in New York, New York.  Although documents submitted to the Bank for purposes of securing the loan did not mention SHIN’s financial interest, the business was secretly operated as a partnership between SHIN, the Broker, and another individual.   The loan ultimately went into default status, ultimately resulting in a loss to the Bank of approximately $591,278.60.    

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SHIN, 58, of Ambler, Pennsylvania, was convicted of one count of conspiracy to commit bank fraud and wire fraud affecting a financial institution, which carries a maximum potential sentence of 30 years in prison, one count of conspiracy to commit bank bribery, which carries a maximum potential sentence of five years in prison, one count of conspiracy to commit loan fraud, which carries a maximum potential sentence of five years in prison, another count of conspiracy to commit bank fraud, which carries a maximum potential sentence of 30 years in prison, and one count each of bank bribery, and theft of funds by a bank officer, each of which carries a maximum potential sentence of 30 years in prison.  The maximum potential sentences in this case are prescribed by Congress and are provided here for informational purposes only, as any sentencing of the defendant will be determined by the judge.

Mr. Williams praised the outstanding investigative work of the FDIC-OIG, HSI, SBA-OIG, and SIGTARP.

This case is being handled by the Office’s Money Laundering and Transnational Criminal Enterprises Unit.  Assistant U.S. Attorneys Tara La Morte, Anden Chow, Jessica Greenwood, and Daniel M. Tracer are in charge of the prosecution.

Damian Williams, United States Attorney for the Southern District of New York, John DeVito, Special Agent-in-Charge of the Bureau of Alcohol, Tobacco, Firearms and Explosives, New York Field Division (ATF), and Keechant L. Sewell, Police Commissioner for the City of New York (NYPD), announced today that RONALD ROGERS and ANAUNCIA ROGERS were charged with conspiracy to commit gun trafficking and gun trafficking, in connection with their involvement in a scheme to illegally obtain and transport firearms from Georgia for resale to residents of New York.  RONALD ROGERS was arrested yesterday traveling from Georgia to New York and was presented today before Magistrate Judge Robert W. Lehrburger in the Southern District of New York.  ANAUNCIA ROGERS was also arrested yesterday in Georgia and was presented today in the Northern District of Georgia.

U.S. Attorney Damian Williams said:  “As alleged, Anauncia and Ronald Rogers were in the business of illegally purchasing firearms in Georgia and transporting them to New York.  The two are alleged to have purchased 68 guns in their interstate weapons-buying scheme.  The importation of firearms into the tri-state exposes millions of New Yorkers to potentially lethal harm, and I commend the career prosecutors of this Office for partnering with the ATF and NYPD in the ongoing effort to rid our streets of illegal guns.”

ATF Special Agent-in-Charge John  DeVito said:  “One of ATF’s top priorities is to decrease the ever-growing threat to public safety caused by illegally trafficked firearms.  The men and women of the Joint Firearms Task Force worked diligently to identify, investigate and to apprehend Ronald and Anauncia Rogers in this case.  This investigation is yet another example of the collaborative work of the NYC Crime Gun Intelligence Center and all our investigative partners to reduce firearms trafficking and violent crime across our City and Nation.”

NYPD Commissioner Keechant L. Sewell said:  “The NYPD and our law enforcement partners at the ATF and the Office of the U.S. Attorney for the Southern District remain precisely focused on building strong cases against anyone who peddles illegal guns on the streets of New York.  Bringing these gun traffickers to justice is dangerous work, and I commend our dedicated investigators for identifying and taking into custody this husband-and-wife team, who will now face the full consequences of their alleged actions.”

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

From at least in or around September 2018 up to and including March 2022, RONALD ROGERS and ANAUNCIA ROGERS, both residents of the state of Georgia, engaged in a scheme to buy at least 68 firearms from at least seven federal firearms licensees (“FFLs”) in Georgia.  Over the course of the scheme, ANAUNCIA ROGERS personally purchased at least 47 firearms. In connection with each purchase, ANAUNCIA ROGERS attested that she was the true purchaser of the firearms, when in fact she was buying guns on behalf of her husband and co-defendant, RONALD ROGERS.  After ANAUNCIA ROGERS purchased the guns, RONALD ROGERS transported the firearms to New York City, usually by car, and illegally resold many of the guns to others.

To date, the NYPD has seized six firearms purchased in Georgia by ANAUNCIA ROGERS during arrests in New York City. 

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RONALD ROGERS, 26, and ANAUNCIA ROGERS, 26, both of Riverdale, Georgia, are charged with one count of conspiracy to commit gun trafficking, which carries a maximum penalty of five years in prison, and one count of gun trafficking, which also carries a maximum penalty of five years in prison.

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

Mr. Williams praised the outstanding work of the ATF and the NYPD for their assistance in this investigation.

This case is being handled by the Office’s General Crimes Unit.  Assistant United States Attorney Matthew J. King is in charge of the prosecution.

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

 

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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 in this release constitute only allegations, and every fact described should be treated as an allegation.

Damian Williams, the United States Attorney for the Southern District of New York, announced that RULESS PIERRE was sentenced to 84 months in prison yesterday in connection with his Ponzi-like securities fraud schemes that primarily targeted PIERRE’s own Haitian community in Rockland County, New York.  PIERRE was convicted of securities fraud, wire fraud, and structuring offenses after a jury trial in May 2021 before U.S. District Judge Sidney Stein, who imposed the sentence. 

U.S. Attorney Damian Williams said:  “Ruless Pierre violated the trust of his closest friends and fellow community members.  Pierre’s brazen lies caused many of his victims not only financial losses, but long-lasting emotional damage as well.  This sentence achieves some measure of justice for Pierre’s victims and puts fraudsters on notice that we will protect investors from those that would violate their trust.”   

According to the Complaint, the Indictment, and the evidence presented at trial: 

Investment Promissory Fraud

From at least November 2016 through October 2019, PIERRE solicited money from investors in Ruless Pierre Consulting Group (“RPCG”) by falsely promising them that he would earn a 20% return on their initial investment every 60 days through stock trading (the “Promissory Note Fraud”).  The investments were written down in documents known as “Investment Promissory Notes.”  These investment contracts generally promised that the investor would be paid 20% interest every 60 days and that the investor could withdraw all funds from the investment with 30 days’ notice.  Based on these documents and the false representations of PIERRE, the investors understood that their principal and interest were guaranteed.  

During the course of the investment fraud scheme, PIERRE fraudulently obtained over $2 million from approximately 100 investors.  After receiving money from investors, PIERRE deposited the money into one of his personal bank accounts or bank accounts of RPCG.  PIERRE then transferred the money to trading accounts, where he engaged in unprofitable day trading.  Despite his trading losses, PIERRE repeatedly and falsely represented to investors, including in investment statements containing fictitious balances, that the trading was profitable and that their investments were growing as promised.  In addition to losing their money, PIERRE also used investors’ funds to pay for personal expenses, including luxury vehicles.  Additionally, PIERRE further concealed the truth from investors by using money obtained from new investors to make redemption payments to previous investors, in Ponzi-like fashion.

The Franchise Investment Fraud

Beginning in or about November 2018, PIERRE began to offer investors, including some individuals who invested in his Promissory Note Fraud, the opportunity to purchase partnership interests in a partnership that would run three fast-food franchise locations (hereinafter, the “Franchise Investment Fraud”).   At the time, PIERRE did not own any of the fast-food franchises, but he was in discussions regarding purchasing them.  Each investment was memorialized in a document entitled “Silent Partnership Agreement.” 

The Silent Partnership Agreements promised the investors a 5% monthly return on the investment, in addition to a 40% pro rata share of the quarterly gross operating profit.  The minimum investment was $5,000. 

The Silent Partnership Agreements further provided that PIERRE was the General Partner, and that he was responsible “for the complete management, control, and policies related to the operation and conduct of the business.”

PIERRE received financial statements for the franchise locations, which showed minimal profits.  Nonetheless, PIERRE promised investors an unrealistic 5% monthly return on their investment.

In or about April 2019, PIERRE purchased one fast food franchise for approximately $50,000.  Pierre did not purchase the other franchises.

PIERRE deposited the fast-food franchise investors’ money in various bank accounts, which commingled the funds from the Franchise Investment Fraud with the Promissory Note Fraud.  In Ponzi-like fashion, PIERRE fraudulently misappropriated some of the fast-food franchise investors’ money to pay back investors in the Promissory Note Fraud.

In total, PIERRE raised at least $200,000 by selling the Silent Partnership Agreements to at least 18 investors.  Some of the investors were paid their five percent monthly distribution, but the vast majority of the investors were not been made whole.  The fast-food franchise went out of business in December 2019.

The Embezzlement Fraud Scheme and Structuring

In the another scheme, PIERRE embezzled money from his former employers.  From approximately 2007 until February 2016, PIERRE was the director of finance for two different hotels, which were owned by the same company (“Company-1”).  One hotel was located in the Palisades, New York (“Hotel-1”), while the other was located in Armonk, New York (“Hotel-2”) (collectively, “the Hotels”).   As the director of finance, PIERRE was the signatory on several bank accounts held in the name of the management companies that managed the Hotels (“Management Companies”). 

After August 2018, PIERRE no longer worked at either Hotel-1 or Hotel-2, but he regularly wrote himself checks payable to cash from the Management Companies’ bank accounts.  Specifically, from September 2018 through March 2019, PIERRE wrote over 70 checks to “cash” or “petty cash” from one of the bank accounts for Hotel-1, for over $300,000.

In addition, from March 2017 through 2019, PIERRE deposited large amounts of cash into his personal bank accounts in amounts that were generally less than $10,000.  The deposits were conducted at various bank locations and typically took place on the same day, consecutive days, or within a short period of time.  For example, in just seven months, from June 2018 through December 2018, PIERRE deposited approximately $225,612, through 138 cash deposits all under $10,000, into a bank account in the name of RPCG.

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In addition to the prison term, PIERRE, 52, of Nanuet, New York, was sentenced to 3 years of supervised release and was ordered to pay forfeiture in the amount of $3,701,893.91 and restitution to victims in the amount of $2,030,337.32.

Mr. Williams praised the outstanding investigative work of Homeland Security Investigations and thanked the United States Postal Inspection Service, the United States Internal Revenue Service, the New York City Police Department, and the New York City Sherriff’s Office, which assisted in the investigation.  Mr. Williams also thanked the Securities and Exchange Commission, which has brought and filed a civil enforcement action against the defendant. 

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

Damian Williams, the United States Attorney for the Southern District of New York, announced that ALEXANDER ARGUEDAS, a/k/a “Reckless,” was sentenced today to 32 years and 6 months in prison in connection with his leadership of the Black Stone Gorilla Gang, a violent street gang that operated in New York City and elsewhere, including for his participation in the December 9, 2012 murder of Gary Rodriguez, narcotics trafficking, firearms offenses, and other acts of violence.  On February 8, 2022, ARGUEDAS pled guilty to racketeering conspiracy, narcotics conspiracy, and a firearms offense.  U.S. District Judge Jesse M. Furman imposed today’s sentence.

U.S. Attorney Damian Williams said:  “Alexander Arguedas was one of the Godfathers of the Black Stone Gorilla Gang, a violent Bloods gang that flooded New York City neighborhoods with drugs, assaults, slashings, and shootings.  He groomed young men to become drug dealers, shooters, and gang members.  He murdered Gary Rodriguez in cold blood in December 2012, and he went on to commit a multitude of other heinous acts of violence.  Today’s lengthy sentence sends an important message to gang members who commit crimes that they will be apprehended and prosecuted to the fullest extent of the law.”

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

ALEXANDER ARGUEDAS, a/k/a “Reckless,” was previously one of the Godfathers of the Black Stone Gorilla Gang (“BSGG”), a racketeering enterprise that operated principally in the New York City metropolitan area and in the jails and prisons of New York City and the State of New York.  In order to enrich the enterprise, preserve and protect the power of the enterprise, and enhance its criminal operations, BSGG members and associates committed, conspired, attempted, and threatened to commit acts of violence, including murder and assaults; distributed and possessed with intent to distribute narcotics; committed robberies; engaged in bank fraud and wire fraud; and obtained, possessed, and used firearms.  BSGG members also attempted to evade prosecution by law enforcement authorities through acts of intimidation and violence against potential witnesses to crimes committed by the gang.  ARGUEDAS accepted responsibility for participating in a conspiracy to distribute quantities of cocaine, heroin, and cocaine base, and for using and carrying firearms in furtherance of drug trafficking.  ARGUEDAS also participated in the following acts of violence, among others:

On December 9, 2012, ARGUEDAS shot and killed Gary Rodriguez, 46, in the vicinity of 3089 Decatur Avenue in the Bronx.

On September 5, 2015, ARGUEDAS assaulted another inmate while in the custody of the New York State Department of Corrections, causing the victim to lose consciousness.

Between 2017 and 2018, ARGUEDAS got into a violent dispute with another BSGG member (“Victim-1”) about who would serve as a Godfather of the gang.  As a result of this conflict, in or around the Summer of 2018, ARGUEDAS ordered another BSGG member to fire shots at Victim-1 during a BSGG meeting in a public park in the vicinity of Olinville Avenue and East Gun Hill Road in the Bronx, New York.

On August 27, 2018, ARGUEDAS ordered co-defendant JAHVONNE CHAMBERS, a/k/a “JV”, who was incarcerated in the New York City Department of Corrections, to use a scalpel to slash a rival gang member housed in the same facility (“Victim-2”).

On November 12, 2019, ARGUEDAS and co-defendant TYERANCE MICKEY, a/k/a “Hoodlum,” participated in a brutal assault of a disfavored BSGG member (“Victim-3”).  During the assault, ARGUEDAS placed a plastic bag over Victim-3’s head in an attempt to suffocate Victim-3, and MICKEY hit Victim-3 over the head with a chair.  As a result of the assault, Victim-3 suffered a broken arm and substantial bruising to Victim-3’s face and body.

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In addition to his prison term, ARGUEDAS, 32, of the Bronx, New York, was sentenced to five years of supervised release.

Mr. Williams praised the outstanding investigative work of the Drug Enforcement Administration, Homeland Security Investigations, the Special Agents of the U.S. Attorney’s Office for the Southern District of New York, the New York City Police Department, and the New York City Department of Corrections.

This case is being handled by the Office’s Violent and Organized Crime Unit.  Assistant United States Attorneys Andrew K. Chan, Brandon D. Harper, Emily A. Johnson, Danielle R. Sassoon and Special Assistant United States Attorney Jaclyn M. Wood are in charge of the prosecution.

Merrick B. Garland, the United States Attorney General, Damian Williams, the United States Attorney for the Southern District of New York, Kenneth A. Polite, Jr., Assistant Attorney General of the Justice Department’s Criminal Division, Vanessa Roberts Avery, U.S. Attorney of the District of Connecticut, Luis Quesada, Assistant Director of the Federal Bureau of Investigation’s Criminal Investigative Division, and Gary Barksdale, Chief Postal Inspector of the United States Postal Inspection Service, announced that Glencore International A.G. (Glencore) pled guilty today in the Southern District of New York to violations of the Foreign Corrupt Practices Act (FCPA).  In addition, as part of a separate resolution, Glencore Ltd., pled guilty in the District of Connecticut to a commodity price manipulation conspiracy.  Together, Glencore and Glencore Ltd., both part of a multi-national commodity trading and mining firm headquartered in Switzerland, agreed to pay over $1.1 billion to resolve the government’s investigations into bribery and commodity and price manipulation.   These guilty pleas are part of coordinated resolutions with criminal and civil authorities in the U.S., U.K., and Brazil.

Attorney General Merrick B. Garland said:  “The rule of law requires that there not be one rule for the powerful and another for the powerless; one rule for the rich and another for the poor.  The Justice Department will continue to bring to bear its resources on these types of cases, no matter the company and no matter the individual.”

U.S. Attorney Damian Williams said:  “The scope of this criminal bribery scheme is staggering.  Glencore paid bribes to secure oil contracts.  Glencore paid bribes to avoid government audits.  Glencore bribed judges to make lawsuits disappear.  At bottom, Glencore paid bribes to make money—hundreds of millions of dollars.  And it did so with the approval, and even encouragement, of its top executives.  The criminal charges filed against Glencore in the Southern District of New York are another step in making clear that no one – not even multinational corporations—is above the law.”

Assistant Attorney General Kenneth A. Polite, Jr. said: “Glencore’s guilty pleas demonstrate the Department’s commitment to holding accountable those who profit by manipulating our financial markets and engaging in corrupt schemes around the world.  In the foreign bribery case, Glencore International A.G. and its subsidiaries bribed corrupt intermediaries and foreign officials in seven countries for over a decade. In the commodity price manipulation scheme, Glencore Ltd. undermined public confidence by creating the false appearance of supply and demand to manipulate oil prices.”

U.S. Attorney Vanessa Roberts Avery said: “Glencore’s market price manipulation threatened not just financial harm, but undermined participants’ faith in the commodities markets’ fair and efficient function that we all rely on.  This guilty plea, and the substantial financial penalty incurred, is an appropriate consequence for Glencore’s criminal conduct, and we are pleased that Glencore has agreed to cooperate in any ongoing investigations and prosecutions relating to their misconduct, and to strengthen its compliance program company-wide.  I thank both our partners at the U.S. Postal Inspection Service for their hard work and dedication in investigating this sophisticated set of facts and unraveling this scheme, and the Fraud Section, with whom we look forward to continuing our fruitful partnership of prosecuting complex financial and corporate criminal cases.

FBI Assistant Director Luis Quesada said:  “Today’s guilty pleas by Glencore entities show that there is no place for corruption and fraud in international markets.  Glencore engaged in long-running bribery and price manipulation conspiracies, ultimately costing the company over a billion dollars in fines. The FBI and our law enforcement partners will continue to investigate criminal financial activities and work to restore the public’s trust in the marketplace.”

USPIS Chief Postal Inspector Gary Barksdale said:  “The idea of fair and honest trade is at the bedrock of American commerce. It is insult to our shared traditions and values when individuals and corporations use their power, wealth, and influence to stack the deck unfairly in their own favor.  The resulting guilty plea by Glencore Limited demonstrates the tenacity of the U.S. Postal Inspection Service and its law enforcement partners in holding criminals accountable who try to enrich themselves by undermining the forces of supply and demand.”

The FCPA Case

According to the Information filed in the Southern District of New York, statements made in court, as well as other publicly-filed documents in this case:

Glencore, acting through its employees and agents, engaged in a conspiracy for over a decade to pay more than $100 million to third-party intermediaries, while intending that a significant portion of these payments would be used to pay bribes to officials in several countries, including Nigeria, Cameroon, Ivory Coast, Equatorial Guinea, Brazil, Venezuela, and the Democratic Republic of the Congo (DRC).

Between approximately 2007 and 2018, Glencore and its subsidiaries caused approximately $79.6 million in payments to be made to intermediary companies in order to secure improper advantages to obtain and retain business with state-owned and state-controlled entities in West Africa, including Nigeria, Cameroon, Ivory Coast, and Equatorial Guinea. Glencore concealed the bribe payments by entering into sham consulting agreements, paying inflated invoices, and using intermediary companies to make corrupt payments to foreign officials. For example, in Nigeria, Glencore and Glencore’s U.K. subsidiaries entered into multiple agreements to purchase crude oil and refined petroleum products from Nigeria’s state-owned and state-controlled oil company. Glencore and its subsidiaries engaged two intermediaries to pursue business opportunities and other improper business advantages, including the award of crude oil contracts, while knowing that the intermediaries would make bribe payments to Nigerian government officials to obtain such business. In Nigeria alone, Glencore and its subsidiaries paid more than $52 million to the intermediaries, intending that those funds be used, at least in part, to pay bribes to Nigerian officials.

In the DRC, Glencore admitted that it conspired to corruptly offer and pay approximately $27.5 million to third parties, while intending for a portion of the payments to be used as bribes to DRC officials, in order to secure improper business advantages. Glencore also admitted to bribery of officials in Brazil and Venezuela. In Brazil, the company caused approximately $147,202 to be used, at least in part, as corrupt payments for Brazilian officials. In Venezuela, Glencore admitted to conspiring to secure improper business advantages by paying over $1.2 million to an intermediary company that made corrupt payments for the benefit of a Venezuelan official.

In July 2021, a former senior trader in charge of Glencore’s West Africa desk for the crude oil business pled guilty to one count of conspiracy to violate the FCPA and one count of conspiracy to commit money laundering.

Under the terms of the plea agreement, which remains subject to Court approval, Glencore pled guilty to one count of conspiracy to violate the FCPA, agreed to a criminal fine of $428,521,173, and acknowledged criminal forfeiture liability in the amount of $272,185,792. Glencore also had charges brought against it by the U.K.’s Serious Fraud Office (SFO) and reached separate parallel resolutions with the Brazilian Ministério Público Federal (MPF) and the Commodity Futures Trading Commission (CFTC). Under the terms of the plea agreement, the department has agreed to credit the company over $256 million in payments that it makes to the CFTC, to the Court in the U.K. as well as to authorities in Switzerland, in the event that the company reaches a resolution with Swiss authorities within one year.

The department reached its agreement with Glencore based on a number of factors, including the nature, seriousness, and pervasiveness of the offense conduct, which spanned over a 10-year period, in numerous countries, and involved high-level employees and agents of the company; the company’s failure to voluntarily and timely disclose the conduct to the department; the state of Glencore’s compliance program and the progress of its remediation; the company’s resolutions with other domestic and foreign authorities; and the company’s continued cooperation with the department’s ongoing investigation. Glencore did not receive full credit for cooperation and remediation, because it did not at all times demonstrate a commitment to full cooperation, it was delayed in producing relevant evidence, and it did not timely and appropriately remediate with respect to disciplining certain employees involved in the misconduct. Although Glencore has taken remedial measures, certain of the compliance enhancements are new and have not been fully implemented or tested to demonstrate that they would prevent and detect similar misconduct in the future, necessitating the imposition of an independent compliance monitor for a term of three years.

The Commodity Price Manipulation Case

According to court documents filed in the District of Connecticut, Glencore Ltd. operated a global commodity trading business, which included trading in fuel oil. Between approximately January 2011 and August 2019, Glencore Ltd. employees (including those who worked at Chemoil Corporation, which was majority-owned by Glencore Ltd.’s parent company and then fully-acquired in 2014) conspired to manipulate two benchmark price assessments published by S&P Global Platts (Platts) for fuel oil products, specifically, intermediate fuel oil 380 CST at the Port of Los Angeles (Los Angeles 380 CST Bunker Fuel) and RMG 380 fuel oil at the Port of Houston (U.S. Gulf Coast High-Sulfur Fuel Oil). The Port of Los Angeles is the busiest shipping port in the U.S. by container volume. The Port of Houston is the largest U.S. port on the Gulf Coast and the busiest port in the U.S. by foreign waterborne tonnage.

As part of the conspiracy, Glencore Ltd. employees sought to unlawfully enrich themselves and Glencore Ltd. itself, by increasing profits and reducing costs on contracts to buy and sell physical fuel oil, as well as certain derivative positions that Glencore Ltd. held. The price terms of the physical contracts and derivative positions were set by reference to daily benchmark price assessments published by Platts—either Los Angeles 380 CST Bunker Fuel or U.S. Gulf Coast High-Sulfur Fuel Oil—on a certain day or days plus or minus a fixed premium. On these pricing days, Glencore Ltd. employees submitted orders to buy and sell (bids and offers) to Platts during the daily trading “window” for the Platts price assessments with the intent to artificially push the price assessment up or down.

For example, if Glencore Ltd. had a contract to buy fuel oil, Glencore Ltd. employees submitted offers during the Platts “window” for the express purpose of pushing down the price assessment and hence the price of the fuel oil that Glencore Ltd. purchased. The bids and offers were not submitted to Platts for any legitimate economic reason by Glencore Ltd. employees, but rather for the purpose of artificially affecting the relevant Platts price assessment so that the benchmark price, and hence the price of fuel oil that Glencore Ltd. bought from, and sold to, another party, did not reflect legitimate forces of supply and demand.

According to court documents, between approximately September 2012 and August 2016, Glencore Ltd. employees conspired to manipulate the price of fuel oil bought from, and sold to, a particular counterparty, Company A, through private, bilateral contracts, by manipulating the Platts price assessment for Los Angeles 380 CST Bunker Fuel. Between approximately January 2014 and February 2016, Glencore Ltd. employees also undertook a “joint venture” with Company A, which involved buying fuel oil from Company A at prices artificially depressed by Glencore Ltd.’s manipulation of the Platts Los Angeles 380 CST Bunker Fuel benchmark. Finally, between approximately January 2011 and August 2019, Glencore Ltd. employees conspired to manipulate the price of fuel oil bought and sold through private, bilateral contracts, as well as derivative positions, by manipulating the Platts price assessment for U.S. Gulf Coast High-Sulfur Fuel Oil.

A former Glencore Ltd. senior fuel oil trader, Emilio Jose Heredia Collado, of Lafayette, California, pled guilty in March 2021 to one count of conspiracy to engage in commodities price manipulation in connection with his trading activity related to the Platts Los Angeles 380 CST Bunker Fuel price assessment. Heredia’s sentencing is scheduled for June 17, 2022.

Glencore Ltd. pleaded guilty, pursuant to a plea agreement, to one count of conspiracy to engage in commodity price manipulation. Under the terms of Glencore Ltd.’s plea agreement regarding the commodity price manipulation conspiracy, which remains subject to court approval, Glencore Ltd. will pay a criminal fine of $341,221,682 and criminal forfeiture of $144,417,203. Under the terms of the plea agreement, the department will credit over $242 million in payments that the company makes to the CFTC. Glencore Ltd. also agreed to, among other things, continue to cooperate with the department in any ongoing investigations and prosecutions relating to the underlying misconduct, to modify its compliance program where necessary and appropriate, and to retain an independent compliance monitor for a period of three years.

A number of relevant considerations contributed to the department’s plea agreement with Glencore Ltd., including the nature and seriousness of the offense, Glencore Ltd.’s failure to fully and voluntarily self‑disclose the offense conduct to the department, Glencore Ltd.’s cooperation with the department’s investigation, and the state of Glencore Ltd.’s compliance program and the progress of its remediation.

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A sentencing control date was scheduled in the Southern District of New York on October 3, 2022, before United States District Judge Lorna G. Schofield, who presided over Glencore’s guilty plea today.

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

The FCPA case is being prosecuted by Assistant U.S. Attorneys Michael McGinnis and Juliana Murray of the Southern District of New York, Trial Attorneys Leila Babaeva and James Mandolfo of the Justice Department’s Fraud Section, and Trial Attorney Michael Khoo of the Justice Department’s Money Laundering and Asset Recovery Section.

Damian Williams, the United States Attorney for the Southern District of New York, announced today that KARIM ELKORANY, a former communications specialist with the United Nations (“UN”) in Iraq, pled guilty before United States District Judge Naomi Reice Buchwald to sexually assaulting an internationally protected person and making false statements to cover up another sexual assault.  In connection with the plea, ELKORANY also admitted that he drugged and/or sexually assaulted seventeen additional victims. 

U.S. Attorney Damian Williams said:  “Karim Elkorany admitted today to drugging at least 19 victims, and sexually assaulting at least 13 of them while they were unconscious after he drugged them.  He committed many of his heinous crimes while employed by the United Nations.  Nothing can reclaim what Elkorany stole from his victims, but we hope the victims will take some measure of comfort in knowing that Elkorany has admitted to and been convicted of his abominable crimes.   We again urge anyone who thinks they may be victim of Elkorany to please contact the FBI at 1-800-CALL-FBI or tips.fbi.gov.”

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

Since at least in or about 2005 up to at least in or about April 2018, ELKORANY worked in international aid, development and/or foreign relations.  From in or about October 2013 up to in or about April 2016, ELKORANY worked for the UN Children’s Fund in Iraq.  From in or about July 2016 up to in or about April 2018, ELKORANY worked as a Communications Specialist for the UN in Iraq. 

In or about November 2016, ELKORANY drugged and sexually assaulted a woman (“Victim-1”) in Iraq, where he was stationed while working for the UN.  ELKORANY drugged Victim-1 and brought Victim-1 to his apartment.  While at ELKORANY’s apartment, ELKORANY sexually assaulted Victim-1 while she was unconscious.  In or around December 2016, Victim-1 reported the sexual assault to the UN.  The UN initiated an investigation, through which ELKORANY was notified of the substance of Victim-1’s allegations against him.

On or about November 3, 2017, special agents working with the New York Field Office of the Federal Bureau of Investigation (“FBI”) conducted a voluntary interview of ELKORANY outside of his residence in New Jersey.  During that interview, ELKORANY expressed familiarity with the nature and substance of the allegations made by Victim-1 to the UN, but falsely stated that the drugging and sexual assault by ELKORANY that Victim-1 had reported to the UN did not occur. 

ELKORANY also engaged in a pattern of similar conduct involving many other women.  Between in or around 2014 and in or around 2019, ELKORANY drugged and sexually assaulted a woman (“Victim-2”), who was a contractor for a UN organization at relevant times, in the United States and Iraq, among other locations, on multiple occasions.  In addition to Victim-1 and Victim‑2, ELKORANY drugged and sexually assaulted eleven additional victims between in or around 2002 and in or around 2016, and drugged six additional victims between in or around 2007 and 2016.

*                *                *

ELKORANY, 38, of West Orange, New Jersey, pled guilty to one count of making false statements to special agents of the FBI, and one count of assault of an internationally protected person.  The total maximum term of prison on these two counts is 15 years.  

The maximum potential sentences are prescribed by Congress and are provided here for informational purposes only, as sentencing of the defendant will be determined by the court.  ELKORANY is scheduled to be sentenced by Judge Buchwald on September 29, 2022.

Mr. Williams praised the outstanding work of the Federal Bureau of Investigation.  Mr. Williams also thanked the United States Department of State and the UN for their assistance.  Any individuals who believe they have information concerning ELKORANY or any similar conduct should contact the FBI at 1-800-CALL-FBI or tips.fbi.gov.

The case is being prosecuted by the Office’s Public Corruption Unit.  Assistant U.S. Attorneys Lara Pomerantz, Amanda L. Houle, Daniel C. Richenthal, and Robert B. Sobelman 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 a complaint charging FRANK GLASSNER, a principal of an executive compensation consulting firm based in Novato, California (the “Consulting Firm”), with securities fraud in connection with a scheme to commit insider trading based on material, nonpublic information regarding the upcoming public announcement that Kadmon Holdings, Inc. (“Kadmon”) – which GLASSNER and the consulting firm were advising – would be acquired by Sanofi, S.A. (“Sanofi”).  GLASSNER was arrested this morning in Novato, California and will be presented today in the United States District Court for the District of Northern California.

U.S. Attorney Damian Williams said:  “As an advisor to Kadmon Holdings, Frank Glassner is alleged to have illegally taken advantage of his access to nonpublic information regarding the company’s acquisition to front run trades for himself.  Glassner’s alleged attempts to illegally game the markets may have given him a profitable edge, but they also exposed him to a much riskier downside — criminal liability for insider trading.”

FBI Assistant Director-in-Charge Michael J. Driscoll said:  “We allege Glassner used confidential information he was privy to as a consultant to trade in advance of a company’s acquisition and then to cash in after the deal was publicly announced. This type of illicit action makes markets unfair and creates an atmosphere of distrust. Our work investigating insider trading hopefully restores faith for investors who need to believe in the process.”

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

Prior to its acquisition by Sanofi, Kadmon was a publicly-traded biopharmaceutical company that engaged in the discovery, development, and commercialization of small molecules and biologics with a focus on inflammatory and fibrotic diseases. Kadmon’s stock was traded under the ticker symbol “KDMN” on the NASDAQ.

Between July 2021 and September 2021, Kadmon engaged GLASSNER and the Consulting Firm to provide executive compensation consulting services related to the potential acquisition of Kadmon. In connection with this engagement, GLASSNER had access to material, non-public information, which he misappropriated and, in violation of the duties that he owed to Kadmon, used to trade Kadmon stock and call options. 

GLASSNER engaged in this trading between on or about August 3, 2021 and on or about August 23, 2021 – at the same time he was advising Kadmon about its potential acquisition. On September 8, 2021, Kadmon publicly announced that it had agreed to be acquired by Sanofi for a per-share price significantly above the share price at which Kadmon was trading. That day, Kadmon’s share price increased by approximately 71% and GLASSNER earned approximately $405,000 of realized and unrealized profits on the Kadmon stock and call options he had previously purchased. 

*                *                *

GLASSNER, 68, of Novato, California is charged with two counts of securities fraud, one of which carries a maximum sentence of 20 years in prison and one of which carries a maximum sentence of 25 years in prison. 

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

Mr. Williams praised the outstanding work of the FBI. Mr. Williams also thanked the U.S. Securities and Exchange Commission, which today filed a parallel civil action. 

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

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

 

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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 in this release constitute only allegations, and every fact described should be treated as an allegation.

Damian Williams, the United States Attorney for the Southern District of New York, announced that VICTOR RIVERA was sentenced today to 27 months in prison for conspiring to commit honest services fraud. RIVERA, who used to lead Bronx Parent Housing Network (“BPHN”), a non-profit organization that operated soup kitchens, homeless shelters, and affordable-housing facilities in New York City, schemed to enrich himself through bribes and kickbacks from BPHN’s contractors. RIVERA was sentenced by United States District Judge Sidney H. Stein.

U.S. Attorney Damian Williams said:  “Victor Rivera abused his position of authority at a non-profit established to help the most vulnerable in order to line his own pockets. For this egregious violation of trust, he is now sentenced to prison.”

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

RIVERA was the President and Chief Executive Officer of BPHN, which annually spent millions of dollars in public funds on real estate, security, cleaning, construction, and food expenses, among other costs related to the housing and social services BPHN provided. From at least in or about 2013 until in or about 2020, RIVERA engaged in a scheme to enrich himself and his relatives by soliciting and accepting bribes and kickbacks from contractors doing work related to or for BPHN. The scheme yielded RIVERA hundreds of thousands of dollars in illicit gains. 

*                *                *

In addition to his prison sentence, RIVERA, 62, of Stony Point, New York, was sentenced to two years of supervised release. RIVERA was also ordered to forfeit $1,249,158.93, and to pay BPHN $902,269.23 in restitution.

Mr. Williams praised the outstanding investigative work of the Special Agents of the United States Attorney’s Office for the Southern District of New York and the New York Department of Investigation. Mr. Williams also thanked the Internal Revenue Service for its assistance.

This case is being handled by the Office’s Money Laundering and Transnational Criminal Enterprises Unit. Assistant United States Attorneys David Abramowicz and Tara La Morte are in charge of the prosecution.

Damian Williams, the United States Attorney for the Southern District of New York, announced today that INIGO PHILBRICK, an art dealer specializing in post-war and contemporary fine art with galleries in London, United Kingdom, and Miami, Florida, was sentenced today to 84 months in prison in connection with a multi-year scheme to defraud various individuals and entities in order to finance his art business. U.S. District Judge Sydney H. Stein imposed today’s sentence.

U.S. Attorney Damian Williams said:  “Inigo Philbrick grew his purportedly successful art business by collateralizing and reselling fractional shares in high dollar contemporary art. Unfortunately, his success was built on brazen lies, including concealed ownership interests, fake documents, and even an invented art collector. When the house of cards fell apart, Philbrick fled for a remote island in the Pacific, leaving many of his victims without recourse. For his extensive fraud, Philbrick is now sentenced to a substantial prison term.” 

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

From approximately 2016 through 2019, to finance his art business, PHILBRICK engaged in a scheme to defraud multiple individuals and entities in the art market located in the New York metropolitan area and abroad.  PHILBRICK made material misrepresentations and omissions to art collectors, investors, and lenders to access valuable art and obtain sales proceeds, funding, and loans (the “Fraud Scheme”).  PHILBRICK knowingly misrepresented the ownership of certain artworks, for example, by selling a total of more than 100 percent ownership in an artwork to multiple individuals and entities without their knowledge; and by selling artworks and/or using artworks as collateral on loans without the knowledge of co-owners, and without disclosing the ownership interests of third parties to buyers and lenders. PHILBRICK furnished fraudulent contracts and records to investors to artificially inflate the artworks’ value and conceal his scheme, including a contract that listed a stolen identity as the seller.

Over the years, PHILBRICK obtained over $86 million in loans and sale proceeds in connection with the Fraud Scheme.  Artworks about which PHILBRICK made these fraudulent misrepresentations in furtherance of the Fraud Scheme include, among others, a 1982 painting by the artist Jean-Michel Basquiat titled “Humidity,” a 2010 untitled painting by the artist Christopher Wool, and an untitled 2012 painting by the artist Rudolf Stingel depicting the artist Pablo Picasso.  

By in or about the fall of 2019, PHILBRICK’s Fraud Scheme began to come to light as various investors and lenders learned about the fraudulent records PHILBRICK had provided and the material misrepresentations and omissions he had made.  By in or about mid-October, a lender officially notified PHILBRICK that he was in default of approximately a $14 million loan, and by November 2019, various investors had filed civil lawsuits in multiple jurisdictions regarding PHILBRICK’s Fraud Scheme in connection with various artworks.  At around the same time, PHILBRICK’s art galleries in Miami and London closed, and PHILBRICK stopped responding to legal process.  PHILBRICK fled the United States shortly before public reporting began about the lawsuits.  A fugitive, PHILBRICK resided in Vanuatu from approximately October 2019 until he was arrested there on June 11, 2020, in connection with this case.   

*                *                *

In addition to the prison term, PHILBRICK, 34, a U.S. citizen previously residing in London, United Kingdom, was sentenced to two years of supervised release.  PHILBRICK was further ordered to pay a forfeiture of $86,672,790. 

Mr. Williams praised the investigative work of the Federal Bureau of Investigation’s Art Crime Team.

This case is being handled by the Office’s Money Laundering and Transnational Criminal Enterprises Unit.  Assistant United States Attorneys Jessica K. Feinstein and Cecilia E. Vogel are in charge of the prosecution.

Damian Williams, the United States Attorney for the Southern District of New York, and Michael J. Driscoll, the Assistant Director-in-Charge of the New York Field Office of the Federal Bureau of Investigation (“FBI”), announced today that CHIBUNDU JOSEPH ANUEBUNWA, a citizen of Nigeria, was extradited from the United Kingdom and arrived in the United States this afternoon.  ANUEBUNWA was extradited on charges of conspiracy to commit wire fraud and wire fraud in connection with his alleged participation in a multimillion-dollar business email compromise campaign that targeted thousands of victims around the world, including in the United States.  ANUEBUNWA will be presented today before U.S. Magistrate Judge Katharine H. Parker.  The case is assigned to U.S. District Judge Paul A. Crotty.  In connection with the same conspiracy as ANUEBUNWA, co-defendant DAVID CHUKWUNEKE ADINDU was previously sentenced to 41 months in prison, and co-defendant ONYEKACHI EMMANUEL OPARA was previously extradited from South Africa and sentenced to 60 months in prison.

U.S. Attorney Damian Williams said:  “As alleged in the indictment, Chibundu Joseph Anuebunwa tried to steal money from thousands of businesses around the world by impersonating corporate executives and sending phony emails to company employees.  Today’s extradition should serve as a warning to those who think they can defraud victims in the United States from halfway around the world: the United States and its international partners will find you and hold you accountable no matter how long it takes.”

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

Between 2014 and 2016, ANUEBUNWA, OPARA, and ADINDU participated in business email compromise scams (“BEC scams”) targeting thousands of victims around the world, including in the United States.  As part of the BEC scams, emails were sent to employees of various companies directing that funds be transferred to specified bank accounts.  The emails purported to be from supervisors at those companies or third-party vendors that did business with those companies.  The emails, however, were not legitimate.  Rather, they were either from email accounts with a domain name that was very similar to a legitimate domain name, or the metadata in the emails had been modified so that the emails appeared as if they were from legitimate email addresses.  After victims complied with the fraudulent wiring instructions, the transferred funds were quickly withdrawn or moved into different bank accounts.  In total, the BEC scams attempted to defraud millions of dollars from victims.

ANUEBUNWA and others carried out BEC scams by exchanging information regarding: (1) bank accounts used for receiving funds from victims; (2) email accounts used for communicating with victims; (3) scripts for requesting wire transfers from victims; and (4) lists of names and email addresses for contacting and impersonating potential victims.

*                *                *

ANUEBUNWA, 39, of Lagos, Nigeria, is charged with one count of conspiracy to commit wire fraud, which carries a maximum penalty of 20 years in prison, and one count of wire fraud, which also carries a maximum penalty of 20 years in prison. 

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

Mr. Williams praised the investigative work of the FBI and thanked the Yahoo E-Crime Investigations Team for their assistance.  The U.S. Department of Justice’s Office of International Affairs of the Department’s Criminal Division provided significant assistance in securing the defendant’s extradition from the United Kingdom. Mr. Williams also thanked the United Kingdom’s Crown Prosecution Service for their assistance in today’s extradition.

This case is being handled by the Office’s Complex Frauds and Cybercrime Unit.  Assistant United States Attorneys Andrew K. Chan and Daniel Loss 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.

 

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[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, announced that Arthur Hayes was sentenced today to six months of home detention, in connection with his violation of the Bank Secrecy Act (the “BSA”), through his willful failure to establish, implement, and maintain an anti-money laundering (“AML”) program at the cryptocurrency company he co-founded and owned, Bitcoin Mercantile Exchange or “BitMEX”.  U.S. District Judge John G. Koeltl imposed today’s sentence.

U.S. Attorney Damian Williams said:  “While building a cryptocurrency platform that profited him millions of dollars, Arthur Hayes willfully defied U.S. law that requires businesses to do their part to help in preventing crime and corruption.  He intentionally failed to implement and maintain even basic anti-money laundering policies, which allowed BitMEX to operate as a platform in the shadows of the financial markets. This Office will continue to vigorously enforce United States law intended to prevent money laundering through financial institutions, including cryptocurrency platforms.”

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

ARTHUR HAYES, together with BENJAMIN DELO and SAM REED, who have also pled guilty and are scheduled to be sentenced in the near-future, was one of the three co-founders and the CEO of BitMEX. 

BitMEX is an online cryptocurrency derivatives exchange that, during the relevant time period, had U.S.-based operations and served thousands of U.S. customers, notwithstanding false representations to the contrary by the company, including HAYES.  From at least September 2015, and continuing at least through the time of the Indictment in September 2020, HAYES willfully caused BitMEX to fail to establish and maintain an AML program, including a program for verifying the identify of BitMEX’s customers (or a “know your customer” or “KYC” program).  As a result of its willful failure to implement AML and KYC programs, BitMEX was in effect a money laundering platform.  For example, in May 2018, HAYES was notified of allegations that BitMEX was being used to launder the proceeds of a cryptocurrency hack.  Neither HAYES nor the company filed a suspicious activity report thereafter, nor did they implement an AML or KYC program in response. 

HAYES failed to institute AML or KYC programs at BitMEX despite closely following U.S. regulatory developments that made clear their legal obligation to do so if BitMEX operated in the United States, which it did.  Despite repeatedly stating that BitMEX did not serve U.S. customers, including to members of the press and others outside of BitMEX, HAYES knew that BitMEX’s purported withdrawal from the U.S. market in or about September 2015 was a sham, and that “controls” BitMEX put in place to prevent U.S. trading were an ineffective facade that did not, in fact, prevent users from accessing or trading on BitMEX from the United States. 

HAYES derived substantial profits from BitMEX, as a result of U.S.-based trading, and aggressively advertised the company’s lack of an AML or KYC program.  At various points in time, BitMEX’s website stated that “No real name or other advanced verification is required on BitMEX.”  Through at least August 2017, the platform’s registration page explicitly stated that first and last name were “not required” to register.

Because of the lack of KYC, the full scope of criminal conduct on BitMEX may never be known. The company, still owned by HAYES and his co-defendants, accepted a settlement with the Department of Treasury in which the Company neither admitted nor denied that that it had conducted more than $200 million in suspicious transactions, and that the Company had failed to file suspicious activity reports on nearly 600 specific suspicious transactions.

*                *                *

HAYES, 36, of Miami, Florida, was sentenced to six months of home detention and two years of probation.  Hayes also agreed to pay a fine of $10 million dollars representing his pecuniary gain from the offense.

Mr. Williams praised the outstanding investigative work of the Federal Bureau of Investigation’s New York Money Laundering Investigation Squad, and thanked the attorneys and investigators at the Commodity Futures Trading Commission whose expertise and diligence were integral to the development of this case.

The prosecution is being handled by the Office’s Money Laundering and Transnational Criminal Enterprises Unit.  Assistant U.S. Attorneys Jessica Greenwood, Samuel Raymond, and Thane Rehn are in charge of the prosecution. 

Damian Williams, the United States Attorney for the Southern District of New York, Michael J. Driscoll, the Assistant Director-in-Charge of the New York Office of the Federal Bureau of Investigation (“FBI”), and James F. Boyersmith, Special Agent-in-Charge of the Department of Justice Office of the Inspector General Miami Field Office, announced today that JOHN COSTANZO JR., a Drug Enforcement Administration (“DEA”) Special Agent, and MANUEL RECIO, a former DEA Assistant Special Agent-in-Charge, were indicted in Manhattan federal court with conspiracy to bribe a public official, conspiracy to commit honest services wire fraud, and honest services wire fraud, for a scheme in which RECIO funneled tens of thousands of dollars to COSTANZO in exchange for COSTANZO providing sensitive law enforcement information to RECIO to assist RECIO in recruiting clients for defense lawyers. In addition, COSTANZO was charged with accepting a bribe from RECIO and RECIO was charged with giving a bribe to COSTANZO. COSTANZO and RECIO were arrested today and presented before Magistrate Judge Barbara Moses.  The case has been assigned to U.S. District Judge J. Paul Oetken.

U.S. Attorney Damian Williams said:  “The conduct alleged in the indictment violates the core duty of law enforcement officers to protect and serve the public, rather than to use their access to sensitive information to enrich themselves. As alleged, Manuel Recio provided substantial secret payments to John Costanzo Jr., and in exchange, received information about pending DEA investigations, sealed indictments, and impending arrests. It is critical for federal law enforcement officers to preserve the integrity of ongoing investigations and not divulge confidential information to the private sector in exchange for financial benefits.”

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

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

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

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

*                *                *

COSTANZO JR., 47, of Arlington, Virginia, and RECIO, 53, of Miami, Florida, are each charged with one count of conspiracy to commit bribery, which carries a maximum term of five years in prison, and one count of receiving or paying a bribe, respectively, which carries a maximum term of 15 years in prison. COSTANZO and RECIO are also charged with one count of conspiracy to commit honest services wire fraud and one count of honest services wire fraud, each of which counts carries a maximum term of 20 years in prison.

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

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

The prosecution is being handled by the Office’s Money Laundering and Transnational Criminal Enterprises Unit.  Assistant United States Attorneys Thane Rehn and Sheb Swett are in charge of the prosecution. 

 

---

[1] 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 FRED ASANTE was sentenced to 108 months for his role as the top U.S.-based money launderer for a criminal enterprise based in the Republic of Ghana (“Ghana”) that engaged in fraud schemes that stole tens of millions of dollars from victims across the United States.  These fraud schemes included business email compromises, romance scams targeting elderly victims, and fraud schemes related to the COVID-19 pandemic.  ASANTE was arrested on February 17, 2021 in Virginia and pled guilty to conspiracy to commit money laundering on February 16, 2022 before District Judge Jed S. Rakoff, who imposed today’s sentence.

U.S. Attorney Damian Williams said:  “Fred Asante set up companies that appeared to be involved in legitimate business, but in reality they were simply fronts that he used to receive and launder millions of dollars for a criminal enterprise in Ghana that defrauded American businesses and individuals through online scams.  Asante will now serve a substantial term in prison for his money laundering operation.  We will continue to work tirelessly with our law enforcement partners to hold accountable those who participate in the money side of the fraud business.”

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

From at least September 2016 through when he was arrested in February 2021, ASANTE was a member of a criminal enterprise (the “Enterprise”) based in Ghana that committed a series of frauds against individuals and businesses located across the United States, including in the Southern District of New York.  The frauds perpetrated by the Enterprise have consisted of, among other frauds, business email compromises, romance scams, and fraud schemes related to the novel coronavirus/COVID-19 pandemic.  First, the objective of the Enterprise’s business email compromise fraud scheme was to trick and deceive businesses into wiring funds into accounts controlled by the Enterprise through the use of email accounts that “spoofed” or impersonated employees of a victim company or third parties engaged in business with a victim company.  Second, the Enterprise conducted the romance scams by using electronic messages sent via email, text messaging, or online dating websites that deluded victims, many of whom were vulnerable older men and women who lived alone, into believing the victim was in a romantic relationship with a fake identity assumed by members of the Enterprise.  Once members of the Enterprise had gained the trust of the victims using the fake identity, they used false pretenses to cause the victims to wire money to bank accounts the victims believed were controlled by their romantic interests, when in fact the bank accounts were controlled by members of the Enterprise.  Finally, the Enterprise submitted fraudulent loan applications through a loan program of the United States Small Business Administration (the “SBA”) designed to provide relief to small businesses during the COVID-19 pandemic, namely the Economic Injury Disaster Loan (“EIDL”) Program.  The Enterprise submitted fraudulent EIDL applications in the names of actual companies to the SBA and when an EIDL loan was approved, the funds were ultimately deposited in bank accounts controlled by members of the Enterprise. 

ASANTE and other members of the Enterprise received fraud proceeds from victims of the Enterprise in dozens of business bank accounts that they controlled in New York, New Jersey, and Virginia.  The business bank accounts were opened in the names of companies formed by ASANTE and other members of the Enterprise that were purportedly involved in, among other things, automobile sales, food imports and exports, and freight trucking and shipping.  Once ASANTE received fraud proceeds in bank accounts under his control, he withdrew, transported, and laundered those fraud proceeds to other members of the Enterprise abroad.  ASANTE primarily laundered the fraud proceeds through his businesses by using the proceeds to purchase automobiles, food products, and other goods from U.S.-based suppliers and distributors of such products and shipping those products to Ghana and elsewhere.  These transactions had the appearance of legitimate business transactions when, in fact, the products had been purchased using the proceeds of fraud schemes.  This trade-based money laundering scheme was designed to obscure the origin of the fraud proceeds as well as the identity of the ultimate beneficiaries of these schemes. 

In total, ASANTE opened and maintained 19 bank accounts at more than 10 different banks as part of his money laundering operation.  These bank accounts had deposits that totaled approximately $36.4 million during the 4.5-year period from September 2016 through January 2021, which included fraud proceeds from more than 80 identified victims.  

*                *                *

In addition to the prison term, ASANTE, 37, of Fredericksburg, Virginia, was sentenced to three years of supervised release.  ASANTE was also ordered to pay forfeiture in the amount of $647,488 and restitution in the amount of  $2,292,486.71.    

ASANTE’s co-defendant, LORD ANING, was previously sentenced to two years in prison by Judge Rakoff on February 28, 2022. 

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

The prosecution of this case is being handled by the Office’s Complex Frauds and Cybercrime Unit.  Assistant United States Attorneys Sagar K. Ravi, Katherine Reilly, and Mitzi Steiner are in charge of the prosecution.

Damian Williams, the United States Attorney for the Southern District of New York, announced that JOSEPH CIMINO was sentenced today to 18 months in prison, in connection with his scheme to induce victims to invest several hundred thousand dollars into his Hudson Valley tequila business based on false information about the company’s finances.  CIMINO previously pled guilty to committing securities fraud and wire fraud in connection with his misrepresentations to investors and misappropriation of investor funds.  U.S. District Judge Vincent L. Briccetti imposed today’s sentence in White Plains federal court.

U.S. Attorney Damian Williams said:  “Cimino doctored documents and provided phony information to dupe investors into handing over hundreds of thousands of dollars that he used in part to line his own pockets.  Now Cimino has been sentenced for his crimes.”

According to statements in the Complaint, Information, and other filings and statements at public court proceedings in the case:

In or about 2016 to 2018, CIMINO raised approximately $615,000 from approximately 16 investors.  To attract investors, CIMINO falsely inflated the amount of capital that he had raised from prior investors, and fraudulently altered an investor list to include several individuals who, in fact, had not contributed any funds.  CIMINO also falsely inflated his company’s sales.  For example, in July 2017, CIMINO claimed in an investor report that year-to-date sales totaled 3,410 cases of tequila, when the actual sales totaled only 350 cases.  Similarly, in October 2017, CIMINO falsely claimed that year-to-date sales totaled 6,035 cases, which was approximately five times the actual total.  CIMINO further claimed in October 2017 that his company would receive reimbursement for 800 cases of tequila supposedly destroyed at a Puerto Rican warehouse as a result of Hurricane Maria.  In reality, no inventory was destroyed in the hurricane, and the company lacked insurance.

CIMINO also misused a substantial portion of investor money that was intended to fund the operations of his tequila business for personal expenses, contrary to the company’s operating agreement.  For example, CIMINO transferred investor money to his personal bank account in order to subsidize his food, entertainment, and other living expenses.

*                *                *

In addition to the prison term, CIMINO, 58, of Warwich, New York, was sentenced to three years of supervised release.  CIMINO was further ordered to pay restitution to his victims in the amount of $615,000.02 and to forfeit $159,258.23 in fraud proceeds.  

Ms. Williams praised the investigative work of the Federal Bureau of Investigation and thanked the U.S. Securities and Exchange Commission for its assistance.

This case is being handled by the Office’s White Plains Division.  Assistant United States Attorneys Benjamin Gianforti and Daniel Loss are in charge of the prosecution.

Damian Williams, the United States Attorney for the Southern District of New York, Catherine Hermsen, Assistant Commissioner, United States Food and Drug Administration Office of Criminal Investigations (“FDA-OIC”), Michael J. Driscoll, Assistant Director-in-Charge of the New York Field Division of the Federal Bureau of Investigation (“FBI”), and Thomas Walsh, Rockland County District Attorney, announced that GABRIEL LETIZIA, Jr., was sentenced in White Plains federal court to 60 months in prison for defrauding customers of his consumer products testing company and causing misbranded drugs to be introduced into interstate commerce.  United States District Judge Kenneth M. Karas imposed today’s sentence.  LETIZIA previously pled guilty before United States Magistrate Judge Paul E. Davison. 

U.S. Attorney Damian Williams said:  “For three decades, Gabriel Letizia defrauded AMA’s customers and jeopardized the safety of millions of consumers, all in the name of greed.  Thanks to our partners at FDA-OIC, the FBI, and the Rockland County District Attorney’s Office, he has now been sentenced to prison.”   

According to the allegations in the Indictment, the Superseding Information to which LETIZIA pled guilty, court filings, and statements made in court:

LETIZIA was the owner and executive director of AMA Laboratories, Inc. (“AMA”), a consumer product testing company in Rockland County, New York.  LETIZIA began operating AMA in the early 1980s, and became its sole owner in approximately 2003.

AMA purported to test the safety and efficacy of cosmetics, sunscreens, and other products on specified numbers of volunteer panelists for consumer products companies.  Clients of AMA used the test results to support their claims that their products were safe, effective, hypoallergenic, or provided a certain Sun Protection Factor (“SPF”), including after exposure to water.  AMA clients that manufactured sunscreens used the test results to comply with FDA regulations requiring sunscreen manufacturers to have their products tested and to maintain the test results for possible review by the FDA. 

From 1987 through April 2017, LETIZIA and AMA personnel operating at his direction defrauded AMA’s customers of more than $46 million by testing products on materially lower numbers of panelists than the numbers specified and paid for by AMA’s customers.  According to AMA employees, the majority of AMA’s tests contained fraudulent results, for two reasons.  First, at LETIZIA’s instruction, AMA personnel rarely tested products on the number of panelists requested by AMA’s clients.  Instead, AMA tested products on a far lower number of panelists, typically 20 or less, rather than the 50 for which the clients had paid.  AMA’s fees for tests were based, in part, on the number of panelists that were to participate in the study.  At LETIZIA’s direction, AMA sent its clients fraudulent test results in which AMA personnel included fictitious data for “phantom” panelists who had not actually participated in the tests. 

Second, at LETIZIA’s direction, AMA personnel routinely falsified test results relating to its clients’ products, which included suppressing adverse reactions and deviating from testing protocols.  From 2012 through April 2017, AMA received $46.2 million in revenue from the fraudulent reports. 

*                *                *

In addition to his prison term, LETIZIA, 72, of New City, New York, was sentenced to three years of supervised release, restitution in the amount of $1,440,238, and forfeiture in the amount of $46,200,000. 

Mr. Williams praised the outstanding investigative work of the U.S. Food and Drug Administration, Office of Criminal Investigations, the Federal Bureau of Investigation, and the Rockland County District Attorney’s Office.

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

Allianz Global Investors U.S. LLC Also Charged with Securities Fraud, Agrees to Plead Guilty

An indictment was unsealed today in the Southern District of New York charging Gregoire Tournant, the Chief Investment Officer and co-lead Portfolio Manager for a series of private investment funds managed by Allianz Global Investors U.S. LLC (AGI), with securities fraud, investment adviser fraud and obstruction of justice offenses in connection with a scheme to defraud investors. Those funds ultimately collapsed, leading to billions of dollars of investor losses. Tournant surrendered to Postal Inspectors in Denver, Colorado, this morning and is expected to be presented later today. The case has been assigned to U.S District Court Judge Laura Taylor Swain.

Also unsealed today are the guilty pleas of Trevor Taylor and Stephen Bond-Nelson in connection with their respective roles in the scheme. Taylor pleaded guilty pursuant to an information before U.S. District Judge Denise Cote on March 8. Bond-Nelson pled guilty pursuant to an information before U.S. District Judge Paul A. Engelmayer on March 3. Both are cooperating with the government.

“I previously warned that the Department of Justice would crack down on corporate crime, without regard to size, salary or other privilege,” said Deputy Attorney General Lisa O. Monaco. “For the second time in under a month, the Department has brought charges in connection with a sophisticated Wall Street scheme that cost victims billions of dollars. Other corporations should take note that the results here are driven in part by the fact that this company failed to self-report their crimes. The Department stands ready to keep bringing these kinds of charges to assure the public that no one is above the law.”

U.S. Attorney Damian Williams for the Southern District of New York and Inspector-in-Charge Daniel B. Brubaker of the New York Office of the U.S. Postal Inspection Service also announced today a plea agreement (the agreement) pursuant to which AGI will plead guilty to securities fraud in connection with this fraudulent scheme, and pay more than $3 billion in restitution to the victims of this fraud, pay a criminal fine of approximately $2.3 billion, and forfeit approximately $463 million to the government. The case has been assigned to U.S. District Judge Colleen McMahon. A conference has been scheduled for today at 3:00 p.m. before U.S. District Court Judge Loretta A. Preska, at which time AGI is expected to plead guilty to an information pursuant to the agreement.

“As alleged, Gregoire Tournant and his co-conspirators lied to investors and secretly exposed them to substantial risk in order to line their own pockets and those of their employer, AGI,” said U.S. Attorney Williams. “Pensions funds for so many retirees, religious organizations and essential workers – from laborers in Alaska, to teachers in Arkansas, to bus drivers and subway conductors here in New York City – invested with AGI because they were promised a relatively safe investment with strict risk controls. But AGI, the ‘master cop’ that Tournant claimed was watching over his shoulder, making sure that he adhered to his promises, was asleep on the beat. And when the storm came in March 2020, when the COVID-19 crash hit, these investors got soaked and lost billions. Today’s actions are further evidence that this office is not asleep on the beat and that with our law enforcement partners we will act swiftly to protect investors and bring white collar criminals to justice.”

“These individuals working under the name of Allianz Global Investors, an international management firm, allegedly took advantage of its global recognition when they devised a scheme to mislead investors leading to the loss of billions of dollars,” said Inspector-in-Charge Daniel B. Brubaker of the New York Office of the U.S. Postal Inspection Service. “Postal Inspectors will never let these schemes go unchecked and will vigorously investigate and pursue those who choose criminal behavior over honest business practices.”

According to the allegations in the indictment and the agreement unsealed today in Manhattan federal court:

Between 2014 and 2020, Gregoire Tournant, the defendant, was the Chief Investment Officer of a set of private funds at AGI known as the Structured Alpha Funds. These funds were marketed largely to institutional investors, including pension funds for workers all across America. As alleged, Tournant and his co-conspirators misled these investors into believing that the funds were protected from a sudden stock market crash with particular hedges. But in late 2015, as the cost of those promised hedges increased, Tournant decided to lie and secretly buy cheaper hedges that provided much less protection to investors. As alleged, Tournant and his co-conspirators also provided investors with altered documents that were sent to investors to hide the true riskiness of the funds’ investments, including that they were buying cheaper hedges.

In March 2020, following the onset of market dislocations brought on by the COVID-19 pandemic, the funds lost in excess of $7 billion in market value, including over $3.2 billion in principal, faced margin calls and redemption requests, and ultimately were shut down. More than 100 institutional investors, representing more than 100,000 individuals, were victims of this scheme. These institutional investors included, among others, pension funds for teachers in Arkansas, laborers in Alaska, bus drivers and subway conductors in New York City, as well as religious organizations, engineers, and other individuals, universities and charitable organizations across the United States.

The scheme alleged was an egregious, long-running and extensive fraud that went undetected for years. It occurred at a very profitable component of AGI – one that accounted for 25% of AGI’s revenue in recent years, which amounted to hundreds of millions of dollars. As alleged, one of the ways Tournant carried out the fraud was by marketing the fact that he worked for a well-respected financial institution, AGI, which is a part of the Allianz SE (Allianz) family. Allianz is one of the world’s largest financial services companies and one of the world’s largest insurance companies. Tournant touted the protections provided by the funds’ position within the global Allianz corporate structure, calling Allianz a “master cop” that would ensure that Tournant followed the risk guidelines promised to investors.

Despite Tournant’s claim that Allianz acted as a “master cop” looking over his shoulder, no one at AGI or Allianz was verifying that Tournant and his colleagues were actually adhering to the investment strategies promised to investors. No risk or compliance personnel at AGI verified, attempted to verify or were responsible for verifying that Tournant and his colleagues were purchasing hedging positions within the range that was represented to investors. Much of this historic fraud was made possible because AGI’s control environment was not designed to verify that Tournant and his co-conspirators were telling investors the truth. Because AGI, a registered investment adviser, failed to provide meaningful oversight, Tournant and his co-conspirators were able to deceive investors about the risks they were taking with their money.

In addition, as alleged, in the summer of 2020, after the onset of the pandemic and in order to cover up the fraudulent scheme, Tournant attempted to obstruct an investigation by the U.S. Securities and Exchange Commission (SEC) into the circumstances that led to the losses in March 2020.

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

A chart containing the names, ages, residences, charges and maximum penalties for the defendants is attached.

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

The U.S. Postal Inspection Service and the Special Agents of the U.S. Attorney’s Office for the Southern District of New York investigated this case. The U.S. Securities and Exchange Commission filed a parallel civil action today.

This case is being handled by SDNY’s Securities and Commodities Fraud Task Force. Assistant U.S. Attorneys Margaret Graham, Gina Castellano, Nicholas Folly and Richard Cooper 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.

Defendant

Age

Residence

Charges

Maximum Potential Sentence(s)

United States v. Gregoire Tournant, 22 Cr. 276 (LTS)

TOURNANT

55

 

Basalt, Colorado

Conspiracy to commit securities fraud, investment adviser fraud, and wire, 18 U.S.C. § 371 (Count One)

 

Securities fraud, 15 U.S.C. §§ 78j(b) & 78ff (Count Two)

 

Investment adviser fraud, 15 U.S.C. §§ 80b-6 & 80b-17 (Count Three)

 

Investment adviser fraud, 15 U.S.C. §§ 80b-6(4) & 80b-17, 17 C.F.R. § 275.206(4)-8 (Count Four)

 

Conspiracy to obstruct justice, 18 U.S.C. § 371 (Count Five)

5 years

 

20 years

 

 

5 years (on each count)

 

 

5 years

 

 

5 years

United States v. Trevor Taylor, 22 Cr. 149 (DLC)

TAYLOR

49

Miami, Florida

Conspiracy to commit securities fraud, investment adviser fraud, and wire fraud, 18 U.S.C. § 371 (Count One)

 

Securities fraud, 15 U.S.C. §§ 78j(b) & 78ff (Count Two)

 

Investment adviser fraud, 15 U.S.C. §§ 80b-6 & 80b-17 (Count Three)

5 years

 

20 years

 

5 years

United States v. Stephen Bond-Nelson, 22 Cr. 137 (PAE)

BOND-NELSON

51

Berkeley Heights, New Jersey

Conspiracy to commit securities fraud, investment adviser fraud, and wire fraud, 18 U.S.C. § 371 (Count One)

 

Securities fraud, 15 U.S.C. §§ 78j(b) & 78ff (Count Two)

 

Investment adviser fraud, 15 U.S.C. §§ 80b-6 & 80b-17 (Count Three)

 

Conspiracy to obstruct justice, 18 U.S.C. § 371 (Count Four)

5 years

 

20 years

 

5 years

 

5 years

United States v. Allianz Global Investors U.S. LLC

AGI US

 

 

Securities Fraud, 15 U.S.C. §§ 78j(b) & 78ff (Count Two)

5 years’ probation

Allianz Global Investors U.S. LLC Also Charged With Securities Fraud, Agrees to Plead Guilty

Damian Williams, the United States Attorney for the Southern District of New York, Lisa O. Monaco, the Deputy Attorney General of the United States, and Daniel B. Brubaker, Inspector-in-Charge of the New York Office of the U.S. Postal Inspection Service (“USPIS”), announced today the unsealing of an indictment charging GREGOIRE TOURNANT, the Chief Investment Officer and co-lead Portfolio Manager for a series of private investment funds managed by Allianz Global Investors U.S. LLC (“AGI”), with conspiracy, securities fraud, investment adviser fraud, and obstruction of justice offenses in connection with a scheme to defraud investors. Those funds ultimately collapsed, leading to billions of dollars of investor losses. TOURNANT surrendered to Postal Inspectors in Denver, Colorado this morning and is expected to be presented later today.  The case has been assigned to U.S District Judge Laura Taylor Swain.

Also unsealed today are the guilty pleas of TREVOR TAYLOR and STEPHEN BOND-NELSON in connection with their respective roles in the scheme. TAYLOR pled guilty pursuant to an Information before U.S. District Judge Denise Cote on March 8, 2022. BOND-NELSON pled guilty pursuant to an Information before U.S. District Judge Paul A. Engelmayer on March 3, 2022. Both are cooperating with the Government.

U.S. Attorney Williams, Deputy Attorney General Monaco, and Inspector-in-Charge Brubaker also announced today a plea agreement (the “Agreement”) pursuant to which AGI will plead guilty to securities fraud in connection with this fraudulent scheme, and pay more than $3 billion in restitution to the innocent victims of this fraud, pay a criminal fine of approximately $2.3 billion, and forfeit approximately $463 million to the Government.  The case has been assigned to U.S. District Judge Colleen McMahon. A conference has been scheduled for today at 3:00 p.m. before U.S. District Judge Loretta A. Preska, Part I, at which time AGI is expected to plead guilty to an Information pursuant to the Agreement.

U.S. Attorney Damian Williams said:  “As alleged, Gregoire Tournant and his co-conspirators lied to investors and secretly exposed them to substantial risk in order to line their own pockets and those of their employer, AGI.  Pension funds for so many retirees, religious organizations, and essential workers – from laborers in Alaska, to teachers in Arkansas, to bus drivers and subway conductors here in New York City – invested with AGI because they were promised a relatively safe investment with strict risk controls.  But AGI, the “master cop” that Tournant claimed was watching over his shoulder, making sure that he adhered to his promises, was asleep on the beat. And when the storm came in March 2020, when the COVID crash hit, these investors got soaked and lost billions.  Today’s actions are further evidence that this office is not asleep on the beat and that with our law enforcement partners we will act swiftly to protect investors and bring white collar criminals to justice.”

Deputy Attorney General Lisa O. Monaco said:  “I previously warned that the Department of Justice would crack down on corporate crime, without regard to size, salary, or other privilege. For the second time in under a month, the Department has brought charges in connection with a sophisticated Wall Street scheme that cost victims billions of dollars. Other corporations should take note that the results here are driven in part by the fact that this company failed to self-report their crimes. The Department stands ready to keep bringing these kinds of charges to assure the public that no one is above the law.”

USPIS Inspector-in-Charge Daniel B. Brubaker said: “These individuals working under the name of Allianz Global Investors, an international management firm, allegedly took advantage of its global recognition when they devised a scheme to mislead investors leading to the loss of billions of dollars. Postal Inspectors will never let these schemes go unchecked and will vigorously investigate and pursue those who choose criminal behavior over honest business practices.”

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

Between 2014 and 2020, GREGOIRE TOURNANT, the defendant, was the Chief Investment Officer of a set of private funds at AGI known as the Structured Alpha Funds.  These funds were marketed largely to institutional investors, including pension funds for workers all across America.  As alleged, TOURNANT and his co-conspirators misled these investors into believing that the funds were protected from a sudden stock market crash with particular hedges.  But in late 2015, as the cost of those promised hedges increased, TOURNANT decided to lie and secretly buy cheaper hedges that provided much less protection to investors.  As alleged, TOURNANT and his co-conspirators also provided investors with altered documents that were sent to investors to hide the true riskiness of the funds’ investments, including that they were buying cheaper hedges.  

In March 2020, following the onset of market dislocations brought on by the COVID-19 pandemic, the funds lost in excess of $7 billion in market value, including over $3.2 billion in principal, faced margin calls and redemption requests, and ultimately were shut down.  More than 100 institutional investors, representing more than one hundred thousand individuals, were victims of this scheme. These institutional investors included, among others, pension funds for teachers in Arkansas, laborers in Alaska, bus drivers and subway conductors in New York City, as well as religious organizations, engineers, and other individuals, universities, and charitable organizations across the United States.

The scheme alleged was an egregious, long-running, and extensive fraud that went undetected for years.  It occurred at a very profitable component of AGI – one that accounted for 25% of AGI’s revenue in recent years, which amounted to hundreds of millions of dollars.  As alleged, one of the ways TOURNANT carried out the fraud was by marketing the fact that he worked for a well-respected financial institution, AGI, which is a part of the Allianz SE (“Allianz”) family.  Allianz is one of the world’s largest financial services companies and one of the world’s largest insurance companies.  TOURNANT touted the protections provided by the funds’ position within the global Allianz corporate structure, calling Allianz a “master cop” that would ensure that TOURNANT followed the risk guidelines promised to investors. 

Despite TOURNANT’s claim that Allianz acted as a “master cop” looking over his shoulder, no one at AGI or Allianz was verifying that TOURNANT and his colleagues were actually adhering to the investment strategies promised to investors.  No risk or compliance personnel at AGI verified, attempted to verify, or were responsible for verifying that TOURNANT and his colleagues were purchasing hedging positions within the range that was represented to investors.  Much of this historic fraud was made possible because AGI’s control environment was not designed to verify that TOURNANT and his co-conspirators were telling investors the truth.  Because AGI, a registered investment adviser, failed to provide meaningful oversight,  TOURNANT and his co-conspirators were able to deceive investors about the risks they were taking with their money. 

In addition, as alleged, in the summer of 2020, after the onset of the pandemic and in order to cover up the fraudulent scheme, TOURNANT attempted to obstruct an investigation by the U.S. Securities and Exchange Commission (the “SEC”) into the circumstances that led to the losses in March 2020. 

*                *                *

A chart containing the names, ages, residences, charges, and maximum penalties for the defendants is attached.

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

Mr. Williams praised the outstanding work of the USPIS and Special Agents of the United States Attorney’s Office. Mr. Williams further thanked the U.S. Securities and Exchange Commission, which today filed a parallel civil action.

This case is being handled by the Office’s Securities and Commodities Fraud Task Force. Assistant United States Attorneys Margaret Graham, Gina Castellano, Nicholas Folly, and Richard Cooper 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.

 

Defendant

Age

Residence

Charges

Maximum Potential Sentence(s)

United States v. Gregoire Tournant, 22 Cr. 276 (LTS)

TOURNANT

55

 

Basalt, Colorado

Conspiracy to commit securities fraud, investment adviser fraud, and wire, 18 U.S.C. § 371

(Count One)

 

Securities fraud, 15 U.S.C. §§ 78j(b) & 78ff

(Count Two)

 

Investment adviser fraud, 15 U.S.C. §§ 80b-6 & 80b-17 (Count Three)

 

Investment adviser fraud, 15 U.S.C. §§ 80b-6(4) & 80b-17, 17 C.F.R. § 275.206(4)-8 (Count Four)

 

Conspiracy to obstruct justice, 18 U.S.C. § 371 (Count Five)

5 years

 

 

20 years

 

 

 

5 years (on each count)

 

5 years

 

 

 

5 years

United States v. Trevor Taylor, 22 Cr. 149 (DLC)

TAYLOR

49

Miami, Florida

Conspiracy to commit securities fraud, investment adviser fraud, and wire fraud, 18 U.S.C. § 371 (Count One)

 

Securities fraud, 15 U.S.C. §§ 78j(b) & 78ff (Count Two)

 

Investment adviser fraud, 15 U.S.C. §§ 80b-6 & 80b-17 (Count Three)

5 years

 

 

 

20 years

 

 

 

5 years

United States v. Stephen Bond-Nelson, 22 Cr. 137 (PAE)

BOND-NELSON

51

Berkeley Heights, New Jersey

Conspiracy to commit securities fraud, investment adviser fraud, and wire fraud, 18 U.S.C. § 371 (Count One)

 

Securities fraud, 15 U.S.C. §§ 78j(b) & 78ff (Count Two)

 

Investment adviser fraud, 15 U.S.C. §§ 80b-6 & 80b-17 (Count Three)

 

Conspiracy to obstruct justice, 18 U.S.C. § 371

(Count Four)

5 years

 

 

20 years

 

 

5 years

 

 

 

5 years

United States v. Allianz Global Investors U.S. LLC, 22 Cr. 279 (CM)

AGI US

 

 

Securities Fraud, 15 U.S.C. §§ 78j(b) & 78ff (Count Two)

 

5 years’ probation

 

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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 in this release constitute only allegations, and every fact described should be treated as an allegation.

Damian Williams, the United States Attorney for the Southern District of New York, and Keechant L. Sewell, Police Commissioner for the City of New York (“NYPD”), announced today that RICARDO FERGUSON, a/k/a “Mayback,” was charged with the December 5, 2021 murder of Robert Brown, Sr., in the Aqueduct Walk park in the University Heights neighborhood of the Bronx. FERGUSON was arrested today and will be presented this afternoon in Manhattan federal court. The case has been assigned to United States District Judge Richard M. Berman.

U.S. Attorney Damian Williams said:  “Ferguson allegedly murdered Robert Brown, Sr., in broad daylight in a Bronx park. We hope that today’s charges bring some measure of comfort to the family of Robert Brown, Sr. and make clear that this Office and our law enforcement partners will continue to be relentless in our pursuit of anyone who takes another person’s life.”

NYPD Commissioner Keechant L. Sewell said:  “Aqueduct Walk is a tree lined stretch lined with park benches where New Yorkers can take a walk or find a moment’s peace from the bustle of Fordham Road. When gunfire broke that peace on December 5th and a man was shot dead on that tree lined stretch, NYPD detectives went to work to gather evidence and bring justice. I want to thank US Attorney Damian Williams and the Criminal Investigators of the US Attorney’s Office for the Southern District of New York for their efforts that resulted in this federal indictment. These federal charges should remind those willing to carry guns or commit murder associated with drug-trafficking: You may face many years or even life in prison.”

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

On or about December 5, 2021, in the Aqueduct Walk park, near Aqueduct Avenue and West Fordham Road in the Bronx, FERGUSON shot and killed Robert Brown, Sr. while FERGUSON and another attempted to rob Brown.

*               *                *

FERGUSON, 36, of the Bronx, New York, is charged with one count of conspiracy to distribute crack cocaine, which carries a maximum sentence of twenty years in prison; one count of attempted Hobbs Act robbery, which caries a maximum sentence of twenty years in prison; one count of using violence in furtherance of a plan to commit Hobbs Act robbery, which carries a maximum sentence of twenty years in prison; and using a firearm to commit murder during a drug-trafficking crime and crime of violence, which carries a maximum sentence of death or life in prison, and a mandatory minimum term of five years in prison.

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

Mr. Williams praised the outstanding investigative work of the NYPD and the Special Agents of the United States Attorney’s Office.

The case is being handled by the Office’s Violent and Organized Crime Unit. Assistant United States Attorneys Mathew Andrews and Peter Davis are in charge of the prosecution.

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

 

---

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

Damian Williams, the United States Attorney for the Southern District of New York, announced that defendant ELLIOT SMERLING was sentenced to 97 months in prison for a multi-year bank and securities fraud scheme that caused the issuance of approximately $133 million in collateralized loans on the basis of forged documents, including subscription agreements from purported limited partners, audit letters attesting to his private equity firm’s finances, and falsified bank account statements.  SMERLING previously pled guilty before U.S. District Judge Denise L. Cote, who imposed today’s sentence.

U.S. Attorney Damian Williams said:  “Elliot Smerling previously admitted to securing funding for his private equity fund by submitting a constellation of fraudulent documents and assurances to lenders. Smerling’s misrepresentations ultimately resulted in massive losses to banks, as he received over $133 million in ill-gotten loans. Smerling has now fittingly been sentenced to more than eight years in federal prison for his bank and securities fraud scheme.”

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

From at least in or about January 2019 through at least in or about March 2021, ELLIOT SMERLING was the mastermind of a scheme to secure financing for a series of private equity funds (the “Funds”) through fraud and deceit.  SMERLING solicited and obtained loans totaling approximately $133 million on behalf of the Funds, which were secured by purported capital commitments made by limited partners in the Funds.  SMERLING obtained the loans on the basis of falsified documents and material misrepresentations, including:  (1) a forged audit letter, purportedly prepared by an international network of accounting, audit, tax, and professional services firms, attesting to audited financial statements; (2) forged subscription agreements that falsely represented, among other things, that the investment fund of a private university based in New York, New York had committed $45 million to the Funds, and that the investment management division of a banking and financial services firm headquartered in New York, New York had committed $40 million to the Funds; and (3) falsified bank records showing wire transfers from purported limited partners to the Funds.  

In connection with his bank fraud scheme, from at least in or about January 2013 through at least in or about March 2021, SMERLING also solicited investments in his Funds through materially false and misleading statements concerning the Funds’ audited financial statements, limited partners, capital commitments, and holdings.

*                *                *

In addition to his prison term, SMERLING, 52, of Lake Worth, Florida, was sentenced to three years of supervised released.  The Court deferred its decision on the amount of restitution.

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

This case is being handled by the Office’s Complex Frauds and Cybercrime Unit.  Assistant U.S. Attorneys Jilan J. Kamal and Timothy V. Capozzi are in charge of the prosecution.

Damian Williams, the United States Attorney for the Southern District of New York, John B. DeVito, Special Agent-in-Charge of the Bureau of Alcohol, Tobacco, Firearms and Explosives, New York Field Division (ATF), Frank A. Tarentino, Special Agent-in-Charge of the Drug Enforcement Administration, New York Division (DEA), and Glenn Scott, Commissioner of the Mount Vernon Police Department, announced the unsealing of a federal Indictment charging JAMES BAZEMORE, a/k/a “TJ,” with the broad daylight murder of Tasheen Williams on April 30, 2018 in Mount Vernon, New York.  The Indictment also charges JARED MUJAAHID, a/k/a “Jay,” with aiding and abetting assault with a deadly weapon by providing BAZEMORE with the gun BAZMORE used to commit the murder. The Indictment also charges BAZEMORE and MUJAAHID with racketeering conspiracy. BAZEMORE is detained pending trial on other federal charges brought by this Office and MUJAAHID is serving a sentence from a prior federal conviction in this District. The defendants will be brought to the federal courthouse in White Plains, New York to be presented before a United States Magistrate Judge.

U.S. Attorney Damian Williams said:  “In April 2018, Tasheen Williams was shot dead in broad daylight just as a local school was letting out, the victim of senseless gang-related violence. As alleged in the Indictment, James Bazemore is responsible for that murder, and Jared Mujaahid gave him the murder weapon. Thanks to the work of our remarkable law enforcement partners, Bazemore and Mujaahid now stand charged in federal court for this terrible crime.”

ATF Special Agent-in-Charge John B. DeVito said:  “ATF’s top priority is investigating and apprehending those who commit firearms violence and those who provide  firearms for use in violent crimes. This indictment demonstrates the commitment of ATF and our great partners at DEA and the Mount Vernon Police Department to relentlessly pursue justice for victims of violent gun crime and hold those responsible accountable no matter how long it takes.”

DEA Special Agent-in-Charge Frank A. Tarentino said:  “This cold-blooded murder is another example of drug-related violence plaguing our cities. DEA’s priority is making our communities safer through investigations and arresting members of criminal organizations responsible for drug-related overdoses, drug trafficking, and violent crime. I thank the ATF and US Attorney's Office Southern District of New York for their partnership and diligent work on this investigation.”

MVPD Commissioner Glenn Scott said:  “This arrest again shows that Mount Vernon continues to benefit from the partnership the MVPD has formed with its Federal Law Enforcement partners. The Bureau of Alcohol, Tobacco, Firearms, and Explosives, NY Field Office has shown how dedicated they are to assisting the MVPD with closing violent crime investigations. Mount Vernon Police has had Detectives assigned as Task Force Officers with the ATF for several years and this is just one of the many violent crimes that has been solved as a result of the hard work of the Detectives and the Special Agents from ATF.  In cases of this magnitude the MVPD always strives to bring justice to the families effected by violence and we will utilize any and all resources and partnerships that we can do achieve that goal.” 

According to the allegations in the Indictment[1]:

BAZEMORE and MUJAAHID were members or associates of a racketeering enterprise known as Big Paper. In order to fund the enterprise, protect and expand its interests, and promote its standing, members and associates of Big Paper committed, conspired, attempted, and threatened to commit acts of violence against rivals, including murder and assault; conspired to distribute and possess with intent to distribute narcotics; and obtained, possessed and used firearms, including by brandishing and discharging them.

On or about April 30, 2018, BAZEMORE acquired a gun from MUJAAHID, and then BAZEMORE stalked and shot Tasheen Williams dead in Mount Vernon, New York.

*              *             *

BAZEMORE is charged with one count of racketeering conspiracy, which carries a statutory maximum sentence of life in prison, one count of murder in aid of racketeering, which carries a statutory maximum sentence of life in prison, and a mandatory minimum sentence of life in prison; and one count of murder through use of a firearm, which carries a statutory maximum sentence of life in prison, and a mandatory minimum sentence of five years in prison.

MUJAAHID is charged with one count of racketeering conspiracy, which carries a statutory maximum sentence of twenty years in prison, one count of aiding and abetting assault with a deadly weapon in aid of racketeering, which carries a statutory maximum sentence of twenty years in prison; and one count of aiding and abetting the discharge of a firearm in furtherance of a crime of violence, which carries a statutory maximum sentence of life in prison and a mandatory minimum sentence of ten years in prison.

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

Mr. Williams praised the outstanding work of the Bureau of Alcohol, Tobacco, Firearms, and Explosives and the Drug Enforcement Administration, and thanked the Westchester County District Attorney’s Office and the Mount Vernon Police Department for their assistance with the investigation.

This case is being handled by the Office’s White Plains Division.  Assistant United States Attorneys Christopher Brumwell and Benjamin A. Gianforti are in charge of the prosecution.

 

---

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

Damian Williams, the United States Attorney for the Southern District of New York, announced today that AMILCAR ROMERO, a/k/a “Soldado,” a high-ranking member of Mara Salvatrucha, or MS-13, was sentenced by U.S. District Judge Vernon S. Broderick to 13 years in prison. ROMERO previously pled guilty to conspiracy to distribute and possess with intent to distribute methamphetamine. Judge Broderick ordered ROMERO’s sentence in this case to run consecutively to a prior sentence for attempted murder imposed in California state court in 1997 and another prior sentence for conspiring to participate in the affairs of a racketeering enterprise, namely MS-13, imposed in the District of New Jersey in 2016.

U.S. Attorney Damian Williams said:  “Amilcar Romero, a senior leader of the L.A. Program of MS-13, helped plan a cross-border methamphetamine distribution network. He did this by communicating with other members of the gang through a contraband cellphone in state prison while serving a lengthy sentence for a violent crime. With our law enforcement partners, we will continue to hold accountable those like Romero who threaten the safety and well-being of our communities, even if they do so from prison.”

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

ROMERO is a member of MS-13, a transnational racketeering enterprise which operates throughout North and Central America, including in El Salvador, Mexico, New York, California, Texas, Virginia, Tennessee, and North Carolina. To enrich the enterprise, protect and expand its criminal operations, enforce discipline among its members, and retaliate against members of rival gangs, members and associates of MS-13 committed, conspired, attempted, and threatened to commit acts of violence; distributed and possessed with intent to distribute narcotics, including methamphetamine; and obtained, possessed, and used firearms.

MS-13 is organized into chapters called “cliques.” Groups of cliques, in turn, are aligned as “programs.” Each program is governed by a group of senior gang leaders known as the “table.”

ROMERO is a high-ranking member of the table of the “L.A. Program” of MS-13. In 2019, ROMERO participated in the transnational and nationwide affairs of MS-13 through a contraband prison cellphone while he was incarcerated in Calipatria State Prison in California, including by communicating with and relaying orders to other members of MS-13 throughout the United States and in El Salvador.

In the summer and fall of 2019, ROMERO helped plan, with other high-ranking members of MS-13, for the establishment of a methamphetamine distribution network that started in Mexico and operated throughout the United States, including North Carolina, New York, Virginia, and Tennessee.

In addition, in September 2019, ROMERO and other senior members of MS-13 conspired to extort another gang member, who was told that he either had to repay money or be “green lit” (i.e., killed) for introducing a “bad connection” who supplied poor quality narcotics to the gang.

*                *                *

In addition to the prison term, Judge Broderick sentenced ROMERO, 52, to three years of supervised release.

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

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

This case is being handled by the Office’s Violent & Organized Crime Unit.  Assistant United States Attorneys Michael D. Longyear, Justin V. Rodriguez, and Jacob Warren 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, announced today the unsealing of a Complaint in Manhattan federal court charging EDDY ALEXANDRE, the leader of a purported cryptocurrency and forex trading platform called EminiFX, with commodities fraud and wire fraud offenses.  As alleged, ALEXANDRE solicited more than $59 million in investments from hundreds of individual investors after making false representations in connection with the EminiFX trading platform.  ALEXANDRE was arrested this morning and will be presented later today before Magistrate Judge Katharine H. Parker in the U.S. District Court for the Southern District of New York.

U.S. Attorney Damian Williams said:  “Eddy Alexandre allegedly induced his clients to invest over $59 million with promises of huge passive income returns via his own proprietary trading platform called EminiFx. In reality, no such technology existed, as Alexandre is alleged to have invested very little of their money – most of which he lost – and transferred most of it to his own personal accounts to pay for luxury items for himself.  As in any of the financial markets, the foreign exchanges offer high return potential, but investors should beware of the downside risks of false claims and get rich quick schemes that oftentimes are too good to be true.” 

FBI Assistant Director-in-Charge Michael J. Driscoll said:  “As alleged, Mr. Alexandre solicited millions of dollars from unwitting investors to whom he ‘guaranteed’ weekly returns of 5% through his trading platform using a new technology he refused to disclose.  As with many greedy actors who have preceded him, he then used significant portions of the investor funds he solicited to buy expensive luxuries for himself.  Today's action again demonstrates the FBI's commitment to pursuing fraudsters like Mr. Alexandre and guaranteeing they face the consequences of their actions in the federal criminal justice system.”

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

From in or about September 2021, up to and including in or about May 2022, ALEXANDRE, operated EminiFX, Inc. (“EminiFX”), a purported investment platform that ALEXANDRE founded, and for which he solicited more than $59 million in investments from hundreds of individual investors. ALEXANDRE marketed EminiFX as an investment platform through which investors would earn passive income through automated investments in cryptocurrency and foreign exchange (“FOREX”) trading. ALEXANDRE offered his investors “guaranteed” high investment returns using new technology that he claimed was secret. Specifically, ALEXANDRE falsely represented to investors that they would double their money within five months of investing by earning a 5% weekly return on their investment using a “Robo-Advisor Assisted account” to conduct trading. ALEXANDRE referred to this technology as his “trade secret” and refused to tell investors what the technology was. Each week EminiFX’s website falsely represented to investors that they had earned at least 5% on their investment, which they could withdraw or re-invest.

In truth and in fact, and as ALEXANDRE well knew, EminiFX did not earn 5% weekly returns for its investors. ALEXANDRE did not even invest the vast majority of investor funds entrusted to him, and ALEXANDRE sustained over $6 million in losses on the limited portion of funds that he did invest, which he did not disclose to his investors. Instead of using investors’ funds as he had promised, ALEXANDRE misdirected at least approximately $14,700,000 to his personal bank account and failed to invest the vast majority of the investors’ funds. For example, ALEXANDRE used $155,000 in investor funds to purchase a BMW car for himself and spent an additional $13,000 of investor funds on car payments, including to Mercedes Benz. 

*                *                *

ALEXANDRE, 50, of Valley Stream, New York, is charged with one count of commodities fraud, which carries a maximum sentence of 10 years in prison, and one count of wire fraud, which carries a maximum sentence of 20 years in prison. 

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

Mr. Williams praised the investigative work of the Federal Bureau of Investigation and also thanked the Commodity Futures Trading Commission for its assistance.

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

 

---

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

 

Damian Williams, the United States Attorney for the Southern District of New York, announced that recording artist CASWELL SENIOR, a/k/a “Casanova,” pled guilty today to racketeering and narcotics offenses arising out of his leadership role in the Untouchable Gorilla Stone Nation Bloods Gang (“Gorilla Stone”) in Westchester County, New York City, and Florida.  As part of the racketeering conspiracy offense, SENIOR admitted to participating in a shooting in Florida on July 5, 2020, a robbery in New York City on August 5, 2018, and conspiring to traffic over 100 kilograms of marijuana.  SENIOR pled guilty before U.S. District Judge Philip M. Halpern. 

U.S. Attorney Damian Williams said:  “Like twelve of his co-defendants, Caswell Senior, an accomplished recording artist and performer, now stands convicted of playing a leadership role in Gorilla Stone, a particularly violent Bloods gang that operates throughout New York and across the country.  In addition to his supervisory role, Senior was an active, hands-on participant in the gang’s senseless violence, including a shooting in Miami and contributing to a robbery at a Manhattan diner.  Dismantling violent gangs and stopping gun violence continues to be one of my highest priorities.  Thanks to the dedication of our partners at the Federal Bureau of Investigation, Senior now awaits sentencing for his dangerous conduct.”      

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

Beginning in at least 2004 and lasting until December 2020, SENIOR participated in and was associated with the Gorilla Stone racketeering conspiracy.  Senior admitted that as part of the racketeering activity, on or about July 5, 2020, while at a party in Florida that included gang members, he discharged a firearm at an individual with whom he was having a gambling dispute.  A victim suffered serious bodily injury because of the shooting.  Thereafter, other party attendees discharged multiple firearms.  Additionally, SENIOR stipulated that as part of a separate August 5, 2018 robbery in Manhattan, a victim was restrained and suffered serious bodily injury.  In connection with his guilty plea, SENIOR further stipulated that he was an organizer or leader of a criminal activity that involved five or more participants and he agreed to traffic at least 100 kilograms of marijuana.

*                *                *

SENIOR, 35, of Montville, New Jersey, is scheduled to be sentenced by United States District Judge Philip M. Halpern on December 6, 2022, at 11:00 a.m.  SENIOR pled guilty to one count of conspiring to conduct and participate in the conduct of the affairs of a criminal enterprise through a pattern of racketeering activity and one count of conspiring to distribute over 100 kilograms of marijuana.  The total maximum term of prison on these two counts is 60 years, with a mandatory minimum term of five years in prison. 

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

SENIOR is the thirteenth defendant in the Gorilla Stone case to plead guilty.  The twelve other defendants who previously pled guilty are: DESHAWN THOMAS, a/k/a “Don,” NAYA AUSTIN, a/k/a “Baby,” BRANDON NIEVES, a/k/a “Untouchable Dot,” DONAVAN GILLARD, a/k/a “Donnie Love,” JARRETT CRISLER, Jr., a/k/a “Jayecee,” DEZON WASHINGTON, a/k/a “Blakk,” STEPHEN HUGH, a/k/a “Chino,” JORDAN INGRAM, a/k/a “Flow,” SHANAY OUTLAW, a/k/a “Easy,” ROBERTA SLIGH, a/k/a “Trouble,” BRINAE THORNTON, a/k/a “Luxury,” and JAMAL TRENT, a/ka/ “Trap Smoke.” 

Mr. Williams praised the outstanding investigative work of the FBI Westchester County Safe Streets Task Force, which is comprised of special agents and task force officers from the FBI, US Probation, New York State Police, New York State Department of Corrections and Community Supervision, NYPD, Westchester County PD, Westchester County DAs Office, Putnam County Sheriff's Office, Rockland DAs Office and the Yonkers, New Rochelle, Mount Vernon, Greenburgh, White Plains, Peekskill, Ramapo and Clarkstown Police Departments.

This case is being prosecuted by the Office’s White Plains Division.  Assistant U.S. Attorneys Shiva H. Logarajah, David R. Felton, and Courtney L. Heavey are in charge of the prosecution.

Damian Williams, the United States Attorney for the Southern District of New York, announced that defendants LOUIS GRASSO and RICHARD BANCA pled guilty to their respective roles in the distribution of adulterated and misbranded drugs with the intent to defraud and mislead, in connection with the charges filed in United States v. Grasso et al., 20 Cr. 163 (OKC).  Both GRASSO and BANCA pled guilty before U.S. District Judge P. Kevin Castel. GRASSO and BANCA will each be sentenced by Judge Castel on September 6, 2022.

U.S. Attorney Damian Williams said:  “Grasso and Banca represent the corruption and greed of those in the racehorse industry looking to win at any cost.  In peddling illegal drugs and selling prescriptions to corrupt trainers, Louis Grasso abdicated his responsibilities as a medical professional to ensure the safety and health of the racehorses he “treated.” By injecting horses with unnecessary and, at times, unknown drugs, Grasso risked the lives and welfare of the animals under his care, all in service of helping corrupt racehorse trainers like Banca line their pockets through fraud. These latest convictions demonstrate the commitment of this Office and of our partners at the FBI to hold accountable individuals seeking to profit from animal abuse and deceit.”

According to the allegations contained in the Superseding Indictment, the Superseding Information charging GRASSO and BANCA, prior charging instruments and other filings in this case[1], and statements during court proceedings:

The charges in the GRASSO case arise from an investigation of widespread schemes by racehorse trainers, veterinarians, 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, all to the detriment and risk of the health and well-being of the racehorses.  GRASSO, a veterinarian, not only accepted payment in exchange for prescriptions for powerful and medically unnecessary performance-enhancing drugs, he also created, distributed, and administered custom-made performance-enhancing drugs that were all misbranded and adulterated substances designed solely to improve racehorse performance. Through this fraudulent scheme, GRASSO helped corrupt trainers collect over $47 million in ill-gotten purse winnings. As a racehorse trainer, BANCA purchased and administered adulterated and misbranded drugs to his racehorses, and as a result of his crimes, his horses earned over $16 million in purse winnings. BANCA stood to profit from the success of racehorses under his control by earning a share of his horses’ winnings, and by improving his horses’ racing records, thereby yielding higher trainer fees and increasing the number of racehorses under his control.

*                 *                 *

U.S. Attorney Williams praised the outstanding investigative work of the FBI 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 United States Attorneys Sarah Mortazavi and Anden Chow are in charge of the prosecution.

 

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[1] As to Grasso and Banca’s co-defendants, the entirety of the texts of the Indictments and the descriptions 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 ALEXEI SAAB, a/k/a “Ali Hassan Saab,” a/k/a “Alex Saab,” a/k/a “Rachid,” was convicted today of receiving military-type training from a designated foreign terrorist organization, Hizballah, marriage fraud conspiracy, and making false statements, following a two-week trial before the Honorable Paul G. Gardephe. 

U.S. Attorney Damian Williams said:  “A unanimous jury found today that Alexei Saab is guilty of receiving military-type training from Hizballah, a known terrorist organization.  The evidence at trial showed that Saab surveilled some of New York’s most iconic and highly trafficked locations, such as the U.N. headquarters, Statue of Liberty, Rockefeller Center, Times Square, the Empire State Building, and local airports, tunnels, and bridges— in order to provide critical intelligence on how they could be most effectively attacked.  Saab’s chilling campaign against the American ideals of liberty and freedom has thankfully come to an end.”

According to court documents and evidence at trial:

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

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

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

In approximately 1999, SAAB attended his first Hizballah training.  The training was focused on the use of firearms, and SAAB handled and fired an AK-47, an M16 rifle, and a pistol, and threw grenades.  In 2000, SAAB transitioned to membership in Hizballah’s unit responsible for external operations, the IJO, and he then received extensive training in IJO tradecraft, weapons, and military tactics, including how to construct and detonate bombs and other explosive devices and how to best use these devices in attacks.  Specifically, SAAB received detailed instruction in, among other things, triggering mechanisms, explosive substances, detonators, and the assembly of circuits. 

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

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

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

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SAAB, 44, of Morristown, New Jersey, was convicted of one count of receiving military-type training from a designated foreign terrorist organization, which carries a potential sentence of 10 years in prison; one count of conspiracy to commit marriage fraud, which carries a maximum sentence of five years in prison; and one count of making false statements, which carries a maximum sentence of five years in prison.  SAAB was also acquitted of one count of conspiracy to provide material support to Hizballah, one count of citizenship application fraud, and one count of naturalization fraud. 

The maximum potential sentences in this case are prescribed by Congress and are provided here for informational purposes only, as the defendant’s sentence will be determined by Judge Gardephe.

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

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

Damian Williams, the United States Attorney for the Southern District of New York, announced today the conviction of CHRISTIAN PABON, a/k/a “Banga,” of racketeering conspiracy and murder in aid of racketeering.  A unanimous jury convicted PABON of every count presented to the jury after a one-week trial before U.S. District Judge Sidney H. Stein.

U.S. Attorney Damian Williams said:  “For years, Christian Pabon terrorized his northern Manhattan neighborhood as a shooter in a violent street gang.  The jury’s verdict holds him accountable for his senseless violence, which injured two young people and ripped a father away from his family.  My office remains committed to combatting gang violence and seeking justice for victims.”

According to the Indictment and the evidence at trial:

PABON was a member of a street gang known as the “200.”  The 200 was based in the neighborhood around Dyckman Street in northern Manhattan.  Between 2014 and 2018, the 200’s members and associates engaged in armed robberies, shootings, pharmacy burglaries, assaults, and the distribution of heroin, crack, and other drugs.  PABON was one of the gang’s “shooters,” meaning that the gang called upon him to provide guns and commit violence against rivals. 

On October 2, 2014, PABON and other members of the 200 drove to their rival gang’s territory in the vicinity of 193rd Street in the Washington Heights neighborhood of Manhattan, intending to shoot at members of the enemy gang.  After driving to the area, PABON and three other members of the 200 approached the intersection of 193rd and Saint Nicholas Avenue on foot.  Upon reaching the intersection, PABON and Marcos Espinal, a/k/a “Ito,” who was also a member of the 200, fired at least 15 shots at a group of people standing in front of a bodega.  PABON and Espinal hit three people with their gunshots.  Two of the victims—a 17-year old girl and a 20-year old man—survived their injuries.  The third victim was Orlando Rivera, a 42-year old father and innocent bystander who was standing in front of the bodega.  Rivera was killed by a bullet to his back as he attempted to run away from the bullets that PABON and Espinal fired.  Espinal was previously prosecuted for his participation in this crime by the New York County District Attorney’s Office.

*                *                *

PABON, age 29, of Manhattan, was convicted of racketeering conspiracy, which carries a maximum sentence of life in prison, and murder in aid of racketeering, which carries a mandatory sentence of life in prison. 

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

The prosecution is being handled by the Office’s Violent and Organized Crime Unit.  Assistant U.S. Attorneys Rushmi Bhaskaran, Elizabeth A. Espinosa, and Adam S. Hobson are in charge of the prosecution and represented the Government at trial.  Assistant U.S. Attorneys Jamie Bagliebter, Maurene Comey, Margaret Graham, and Hagan Scotten also participated in the investigation and prosecution of this case.

Damian Williams, the United States Attorney for the Southern District of New York, and Anne Milgram, the Administrator of the U.S. Drug Enforcement Administration (“DEA”), announced today the extradition of JUAN CARLOS BONILLA VALLADARES, a/k/a “El Tigre,” on charges of conspiring to import cocaine into the United States and related weapons offenses involving the use and possession of machine guns and destructive devices.  BONILLA VALLADARES arrived from Honduras in the Southern District of New York yesterday, and will be presented today before U.S. Magistrate Judge Katharine H. Parker.

U.S. Attorney Damian Williams said:  “Rather than use his high-powered position as the Chief of Honduran Police to combat drug trafficking, Juan Carlos Bonilla Valladares, a/k/a ‘El Tigre,’ corruptly exploited his position to protect and assist the drug trafficking organizations he was obligated to disrupt.  With his support and protection, Bonilla Valladares’s associates became a critical pipeline for the Central American drug trade to the United States.  His extradition demonstrates that no one is exempt by virtue of their title or position of authority – even foreign Presidents and police chiefs – from criminal prosecution for contributing to the flood of illegal narcotics into this country that causes so much harm.” 

DEA Administrator Anne Milgram said:  “Former Honduran President Juan Orlando Hernandez would not have risen to power and successfully benefited from massive drug proceeds had it not been for his expansive network of corrupt associates.  These associates, including Bonilla Valladares, likewise exploited their positions to traffic cocaine to the United States and violently protect other politically connected drug traffickers, all for their own personal gains. Bonilla Valladares further betrayed the Honduran people by using his law enforcement badge to cover for his crimes. Bonilla Valladares’s extradition shows the world once again that corrupt officials cannot hide behind their positions. DEA, in coordination with our U.S. and international partners, will stop at nothing to bring to justice anyone who threatens the safety and health of Americans.”

According to the allegations contained in the Complaint charging BONILLA VALLADARES, evidence presented at the October 2019 trial of Juan Antonio Hernandez Alvarado (“Hernandez Alvarado”) in the Southern District of New York, and statements in open court during the prosecution of Hernandez Alvarado[1]:

Between approximately 2003 and 2020, multiple drug-trafficking organizations in Honduras and elsewhere worked together, and with support from certain prominent public and private individuals, including Honduran politicians and law enforcement officials, to receive multi-ton loads of cocaine sent to Honduras from, among other places, Colombia and Venezuela via air and maritime routes, and to transport the drugs westward in Honduras toward the border with Guatemala and eventually to the United States.  For protection from law enforcement interference, and in order to facilitate the safe passage through Honduras of multi-ton loads of cocaine, drug traffickers paid bribes to public officials, including certain presidents, members of the National Congress of Honduras, and personnel from the Honduran National Police, including BONILLA VALLADARES. 

BONILLA VALLADARES was a member of the Honduran National Police between approximately 1998 and approximately 2016.  During his tenure, he held high-ranking positions, including Regional Police Chief with authority over locations in western Honduras that were strategically important to drug traffickers, and Chief of the Honduran National Police for all of Honduras between approximately 2012 and approximately 2013.  BONILLA VALLADARES corruptly exploited these official positions to facilitate cocaine trafficking, and used violence, including murder, to protect the particular cell of politically connected drug traffickers he aligned with, including former Honduran congressman Hernandez Alvarado and former president of Honduras Juan Orlando Hernandez (“Hernandez”), who is referred to in the Complaint charging BONILLA VALLADARES as “CC-4.” 

For example, in exchange for bribes paid in drug proceeds, BONILLA VALLADARES directed members of the Honduran National Police, who were armed with machine guns, to let cocaine shipments pass through police checkpoints without being inspected or seized.  BONILLA VALLADARES, in coordination with Hernandez Alvarado and others, also provided members of their conspiracy with sensitive law enforcement information to facilitate cocaine shipments, including information regarding aerial and maritime interdiction operations.

In or about 2010, Hernandez Alvarado told a cooperating witness (“CW-1”) that Hernandez Alvarado and Hernandez helped BONILLA VALLADARES advance his position within the Honduran National Police, and that BONILLA VALLADARES protected their drug-trafficking activities in return.  Hernandez Alvarado also told CW-1 that BONILLA VALLADARES was very violent, and that Hernandez Alvarado and Hernandez trusted BONILLA VALLADARES with special assignments, including murder.  For example, in or about July 2011, BONILLA VALLADARES participated in the murder of a rival drug trafficker at the request of Hernandez Alvarado and others because the rival trafficker had attempted to prevent Hernandez Alvarado and other members of the conspiracy from transporting cocaine through a region of western Honduras near the border with Guatemala. 

*                      *                     *

The Complaint charges BONILLA VALLADARES, 62, with: (1) conspiring to import cocaine into the United States, (2) using and carrying machine guns and destructive devices during and in relation to, and possessing machine guns and destructive devices in furtherance of, the cocaine-importation conspiracy; and (3) conspiring to use and carry machine guns and destructive devices during and in relation to, and to possess machine guns and destructive devices in furtherance of, the cocaine-importation conspiracy.  If convicted, BONILLA VALLADARES faces a mandatory minimum sentence of 10 years in prison and a maximum term of life in prison on Count One, a mandatory minimum sentence of 30 years in prison and a maximum term of life in prison on Count Two, and a maximum term of life in prison on Count Three. 

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

Mr. Williams praised the outstanding investigative work of the DEA’s Special Operations Division Bilateral Investigations Unit, New York Strike Force, and the Tegucigalpa Country Office.  The Justice Department’s Office of International Affairs provided valuable assistance in securing BONILLA VALLADARES’s arrest and extradition.

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

This case is being handled by the Office’s National Security and International Narcotics Unit. Assistant U.S. Attorneys Jacob H. Gutwillig, Michael D. Lockard, Jason A. Richman, and Elinor L. Tarlow are in charge of the prosecution.

The charges in the Complaint are merely accusations, and BONILLA VALLADARES 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 that defendant JEREMY SPENCE, a/k/a “Coin Signals,” was sentenced to 42 months in prison for defrauding more than 170 victims in connection with various cryptocurrency funds that he operated. SPENCE previously pled guilty before U.S. District Judge Lewis A. Kaplan, who imposed today’s sentence.

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

From November 2017 through April 2019, SPENCE solicited investors in various cryptocurrency investment pools that SPENCE had created and managed (the “Funds”). SPENCE solicited investments for several Funds, the largest and most active of which were the Coin Signals Bitmex Fund, a/k/a the “CS Mex Fund,” the Coin Signals Alternative Fund, a/k/a the “CS Alt Fund,” and the Coin Signals Long Term Fund. Investors who wanted to participate in a Fund would transfer cryptocurrency, such as Bitcoin and Ethereum, to SPENCE in order for SPENCE to invest it. 

SPENCE solicited more than $5 million through false representations, including that SPENCE’s crypto trading had been extremely profitable when, in fact, SPENCE’s trading had been consistently unprofitable.  For example, on January 28, 2018, SPENCE posted a message in an online chat group falsely claiming that his trading of investor funds over the past month had generated a return of more than 148%. As a result of this misrepresentation, investors transferred additional funds to SPENCE. In fact, over that same period of approximately one month, SPENCE’s trading resulted in net losses in the accounts in which he traded investor funds.

To forestall redemptions by investors, and to continue to raise money from investors to fund his scheme, SPENCE generated fictitious account balances, which he made available to investors online. Instead of accurately reporting the trading losses SPENCE was incurring, the account balances falsely indicated to investors that they were making money by investing with SPENCE. To hide his trading losses, SPENCE used new investor funds to pay back other investors in a Ponzi-like fashion. In total, SPENCE distributed cryptocurrency worth approximately $2 million to investors substantially from funds previously deposited by other investors. 

*                      *                      *

In addition to his prison term, SPENCE, 25, of Bristol, Rhode Island, was sentenced to three years of supervised released and restitution in the amount of $2,847,743.00.

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

The case is being handled by the Office’s Securities and Commodities Fraud Unit. Assistant U.S. Attorney Christine I. Magdo is in charge of the prosecution.

Damian Williams, the United States Attorney for the Southern District of New York, announced the conviction at trial of defendant LISA GIANNELLI, on one count of drug adulteration and misbranding, with intent to defraud and mislead, in connection with a nearly twenty-year scheme to create and distribute “untestable” performance enhancing drugs for use in professional horseracing. GIANNELLI was one of over thirty defendants charged in four separate cases in March 2020, each arising from this Office’s multi-year investigation of the abuse of racehorses through the use of performance enhancing drugs.

U.S. Attorney Damian Williams said:  “For almost two decades, Lisa Giannelli peddled untestable performance-enhancing drugs to give racehorse trainers the tools to dope racehorses. As a former standardbred racehorse trainer, Giannelli knew firsthand the dangers of selling illegal, injectable performance-enhancing drugs to trainers who were recklessly injecting horses to gain a competitive edge. The jury’s swift conviction demonstrates the gravity of Giannelli’s criminal scheme. This Office remains committed to holding accountable those who would engage in the kind of fraud and animal abuse exemplified by Giannelli’s crimes.”

As established by the evidence at trial:[1]

GIANNELLI was charged in United States v. Navarro, 20 Cr. 160 (MKV), a case arising from an investigation of widespread schemes by racehorse trainers, veterinarians, 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 drug 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, Ohio, Kentucky, and the United Arab Emirates (“UAE”), all to the detriment and risk of the health and well-being of the racehorses.  Trainers 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. Indicted veterinarians profited from the sale and administration of these medically unnecessary, misbranded, and adulterated substances. GIANNELLI, a seller of customized PEDs designed specifically to evade anti-doping controls, personally earned hundreds of thousands of dollars in sales commissions from her sale and distribution of PEDs to trainers around the United States.

GIANNELLI marketed these drugs as “untestable” under typical anti-doping drug screens and extolled the virtues of these illegal drugs by describing their potency and untestability.  In the course of over fifteen years during which Giannelli operated under the auspices of the company, Equestology, GIANNELLI deliberately lied to state investigators to cover up her crimes and sold vials with no or incomplete labels, with no hint as to the provenance of those unsafe and prohibited drugs.

The drugs GIANNELLI sold included intravenous and intramuscular injectables that she sold to laypeople for injection into the horses under their purported “care,” many of which were seized at premises throughout the country at the time of the original indictments in this case, including barns located in New York. Those included “blood building” drugs (for example, “BB3” and other Epogen-mimetic substances), vasodilators (for example, “VO2Max”), and bags filled with scores of “bleeder pills,” each designed to covertly increase performance in affected horses.

GIANNELLI was convicted of one count of conspiracy to commit misbranding and drug adulteration in connection with her work for Equestology. GIANNELLI faces up to five years in prison for her conviction.

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

*                *                *

Mr. Williams praised the outstanding investigative work of the FBI 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 Customs and Border Protection and the Food and Drug Administration for their assistance and expertise. This case is being handled by the Office’s Money Laundering and Transnational Criminal Enterprises Unit.  Assistant United States Attorneys Sarah Mortazavi, Benjamin A. Gianforti, and Anden Chow are in charge of the prosecution.

 

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[1] As to Giannelli’s co-defendants, these facts, including the entirety of the texts of the Indictments and the descriptions 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 JEFFERY N. CROSSLAND was sentenced yesterday to 51 months in prison, RAYMOND E. ROBINSON, a pastor, was sentenced on March 18, 2022 to 42 months in prison and STEPHEN C. PARENTE was sentenced on March 19, 2022 to 33 months in prison for conspiring to defraud four churches and a real estate development company out of more than $3.5 million.

U.S. Attorney Damian Williams said:  “Crossland, Robinson, and Parente abused the trust of four churches and Crossland and Robinson victimized a real estate development company as well.  All the victims were seeking financing for building projects.  The defendants induced them to enter into loan agreements requiring the victims to transfer “deposit” money into a bank account by falsely representing that the deposit money would be safe from loss.  Based on those false representations, the victims transferred their deposits.  But the money did not remain in the account safe from loss.  Instead, the victims lost their money and their ability to fund their building construction projects.  For their crime, Crossland, Robinson, and Parente will serve a substantial sentence in prison.”

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

CROSSLAND was a managing member of Crossland Capital Partners, LLC, a purported broker dealer focused on “real estate related capital raising,” located in Santa Monica, California.  He also controlled JC Funding Group, also located in Santa Monica, which was represented to be a corporate entity overseeing various subsidiary lending companies under the JC Funding name.  PARENTE controlled Eagle Capital Investment Partners, LP (“Eagle Capital”), a purported private financial advisory consultancy practice based in Georgia.  ROBINSON was a minister.  He was employed by a church-building company based in Missouri and he ran Ray Robinson Ministries – a purported consulting firm for churches.  ROBINSON, along with PARENTE, had an ownership interest in Eagle Capital.

In or about early 2013, the defendants met in California and planned their strategy, which was to target churches and market to them by capitalizing on ROBINSON’s background as a minister and church builder.  They represented that they were in the business of providing “unconventional loans” for churches and that CROSSLAND funded loans through capital he obtained from other clients who invested in his projects.  To effectuate the scheme to defraud, the three defendants drafted and modified term sheets and loan agreements that required the Victims to provide “deposits” as security for their loans.  To induce the Victims to enter into the loan agreements and provide these deposits, they agreed to and then made various other false representations about the Victims’ deposit money.  Through their communications with the Victims and language they drafted together and included in loan documents, they led the Victims to believe the deposit money would be held in a bank account (the “Account”) and that it would be safe from loss.  As the Victims ultimately learned, that was false and their money was not actually being used as the “deposit” they thought it was. Instead, it was being invested in what the defendants understood to be “trading programs” involving overseas investors.

In order to perpetuate the scheme and conceal the fraud, CROSSLAND had others transfer some of Victims’ deposit money to other Victims and falsely represented that these money transfers were loan draw payments.  In actuality, CROSSLAND never had the money to fund the Victims’ loans.  In addition to providing certain Victims with funds the defendants claimed to be loan draw payments, in order to perpetuate the scheme and conceal the fraud, CROSSLAND and ROBINSON had communications with the Victims, with the intention of (a) lulling them into believing that their loans would be funded and/or their deposits returned, and (b) preventing them from reporting their conduct to law enforcement authorities and/or taking legal action against them.

In this way, from April 2013 through March 2015, CROSSLAND, ROBINSON, and PARENTE fraudulently induced Victims to transfer more than $3.5 million to the Escrow Account.  The purported loans were never funded and millions of dollars in deposits were lost.

*                *                *

In imposing CROSSLAND’S sentence, U.S. District Judge Kenneth M. Karas noted that the crime was “really serious and it required a great deal of planning and heartlessness.” 

CROSSLAND, 65, of Glendale, California, ROBINSON, 70, of Leander, Texas, and PARENTE, 54, of Buford, Georgia, each pled guilty to a one count Indictment charging them with conspiracy to commit wire fraud. CROSSLAND previously pled guilty to the one count Indictment on September 17, 2021.  ROBINSON and PARENTE previously pled guilty on September 8, 2021 and July 15, 2021, respectively. 

In addition to the prison terms, CROSSLAND was sentenced to three years of supervised release and ordered to pay forfeiture of $37,873 and restitution of $3,226, 950. ROBINSON was also sentenced to three years of supervised release and ordered to pay forfeiture of $17,750 and restitution of $3,226, 950.  PARENTE was sentenced to three years of supervised release and ordered to pay forfeiture of $33,230 and restitution of $2,986,950. 

Mr. Williams praised the outstanding investigative work of the U.S. Postal Inspection Service and Special Agents of the United States Attorney’s Office.  Mr. Williams also thanked the United States Attorney’s Office for the Eastern District of Tennessee, the Knoxville, Tennessee, field office of the Federal Bureau of Investigation, and the Westchester County District Attorney’s Office for their assistance.

The case is being prosecuted by the Office’s White Plains Division.  Assistant U.S. Attorneys Margery Feinzig and Derek Wikstrom are in charge of the prosecution.

Damian Williams, the United States Attorney for the Southern District of New York, announced that defendant ARIFUL HAQUE was sentenced to one year and one day in prison for participating in a technical support fraud scheme.  This conspiracy exploited victims, including elderly victims, by remotely accessing their computers and convincing victims to pay for computer support services that they did not need, and which were never actually provided.  As part of this scheme, HAQUE registered a purported technical support company, which defrauded more than 100 victims located across the United States and Canada.  HAQUE previously pled guilty before U.S. District Judge Paul A. Crotty, who imposed today’s sentence.

U.S. Attorney Damian Williams said:  “Ariful Haque participated in a conspiracy that caused pop-up windows to appear on victims’ computers—pop-up windows that claimed, falsely, that a virus had infected the victim’s computer.  Through this and other misrepresentations, this fraud scheme deceived scores of victims across the country into paying hundreds or thousands of dollars to the perpetrators for computer support services they did not need.  Thanks to our partners at Homeland Security Investigations, this scheme has been dismantled and another participant has been sentenced to prison.”

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

From approximately November 2017 through June 2019, HAQUE was a member of a criminal fraud ring (the “Fraud Ring”) based in the United States and India that committed a technical support fraud scheme that exploited score of victims located across the United States and Canada, including in the Southern District of New York.  The Fraud Ring’s primary objective was to trick victims into believing that their computers were infected with malware, in order to deceive them into paying hundreds or thousands of dollars for phony computer repair services. 

The scheme generally worked as follows.  First, the Fraud Ring caused pop-up windows to appear on victims’ computers.  The pop-up windows claimed, falsely, that a virus had infected the victim’s computer.  The pop-up window directed the victim to call a particular telephone number to obtain technical support.  In at least some instances, the pop-up window threatened victims that, if they restarted or shut down their computer, it could “cause serious damage to the system,” including “complete data loss.”  In an attempt to give the false appearance of legitimacy, in some instances the pop-up window included, without authorization, the corporate logo of a well-known, legitimate technology company.  In fact, no virus had infected victims’ computers, and the technical support phone numbers were not associated with the legitimate technology company.  Rather, these representations were false and were designed to trick victims into paying the Fraud Ring to “fix” a problem that did not exist.  And while the purported “virus” was a hoax, the pop-up window itself did cause various victims’ computers to completely “freeze,” thereby preventing these victims from accessing the data and files in their computer—which caused some victims to call the phone number listed on the pop-up window.  In exchange for victims’ payment of several hundred or thousand dollars (depending on the precise “service” victims purchased), the purported technician remotely accessed the victim’s computer and ran an anti-virus tool, which is free and available on the Internet.  The Fraud Ring also re-victimized various victims, after they had made payments to purportedly “fix” their tech problems.

The Fraud Ring operated through at least 15 fraudulent entities.  In November 2017, HAQUE registered one of these fraudulent entities in New York State.  HAQUE’s entity defrauded more than approximately 100 victims as part of this scheme.  As part of his involvement in the fraud, HAQUE opened U.S. bank accounts to receive funds from victims, deposited victim checks, received a victim complaint, and repeatedly provided a co-conspirator in India (“CC-1”) with authentication codes so that CC-1 could wire funds out of these bank accounts.  HAQUE, a former bank branch manager in New York City, also tried to use his banking experience to further the scheme, including by advising CC-1 that it was “[n]ot a good idea to deposit” certain checks, some of which would risk the involvement of “the Feds.”  Moreover, on occasion, HAQUE also assisted another co-conspirator (“CC-2”), who had registered a different fraudulent entity that was part of the Fraud Ring, as well.  In total, as he admitted in his plea agreement, HAQUE is responsible for losses exceeding $600,000.

*                *                *

In addition to his prison term, HAQUE, 36, of Queens, New York, was sentenced to three years of supervised release, forfeiture of $38,886.32, and restitution of $470,672.16.

HAQUE’s co-defendant, Romana Leyva, was previously sentenced to 100 months in prison, three years of supervised release, forfeiture of $4,679,586.93, and restitution of $2,707,882.91.

Mr. Williams praised the New York Office of U.S. Immigration and Customs Enforcement’s Homeland Security Investigations (“HSI”)’s El Dorado Task Force, Cyber Intrusion/Cyber Fraud Group for its outstanding work on the investigation.  Mr. Williams also thanked the New York City Police Department for its assistance on this case. 

This matter is being handled by the Office’s Complex Frauds and Cybercrime Unit.  Assistant United States Attorneys Michael D. Neff and Jilan J. Kamal are in charge of the prosecution.

 

Damian Williams, the United States Attorney for the Southern District of New York, and Ricky Patel, Acting Special Agent in Charge of the New York Field Office of Homeland Security Investigations (“HSI”), announced today that NATALIA KORZHA pled guilty today in Manhattan federal court to conspiracy to commit bank fraud in connection with a scheme to launder money derived from an online vehicle sale scam that generated at least $5.3 million from dozens of defrauded consumers.  KORZHA pled guilty before U.S. District Judge Analisa Torres.

U.S. Attorney Damian Williams said:  “As she admitted today, Natalia Korzha managed a group of co-conspirators who opened bank accounts that were used to launder millions of dollars in criminal proceeds from an online vehicle sale scam.  Without her money laundering operation, online fraudsters would not be able to profit from their illegal schemes.  Korzha will now face a term of imprisonment and be required to forfeit her ill-gotten gains.”

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

From at least March 2019 through approximately March 2021, KORZHA managed a money laundering operation based in Brooklyn that included co-defendants VLADISLAV NECEAEV, ANASHON KAMALOV, KAROL KAMINSKI, STANISLAV TUNKEVIC, and SVETLANA VAIDOTIENE, among others.  With KORZHA as coordinator, NECEAEV, KAMALOV, KAMINSKI, TUNKEVIC, 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, KAMALOV, KAMINSKI, TUNKEVIC, 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. 

*                *                *

KORZHA, 49, of Brooklyn, New York, pled guilty to one count of conspiracy to commit bank fraud and agreed to forfeiture of $5,386,538 and restitution of $5,386,538.  KORZHA is scheduled to be sentenced by U.S. District Judge Analisa Torres on September 7, 2022.

NECEAEV, 28, of Brooklyn, New York, pled guilty to one count of conspiracy to commit bank fraud on March 14, 2022, before Magistrate Judge Robert W. Lehrburger.  He has agreed to forfeit $526,000.  NECEAEV is scheduled to be sentenced by Judge Torres on June 8, 2022.

TUNKEVIC, 47, was extradited to the United States from Lithuania on March 25, 2022, and presented in Manhattan federal court before United States Magistrate Judge Sarah L. Cave on March 28, 2022.

KAMINSKI, 32, was extradited to the United States from Lithuania on April 4, 2022, and presented in Manhattan federal court before United States Magistrate Judge Jennifer E. Willis on April 5, 2022.

VAIDOTIENE, 54, was extradited to the United States from Lithuania on April 8, 2022, and presented in Manhattan federal court before United States Magistrate Judge Ona T. Wang on April 11, 2022.

TUNKEVIC, KAMINSKI, and VAIDOTIENE are each charged with one count of conspiracy to commit bank fraud and one count of conspiracy to commit money laundering.  The charges against each of them are pending.   They have been ordered detained pending trial.

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 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, 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 a complaint charging DAVID STONE with securities fraud in connection with an insider trading scheme. STONE was arrested yesterday and will be presented today in the United States District Court for the District of Oregon.

U.S. Attorney Damian Williams said:  “As alleged, David Stone used his computer skills to extract pre-publication stock picks from an investment advice service so he could beat the markets and generate millions in trading profits. Though Stone may have thought that he could hide his scheme behind IP addresses, other losing trades, and donations to his church, he was wrong. This prosecution reflects my office’s commitment to market integrity and a fair playing field for investors.”

FBI Assistant Director Michael J. Driscoll said:  “As we allege here today, Mr. Stone exploited his unauthorized access to market-moving stock recommendations to make trades in advance of their release.  In relaying tips to another individual, he acknowledged his actions might be illegal and even provided advice to the individual on avoiding detection.  As today's action demonstrates, the FBI and our partners remain committed to protecting the integrity of our financial markets from the unscrupulous actions of those who seek to reap illegal gains from them.”

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

From 2020 up to his arrest in 2022, DAVID STONE exploited market-moving stock recommendations made by an investment recommendation service (“Advisor-1”) before those recommendations were released to paying subscribers. STONE, an information technology (“I.T.”) professional, accessed Advisor-1’s computing system without authorization and viewed information relating to Advisor-1’s recommendations before they were announced to Advisor-1’s paying subscribers.

Advisor-1’s stock recommendations typically, but not always, lead to higher closing prices for the recommended stock as compared to the prior day’s closing price. By trading on those recommendations before they were announced, STONE was able to obtain significant profits unavailable to other market participants. In fact, since in or about November 2020, brokerage accounts associated with STONE traded ahead of Advisor-1 recommendations on more than a dozen occasions for approximately $3 million in gross gains.

In addition to his own trading, STONE supplied trading tips to at least one other person (“Tipee-1”). Between on or about January 20, 2021 up to and including on or about March 17, 2022, on approximately 45 different days, STONE sent emails to Tipee-1 providing stock names and/or ticker symbols ahead of Advisor-1 announcements of stock recommendations to its paying subscribers. Since in or about January 2021, a brokerage account associated with Tipee-1 traded ahead of Advisor-1 recommendations on more than a dozen occasions. As a result of that trading, Tipee-1 profited more than approximately $2.7 million.

Before providing tips to Tipee-1, STONE provided Tipee-1 with “guidelines” for avoiding detection and for donating some of the trading profits to a church. Specifically, on or about January 16, 2021, STONE sent an email to Tipee-1 that included the following:

I’m ok with sharing the weekly trades with you. I have used it so far to generate a significant amount of money and I'm sure you will be able to as well. There is a small possibility that what we are doing could be considered insider trading. [Advisor-1] uses only public information about to make its recommendations and even the recommendations are behind a paywall so it is a stretch to call it insider trading but it certainly behaves like it because it almost guarantees favorable price moves at a certain time.

So with that in mind these are the guidelines I am following:

. . . .

* Purchase a [Service-1] subscription from [Advisor-1] . . . and open some long term position of some of the recommendation that appeal to you

* Do other trades besides just what I tell you. If all your trades are up 5x and you never make a loosing trade it may call attention of regulators. . . .

* Pay your taxes. These trades are short term capital gains and are taxed at your regular income tax rate. You may get a significant tax bill come April 15 2022.

* Pay your tithe. This extra income has been a subject of regular prayer for me. I anticipate I will not need to keep my regular job for long when we are on the mission field. I have opened a donor advised fund which make it easy to contribute large sums of money or stocks directly and then schedule donations to be made to my church and any other charity I choose. It makes it easier to make anonymous donations as well which I feel is important.

. . . .

With these guidelines in place I can email the recommendations as soon as I know. I feel [a particular email provider] will be a more secure form of communication if it works for you.

*                *                *

STONE, 36, of Nampa, Idaho is charged with one count of securities fraud, which carries a maximum sentence of 25 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 work of the FBI.  Mr. Williams also thanked the U.S. Securities and Exchange Commission, which today filed a parallel civil action. 

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

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

 

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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 in this release constitute only allegations, and every fact described should be treated as an allegation.

Damian Williams, the United States Attorney for the Southern District of New York, and Scott J. Lampert, Special Agent-in-Charge of the U.S. Department of Health and Human Services Office of the Inspector General (“HHS-OIG”) New York Regional Office, announced today that the United States filed and settled a healthcare fraud lawsuit against online retail pharmacy PillPack, LLC (“PillPack”), a wholly-owned subsidiary of Amazon.com, Inc.  The settlement resolves allegations that PillPack improperly billed Government healthcare programs (“GHPs”), including Medicare and Medicaid, for more insulin pens than patients needed according to their prescriptions and falsely under-reported the days-of-supply of insulin dispensed.  Under the settlement, PillPack agreed to pay approximately $5.79 million to the United States and various States that were fraudulently overbilled for insulin.  As part of the settlement, PillPack also admitted and accepted responsibility for certain conduct the Government alleged in its Complaint, including that it dispensed insulin pens that exceeded days-of-supply limits imposed by GHPs.

U.S. Attorney Damian Williams said:  “Pharmacies are trusted to provide accurate information to Government healthcare programs and to prevent waste when dispensing medications to patients.  PillPack abused this trust by dispensing insulin refills long before patients needed them and by falsely reporting the days-of-supply of insulin actually dispensed to prevent its claims for reimbursement from being denied.  This Office will continue to hold pharmacies accountable when they submit false information and waste taxpayer dollars.”

Insulin pens (hard plastic pen-shaped cases containing syringes filled with insulin solution) are a common way for diabetic patients to self-administer insulin.  Manufacturers most frequently distribute insulin pens in five-pen cartons with each pen containing 300 units (3 mL) of insulin solution.  Pharmacies can dispense such pens to patients only with valid prescriptions from licensed prescribers.  Valid insulin prescriptions must set forth the “directions for use,” which typically designate both how much insulin to administer and the frequency and/or timing of when to administer it.

When PillPack sought reimbursement from GHPs for insulin pens, it was required to report, among other data, the quantity dispensed and the days-of-supply.  The “quantity dispensed” specifies the amount of medication being dispensed to a patient when the pharmacy fills the prescription, and the “days-of-supply” refers to the number of days that the dispensed medication should last if the patient uses it according to the directions for use in the prescription.  Typically, to calculate days-of-supply, a pharmacist divides the total quantity of medication being dispensed to a particular patient by that patient’s “daily dose,” i.e., the amount of medication that the prescriber directs the patient to use each day. 

GHPs impose dispensing limits for prescription drugs, including insulin pens, in terms of quantity and days-of-supply and will deny a claim if the reported days-of-supply exceeds those limits, unless an override is obtained.  GHPs typically calculate the date on which a prescription refill would be needed (the “refill due date”) based on the date when a patient last filled a prescription and the days-of-supply reported by the pharmacy for that prior fill.  GHPs also typically establish automated processes to deny claims for reimbursement for refills that are submitted too far in advance of the refill due dates.  The reliability of these processes depends on the accuracy of the days-of-supply reported by pharmacies.

As alleged in the Government’s Complaint:

From April 2014 through November 2019 (the “Covered Period”), PillPack’s general practice was to dispense insulin pens to patients using full cartons.  PillPack would dispense and bill for the full carton, and falsely under report the days-of-supply to make it appear that the dispensing did not violate the program’s days-of-supply limit.

The practice of under-reporting days-of-supply also led PillPack to dispense premature refills to program beneficiaries.  Whenever PillPack recorded in its internal system the inaccurate lower days-of-supply that were submitted to conform with the GHP’s days-of-supply limit, the system would generate a premature refill due date.  As a result, PillPack pharmacists frequently dispensed insulin pen refills days or weeks before patients actually needed them according to their prescriptions. 

The settlement requires PillPack to pay $5,616,136.85 to the United States, and PillPack has agreed separately to pay $175,522.55 to state governments, for a total of $5,791,659.40.  Under the settlement, PillPack admitted, among other things, that:

• During the Covered Period, PillPack’s insulin pen dispensing practice was to supply patients with a full carton of insulin pens.  In many instances, this resulted in exceeding the GHP’s applicable days-of-supply limit.  Instead of accurately reporting the days-of-supply and contacting the GHP or its agent to attain the requisite override, in many instances PillPack would dispense and bill for the full carton, and reduce the days-of-supply reported to the GHP to conform to the GHP’s days-of-supply limit.   As a result, for those claims, PillPack reported days-of-supply data to GHPs that were different from, and lower than, the days-of-supply that should have been reported had PillPack calculated days-of-supply according to the typical pharmacy billing formula of dividing the quantity of insulin dispensed by the daily dose.
• Prior to April 2019, PillPack’s prescription management and dispensing software determined refill dates based on the reported days-of-supply.  Thus, during this time period, when PillPack pharmacists reported inaccurate lower days-of-supply data to GHPs and payors working on their behalf, the software used this inaccurate data to generate premature refill due dates, causing PillPack pharmacists to dispense insulin pen refills to patients days or weeks before the patients actually needed them according to their prescriptions. 
• During the Covered Period, PillPack received audit reports from pharmacy benefit managers, acting on behalf of GHPs, requesting that PillPack repay the overpayments it had received for insulin pen prescription claims due to inaccurate days-of-supply reporting.
• GHPs and payors working on their behalf approved and paid claims submitted by PillPack for insulin pen refills that they would not have approved if PillPack had accurately reported the days-of-supply for previous fills according to the typical pharmacy billing formula of dividing the quantity dispensed by the daily dose.  Specifically, PillPack’s practice of dispensing and submitting reimbursement claims for insulin pen refills using inaccurate lower days-of-supply data prevented GHPs and payors working on their behalf from reliably calculating refill due dates and confirming that refills had not been prematurely dispensed before approving PillPack’s claims for reimbursement. 
• In certain instances, over time, patients accumulated multiple extra insulin pens that they did not need according to their prescriptions.

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

Mr. Williams praised the outstanding investigative work of the Office of Inspector General, Department of Health and Human Services.  He also thanked the Medicaid Fraud Control Units for Washington and Texas for their assistance in this case.

This case is being handled by the Office’s Civil Frauds Unit.  Assistant U.S. Attorneys Danielle Levine and Pierre Armand are in charge of the case.

Damian Williams, the United States Attorney for the Southern District of New York, and Anne Milgram, the Administrator of the U.S. Drug Enforcement Administration (“DEA”), announced today the extradition of CARLOS FERNANDO MELO, for narco-terrorism, firearms, and drug-trafficking offenses. MELO, a Colombian national, was taken into custody by Colombian authorities on April 20, 2021 at the request of the United States, extradited to the United States, and arrived in the Southern District of New York yesterday from Colombia. MELO is expected to be presented later today before U.S. Magistrate Judge James L. Cott. The case is assigned to United States District Court Judge Sidney H. Stein.

U.S. Attorney Damian Williams said:  “As alleged, Carlos Fernando Melo attempted to broker deals for machine guns with known narco-terrorist organizations, with the stated mission of murdering a DEA agent abroad as a ‘trophy.’  Unbeknownst to him, the individuals Melo believed to be arms traffickers were, in actuality, DEA confidential sources.  Melo’s extradition today ensures that he’ll be held accountable on U.S. soil for allegedly targeting DEA Special Agents committed to fighting the illicit drug trade.”

DEA Administrator Anne Milgram said:  “DEA’s central mission is targeting the most dangerous, most ruthless drug-traffickers who threaten our communities for their own profit.  Carlos Fernando Melo is alleged to have not only supported and participated in violent narco-terrorism, but also sought to have a DEA agent murdered.  DEA will relentlessly pursue narco-terrorists and drug traffickers who threaten the safety and health of Americans.”

According to the allegations contained in the Complaint and Indictment charging the defendant, which were unsealed today in Manhattan federal court:[1]

Between approximately September 2019 and December 2019, MELO attempted to purchase explosives and firearms, including machine guns, from individuals MELO understood to be arms traffickers for use by two organizations then designated by the Department of State as Foreign Terrorist Organizations: the Fuerzas Armadas Revolucionarias de Colombia (“FARC”) and the Ejército de Liberación Nacional (“ELN”). Unbeknownst to MELO, the arms traffickers with whom he was negotiating were, in actuality, DEA confidential sources.

During these meetings, a confidential source posing as a weapons broker introduced MELO to two other confidential sources who claimed to be weapons dealers. These confidential sources, in turn, introduced MELO to an undercover law enforcement officer who purported to be a member of the terrorist organization Hizballah with access to explosive material and firearms. In the meetings, MELO reiterated that he was seeking to broker weapons deals for the FARC and ELN, which he claimed to have done in the past. MELO provided the sources with a coded list of weapons that the FARC and ELN wanted to purchase. MELO also represented that he had spoken with leadership in the FARC and ELN regarding their interest in acquiring weapons and explosive material. Ultimately, MELO requested more than 300 machine guns for the FARC as well as explosive material and mercury for the ELN. While MELO initially suggested that the FARC would pay for their weapons in cocaine, MELO later told the confidential sources that the FARC would pay cash for their arms, and that MELO had another contact who would sell cocaine to the confidential sources for importation into the United States.

MELO also explained during these meetings that he sought to purchase the firearms and explosives because the FARC and ELN wanted to conduct attacks in Colombia. He detailed particulars of these planned attacks, which included the possible kidnapping and murder of a DEA agent in Colombia and the bombing of the U.S. Embassy in Bogota, Colombia. MELO said that killing a DEA agent would be a “trophy” for the FARC or ELN and that he had a particular assassin in mind who could carry out the murder.

In furtherance of these plans, MELO enlisted a co-conspirator to take photographs of the U.S. Embassy in Bogota. When this co-conspirator called MELO expressing concern about the security at the Embassy, MELO instructed the co-conspirator to take the photographs on a single day so as to not arouse any suspicion.

*                 *                *

MELO, 58, a Colombian national, is charged with: (1) participating in a narco-terrorism conspiracy, which carries a 20-year mandatory minimum sentence and a maximum of life in prison; (2) conspiring to import cocaine into the United States, which carries a 10-year mandatory minimum sentence and a maximum of life in prison; and (3) conspiring to possess machine guns and destructive devices during and in relation to the narco-terrorism and cocaine importation conspiracies, which carries a maximum of life in prison.

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

Mr. Williams praised the outstanding efforts of the DEA’s Special Operations Division Bilateral Investigations Unit. Mr. Williams also thanked the Department of Justice’s Office of International Affairs, Judicial Attachés in Bogotá, Colombia, and the Counterterrorism Section.

The case is being handled by the Office’s National Security and International Narcotics Unit. Assistant United States Attorneys Jason A. Richman, Kyle A. Wirshba, and Kaylan E. Lasky are in charge of the prosecution.

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

Damian Williams, the United States Attorney for the Southern District of New York, announced that JOSE CABAN, a/k/a “Nene,” was sentenced today to 21 years in prison for committing violent crimes in aid of racketeering and firearms offenses. In June 2018, CABAN helped shoot and paralyze an 18-year-old victim and, then a few months later, in February 2019, CABAN fired a gun five times on a crowded street when attempting to murder a gang rival. CABAN was convicted in October 2021 after a jury trial before U.S. District Judge Valerie E. Caproni, who imposed today’s sentence.

U.S. Attorney Damian Williams said:  “Today, Jose Caban was rightly sentenced to decades of imprisonment for participating in two shootings that paralyzed an 18-year-old victim and sent people, including children, running for their lives on a crowded street. We will continue to hold accountable those who plague our communities with senseless gun violence.”

According to the Superseding Indictment and the evidence at trial:

CABAN is a member of the Jack Boyz, a criminal enterprise involved in committing numerous acts of violence, including shootings, in and around the Bronx.  Members and associates of the Jack Boyz engage in violence to retaliate against rival gangs, and to promote the standing and reputation of the Jack Boyz.

On June 19, 2018, near East 136th Street and Willis Avenue in the Bronx, CABAN helped another member of the Jack Boyz attempt to murder a rival, who was shot in the spine and paralyzed from the chest down.

On February 8, 2019, near East 135th Street and Willis Avenue in the Bronx, CABAN fired a gun five times on a street crowded with innocent bystanders, including children, in an attempt to murder a rival.

*                *                *

In addition to his prison term, CABAN, 23, was sentenced to five years of supervised release.

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

The case is being handled by the Office’s Violent and Organized Crime Unit. Assistant United States Attorneys Lindsey Keenan, Justin V. Rodriguez, and Jamie E. Bagliebter are in charge of the prosecution.

Damian Williams, United States Attorney for the Southern District of New York, announced today that ROBERT LENARD BOOTH, a/k/a “Trevor Nicholas,” was found guilty on all counts of a three-count Indictment that charged him with defrauding victim investors in countries around the world and laundering the proceeds of the fraud. The verdict followed a six-day jury trial in Manhattan Federal Court before U.S. District Judge Jed S. Rakoff.

U.S. Attorney Damian Williams said:  “Robert Lenard Booth stole his victims’ lifesavings and moved the money around the world to hide his elaborate fraud. He thought he could get away with it. Today the jury showed him he was wrong.”

According to the Indictment and the evidence at trial:

From at least June 2019 through August 2021, BOOTH ran, and conspired with others to run, a boiler room operation that impersonated Manhattan-based brokerage firms and sold investors nearly $2 million in securities that they never received. To deceive investors, BOOTH and his co-conspirators created fake identities and false and misleading webpages, email addresses, and phone numbers. On phone calls with investors, BOOTH and others pretended to be licensed brokers, lied, and used high-pressure tactics to pitch stocks for American companies. They followed up by sending the victims false paperwork to confirm the alleged stock purchases and trades.

The victims were directed to wire payments—sometimes hundreds of thousands of dollars—to shell company accounts in New York, Hong Kong, and Singapore. The funds were laundered and distributed to BOOTH and his co-conspirators.

BOOTH was convicted of conspiracies to commit securities fraud, wire fraud and money laundering. He faces a maximum sentence of 45 years in prison and a maximum fine of $500,000 or twice the gross gain or gross loss from the offense.

Formerly a resident of Brooklyn, New York, BOOTH, 68, relocated overseas and spent years operating his scheme from Thailand and Panama. In August 2021, BOOTH flew from Thailand into JFK International Airport and was arrested on arrival. Pending trial, BOOTH resided in Brooklyn, where he lived until his conviction today. Judge Rakoff revoked his bail and remanded him following the conviction.

Mr. Williams praised the outstanding investigative work of the Special Agents of the United States Attorney’s Office, Homeland Security Investigations, and the Internal Revenue Service, Criminal Investigation and their partnership with the J5. The J5 works together to gather information, share intelligence and conduct coordinated operations against transnational financial crimes. The J5 includes the Australian Taxation Office, the Canadian Revenue Agency, the Dutch Fiscal Information and Investigation Service, Her Majesty's Revenue and Customs from the U.K. and IRS-CI from the U.S.

This case is being handled by the Office’s General Crimes Unit.  Assistant United States Attorneys Andrew Jones, Jane Y. Chong, and Andrew Thomas are in charge of the prosecution.

Damian Williams, the United States Attorney for the Southern District of New York, announced that STEVE ROSADO, a registered sex offender, was sentenced today by the Honorable Jed S. Rakoff to 20 years in prison for attempting to entice two minor girls to engage in illegal sexual activity, and for attempting to receive child pornography after having been previously convicted of sex offenses involving minors.  ROSADO was arrested in December 2020 and pled guilty to the charges in November 2021.

U.S. Attorney Damian Williams said:  “Steve Rosado tried to – and in some cases, did – prey on the most defenseless members of our community.  He attempted to engage in repeated sexual activity with multiple children, some of whom he believed to be as young as 9 years old, even after having been twice before convicted of sex offenses and required to register as a sex offender.  Crimes like this can have devastating and lasting effects on minor victims, and I once again thank the FBI and the NYPD for their work in investigating and arresting Rosado before he could harm any others.”

According to public court filings:

On November 29, 2020, an undercover FBI agent (the “UC”), posing as the mother of a 12-year-old girl and a 9-year-old girl, initiated a series of conversations with ROSADO, then 41 years old, via an online messaging service.  The UC and ROSADO later exchanged telephone numbers, and they proceeded to communicate over the next week via the online messaging service, text message, and lengthy telephone conversations that were recorded by the UC.

In hundreds of text messages, and hours of calls, ROSADO repeatedly expressed, in graphic and unambiguous terms, his desire to engage in repeated sexual activity with both children – including both oral and vaginal sex – as part of their “new routine together.”  To help alleviate any concerns the UC might have regarding ROSADO having sexual relations with her young children, ROSADO provided the UC with his recent test results for COVID-19 and HIV, and he discussed what he and the UC could do if he were to impregnate one of the children.

The UC and ROSADO arranged to meet at a bar in Manhattan on the evening of December 7, 2020, with the understanding that they would return to the UC’s apartment afterward and ROSADO would then engage in sexual activity with the children.  On the evening in question, ROSADO met the UC at the agreed-upon location.  After the two of them left the bar and began walking toward the UC’s purported apartment, law enforcement arrested ROSADO.  ROSADO was at the time in possession of gifts for the children – including dolls and a stuffed animal – and an overnight bag containing, among other things, lubricant.

That same day, law enforcement seized multiple electronic devices belonging to ROSADO.  Subsequent searches of those devices by law enforcement, pursuant to search warrants, revealed that ROSADO had for weeks been communicating online with several other individuals who purported to be minors – some purporting to be as young as 13 years old – in an ongoing effort not only to receive child pornography, but also to persuade the young victims to move to New York to live with him, so that he could engage in sexual activity with them, impregnate them, and eventually engage in sexual activity with their future children.  ROSADO’s electronic devices further revealed that during this same period, ROSADO was engaged in an ongoing sexual relationship with a 16-year-old female victim.

At the time he committed the aforementioned offenses, ROSADO was a registered sex offender, having twice before been convicted of sex offenses involving minors.  In 2004, ROSADO was convicted of possessing a sexual performance by a child, in violation of New York State Penal Law § 263.16; and in 2005, ROSADO was convicted of four counts of rape in the second degree, in violation of New York State Penal Law § 130.30(1), four counts of rape in the third degree, in violation of New York State Penal Law § 130.25(2), and two counts of endangering the welfare of a child, in violation of New York State Penal Law § 260.10(1).  The 2004 conviction arose out of ROSADO’s stalking and attempted kidnapping of a 13-year-old female victim he met online, and the 2005 conviction arose out of ROSADO’s having had sexual intercourse approximately 24 times with a 14-year-old female victim.  As a result of his prior convictions, ROSADO was incarcerated from December 2005 to October 2013.

*                *                *

In addition to his prison term, ROSADO, 42, of the Bronx, New York, was sentenced to lifetime supervised release.

Mr. Williams praised the outstanding investigative work of the FBI-NYPD Child Exploitation and Human Trafficking Task Force.

This case is being handled by the Office’s General Crimes Unit.  Assistant United States Attorneys Jonathan L. Bodansky, Jane Y. Chong, and Elinor L. Tarlow 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 a Superseding Indictment charging TERRENCE WILLIAMS, AAMIR WAHAB, WILLIAM WASHINGTON, ALAN ANDERSON, KEYON DOOLING, ANTHONY ALLEN, DESIREE ALLEN, SHANNON BROWN, WILLIAM BYNUM, RONALD GLEN DAVIS, CHRISTOPHER DOUGLAS-ROBERTS, a/k/a “Supreme Bey,” JAMARIO MOON, DARIUS MILES, MILTON PALACIO, RUBEN PATTERSON, EDDIE ROBINSON, SEBASTIAN TELFAIR, CHARLES WATSON JR., and ANTHONY WROTEN with conspiracy to commit health care fraud and wire fraud, in connection with a scheme to defraud the National Basketball Association’s (“NBA’s”) Health and Welfare Benefit Plan out of at least approximately $5 million.  TERRENCE WILLIAMS and ALAN ANDERSON are also charged with aggravated identity theft in connection with the same scheme.  TERRENCE WILLIAMS, ALAN ANDERSON, ANTHONY ALLEN, DESIREE ALLEN, SHANNON BROWN, WILLIAM BYNUM, RONALD GLEN DAVIS, CHRISTOPHER DOUGLAS-ROBERTS, a/k/a “Supreme Bey,” JAMARIO MOON, DARIUS MILES, MILTON PALACIO, RUBEN PATTERSON, EDDIE ROBINSON, SEBASTIAN TELFAIR, CHARLES WATSON JR., and ANTHONY WROTEN were charged in a prior Indictment and arrested, or surrendered, in October 2021.  AAMIR WAHAB and WILLIAM WASHINGTON, both medical providers who allegedly facilitated the scheme, and KEYON DOOLING, a former NBA player who allegedly engaged in the scheme and recruited other co-conspirators to join the scheme, were added as defendants to the charged health care fraud and wire fraud conspiracy.  WAHAB, WASHINGTON, and DOOLING were arrested today.  WASHINGTON will be presented in the Western District of Washington.  WAHAB will be presented in the Central District of California.  DOOLING will be presented in the District of Utah.  The case is assigned to U.S. District Judge Valerie E. Caproni.

U.S. Attorney Damian Williams said:  “Today’s unsealing of additional charges in this case shows my office will investigate, and where appropriate charge, individuals involved in fraud schemes including medical providers who abuse their positions to defraud others.  I thank our law enforcement partners in the FBI for their hard work uncovering more details of the defendants’ alleged pervasive scheme to attempt to defraud the NBA Health and Welfare Benefit Plan out of at least approximately $5,000,000.”

FBI Assistant Director-in-Charge Michael J. Driscoll said:  “Today we’re charging additional defendants in this health care fraud scheme who attempted to defraud the National Basketball Association’s Health and Welfare Benefit Plan of at least approximately $5,000,000. Health care fraud causes serious problems for both the industry and consumers alike, and results in losses of tens of billions of dollars a year to fraud. Thanks to the work of our dedicated FBI agents and partners who continue to work tirelessly on this case.”

As alleged in the Superseding Indictment unsealed today[1]:

The National Basketball Association Players’ Health and Welfare Benefit Plan (the “Plan”) is a health care plan providing benefits to eligible active and former players of the NBA.  From at least in or about 2017, up to and including at least in or about 2021, TERRENCE WILLIAMS, AAMIR WAHAB, WILLIAM WASHINGTON, ALAN ANDERSON, KEYON DOOLING, ANTHONY ALLEN, DESIREE ALLEN, SHANNON BROWN, WILLIAM BYNUM, RONALD GLEN DAVIS, CHRISTOPHER DOUGLAS-ROBERTS, a/k/a “Supreme Bey,” JAMARIO MOON, DARIUS MILES, MILTON PALACIO, RUBEN PATTERSON, EDDIE ROBINSON, SEBASTIAN TELFAIR, CHARLES WATSON JR., and ANTHONY WROTEN engaged in a widespread scheme to defraud the Plan by submitting and causing to be submitted fraudulent claims for reimbursement of medical and dental services that were not actually rendered.  Over the course of the scheme, the defendants submitted and caused to be submitted to the Plan false claims totaling at least approximately $5 million.

TERRENCE WILLIAMS orchestrated the scheme to defraud the Plan.  WILLIAMS recruited other Plan participants to defraud the Plan by offering to provide them with false invoices to support their fraudulent claims.  AAMIR WAHAB, a dentist in California, and WILLIAM WASHINGTON, a doctor in Washington State, provided WILLIAMS with fraudulent invoices that WILLIAMS sent to other co-conspirators.  WILLIAMS, ALAN ANDERSON, and KEYON DOOLING each recruited other Plan participants to defraud the Plan by offering to supply them with false invoices to support their false and fraudulent claims to the Plan in exchange for payments to WILLIAMS and DOOLING.  DOOLING also obtained fraudulent invoices from WAHAB, and others, which he used to submit his own fraudulent claims; based on those claims, DOOLING himself fraudulently obtained approximately $350,000 of Plan proceeds. 

As described in the Superseding Indictment, WAHAB exchanged text messages with both WILLIAMS and DOOLING about the scheme.

For example, in or about March 2019, WILLIAMS requested that WAHAB produce additional fraudulent invoices, but WAHAB was hesitant to do so because they were having trouble collecting kickbacks from co-conspirators.  WILLIAMS appeared to be upset and messaged WAHAB, in substance and in part, “YOUVE MADE THOUSANDS OF F[---]ING DOLLARS TO PRINT A INVOICE WITH A NAME AT THE TOP like you f[---]ing kidding me[?]  We not gonna act like you doing dental work.”  WILLIAMS also sent WAHAB messages containing the names, dates, and amounts to be listed on the fraudulent invoices.

In or about April 2018, WAHAB and DOOLING exchanged messages about the creation of fraudulent invoices for another former-NBA player.  On or about April 30, 2018, WAHAB and DOOLING continued their discussion:

DOOLING:     Let’s make this thing grow sir.

WAHAB:        Lol I’m down bro[.]  Get me the whole NBA [laughing emoji]

DOOLING:     Yes we will[.] 

DOOLING also messaged with another co-conspirator about transferring proceeds obtained from a transaction in the scheme.  Specifically, on or about June 28, 2019, DOOLING messaged that co-conspirator and stated, in substance and in part, “Hey bro, here’s the breakdown: 5600 for you and me. Then 10800 for the guy. I fronted him 4200$ so you can put it with my 5600= 9800 to My [bank account information]. . . .  That way everything is under 10k.”

The Plan also enabled eligible participants to use a Plan-issued debit card (the “Plan Debit Card”) to pay for eligible medical services and products at the point of service.  WILLIAM WASHINGTON charged, and caused others to charge, the Plan Debit Cards of two co-conspirators for approximately $436,126.  WILLIAMS also exchanged messages with WASHINGTON about WASHINGTON’s creation of fraudulent invoices in furtherance of the scheme.  For example: 

WILLIAMS:  You have the card reader I have the [Plan Debit C]ards. Let’s work together . . . .  Give me the bread I’ll get it to them.  You still swiping.  You getting your money back. . . . you gonna owe me.  Ok.

WASHINGTON:  We owe each other lol. . . . 

To verify that certain services were medically necessary, the Plan sometimes requires participants to submit a letter of medical necessity from a medical provider establishing that necessity of the provided services.  WILLIAMS fraudulently created, and transferred letters of medical necessity for three co-conspirators.  ANDERSON also counseled, aided, and induced at least one co-conspirator to submit a forged letter of medical necessity to the Plan.  These letters were unusual in several respects: they were not on letterhead, contained unusual formatting, had grammatical errors, and one of the letters misspelled a purported patient’s name. 

*                      *                     *

TERRENCE WILLIAMS, AAMIR WAHAB, WILLIAM WASHINGTON, ALAN ANDERSON, KEYON DOOLING, ANTHONY ALLEN, DESIREE ALLEN, SHANNON BROWN, WILLIAM BYNUM, RONALD GLEN DAVIS, CHRISTOPHER DOUGLAS-ROBERTS, a/k/a “Supreme Bey,” JAMARIO MOON, DARIUS MILES, MILTON PALACIO, RUBEN PATTERSON, EDDIE ROBINSON, SEBASTIAN TELFAIR, CHARLES WATSON JR., and ANTHONY WROTEN are each charged with one count of conspiracy to commit health care fraud and wire fraud, which carries a maximum sentence of 20 years in prison.  TERRENCE WILLIAMS is also charged with two counts of aggravated identity theft, which carries a mandatory minimum sentence of two years in prison to run consecutively to any other sentence imposed.  ALAN ANDERSON is also charged with one count of aggravated identity theft, which carries a mandatory minimum sentence of two years in prison to run consecutively to any other sentence imposed. 

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

Mr. Williams praised the outstanding investigative work of the FBI.  In addition to the New York Field Office, Mr. Williams praised the work of the Seattle, Los Angeles, and Salt Lake City field offices.

The prosecution of this case is being overseen by the Office’s Complex Frauds and Cybercrime Unit.  Assistant United States Attorneys Ryan B. Finkel and Kristy J. Greenberg are in charge of the prosecution.

The charges contained in the Superseding Indictment are merely allegations, 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 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, announced that DERRICK CASADO, a/k/a “Big Bank,” a/k/a “Papa D,” pled guilty today to conspiring to distribute 28 grams and more of crack cocaine and using, carrying, possessing, brandishing, and discharging a firearm in connection with a crime of violence—namely, the May 17, 2019 shooting of a rival gang member near Sheridan Avenue and Marcy Place in the Bronx.  CASADO was the fourteenth defendant to plead guilty in the case and the second to admit his participation in an October 5, 2019 robbery near 20 East 116th Street in Manhattan, during which CARLOS ROSARIO, a/k/a “Baby Bottle,” shot and killed Jonathan Rodriguez, who tried to intervene in the robbery.  On February 9, 2022, ROSARIO pled guilty to conspiring to commit assault with a dangerous weapon and murder in a gang-related incident on July 18, 2019, and two counts of discharging a firearm during gang-related incidents on July 20, 2019 and October 5, 2019.  ROSARIO also admitted his role in causing Rodriguez’s death.  All of the defendants pled guilty before U.S. District Judge J. Paul Oetken.

According to allegations in the Indictment and Superseding Indictments filed in this case, as well as statements by the Government and defense at plea proceedings in this case:

Between 2017 and 2019, DARRELL LAWRENCE, a/k/a “Capo,” and DAVON MCCULLOUGH, a/k/a “Yung,” a/k/a “Dayday,” were leaders and suppliers of a narcotics conspiracy that operated principally on and around East 176th Street and Anthony Avenue in the Bronx, as well as in Maine and Virginia.  Many members of the conspiracy—including CASADO and ROSARIO—were also members of the Mac Ballers gang.  Members of the conspiracy trafficked in significant quantities of crack cocaine, heroin, fentanyl, and other dangerous drugs; and they routinely used, carried, and possessed firearms to protect their drug operations and advance their gang interests.  For example, on May 17, 2019, CASADO traveled from the area of East 175th Street to Sheridan Avenue near East 169th Street and shot at a member of a rival gang who had insulted CASADO’s gang set on social media.  On July 18, 2019, ROSARIO attempted to shoot at other rival gang members in the vicinity of East 178th Street and Anthony Avenue; and two days later, on July 20, 2019, ROSARIO fired shots into the courtyard of an apartment complex at 2000 Valentine Avenue.  Then, on September 13, 2019, MCCULLOUGH drove two co-conspirators to commit a robbery of marijuana at a store near 2163 Second Avenue in Manhattan, knowing that at least one of the robbers would use a gun to commit the robbery.  During the ensuing robbery, both co-conspirators brandished guns and stole marijuana and proceeds of marijuana sales, among other things.  On October 5, 2019, CASADO, ROSARIO, and a third co-conspirator approached and robbed personal property from two individuals near 20 East 116th Street in Manhattan while ROSARIO brandished a firearm and assaulted one of the victims with the firearm.  Jonathan Rodriguez attempted to intervene, and as he approached ROSARIO from behind, ROSARIO turned and fired a shot, causing Rodriguez’s death.

CASADO pled guilty today to conspiring to distribute 28 grams and more of crack cocaine and using, carrying, and possessing firearms in connection with a crime of violence, which carry a combined mandatory minimum sentence of fifteen years in prison and a maximum sentence of life in prison.  ROSARIO pled guilty to conspiring to commit assault with a dangerous weapon and murder, and two counts of using, carrying, possessing, brandishing, and discharging a firearm during gang related incidents, which carry a combined mandatory minimum sentence of twenty years in prison and a maximum sentence of life in prison.

Among the other defendants to plead guilty in this case, LAWRENCE pled guilty to conspiring to distribute 280 grams and more of crack cocaine, heroin, fentanyl, cocaine, oxycodone, and marijuana, which carries a mandatory minimum sentence of ten years in prison and a maximum sentence of life in prison; and on February 14, 2022, MCCULLOUGH pled guilty to using, carrying, and possessing a firearm in connection with a drug trafficking crime; using, carrying, and possessing a firearm that was brandished in connection with a robbery on September 13, 2019, and conspiring to retaliate against a cooperating witness, which carry a combined mandatory minimum sentence of twelve years in prison and a maximum sentence of life in prison.

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

ROSARIO is scheduled to be sentenced at 11:30 a.m. on May 26, 2022.  MCCULLOUGH is scheduled to be sentenced at 11:00 a.m. on June 30, 2022.  LAWRENCE is scheduled to be sentenced at 12:00 p.m. on July 12, 2022.  CASADO is scheduled to be sentenced at 11:00 a.m. on October 27, 2022.  Each of the defendants will be sentenced by U.S. District Judge J. Paul Oetken.

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

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