Southern District of New York

An indictment was unsealed today charging Sung Kook (Bill) Hwang, the founder and head of a private investment firm known as Archegos, and Patrick Halligan, Archegos’s Chief Financial Officer, with racketeering conspiracy, securities fraud, and wire fraud offenses in connection with interrelated schemes to unlawfully manipulate the prices of publicly traded securities in Archegos’s portfolio and to defraud many leading global investment banks and brokerages. Deputy Attorney General Lisa O. Monaco, U.S. Attorney Damian Williams for the Southern District of New York and Assistant Director-in-Charge Michael J. Driscoll of the FBI's New York Field Office made the announcement. Both defendants were arrested earlier today and will be presented this afternoon before U.S. Magistrate Judge Jennifer E. Willis. The case has been assigned to U.S. District Judge Andrew L. Carter, Jr.

Also unsealed today are the guilty pleas of Scott Becker and William Tomita in connection with their participation in the conspiracy. Becker pleaded guilty pursuant to an information before U.S. District Judge Laura Taylor Swain on April 21. Tomita pleaded guilty pursuant to an information before Judge Swain on April 21. Both are cooperating with the government.

“Today’s announcement demonstrates the department’s unwavering commitment to hold accountable individuals who distort and defraud our financial markets, including those who occupy the C-Suite,” said Deputy Attorney General Monaco. “That is especially true for this kind of crime — the kind that leaves a financial crater in its wake.”

“We allege that these defendants and their co-conspirators lied to banks to obtain billions of dollars that they then used to inflate the stock price of a number of publicly-traded companies,” said U.S. Attorney Williams. “The lies fed the inflation, and the inflation led to more lies. Round and round it went. In one year, Hwang allegedly turned a $1.5 billion portfolio and pumped it up into a $35 billion portfolio. But last year, the music stopped. The bubble burst. The prices dropped. And when they did, billions of dollars of capital evaporated nearly overnight.”

“As alleged, Hwang and his co-conspirators convinced major financial institutions to enter into agreements with them based on lies, the result of which ultimately led to a massive market manipulation scheme,” said FBI Assistant Director-in-Charge Michael J. Driscoll. “We allege the defendants caused harm to U.S. financial markets and ordinary investors alike, causing significant losses to banks, market participants and Archegos employees. Today’s charges highlight our commitment to making sure the investment arena remains free from fraudulent activity of all kinds.”  

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

Sung Kook (Bill) Hwang is the founder and owner of Archegos Capital Management and its related business entities, which are collectively known as Archegos. As alleged, Hwang, along with Patrick Halligan, Scott Becker and William Tomita lied to banks to obtain billions of dollars that they then used to artificially inflate the stock price of a number of publicly traded companies.

Hwang and his co-conspirators invested in stocks mostly through special contracts with banks and brokers called “swaps.” As alleged, these swaps allowed Hwang to cause massive buying of certain stocks, including at carefully selected days and times, to artificially pump up stock prices. Hwang, Halligan and their co-conspirators lied to banks and used a series of manipulative trading techniques to keep those prices high and prevent them from falling. This led to inflation of these stock prices. In one year, Hwang turned a $1.5 billion portfolio and fraudulently pumped it up into a $35 billion portfolio.

Last year, when the prices fell, Hwang’s positions were sold off and he could no longer manipulate the prices, and billions of dollars of capital evaporated nearly overnight.

As alleged, the defendants committed this fraud in secret. Since 2014, Hwang has run Archegos as a private hedge fund or “family office,” meaning that Archegos, unlike other large hedge funds, was not required to tell regulators information about its holdings and debt that might have shined a light on the fraud and allowed the crisis to be averted.

And because Hwang traded mostly through swaps, he was able to do the buying alleged in the indictment without anyone knowing that Archegos was actually behind all the trading. Regular market participants, and even the companies themselves, were duped into thinking the price increases were caused by the normal interplay of supply and demand when, instead, as alleged, they were the artificial result of Hwang’s manipulative trading.

For example, as alleged, by March 24, 2021, Hwang effectively controlled more than 50% of the freely trading shares of Viacom – and no one outside of Archegos knew about it — not investors purchasing Viacom in the market, or the executives at Viacom itself, or even the banks and brokerages who held the stock as part of the swaps. Because, as alleged, by using various banks and brokerages for his swaps, Hwang made sure that no single institution would have any idea that he was behind all of this trading.

The indictment further alleges that in order to get the billions of dollars Archegos needed to sustain this market manipulation scheme, Hwang and his co-conspirators lied to and misled some of Wall Street’s leading banks about how big Archegos’s investments had become, how much cash Archegos had on hand and the nature of the stocks that Archegos held. As alleged, they told those lies so that the banks would have no idea what Archegos was really up to, how risky the portfolio was, and what would happen if the market turned.

As alleged, just over a year ago, the market turned and the stock prices Hwang and his co-conspirators had artificially inflated crashed, causing immense damage to U.S. financial markets and ordinary investors. In a matter of days, the companies at the center of Archegos’s trading scheme lost more than $100 billion in market capitalization, Archegos owed billions of dollars more than it had on hand, and Archegos collapsed. Market participants who purchased the relevant stocks at artificial prices lost the value they believed their investments held, the banks lost billions of dollars, and Archegos employees, many of whom were required to invest 25% or more of their bonuses with Archegos as deferred compensation, lost millions of dollars.

*                *                *

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.

This case was investigated by the U.S. Attorney’s Office for the Southern District of New York and the FBI. The Justice Department’s Organized Crime and Gang Section provided valuable assistance. The U.S. Securities and Exchange Commission and the U.S. Commodity Futures Trading Commission, each of which today filed a parallel civil action, assisted and cooperated in this investigation.

If you think you are a victim of the scheme alleged in this press release, you are encouraged to contact law enforcement at USANYS.ARCHEGOS@USDOJ.GOV.

This case is being handled by the office’s Securities and Commodities Fraud Task Force. Assistant U.S. Attorneys Andrew Thomas, Matthew Podolsky and Alex Rossmiller are in charge of the prosecution.

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

Defendant

Age

Residence

Charges

Maximum Potential Sentence(s)

United States v. Sung Kook (Bill) Hwang and Patrick Halligan, 22 Cr. 240

HWANG

58

 

Tenafly, NJ

Racketeering Conspiracy, 18 U.S.C. § 1962(d) (Count One)

 

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

 

Market Manipulation, 15 U.S.C. §§ 78i & 78ff (Counts Two through Nine)

 

Wire Fraud,

18 U.S.C. § 1343 (Count Eleven)

 

 

20 years

 

 

 

20 years (on each count)

 

 

 

20 years (on each count)

 

 

 

20 years

HALLIGAN

45

Syosset, NY

Racketeering Conspiracy, 18 U.S.C. § 1962(d) (Count One)

 

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

 

Wire Fraud,

18 U.S.C. § 1343 (Count Eleven)

 

 

20 years

 

 

 

20 years

 

 

 

20 years

 

United States v. Scott Becker and William Tomita, 22 Cr. 231 (LTS)

BECKER

38

Goshen, NY

Conspiracy to Commit Racketeering Conspiracy, 18 U.S.C. § 1962(d) (Count One)

 

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

 

Wire Fraud,

18 U.S.C. § 1343 (Count Three)

20 years

 

 

 

 

20 years

 

 

 

20 years

TOMITA

38

Greenwich, CT

Racketeering Conspiracy, 18 U.S.C. § 1962(d) (Count One)

 

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

 

Market Manipulation, 15 U.S.C. §§ 78i & 78ff (Count Three)

 

Wire Fraud,

18 U.S.C. § 1343 (Count Five)

 

 

20 years

 

 

 

20 years (on each count)

 

 

 

20 years

 

 

 

20 years

Damian Williams, the United States Attorney for the Southern District of New York, Deputy United States Attorney General Lisa O. Monaco, 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 SUNG KOOK (BILL) HWANG, the founder and head of a private investment firm known as Archegos, and PATRICK HALLIGAN, Archegos’s Chief Financial Officer, with racketeering conspiracy, securities fraud, and wire fraud offenses in connection with interrelated schemes to unlawfully manipulate the prices of publicly traded securities in Archegos’s portfolio and to defraud many leading global investment banks and brokerages. Both defendants were arrested earlier today and will be presented this afternoon before U.S. Magistrate Judge Jennifer E. Willis.  The case has been assigned to U.S. District Court Judge Andrew L. Carter, Jr..

Also unsealed today are the guilty pleas of SCOTT BECKER and WILLIAM TOMITA in connection with their participation in the conspiracy. BECKER pled guilty pursuant to an Information before U.S. District Judge Laura Taylor Swain on April 21, 2022. TOMITA pled guilty pursuant to an Information before Judge Swain on April 21, 2022. Both are cooperating with the Government.

U.S. Attorney Damian Williams said: “We allege that these defendants and their co-conspirators lied to banks to obtain billions of dollars that they then used to inflate the stock price of a number of publicly-traded companies. The lies fed the inflation, and the inflation led to more lies.  Round and round it went. In one year, Hwang allegedly turned a $1.5 billion portfolio and pumped it up into a $35 billion portfolio.  But last year, the music stopped. The bubble burst.  The prices dropped. And when they did, billions of dollars of capital evaporated nearly overnight.”

Deputy Attorney General Lisa O. Monaco said: “Today’s announcement demonstrates the department’s unwavering commitment to hold accountable individuals who distort and defraud our financial markets, including those who occupy the C-Suite. That is especially true for this kind of crime—the kind that leaves a financial crater in its wake.”

FBI Assistant Director-in-Charge Michael J. Driscoll said: “As alleged, Hwang and his co-conspirators convinced major financial institutions to enter into agreements with them based on lies, the result of which ultimately led to a massive market manipulation scheme. We allege the defendants caused harm to U.S. financial markets and ordinary investors alike, causing significant losses to banks, market participants, and Archegos employees. Today’s charges highlight our commitment to making sure the investment arena remains free from fraudulent activity of all kinds.”

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

SUNG KOOK (BILL) HWANG is the founder and owner of Archegos Capital Management and its related business entities, which are collectively known as Archegos. As alleged, HWANG, along with PATRICK HALLIGAN, SCOTT BECKER, and WILLIAM TOMITA lied to banks to obtain billions of dollars that they then used to artificially inflate the stock price of a number of publicly traded companies.

HWANG and his co-conspirators invested in stocks mostly through special contracts with banks and brokers called “swaps.” As alleged, these swaps allowed HWANG to cause massive buying of certain stocks, including at carefully selected days and times, to artificially pump up stock prices. HWANG, HALLIGAN, and their co-conspirators lied to banks and used a series of manipulative trading techniques to keep those prices high and prevent them from falling. The lies fed the inflation, and the inflation led to more lies. The scale of this alleged fraud was stunning.  In one year, Hwang turned a $1.5 billion portfolio and fraudulently pumped it up into a $35 billion portfolio.

Last year, the music stopped. The prices dropped and HWANG was unable to keep the prices propped up. When the prices fell, HWANG’s positions were sold off and he could no longer manipulate the prices, and billions of dollars of capital evaporated nearly overnight.

As alleged, the defendants committed this fraud in secret. Since 2014, HWANG has run Archegos as a private hedge fund or “family office,” meaning that Archegos, unlike other large hedge funds, was not required to tell regulators information about its holdings and debt that might have shined a light on the fraud and allowed the crisis to be averted.  

And because HWANG traded mostly through swaps, he was able to do the massive buying alleged in the Indictment without anyone knowing that Archegos was actually behind all the trading. Regular market participants, and even the companies themselves, were duped into thinking the price increases were caused by the normal interplay of supply and demand when, instead, as alleged, they were the artificial result of HWANG’s manipulative trading.

To take just one example, as alleged, by March 24, 2021, HWANG effectively controlled more than 50% of the freely trading shares of Viacom – and no one outside of Archegos knew about it—not investors purchasing Viacom in the market, or the executives at Viacom itself, or even the banks and brokerages who held the stock as part of the swaps. Because, as alleged, by using various banks and brokerages for his swaps, HWANG made sure that no single institution would have any idea that he was behind all of this trading.

The Indictment further alleges that in order to get the billions of dollars Archegos needed to sustain this massive market manipulation scheme, HWANG and his co-conspirators lied to and misled some of Wall Street’s leading banks. They lied about how big Archegos’s investments had become. They lied about how much cash Archegos had on hand. They lied about the nature of the stocks that Archegos held. And, as alleged, they told those lies for a purpose: so that the banks would have no idea what Archegos was really up to, how risky the portfolio was, and what would happen if the bubble burst one day.

As alleged, that day ultimately came. Just over a year ago, the market turned and the stock prices HWANG and his co-conspirators had artificially inflated crashed, causing immense damage to U.S. financial markets and ordinary investors. In a matter of days, the companies at the center of Archegos’s trading scheme lost more than $100 billion in market capitalization, Archegos owed billions of dollars more than it had on hand, and Archegos collapsed. Market participants who purchased the relevant stocks at artificial prices lost the value they believed their investments held, the banks lost billions of dollars, and Archegos employees, many of whom were required to invest 25% or more of their bonuses with Archegos as deferred compensation, lost millions of dollars.

*                *                *

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 FBI. Mr. Williams thanked the Department of Justice’s Organized Crime and Gang Section for its assistance. Mr. Williams further thanked the U.S. Securities and Exchange Commission and the U.S. Commodity Futures Trading Commission, each of which today filed a parallel civil action.

If you think you are a victim of the scheme alleged in this press release, beginning tomorrow, April 28th, you are encouraged to contact law enforcement at USANYS.ARCHEGOS@USDOJ.GOV.

This case is being handled by the Office’s Securities and Commodities Fraud Task Force. Assistant United States Attorneys Andrew Thomas, Matthew Podolsky, and Alex Rossmiller 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. Sung Kook (Bill) Hwang and Patrick Halligan, 22 Cr. 240

HWANG

58

 

Tenafly, NJ

Racketeering Conspiracy, 18 U.S.C. § 1962(d) (Count One)

 

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

 

Market Manipulation, 15 U.S.C. §§ 78i & 78ff (Counts Two through Nine)

 

Wire Fraud,

18 U.S.C. § 1343 (Count Eleven)

 

 

20 years

 

 

 

20 years (on each count)

 

 

 

20 years (on each count)

 

 

 

20 years

HALLIGAN

45

Syosset, NY

Racketeering Conspiracy, 18 U.S.C. § 1962(d) (Count One)

 

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

 

Wire Fraud,

18 U.S.C. § 1343 (Count Eleven)

 

 

20 years

 

 

 

20 years

 

 

 

20 years

 

United States v. Scott Becker and William Tomita, 22 Cr. 231 (LTS)

BECKER

38

Goshen, NY

Conspiracy to Commit Racketeering Conspiracy, 18 U.S.C. § 1962(d) (Count One)

 

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

 

Wire Fraud,

18 U.S.C. § 1343 (Count Three)

20 years

 

 

 

 

20 years

 

 

 

20 years

TOMITA

38

Greenwich, CT

Racketeering Conspiracy, 18 U.S.C. § 1962(d) (Count One)

 

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

 

Market Manipulation, 15 U.S.C. §§ 78i & 78ff (Count Three)

 

Wire Fraud,

18 U.S.C. § 1343 (Count Five)

 

 

20 years

 

 

 

20 years (on each count)

 

 

 

20 years

 

 

 

20 years

 

---

[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 Michael J. Driscoll, the Assistant Director-in-Charge of the New York Office of the Federal Bureau of Investigation (“FBI”), announced today the unsealing of an Indictment in White Plains federal court charging ADAM BELARDINO, the Chief Executive Officer of the Maddox Group, a financial advisory firm in New York City and elsewhere, with wire fraud in connection with his embezzlement of more than $313,000 from a Maddox client, a 64 year old New Rochelle resident.  BELARDINO was arrested this morning and will be presented in White Plains federal court later today. 

U.S. Attorney Damian Williams said:  “Adam Belardino abused the trust his client placed in him by stealing more than $313,000 the client gave him to be invested.  Clients like the victim in this case need to be able to entrust their money to financial advisors with confidence that the money will be invested in a manner that is appropriate for them.  This Office will aggressively pursue financial advisors and others who steal money entrusted to them by clients.”

FBI Assistant Director-in-Charge Michael J. Driscoll said:  “Belardino is charged today for allegedly stealing several hundred thousand dollars from a client in an illegal investment fraud scheme. Financial crimes of this nature can cause significant disruptions to the lives of those who are victimized. We urge everyone to exercise their due diligence when investing their money and to report suspicious activity to authorities as soon as possible.”

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

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

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

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

BELARDINO, 37, of New York City, is charged with one count of wire fraud, which carries a maximum sentence of 20 years in prison. 

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

*                      *                      *

Mr. Williams praised the investigative work of the FBI.

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

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

 

---

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

Damian Williams, the United States Attorney for the Southern District of New York, Letitia James, New York State Attorney General, and Eric Gonzalez, Brooklyn District Attorney, announced today the unsealing of a Superseding Indictment charging four members and two associates of the Genovese Organized Crime Family with racketeering. 

The Superseding Indictment charges NICHOLAS CALISI and RALPH BALSAMO, alleged Captains in the Family, MICHAEL MESSINA and JOHN CAMPANELLA, alleged Soldiers in the Family, and MICHAEL POLI and THOMAS POLI, alleged associates of the Family, with racketeering conspiracy involving illegal gambling and extortion.

MESSINA was previously arrested and presented before U.S. Magistrate Judge Ona T. Wang on April 12, 2022.  BALSAMO, CAMPANELLA, MICHAEL POLI, and THOMAS POLI were arrested today and will be presented in Manhattan federal court before U.S. Magistrate Judge Robert W. Lehrburger this afternoon.  CALISI was arrested in Boca Raton, Florida and presented before a U.S. Magistrate Judge in the Southern District of Florida.  The case is assigned to United States District Judge John G. Koeltl.

U.S. Attorney Damian Williams said:  “From extortion to illegal gambling, the Mafia continues to find ways to prey on others to fill its coffers.  Our office and our law enforcement partners remain committed to putting organized crime out of business.”

New York State Attorney General Letitia James said:  “For years, members of the Genovese crime family have terrorized New York communities with violence and illegal businesses. These individuals allegedly made their money through illegal gambling and loan sharking — saddling victims with incredible debt that they cannot repay. Today’s indictment makes clear that we will continue to root out organized crime wherever it exists, and I thank U.S. Attorney Damian Williams and Brooklyn District Attorney Eric Gonzalez for their partnership in taking down these criminal enterprises.”

Brooklyn District Attorney Eric Gonzalez said:  “Organized crime, and the illegal conduct that flows from its activities, remain a problem in Brooklyn and beyond. My Office is committed to continue working together with our law enforcement partners to investigate these criminal organizations, as we’ve done in this case. I thank the United States Attorney for the Southern District of New York and the New York State Office of the Attorney General for their partnership and cooperation.”

According to the allegations in the Superseding Indictment, which was unsealed today[1]:

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

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

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

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

Members of the Genovese Family, including CALISI, BALSAMO, MESSINA, CAMPANELLA, MICHAEL POLLI, and THOMAS POLLI, engaged in or agreed that others would engage in certain crimes, including making extortionate extensions of credit, financing extortionate extensions of credit, collecting extensions of credit by extortion, extortion, operating illegal gambling businesses, and transmission of gambling information.

*          *          *

A chart containing the ages, residency information, and charges against the defendants, as well as the maximum penalties they face is attached.  The maximum penalties are prescribed by Congress and are provided here for informational purposes only, as any sentencing of the defendants will be determined by the judge.

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

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

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

 

United States v. Michael Messina, et al., S1 22 Cr. 212 (JGK)

 

DEFENDANT

AGE

CITY OF RESIDENCE

CHARGES

MAX SENT.

Messina, Michael

69

New Fairfield, CT

18 U.S.C. § 1962(d)

20 years

Calisi, Nicholas

63

Boca Raton, FL

18 U.S.C. § 1962(d)

20 years

Balsamo, Ralph

51

Tuckahoe, NY

18 U.S.C. § 1962(d)

20 years

Campanella, John

47

Bronx, NY

18 U.S.C. § 1962(d)

20 years

Poli, Michael

37

Hawthorne, NY

18 U.S.C. § 1962(d)

20 years

Poli, Thomas

64

Bronx, NY

18 U.S.C. § 1962(d)

20 years

 

---

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

Damian Williams, the United States Attorney for the Southern District of New York, Matthew G. Olsen, the Assistant Attorney General for National Security, and Michael J. Driscoll, the Assistant Director-in-Charge of the New York Field Office of the Federal Bureau of Investigation (“FBI”), announced today the unsealing of a Superseding Indictment charging ALEJANDRO CAO DE BENOS, a citizen of Spain, and CHRISTOPHER EMMS, a citizen of the United Kingdom, with conspiring to violate United States sanctions on the Democratic People’s Republic of Korea (“DPRK” or “North Korea”) by working with U.S. citizen Virgil Griffith to illegally provide cryptocurrency and blockchain technology services to the DPRK. Both CAO DE BENOS and EMMS remain at large. Griffith previously pled guilty to conspiring to assist North Korea in evading sanctions in violation of the International Emergency Economic Powers Act (“IEEPA”), and was sentenced to 63 months in prison and a $100,000 fine by U.S. District Judge P. Kevin Castel.

U.S. Attorney Damian Williams said:  “As alleged, Alejandro Cao de Benos and Christopher Emms conspired with Virgil Griffith, a cryptocurrency expert convicted of conspiring to violate economic sanctions imposed on North Korea, to teach and advise members of the North Korean government on cutting-edge cryptocurrency and blockchain technology, all for the purpose of evading U.S. sanctions meant to stop North Korea’s hostile nuclear ambitions. In his own sales pitch, Emms allegedly advised North Korean officials that cryptocurrency technology made it ‘possible to transfer money across any country in the world regardless of what sanctions or any penalties that are put on any country.’ The sanctions imposed against North Korea are critical in protecting the security interests of Americans, and we continue to aggressively enforce them with our law enforcement partners both here and abroad.”

Assistant Attorney General Matthew G. Olsen said:  “The United States will not allow the North Korean regime to use cryptocurrency to evade global sanctions designed to thwart its goals of nuclear proliferation and regional destabilization. This indictment, along with the successful prosecution of co-conspirator, Virgil Griffith, makes clear that the Department will hold anyone, wherever located, accountable for conspiring with North Korea to violate U.S. sanctions.”

FBI Assistant Director-in-Charge Michael J. Driscoll said:  “The two subjects charged here today, as alleged, conspired to provide financial services to the DPRK in direct violation of sanctions against North Korea imposed by the United States government.  Our government puts sanctions in place to protect our national interests, and today's action demonstrates our commitment to enforcing them both domestically and globally.”

According to the allegations contained in the Superseding Indictment unsealed today in Manhattan federal court,[1] as well as other documents in the public record and statements made in public court proceedings in connection with the Griffith prosecution:

Pursuant to the IEEPA and Executive Order 13466, United States persons are prohibited from exporting any goods, services, or technology to the DPRK without a license from the Department of the Treasury, Office of Foreign Assets Control (“OFAC”) and it is illegal to conspire with U.S. persons to do the same.

Beginning in or about early 2018, CAO DE BENOS, the founder of the “Korean Friendship Association,” a pro-DPRK affinity organization, and EMMS, a cryptocurrency businessman, partnered to jointly plan and organize the “Pyongyang Blockchain and Cryptocurrency Conference” (the “DPRK Cryptocurrency Conference”) for the benefit of the DPRK. CAO DE BENOS and EMMS recruited Griffith, an American cryptocurrency expert, to provide services to the DPRK at the DPRK Cryptocurrency Conference and arranged Griffith’s travel to the DPRK in April 2019 for this purpose, in contravention of U.S. sanctions. CAO DE BENOS coordinated approval from the DPRK government for Griffith’s participation in the Conference. EMMS confirmed for Griffith that “the dprk will not stamp your passport,” which could risk revealing Griffith’s travel to U.S. authorities, and that EMMS had “obtained a rare full permission” from the DPRK “for US citizens to enter the country” for the DPRK Cryptocurrency Conference.[2]

At the DPRK Cryptocurrency Conference, EMMS and Griffith provided instruction on how the DPRK could use blockchain and cryptocurrency technology to launder money and evade sanctions. EMMS and Griffith’s presentations at the DPRK Cryptocurrency Conference had been approved by DPRK officials and tailored to the DPRK audience. For example, EMMS opened the DPRK Cryptocurrency Conference by stating that it was a “great honor” to be “leading this delegation” to “explain to you a lot about Blockchain . . . and how you can use this technology here in the DPRK.” EMMS introduced Griffith as an “early scientist” behind blockchain technology, which, according to EMMS, made it “possible to transfer money across any country in the world regardless of what sanctions or any penalties that are put on any country.”

EMMS and Griffith answered specific questions about blockchain and cryptocurrency technologies for the DPRK audience, including individuals whom they understood worked for the North Korean government, proposed plans to create specialized “smart contracts” to serve the DPRK’s unique interests, and mapped out cryptocurrency transactions designed to evade and avoid U.S. sanctions, including by diagramming such transactions on a whiteboard for the North Korean audience. In one question-and-answer session, EMMS described how North Koreans could use over-the-counter cryptocurrency providers in transactions to evade and avoid U.S. sanctions.

After the DPRK Cryptocurrency Conference, CAO DE BENOS and EMMS continued to conspire with Griffith to provide additional cryptocurrency and blockchain technology services to the DPRK, including by seeking to develop potential cryptocurrency infrastructure and equipment inside North Korea, attempting to broker introductions for DPRK Cryptocurrency Conference attendees, through Griffith, to other cryptocurrency service providers, and recruiting others through Griffith’s contacts, including Americans, to provide expert services relating to cryptocurrency to the DPRK. As part of these efforts, CAO DE BENOS, EMMS, and Griffith planned to hold a second cryptocurrency conference in the DPRK in 2020.

CAO DE BENOS and EMMS took steps in an effort to conceal their activity, and Griffith’s role in the conspiracy, from U.S. authorities. Griffith was arrested by U.S. authorities in November 2019, disrupting CAO DE BENOS, EMMS, and Griffith’s scheme and the second conference planned for 2020. At no time did CAO DE BENOS, EMMS, or Griffith obtain permission from OFAC to provide goods, services, or technology to the DPRK.

*                      *                     *

CAO DE BENOS, 47, of Spain, and EMMS, 30, of the United Kingdom, are charged with one count of conspiring to violate and evade U.S. sanctions, in violation of IEEPA, which carries a maximum sentence of 20 years in prison.

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

Mr. Williams praised the outstanding investigative work of the FBI and its New York Field Office, Counterintelligence Division, and thanked the Department of Justice’s National Security Division, Counterintelligence and Export Control Section, the Department of Justice’s Office of International Affairs, U.S. Department of Commerce’s Office of Export Enforcement, and the Singapore Police Force for their assistance.

The case is being handled by the Office’s National Security and International Narcotics Unit. Assistant U.S. Attorneys Kimberly J. Ravener and Kyle A. Wirshba are in charge of the case, with assistance from Trial Attorney Matthew J. McKenzie of the Counterintelligence and Export Control Section.

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

 

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

[2] The communications described and quoted herein are set forth in substance and in part.

Two individuals are charged in a superseding indictment, unsealed today in the Southern District of New York, with conspiring to violate U.S. sanctions on the Democratic People’s Republic of Korea (DPRK or North Korea) by working with U.S. citizen Virgil Griffith to illegally provide cryptocurrency and blockchain technology services to the DPRK.

According to court documents, Alejandro Cao De Benos, 47, a citizen of Spain, and Christopher Emms, 30, a citizen of the United Kingdom, partnered to jointly plan and organize the Pyongyang Blockchain and Cryptocurrency Conference (the DPRK Cryptocurrency Conference) for the benefit of the DPRK. Both Cao De Benos and Emms remain at large. Griffith pleaded guilty to conspiring to assist North Korea in evading sanctions in violation of the International Emergency Economic Powers Act (IEEPA), and was sentenced on April 12 to 63 months in prison and a $100,000 fine by U.S. District Judge P. Kevin Castel.

“The United States will not allow the North Korean regime to use cryptocurrency to evade global sanctions designed to thwart its goals of nuclear proliferation and regional destabilization,” said Assistant Attorney General Matthew G. Olsen of the Justice Department’s National Security Division. “This indictment, along with the successful prosecution of co-conspirator, Virgil Griffith, makes clear that the department will hold anyone, wherever located, accountable for conspiring with North Korea to violate U.S. sanctions.”

“As alleged, Alejandro Cao de Benos and Christopher Emms conspired with Virgil Griffith, a cryptocurrency expert convicted of conspiring to violate economic sanctions imposed on North Korea, to teach and advise members of the North Korean government on cutting-edge cryptocurrency and blockchain technology, all for the purpose of evading U.S. sanctions meant to stop North Korea’s hostile nuclear ambitions,” said U.S. Attorney Damian Williams for the Southern District of New York. “In his own sales pitch, Emms allegedly advised North Korean officials that cryptocurrency technology made it ‘possible to transfer money across any country in the world regardless of what sanctions or any penalties that are put on any country.’ The sanctions imposed against North Korea are critical in protecting the security interests of Americans, and we continue to aggressively enforce them with our law enforcement partners both here and abroad.”

“Those contemplating evading U.S. sanctions against a foreign government should know the FBI and its partners will aggressively investigate these cases,” said Acting Assistant Director Bradley S. Benavides of the FBI’s Counterintelligence Division. “The FBI appreciates the partnership of the U.S. Department of Commerce and the Singapore Police Force, whose work helped secure this indictment.”

Pursuant to the IEEPA and Executive Order 13466, U.S. persons are prohibited from exporting any goods, services or technology to the DPRK without a license from the Department of the Treasury’s Office of Foreign Assets Control (OFAC) and it is illegal to conspire with U.S. persons to do the same.

As alleged in the superseding indictment, beginning in or about early 2018, Cao De Benos, the founder of the Korean Friendship Association, a pro-DPRK affinity organization, and Emms, a cryptocurrency businessman, partnered to jointly plan and organize the DPRK Cryptocurrency Conference for the benefit of the DPRK. Cao De Benos and Emms recruited Griffith, an American cryptocurrency expert, to provide services at the DPRK Cryptocurrency Conference and arranged Griffith’s travel to the DPRK in April 2019 for this purpose, in contravention of U.S. sanctions. Cao De Benos coordinated approval from the DPRK government for Griffith’s participation in the conference. Emms confirmed for Griffith that “the DPRK will not stamp your passport,” which could risk revealing Griffith’s travel to U.S. authorities, and that Emms had “obtained a rare full permission” from the DPRK “for U.S. citizens to enter the country” for the DPRK Cryptocurrency Conference. 

According to court documents, at the DPRK Cryptocurrency Conference, Emms and Griffith provided instruction on how the DPRK could use blockchain and cryptocurrency technology to launder money and evade sanctions, and Emms’ and Griffith’s presentations were approved by DPRK officials and tailored to the DPRK audience. For example, Emms opened the DPRK Cryptocurrency Conference by stating that it was a “great honor” to be “leading this delegation” to “explain to you a lot about blockchain . . . and how you can use this technology here in the DPRK.” Emms introduced Griffith as an “early scientist” behind blockchain technology, which, according to Emms, made it “possible to transfer money across any country in the world regardless of what sanctions or any penalties that are put on any country.”

Emms and Griffith answered specific questions about blockchain and cryptocurrency technologies for the DPRK audience, including individuals whom they understood worked for the North Korean government; proposed plans to create specialized “smart contracts” to serve the DPRK’s unique interests; and mapped out cryptocurrency transactions designed to evade and avoid U.S. sanctions, including by diagramming such transactions on a whiteboard for the North Korean audience. In one question-and-answer session, Emms described how North Koreans could use over-the-counter cryptocurrency providers in transactions to evade and avoid U.S. sanctions.

After the DPRK Cryptocurrency Conference, Cao De Benos and Emms continued to conspire with Griffith to provide additional cryptocurrency and blockchain technology services to the DPRK, including by seeking to develop potential cryptocurrency infrastructure and equipment inside North Korea, attempting to broker introductions for DPRK Cryptocurrency Conference attendees, through Griffith, to other cryptocurrency service providers, and recruiting others through Griffith’s contacts, including Americans, to provide expert services relating to cryptocurrency to the DPRK. As part of these efforts, Cao De Benos, Emms and Griffith planned to hold a second cryptocurrency conference in the DPRK in 2020.

As alleged, Cao De Benos and Emms took steps to conceal their activity, and Griffith’s role in the conspiracy from U.S. authorities. Griffith was arrested by U.S. authorities in November 2019, disrupting Cao De Benos, Emms and Griffith’s scheme and the second conference planned for 2020. At no time did Cao De Benos, Emms or Griffith obtain permission from OFAC to provide goods, services or technology to the DPRK.

Cao De Benos and Emms are charged with one count of conspiring to violate and evade U.S. sanctions, in violation of IEEPA, which carries a maximum statutory penalty of 20 years in prison. A federal district court judge will determine any sentence after considering the U.S. Sentencing Guidelines and other statutory factors.

The FBI is investigating the case, with valuable assistance provided by the National Security Division’s Counterintelligence and Export Control Section, the Justice Department’s Office of International Affairs, the Department of Commerce’s Office of Export Enforcement, and the Singapore Police Force.

Assistant U.S. Attorneys Kimberly J. Ravener and Kyle A. Wirshba for the Southern District of New York and Trial Attorney Matthew J. McKenzie of the National Security Division’s Counterintelligence and Export Control Section are prosecuting the case.

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

Damian Williams, the United States Attorney for the Southern District of New York, announced that earlier today, REGINALD FOWLER pled guilty to bank fraud, bank fraud conspiracy, operation of an unlicensed money transmitting business, conspiracy to operate an unlicensed money transmitting business, and wire fraud. FOWLER committed the bank fraud and unlicensed money transmitting business offenses in connection with his work for Crypto Capital, a payment processor that provided fiat-currency banking services to various cryptocurrency exchanges through a series of bank accounts opened under false pretenses.  As part of the scheme, Crypto Capital and FOWLER fraudulently processed transactions equaling approximately $750 million in deposits and withdrawals from such exchanges.  In addition,  FOWLER defrauded the Alliance of American Football (“AAF”) by, among other things, claiming that millions of dollars belonging to Crypto Capital and/or Global Trading Solutions customers were instead his own assets, which he was free to use to secure his investments in the AAF.  Based on those misrepresentations, FOWLER acquired a significant investment stake in the AAF yet was unable to fund that investment, which contributed to the AAF’s demise.

Two of FOWLER’s co-conspirators, OZ YOSEF and RAVID YOSEF, remain at large.

U.S. Attorney Damian Williams said:  “Reginald Fowler helped process hundreds of millions of dollars of unregulated transactions on behalf of numerous cryptocurrency exchanges, skirting the anti-money laundering safeguards required of licensed institutions that ensure the U.S. financial system is not used for criminal purposes, and lying to U.S. banks whose own policies would otherwise have prevented it.  As the trade in cryptocurrencies continues to grow, it is essential that it be conducted in a lawful and transparent manner that does not permit its use by criminal actors.  Today’s guilty plea reflects this Office’s continued commitment to the investigation and prosecution of those in the cryptocurrency sector who seek to continue to operate in the shadows.”

According to the allegations in the Indictment, the Superseding Indictments, and statements made during the plea and other proceedings in the case[1]:

In or about February 2018, REGINALD FOWLER established Global Trading Solutions LLC (“GTS”) and began working with Crypto Capital and other related companies (the “Crypto Companies”) , which were operated by Israeli nationals OZ YOSEF and RAVID YOSEF, among others. The Crypto Companies marketed themselves as providing a seamless way for individuals to exchange government-backed, or “fiat,” currency for cryptocurrency. The Crypto Companies offered these services at a time when traditional banks were reluctant to handle cryptocurrency transactions. Because of the demand for the Crypto Companies’ services, a number of cryptocurrency exchanges began using the Crypto Companies to process their fiat-to-cryptocurrency transactions.

In reality, the Crypto Companies lied to banks in order to open accounts that were used to process cryptocurrency transactions without the banks’ knowledge. FOWLER opened dozens of such accounts in the United States and around the world. In general, he represented to banks that GTS and related companies were engaged in real estate and that funds coming into the GTS bank accounts represented real estate investments or rental payments from properties GTS developed. FOWLER did not disclose GTS’s involvement with the Crypto Companies and the fact that it was operating as a payment processor for hundreds of millions of dollars in cryptocurrency transactions.

Additionally, FOWLER directed other individuals to include false information on wire transfer instructions to further deceive banks about the nature of GTS’s business. These false statements would suggest that outgoing wires were related to real estate transactions. In email communications with RAVID YOSEF and others, the co-conspirators discussed the need to ensure that wire narratives were consistent with the false information FOWLER had provided banks at account opening. As banks became aware of FOWLER’s misrepresentations, they shut down GTS bank accounts and FOWLER would move the scheme to new banks. In less than ten months, FOWLER processed approximately $750 million in cryptocurrency transactions in various currencies, nearly $600 million in United States dollars.

Even though FOWLER was receiving and directing monetary transactions on behalf of third parties, neither he, GTS, nor any of the Crypto Companies were ever licensed as a money transmitting business in the United States, as required by federal law.       

Additionally, in 2018, FOWLER defrauded the AAF, a short-lived professional football league, in connection with his acquisition of a significant ownership stake in the league.  In the course of negotiating his investment in the AAF, FOWLER falsely claimed personal ownership of GTS funds that in fact belonged to clients of FOWLER’s illegal money transmission service established in support of the Crypto Companies. As he did when opening bank accounts, FOWLER told AAF executives that the funds in the GTS bank accounts derived from real estate investments as well as government contracts and that the tens of millions of dollars in the GTS accounts were liquid assets he could use to invest in the AAF. FOWLER did not disclose his involvement with the Crypto Companies. Moreover, although FOWLER experienced account closures and government seizure of GTS funds in the month leading up to his investment in the AAF, FOWLER did not disclose those facts to the AAF. FOWLER acquired a significant investment stake in the AAF in November 2018, yet was unable to fund that investment.

*                      *                     *

FOWLER, 63, of Chandler, Arizona, pled guilty today to one count of bank fraud, one count of conspiracy to commit bank fraud, one count of operating an unlicensed money transmitting business, one count of conspiracy to operate an unlicensed money transmitting business, and one count of wire fraud.  These offenses carry a total maximum sentence of 90 years in prison. 

The maximum potential sentence in this case is prescribed by Congress and is provided here for informational purposes only, as FOWLER’s sentence will be determined by the judge. 

FOWLER is scheduled to be sentenced by U.S. District Judge Andrew Carter at 2:00pm on August 30, 2022.

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

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

 

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[1] As to FOWLER’s co-defendants, the entirety of the text of the Indictments and the descriptions in the Indictments set forth below constitute only allegations, and every fact described should be treated as an allegation.

Dwayne Pulliam Arrested for Participating in a Conspiracy to Distribute Crack Cocaine and for Traveling Interstate and Using Facilities of Interstate Commerce to Operate a Narcotics Business Enterprise, and Murdering a Customer He Believed Was Stealing from That Business

Damian Williams, the United States Attorney for the Southern District of New York, Michael J. Driscoll, Assistant Director-in-Charge of the New York Office of the Federal Bureau of Investigation (“FBI”), and Kevin McConville, the Sheriff of the Putnam County Sheriff’s Office, announced today the filing of a criminal complaint in White Plains federal court charging DWAYNE PULLIAM, a/k/a “Doc,” with: (1) participating in a crack-cocaine-distribution conspiracy; and (2) traveling between New York and Connecticut, and using cellphones, to operate a narcotics business enterprise—his business selling crack cocaine—and murdering Lori Lee Campbell, a customer he believed was stealing from his business. PULLIAM was arrested yesterday afternoon in the area of New Milford, Connecticut, and was presented yesterday before United States Magistrate Judge Andrew E. Krause. PULLIAM was ordered held without bail.

As alleged in the Complaint[1]:

In or about December 2020, PULLIAM was released from approximately 24 years of prison for murder. Not long afterward, from at least in or about January 2022, PULLIAM engaged with others in the business of selling crack cocaine, traveling between New York and Connecticut to do so, and using phones to do so.

On March 29, 2022, PULLIAM contacted a co-conspirator of his in the drug trade and asked him to help move an Acura that belonged to Lori Lee Campbell. PULLIAM told his co-conspirator that he suspected that Campbell was stealing drugs from him, that PULLIAM confronted Campbell, that Campbell tried to leave but PULLIAM did not let her do so, and that Campbell started screaming. PULLIAM then told his co-conspirator that he “stopped her from screaming” and that this was not the first time he had “done this.”

When the co-conspirator went with PULLIAM back to PULLIAM’s apartment in Patterson, New York, the co-conspirator saw Campbell’s dead body in the apartment, wrapped in a sheet. PULLIAM said “there’s the culprit,” and then directed his co-conspirator to help him move the body, threatening to kill the co-conspirator’s family if the co-conspirator did not do so. The co-conspirator helped PULLIAM move the body to PULLIAM’s Honda Accord, and they then drove to PULLIAM’s mother’s house in North Carolina. PULLIAM and his co-conspirator got shovels, a bag of lime, and plastic wrap from a shed by PULLIAM’s mother’s house, and drove Campbell’s body to a cul-de-sac, where her body was ultimately covered in lime and buried in a shallow grave.

On April 19, 2021, law enforcement officers found and recovered Campbell’s body from the area in North Carolina where PULLIAM’s co-conspirator said it was buried.

*                *                *

DWAYNE PULLIAM, a/k/a “Doc,” 59, of Patterson, New York is charged with one count of traveling in interstate commerce, and using a facility in interstate commerce, with intent to engage in a business enterprise involving narcotics, and thereafter committing murder to further that unlawful activity, and one count of participating in a conspiracy to distribute and possess with intent to distribute 28 grams and more of crack cocaine. The travel act count carries a maximum sentence of life in prison. The narcotics conspiracy count carries a mandatory minimum sentence of five years in prison and a maximum sentence of 40 years in prison.

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

Mr. Williams praised the outstanding work of the FBI Safe Streets Task Force, the FBI Charlotte Division, the DEA New York Division, the Putnam County Sheriff’s Office, the Alamance County Sherriff’s Office, the Connecticut State Police, and the Putnam County District Attorney’s Office. Mr. Williams noted that the investigation is ongoing.

The case is being prosecuted by the Office’s White Plains Division. Assistant U.S. Attorneys Michael D. Maimin and T. Josiah Pertz are in charge of the prosecution.

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

 

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

Damian Williams, the United States Attorney for the Southern District of New York, announced that BRIAN KOLFAGE and ANDREW BADOLATO pled guilty today in connection with their roles in defrauding hundreds of thousands of donors to an online crowdfunding campaign known as “We Build the Wall.”  Both defendants pled guilty before United States District Judge Analisa Torres.

According to the Indictment filed in the case:

Starting in approximately December 2018, BRIAN KOLFAGE, ANDREW BADOLATO, and others orchestrated a scheme to defraud hundreds of thousands of donors, including donors in the Southern District of New York, in connection with an online crowdfunding campaign ultimately known as “We Build The Wall” that raised more than $25,000,000 to build a wall along the southern border of the United States.  In particular, to induce donors to donate to the campaign, KOLFAGE repeatedly and falsely assured the public that he would “not take a penny in salary or compensation” and that “100% of the funds raised . . . will be used in the execution of our mission and purpose.”

Those representations were false.  In truth, KOLFAGE, BADOLATO, and others received hundreds of thousands of dollars in donor funds from We Build the Wall, which they each used in a manner inconsistent with the organization’s public representations.  For example, KOLFAGE covertly took for his personal use more than $350,000 in funds that donors had given to We Build the Wall.  To conceal the payments to KOLFAGE from We Build the Wall, KOLFAGE, BADOLATO, and others devised a scheme to route those payments from We Build the Wall to KOLFAGE indirectly.  They did so by using fake invoices and sham “vendor” arrangements, among other ways, to ensure, as KOLFAGE noted in a text message to BADOLATO, that his pay arrangement remained “completely confidential” and kept on a “need to know” basis.  

*                *                *

KOLFAGE, 39, and BADOLATO, 57, both residents of Florida, pled guilty to one count of conspiracy to commit wire fraud, which carries a maximum sentence of 20 years in prison.  In the same proceeding, KOLFAGE also pled guilty to tax and wire fraud charges filed by the United States Attorney’s Office for the Northern District of Florida. 

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.

Both KOLFAGE and BADOLATO are scheduled to be sentenced at 1:00 pm on September 6, 2022, by Judge Torres.

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

The case is being handled by the Office’s Public Corruption Unit.  Assistant United States Attorneys Nicolas Roos, Alison G. Moe, and Robert B. Sobelman are in charge of the prosecution.

Damian Williams, the United States Attorney for the Southern District of New York, Michael J. Driscoll, Assistant Director-in-Charge of the New York Office of the Federal Bureau of Investigation (“FBI”), and Police Commissioner John Mueller, Yonkers Police Department, announced charges today against BRYCE MARTIN and XAVIER SIMMS for conspiring to traffic firearms from Georgia to New York. The defendants traveled together with a third co-conspirator who opened fire on a FBI Federal Task Force Officer after law enforcement attempted to interdict in Yonkers, New York on April 20, 2022.  The defendants were presented in White Plains federal court this afternoon before United States Magistrate Andrew E. Krause.

U.S. Attorney Damian Williams said: “Gun crime is plaguing our communities, and the actions of the criminals using them are putting lives in danger. Our law enforcement partners are out doing all they can to get illegal weapons and ‘ghost guns’ off the streets before more people get killed. The violence has to stop, and we have to hold accountable those who are breaking the law.”

FBI Assistant Director-in-Charge Michael J. Driscoll said: “As we allege today, Mr. Martin and Mr. Simms conspired to illegally traffic firearms, and, when law enforcement attempted to intervene, one of their co-conspirators shot and critically wounded one of our task force officers. Subsequent investigation resulted in the recovery of several firearms, including a "ghost gun," an untraceable type of weapon that continues to pose a significant threat in our communities. We are grateful for the survival of our partner, and our thoughts remain with him and his loved ones as he continues to recover from his injuries.”

Commissioner Mueller said: “The Yonkers Police and our fantastic federal, state and local partners will never stop from providing a safe and secure environment for our beloved residents. What took place in this incident is yet another example of the hard work and commitment to mission and heroism. These efforts occur each and every day and will continue for as long as is needed to make our communities safe.”

As alleged in the Complaint[1]:

On April 20, 2022, members of the FBI Westchester Safe Streets Task Force and the Yonkers Police Department were investigating illegal firearms activity in the vicinity of Elm and Linden streets in Yonkers, New York.  During the course of their investigation, they attempted to interdict members of the conspiracy, including Bryce MARTIN and Xavier SIMMS.  A third co-conspirator (“CC-1”) shot and critically wounded an FBI Task Force Officer, at close range, after law enforcement approached members of the conspiracy, including MARTIN and SIMMS. 

Law enforcement recovered at least four firearms from members of the conspiracy, including a “Ghost Gun”—a type of firearm that is designed to evade law enforcement detection.  Later investigation revealed that SIMMS and MARTIN traveled together with CC-1 from Georgia with several firearms to sell.  Evidence recovered from their cellphones showed that SIMMS and MARTIN both had access to specialized firearms, including machinegun-style weapons. 

*                *                *

MARTIN, 23, of Hampton, Georgia, is charged with one count of conspiring to traffic firearms, which carries a maximum sentence of five years’ imprisonment.

SIMMS, 22, of Covington, Georgia, is charged with one count of conspiring to traffic firearms, which carries a maximum sentence of five years’ imprisonment. 

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 and the Yonkers Police Department. 

This case is being handled by the Office’s White Plains Division.  Assistant United States Attorneys Shiva H. Logarajah and Kevin T. Sullivan 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 Indictment and Complaint and the descriptions of the Complaint set forth below constitute only allegations, and every fact described should be treated as an allegation.

Juan Orlando Hernández, alias JOH, de 53 años, expresidente de Honduras, tendrá su comparecencia inicial mañana, 22 de abril, ante el juez de primera instancia Stewart D. Aaron en un tribunal federal en Nueva York luego de ser extraditado hoy desde Honduras. Un tribunal federal reveló hoy los cargos de tráfico de drogas y armas en una acusación enmendada contra Hernández.

 

La acusación formal alega que desde al menos alrededor de 2004, hasta alrededor de 2022, inclusive, Hernández, que fue presidente de Honduras durante dos mandatos, participó en una conspiración corrupta y violenta de narcotráfico para facilitar la importación de cientos de miles de kilogramos de cocaína a los Estados Unidos. Hernández supuestamente recibió millones de dólares para usar su cargo público, las fuerzas del orden público y el ejército para apoyar a las organizaciones de narcotráfico en Honduras, México y otros lugares.

 

“El Departamento de Justicia está adoptando un enfoque integral para proteger a nuestras comunidades y nuestro país de los delitos violentos,” señaló el fiscal general Merrick B. Garland. “El Departamento está comprometido a desarticular todo el ecosistema de las redes de tráfico de drogas que dañan al pueblo estadounidense, sin importar cuán lejos o cuán alto debamos llegar.”

 

“Juan Orlando Hernández, el reciente expresidente de Honduras, supuestamente se asoció con algunos de los narcotraficantes más prolíficos del mundo para construir un imperio corrupto y brutalmente violento basado en el tráfico ilegal de toneladas de cocaína a los Estados Unidos,” expresó el fiscal federal para el Distrito Sur de Nueva York, Damian Williams. “Se alega que Hernández usó sus vastos poderes políticos para proteger y ayudar a los narcotraficantes y líderes de cárteles, alertándolos sobre posibles interdicciones y permitiendo la violencia fuertemente armada para apoyar su tráfico de drogas. Felicito a los fiscales de carrera del Distrito Sur de Nueva York por sus incansables esfuerzos para desarticular todo el ecosistema del tráfico de drogas ilícitas, desde traficantes callejeros hasta un exlíder mundial, y todo lo demás.”

 

“La extradición de hoy muestra claramente que la DEA no se detendrá ante nada para perseguir a los actores políticos más poderosos que participan en el tráfico de drogas, la violencia y la corrupción,” sentenció la administradora de la DEA, Anne Milgram. “La investigación de varios años de la DEA reveló que Juan Orlando Hernández, el ex presidente de Honduras, fue una figura central en una de las mayores y más violentas conspiraciones de tráfico de cocaína del mundo. Hernández usó las ganancias del narcotráfico para financiar su ascenso político y, una vez elegido Presidente, aprovechó los recursos policiales, militares y financieros del gobierno de Honduras para promover su plan de narcotráfico. Este caso debería enviar un mensaje, a todos los líderes políticos del mundo que comercian con posiciones de influencia para fomentar el crimen organizado transnacional, de que la DEA no se detendrá ante nada para investigar estos casos y desmantelar las organizaciones de narcotraficantes que amenazan la seguridad y la salud del pueblo estadounidense.”

 

Según la acusación enmendada, Hernández protegió a algunos de los mayores narcotraficantes del mundo, incluido su hermano y ex miembro del Congreso Nacional de Honduras, Juan Antonio Hernández Alvarado (Hernández Alvarado), alias Tony Hernández, contra la investigación, el arresto y la extradición; hizo que se proporcionara información confidencial militar y policial a los traficantes de drogas para ayudarlos a transportar toneladas de cocaína a través de Honduras con destino a los Estados Unidos; ordenó a miembros fuertemente armados de la Policía Nacional de Honduras y del ejército hondureño que protegieran los cargamentos de drogas mientras transitaban por Honduras; y permitió la violencia brutal.

 

Como congresista, luego Presidente del Congreso Nacional de Honduras y finalmente Presidente de Honduras durante dos mandatos, Hernández supuestamente recibió millones de dólares en ganancias de la cocaína que usó para enriquecerse, financiar sus campañas políticas y cometer fraude electoral mientras el pueblo de Honduras soportaba condiciones de pobreza y violencia desenfrenada.

 

Desde por lo menos 2004, las organizaciones de tráfico de drogas en Honduras han trabajado para recibir toneladas de cocaína enviadas a Honduras desde, entre otros lugares, Colombia y Venezuela, a través de rutas marítimas y aéreas. Estas organizaciones luego transportaron la cocaína hacia el oeste en Honduras hacia su frontera con Guatemala y, finalmente, al norte hacia los Estados Unidos. Durante este tiempo, los miembros de esta conspiración transportaron más de 500,000 kilogramos de cocaína a través de Honduras y hacia los Estados Unidos. Para garantizar que estos envíos masivos de cocaína pasaran con seguridad por Honduras, las mayores organizaciones de tráfico de drogas de la región obtuvieron el apoyo y la protección directa de ciertos funcionarios públicos hondureños prominentes, incluido Hernández. A cambio, estos traficantes pagaron millones de dólares en sobornos a Hernández y otros funcionarios públicos.

Según se alega, como congresista y luego Presidente de Honduras, Hernández se asoció con el exlíder del Cártel de Sinaloa, Joaquín Guzmán Loera (Guzmán Loera), alias El Chapo, entre otros individuos. Aproximadamente en 2013, mientras Hernández estaba haciendo campaña para convertirse en Presidente, aceptó aproximadamente 1 millón de dólares en ganancias del narcotráfico de Guzmán Loera. Hernández envió a Hernández Alvarado y un asociado, armados con ametralladoras, a cobrar el soborno de 1 millón de dólares de Guzmán Loera. A cambio, Hernández prometió seguir protegiendo las actividades de narcotráfico del Cártel de Sinaloa en Honduras.

 

Como se alega, aproximadamente en 2013 y 2014, Hernández se asoció con el traficante hondureño de cocaína a gran escala y violento, Geovanny Fuentes Ramírez. Durante múltiples reuniones entre Hernández y Fuentes Ramírez, Fuentes Ramírez sobornó a Hernández para obtener protección y seguridad para sus actividades de narcotráfico. Hernández informó a Fuentes Ramírez, en parte, que Hernández quería que Fuentes Ramírez se asociara con Hernández Alvarado, quien estaba manejando actividades de narcotráfico en Honduras, y que Hernández iba a “meter la droga en las narices de los gringos.”

 

Además de Guzmán Loera y Fuentes Ramírez, otros narcotraficantes prolíficos en Honduras y Guatemala pagaron a Hernández sobornos provenientes de las ganancias de las drogas para apoyar su carrera política a cambio de la protección y la colaboración de Hernández en su narcotráfico. Hernández usó estos sobornos estimulados por la cocaína para asegurar su continuo ascenso en la política hondureña, incluida su elección como Presidente en 2013 y 2017. En relación con las elecciones de 2013 y 2017, Hernández ordenó a los miembros de esta conspiración que sobornaran a políticos y funcionarios electorales con ganancias de las drogas para garantizar que Hernández ganara la presidencia.

 

En 2018, Hernández Alvarado fue imputado en el Distrito Sur de Nueva York en relación con su participación en esta conspiración, y posteriormente fue condenado tras el juicio el 18 de octubre de 2019. Mientras el caso de Hernández Alvarado estaba pendiente, Hernández continuó coordinando de cerca con traficantes a gran escala, incluido Fuentes Ramírez, quien continuó pagando sobornos a Hernández por protección. Además, durante el juicio de Hernández Alvarado, se introdujeron como prueba libros de contabilidad de drogas pertenecientes a otro exnarcotraficante hondureño y cómplice, mencionado en la acusación formal como “CC-2”. Estos libros de contabilidad contenían, entre otras cosas, anotaciones con el nombre de Hernández Alvarado y “JOH”, las iniciales de Hernández, junto con los asientos correspondientes que reflejaban grandes pagos a Hernández y Hernández Alvarado.

 

Aproximadamente una semana después de la condena de Hernández Alvarado, presos armados con machetes y un arma de fuego asesinaron a CC-2 en una prisión de Honduras para evitar la posible cooperación de CC-2 contra, entre otros, Hernández.

 

El 27 de enero de 2022, Hernández fue imputado en la acusación sdustitutiva y se emitió una orden de arresto en su contra.

 

El 15 de febrero de 2022, Hernández fue arrestado y detenido por las autoridades hondureñas a petición de los Estados Unidos. Posteriormente, los Estados Unidos presentaron una solicitud formal de extradición, que fue concedida por el juez de primera instancia de Honduras. Hernández apeló la decisión de extradición ante el Tribunal Supremo de Justicia de Honduras. El 28 de marzo, el Tribunal Supremo de Honduras rechazó su apelación. El 6 de abril, el Tribunal Ad Hoc de la Sala Constitucional del Tribunal Supremo de Justicia de Honduras determinó que la apelación final de Hernández era inadmisible. El 13 de abril, el gobierno de Honduras certificó la finalización de los procedimientos de extradición de conformidad con las órdenes judiciales anteriores, lo que resultó en la entrega de Hernández a los Estados Unidos el 21 de abril.

Hernández está imputado de tres cargos: (1) conspiración para importar cocaína a los Estados Unidos, lo que conlleva una sentencia mínima obligatoria de 10 años y una sentencia máxima de cadena perpetua; (2) usar y portar ametralladoras y dispositivos destructivos durante la conspiración para importar cocaína, y poseer ametralladoras y dispositivos destructivos para promover la conspiración de importación de cocaína, que conlleva una sentencia mínima obligatoria de 30 años y una sentencia máxima de cadena perpetua; y (3) conspiración para usar y portar ametralladoras y dispositivos destructivos durante la conspiración de importación de cocaína, y poseer ametralladoras y dispositivos destructivos para promover la conspiración de importación de cocaína, que conlleva una sentencia máxima de cadena perpetua. Un juez de un tribunal de distrito federal determinará la sentencia después de considerar las Pautas de sentencia de los EE. UU. y otros factores legales.

 

La División de Operaciones Especiales de la DEA, la Fuerza de Ataque de Nueva York y la Oficina Regional de Tegucigalpa investigaron el caso. La Oficina de Asuntos Internacionales del Departamento de Justicia brindó una valiosa asistencia para asegurar el arresto y la extradición de Hernández.

 

Este enjuiciamiento es parte de una operación de las Fuerzas de Tarea contra la Delincuencia Organizada y los Delitos Asociados al Narcotráfico (OCDETF, por sus siglas en inglés). Se puede encontrar información adicional sobre el Programa OCDETF en https://www.justice.gov/OCDETF.

 

Los fiscales federales adjuntos Jacob H. Gutwillig, Michael D. Lockard, Jason A. Richman y Elinor L. Tarlow del Distrito Sur de Nueva York procesan el caso.

 

Los cargos en la acusación enmendada son simplemente acusaciones, y se presume inocente al acusado hasta que se pruebe su culpabilidad más allá de toda duda razonable en un tribunal de justicia.

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English

Juan Orlando Hernández, aka JOH, 53, the former President of Honduras, will make his initial appearance tomorrow, April 22, before Magistrate Judge Stewart D. Aaron in federal court in New York after being extradited today from Honduras. A federal court unsealed drug-trafficking and weapons charges today in a superseding indictment against Hernández.

The indictment charges that from at least in or about 2004, up to and including in or about 2022, Hernández, the former two-term President of Honduras, participated in a corrupt and violent drug-trafficking conspiracy to facilitate the importation of hundreds of thousands of kilograms of cocaine into the United States. Hernández allegedly received millions of dollars to use his public office, law enforcement, and the military to support drug-trafficking organizations in Honduras, Mexico, and elsewhere.

“The Justice Department is taking a comprehensive approach to protecting our communities and our country from violent crime,” said Attorney General Merrick B. Garland. “The Department is committed to disrupting the entire ecosystem of drug trafficking networks that harm the American people, no matter how far or how high we must go.”

“Juan Orlando Hernández, the recent former President of Honduras, allegedly partnered with some of the world’s most prolific narcotics traffickers to build a corrupt and brutally violent empire based on the illegal trafficking of tons of cocaine to the United States,” said U.S. Attorney Damian Williams for the Southern District of New York. “Hernández is alleged to have used his vast political powers to protect and assist drug traffickers and cartel leaders by alerting them to possible interdictions, and sanctioning heavily armed violence to support their drug trade. I commend the career prosecutors of the Southern District of New York for their tireless efforts to disrupt the entire illicit drug trafficking ecosystem, from street-level dealers to a former world leader, and everything in-between.”

“Today’s extradition clearly shows that the DEA will stop at nothing to pursue the most powerful political actors who engage in drug trafficking, violence, and corruption,” said Administrator Anne Milgram of the Drug Enforcement Administration (DEA). “DEA’s multi-year investigation revealed that Juan Orlando Hernández, the former President of Honduras, was a central figure in one of the largest and most violent cocaine trafficking conspiracies in the world. Hernández used drug trafficking proceeds to finance his political ascent and, once elected President, leveraged the Government of Honduras’ law enforcement, military, and financial resources to further his drug trafficking scheme. This case should send a message – to all political leaders around the world that trade on positions of influence to further transnational organized crime – that the DEA will stop at nothing to investigate these cases and dismantle drug trafficking organizations that threaten the safety and health of the American people.”

According to the superseding indictment, Hernández protected some of the largest drug traffickers in the world, including his brother and former member of the Honduran National Congress, Juan Antonio Hernández Alvarado (Hernández Alvarado), aka Tony Hernández, from investigation, arrest, and extradition; caused sensitive law enforcement and military information to be provided to drug traffickers to aid them in transporting tons of cocaine through Honduras bound for the United States; directed heavily-armed members of the Honduran National Police and Honduran military to protect drug shipments as they transited Honduras; and sanctioned brutal violence.

As a congressman, then President of the Honduran National Congress, and finally the two-term President of Honduras, Hernández was allegedly paid millions of dollars in cocaine proceeds which he used to enrich himself, finance his political campaigns, and commit voter fraud while the people of Honduras endured conditions of poverty and rampant violence.

Since at least 2004, drug-trafficking organizations in Honduras have worked to receive tons of cocaine sent to Honduras from, among other places, Colombia and Venezuela, via maritime and air routes. These organizations then transited the cocaine westward in Honduras toward its border with Guatemala and eventually north to the United States. During this time, members of this conspiracy transported more than 500,000 kilograms of cocaine through Honduras and into the United States. In order to ensure that these massive cocaine shipments safely passed through Honduras, the largest drug-trafficking organizations in the region obtained the support and direct protection of certain prominent Honduran public officials, including Hernández. In return, these traffickers paid millions of dollars in bribes to Hernández and other public officials. 

As alleged, as a congressman and then President of Honduras, Hernández partnered with the former leader of the Sinaloa Cartel, Joaquín Guzman Loera (Guzman Loera), aka El Chapo, among other people. In or about 2013, as Hernández was campaigning to become president, he accepted approximately $1 million in drug-trafficking proceeds from Guzman Loera. Hernández sent Hernández Alvarado and an associate, armed with machine guns, to collect the $1 million bribe from Guzman Loera. In exchange, Hernández promised to continue protecting the Sinaloa Cartel’s drug-trafficking activities in Honduras. 

As alleged, in or about 2013 and 2014, Hernández partnered with violent and large-scale Honduran cocaine trafficker Geovanny Fuentes Ramirez. During multiple meetings between Hernández and Fuentes Ramirez, Fuentes Ramirez bribed Hernández for protection and security for his drug-trafficking activities. Hernández informed Fuentes Ramirez, in part, that Hernández wanted Fuentes Ramirez to partner with Hernández Alvarado, who was managing drug-trafficking activities in Honduras, and that Hernández was going to “stuff the drugs right up the noses of the gringos.”

In addition to Guzman Loera and Fuentes Ramirez, other prolific traffickers in Honduras and Guatemala provided Hernández with bribes from drug proceeds to support his political career in exchange for Hernández’s protection and partnership in their drug trafficking. Hernández used these cocaine-fueled bribes to ensure his continued ascendancy in Honduran politics, including his election as President in 2013 and 2017. In connection with both the 2013 and 2017 elections, Hernández directed members of this conspiracy to bribe politicians and election officials with drug proceeds to ensure that Hernández won the presidency.  

In 2018, Hernández Alvarado was charged in the Southern District of New York in connection with his participation in this conspiracy, and he was subsequently convicted after trial on Oct. 18, 2019. While Hernández Alvarado’s case was pending, Hernández continued to coordinate closely with large-scale traffickers, including Fuentes Ramirez, who continued to pay Hernández bribes for protection. Further, during Hernández Alvarado’s trial, drug ledgers belonging to another former Honduran drug trafficker and co-conspirator, referred to in the superseding indictment as “CC-2,” were introduced into evidence. These ledgers contained, among other things, notations with Hernández Alvarado’s name and “JOH,” Hernández’s initials, along with corresponding entries reflecting large payments to Hernández and Hernández Alvarado. Approximately one week after Hernández Alvarado was convicted, prisoners armed with machetes and a firearm murdered CC-2 in a Honduran prison to prevent CC-2’s potential cooperation against, among others, Hernández.

On Jan. 27, 2022, Hernández was charged in the superseding indictment and a warrant was issued for his arrest.

On Feb. 15, 2022, Hernández was arrested and detained by Honduran authorities at the request of the United States. The United States thereafter submitted a formal extradition request, which the Honduran Magistrate Judge granted. Hernández appealed the extradition decision to the Honduran Supreme Court. On March 28, the Honduran Supreme Court denied his appeal. On April 6, the Ad Hoc Tribunal of the Constitutional Chamber of the Honduran Supreme Court determined Hernández’s final appeal was inadmissible. On April 13, the Government of Honduras certified the completion of the extradition proceedings consistent with the previous court orders, resulting in Hernández’s surrender to the United States on April 21.

Hernández is charged with three counts: (1) conspiring to import cocaine into the United States, which carries a mandatory minimum sentence of 10 years and a maximum sentence of life in prison; (2) using and carrying machine guns and destructive devices during, and possessing machine guns and destructive devices in furtherance of, the cocaine importation conspiracy, which carries a mandatory minimum sentence of 30 years and a maximum sentence of life in prison; and (3) conspiring to use and carry machine guns and destructive devices during, and to possess machine guns and destructive devices in furtherance of, the cocaine importation conspiracy, which carries a maximum sentence of life in prison. A federal district court judge will determine any sentence after considering the U.S. Sentencing Guidelines and other statutory factors.

The DEA’s Special Operations Division, New York Strike Force, and Tegucigalpa Country Office investigated the case. The Justice Department’s Office of International Affairs provided valuable assistance in securing Hernández’s arrest and extradition.

This prosecution is part of an Organized Crime Drug Enforcement Task Forces (OCDETF) operation. Additional information about the OCDETF Program can be found at https://www.justice.gov/OCDETF.

Assistant U.S. Attorneys Jacob H. Gutwillig, Michael D. Lockard, Jason A. Richman, and Elinor L. Tarlow for the Southern District of New York prosecuting the case.

The charges in the superseding indictment are merely accusations, and the defendant is presumed innocent until proven guilty beyond a reasonable doubt in a court of law.

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Español

Merrick Garland, the Attorney General of the United States, 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 unsealing of drug-trafficking and weapons charges contained in a Superseding Indictment against JUAN ORLANDO HERNANDEZ, a/k/a “JOH,” the former President of Honduras. The case is pending before U.S. District Judge P. Kevin Castel. HERNANDEZ, 53, a Honduran national, is expected to arrive in the Southern District of New York today and will have his initial appearance tomorrow, April 22, 2022, before Magistrate Judge Stewart D. Aaron.   

From at least in or about 2004, up to and including in or about 2022, HERNANDEZ, the former two-term President of Honduras, allegedly participated in a corrupt and violent drug-trafficking conspiracy to facilitate the importation of hundreds of thousands of kilograms of cocaine into the United States. HERNANDEZ allegedly received millions of dollars to use his public office, law enforcement, and the military to support drug-trafficking organizations in Honduras, Mexico, and elsewhere.

Attorney General Merrick B. Garland said:  “The Justice Department is taking a comprehensive approach to protecting our communities and our country from violent crime. The Department is committed to disrupting the entire ecosystem of drug trafficking networks that harm the American people, no matter how far, or how high we must go.”

U.S. Attorney Damian Williams said:  “Juan Orlando Hernandez, the recent former President of Honduras, allegedly partnered with some of the world’s most prolific narcotics traffickers to build a corrupt and brutally violent empire based on the illegal trafficking of tons of cocaine to the United States. Hernandez is alleged to have used his vast political powers to protect and assist drug traffickers and cartel leaders by alerting them to possible interdictions, and sanctioning heavily-armed violence to support their drug trade. I commend the career prosecutors of the Southern District of New York for their tireless efforts to disrupt the entire illicit drug-trafficking ecosystem, from street-level dealers to a former world leader, and everything in-between.”

DEA Administrator Anne Milgram said:  “Today’s extradition clearly shows that the DEA will stop at nothing to pursue the most powerful political actors who engage in drug trafficking, violence, and corruption. DEA’s multi-year investigation revealed that Juan Orlando Hernandez, the former President of Honduras, was a central figure in one of the largest and most violent cocaine-trafficking conspiracies in the world. Hernandez used drug-trafficking proceeds to finance his political ascent and, once elected President, leveraged the Government of Honduras’ law enforcement, military, and financial resources to further his drug-trafficking scheme. This case should send a message—to all political leaders around the world that trade on positions of influence to further transnational organized crime—that the DEA will stop at nothing to investigate these cases and dismantle drug-trafficking organizations that threaten the safety and health of the American people.”

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

HERNANDEZ protected some of the largest drug traffickers in the world, including his brother and former member of the Honduran National Congress, Juan Antonio Hernandez Alvarado (“Hernandez Alvarado”), a/k/a “Tony Hernandez,” from investigation, arrest, and extradition; caused sensitive law enforcement and military information to be provided to drug traffickers to aid them in transporting tons of cocaine through Honduras, bound for the United States; directed heavily-armed members of the Honduran National Police and Honduran military to protect drug shipments as they transited Honduras; and sanctioned brutal violence.

As a Congressman, then the President of the Honduran National Congress, and finally the two-term President of Honduras, HERNANDEZ was allegedly paid millions of dollars in cocaine proceeds, which he used to enrich himself, finance his political campaigns, and commit voter fraud while the people of Honduras endured conditions of poverty and rampant violence.

Since at least in or about 2004, drug-trafficking organizations in Honduras have worked together to receive tons of cocaine sent to Honduras from, among other places, Colombia and Venezuela, via maritime and air routes. These organizations then transited the cocaine westward in Honduras toward its border with Guatemala and eventually north to the United States. During this time, members of this conspiracy transported more than 500,000 kilograms of cocaine through Honduras and into the United States. In order to ensure that these massive cocaine shipments safely passed through Honduras, the largest drug-trafficking organizations in the region obtained the support and direct protection of certain prominent Honduran public officials, including HERNANDEZ. In return, these traffickers paid millions of dollars in bribes to HERNANDEZ and other public officials. 

As a Congressman and then President of Honduras, HERNANDEZ partnered with, among others, the former leader of the Sinaloa Cartel, Joaquín Guzman Loera (“Guzman Loera”), a/k/a “El Chapo.”  In or about 2013, as HERNANDEZ was campaigning to become President, he accepted approximately $1 million in drug-trafficking proceeds from Guzman Loera. HERNANDEZ sent Hernandez Alvarado and an associate, armed with machine guns, to collect the $1 million bribe from Guzman Loera. In exchange, HERNANDEZ promised to continue protecting the Sinaloa Cartel’s drug-trafficking activities in Honduras. 

In or about 2013 and 2014, HERNANDEZ partnered with a violent and large-scale Honduran cocaine trafficker named Geovanny Fuentes Ramirez (“Fuentes Ramirez”). During multiple meetings between HERNANDEZ and Fuentes Ramirez, Fuentes Ramirez bribed HERNANDEZ for protection and security for his drug-trafficking activities. HERNANDEZ informed Fuentes Ramirez, in part, that HERNANDEZ wanted Fuentes Ramirez to partner with Hernandez Alvarado, who was managing drug-trafficking activities in Honduras, and that HERNANDEZ was going to “stuff the drugs right up the noses of the gringos.”

In addition to Guzman Loera and Fuentes Ramirez, some of the most prolific traffickers in Honduras and Guatemala provided HERNANDEZ with bribes from drug proceeds to support his political career in exchange for HERNANDEZ’s protection and partnership in their drug trafficking. HERNANDEZ used these cocaine-fueled bribes to ensure his continued ascendancy in Honduran politics, including his election as President in 2013 and 2017. In connection with both the 2013 and 2017 elections, HERNANDEZ directed members of this conspiracy to bribe politicians and election officials with drug proceeds to ensure that HERNANDEZ won the presidency.  

In 2018, Hernandez Alvarado was charged in the Southern District of New York in connection with his participation in this conspiracy, and he was subsequently convicted after trial on October 18, 2019. While Hernandez Alvarado’s case was pending, HERNANDEZ continued to coordinate closely with large-scale traffickers, including Fuentes Ramirez, who continued to pay HERNANDEZ bribes for protection. Further, during Hernandez Alvarado’s trial, drug ledgers belonging to another former Honduran drug trafficker and co-conspirator, referred to in the Superseding Indictment as “CC-2,” were introduced into evidence. These ledgers contained, among other things, notations with Hernandez Alvarado’s name and “JOH,” HERNANDEZ’s initials, along with corresponding entries reflecting large payments to HERNANDEZ and Hernandez Alvarado. Approximately one week after Hernandez Alvarado was convicted, prisoners armed with machetes and a firearm murdered CC-2 in a Honduran prison to prevent CC-2’s potential cooperation against, among others, HERNANDEZ.

On the afternoon of January 27, 2022, HERNANDEZ was charged in the Superseding Indictment and a warrant was issued for his arrest. 

On February 15, 2022, HERNANDEZ was arrested and detained by Honduran authorities at the request of the United States. The United States thereafter submitted a formal extradition request, which the Honduran Magistrate Judge granted. HERNANDEZ appealed the extradition decision to the Honduran Supreme Court. On March 28, the Honduran Supreme Court denied his appeal. On April 6, the Ad Hoc Tribunal of the Constitutional Chamber of the Honduran Supreme Court determined HERNANDEZ’s final appeal was inadmissible. On April 13, the Government of Honduras certified the completion of the extradition proceedings consistent with the previous court orders, resulting in HERNANDEZ’s surrender to the United States on April 21.

*                  *                 *

HERNANDEZ is charged with three counts: (1) conspiring to import cocaine into the United States, which carries a mandatory minimum sentence of 10 years in prison and a maximum sentence of life in prison; (2) using and carrying machine guns and destructive devices during, and possessing machine guns and destructive devices in furtherance of, the cocaine-importation conspiracy, which carries a mandatory minimum sentence of 30 years in prison and a maximum sentence of life in prison; and (3) conspiring to use and carry machine guns and destructive devices during, and to possess machine guns and destructive devices in furtherance of, the cocaine importation conspiracy, which carries a maximum sentence 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 investigative work of the DEA’s Special Operations Division, New York Strike Force, and Tegucigalpa Country Office, as well as the assistance of the Office of International Affairs of the Justice Department’s Criminal Division in the arrest and extradition of HERNANDEZ. 

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 U.S. Attorney’s 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 Superseding 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 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 today that MUGE MA, a/k/a “Hummer Mars,” was sentenced to 52 months in prison in connection with a fraudulent scheme to obtain over $20 million in Government-guaranteed loans designed to provide relief to small businesses during the novel coronavirus/COVID-19 pandemic.  In connection with loan applications for relief available from the Paycheck Protection Program (“PPP”) and the Economic Injury Disaster Loan (“EIDL”) Program, MA falsely represented to the U.S. Small Business Administration (“SBA”) and six financial institutions that his companies, New York International Capital LLC (“NYIC”) and Hurley Human Resources LLC (“Hurley”), had hundreds of employees and paid millions of dollars in wages to those employees, when, in fact, MA appears to have been the only employee of his companies.  MA previously pled guilty to bank fraud and aggravated identity theft before U.S. District Judge Richard M. Berman, who imposed today’s sentence.  MA was arrested on May 21, 2020 and has been detained since his arrest. 

U.S. Attorney Damian Williams said:  “Within days of Congress authorizing billions of dollars to help small businesses struggling to make ends meet during the COVID-19 pandemic, Muge Ma saw it as an opportunity to enrich himself by applying for millions of dollars in funds to pay wages to hundreds of employees that never existed.  Today’s sentence demonstrates that this Office and our law enforcement partners will work tirelessly to prosecute those who sought to commit pandemic relief fraud.”

According to public filings in Manhattan federal court:

The Coronavirus Aid, Relief, and Economic Security (“CARES”) Act is a federal law enacted on March 29, 2020, designed to provide emergency financial assistance to the millions of Americans who are suffering the economic effects caused by the COVID-19 pandemic.  One source of relief provided by the CARES Act was the authorization of hundreds of billions of dollars in forgivable loans to small businesses for job retention and certain other expenses through the SBA’s PPP.  Pursuant to the CARES Act, the amount of PPP funds a business is eligible to receive is determined by the number of employees employed by the business and their average payroll costs.  Businesses applying for a PPP loan must provide documentation to confirm that they have previously paid employees the compensation represented in the loan application.  The CARES Act also expanded the separate EIDL Program, which provided small businesses with low-interest loans of up to $2 million that can provide vital economic support to help overcome the temporary loss of revenue they are experiencing due to COVID-19. 

From at least in or about March 2020 through at least on or about May 15, 2020, MA applied to the SBA and at least six banks for a total of over $20 million in Government-guaranteed loans for his companies NYIC and Hurley (together, the “Ma Companies”) through the SBA’s PPP and EIDL Program.  In connection with these loan applications, MA represented, among other things, that he was the sole owner and executive director of the Ma Companies, that the Ma Companies were located on the sixth floor of his luxury condominium building in New York, New York, and that NYIC and Hurley together had hundreds of employees and paid millions of dollars in wages to those employees on a monthly basis.  In fact, however, MA appears to have been the only employee of NYIC since at least in or about 2019, and Hurley does not appear to have any employees.  In order to support the false representations made by MA in the loan applications about the number of employees at, and the wages paid by, the Ma Companies, MA submitted fraudulent and doctored bank records, tax records, insurance records, payroll records, and/or audited financial statements to six different banks, and also provided links to the Ma Companies’ websites, which describe them as purportedly “global” companies.  MA also used the name and identity of another person in connection with the submission of a fraudulent loan application and supporting documentation to at least one financial institution.

Before the discovery of the fraudulent conduct by MA, the SBA approved a $500,000 EIDL Program loan for NYIC and a $150,000 EIDL Program loan for Hurley, and $20,000 in loans advances were provided to MA by the SBA.  In addition, a bank approved and disbursed over approximately $800,000 in PPP loan funds for Hurley, which were frozen in connection with this investigation.  MA thereafter withdrew his loan applications from the banks and returned the funds.

*                *                *

Mr. Williams praised the investigative work of the FBI’s Financial Cybercrimes Task Force, SBA-OIG, and IRS-CI.  Mr. Williams also thanked the Office of the New York State Comptroller, the New York State Department of Labor, and the New York City Police Department for their assistance with the investigation.

The prosecution of this case is being handled by the Office’s Complex Frauds and Cybercrime Unit.  Assistant United States Attorney Sagar K. Ravi is in charge of the prosecution.

Damian Williams, United States Attorney for the Southern District of New York, and Michael J. Driscoll, Assistant Director-in-Charge, New York Division of the Federal Bureau of Investigation (“FBI”), announced the arrest today of CHET STOJANOVICH, a/k/a “Chester J. Stojanovich,” on charges of defrauding more than a dozen victims of more than $1.8 million, through fraudulent misrepresentations that he would provide the victims with specialized cryptocurrency-mining computers (“Miners”), and that he would provide Miner-hosting services that would provide the victims with a lucrative stream of “hash power” convertible into cryptocurrency.  Instead, as alleged, STOJANOVICH deceived his victims, misappropriated his victims’ money, and provided them with almost no Miners, Miner-hosting services, or hash power.  The defendant was arrested early this morning after crossing from Canada into the United States at Champlain, New York.  He is expected to appear tomorrow before U.S. Magistrate Judge Stewart D. Aaron in the Southern District of New York.

U.S. Attorney Damian Williams said: “A great deal of excitement and ‘buzz’ has been generated in recent years about the ‘new world’ of cryptocurrency mining.  But new financial frontiers can also generate fresh opportunities for old-fashioned fraud.  Here, Chet Stojanovich is charged with using those time-worn fraud techniques on a new frontier.”

FBI Assistant Director-in-Charge Michael J. Driscoll said: “As alleged, Mr. Stojanovich induced his victims to invest in his fraudulent cryptocurrency mining schemes, and caused them to incur losses approaching $2 million.  Today's action should serve as an example of the FBI's commitment to rooting out financial fraud, as well as our focus on identifying and investigating emerging threats as they evolve.”

According to the allegations contained in the Complaint, and publicly available information:[1]

Since at least 2019, STOJANOVICH has controlled various companies, including Chet Mining Co. LLC (“Chet Mining”).  Starting in or about March 2019, STOJANOVICH engaged in a scheme to defraud people who were seeking to purchase Miners and Miner-hosting services through which they expected to obtain “hash power” convertible into cryptocurrency and money.  STOJANOVICH defrauded these victims by falsely telling them that: (1) he would purchase, and had purchased, Miners on their behalf; and (2) he would provide them with Miner-hosting services and had already obtained such Miner-hosting services for them.  In fact, STOJANOVICH failed to deliver the promised Miners and Miner-hosting services.

In all, STOJANOVICH induced more than a dozen customer-victims to pay a total of more than $1.84 million to STOJANOVICH and his companies, ostensibly in return for Miners and Miner-hosting services.  Despite fraudulent representations to the contrary, STOJANOVICH: (1) failed to provide many of the Miners that he told customers he had acquired; (2) failed to provide the hosting services and cryptocurrency hash power that he represented that he would provide; (3) employed deceptive practices to create the illusion that such Miners had been acquired and were being used to provide hash power to those customers; and (4) misappropriated his customers’ funds and spent the funds on unrelated and personal expenditures, including by spending a substantial portion those funds on personal expenses, including chartered air flights, hotel rooms, limousines, and private parties.

Defrauding at Least 10 Victims in 2019

In the spring and early summer of 2019, STOJANOVICH fraudulently induced at least 10 customers to pay a total of more than $1.66 million to STOJANOVICH and Chet Mining, in return for Miners and Miner-hosting services.  Between March and July 2019, based on these and other misrepresentations, STOJANOVICH issued at least 15 invoices to these 10 victims, with instructions to make payment to STOJANOVICH or one of his companies.  As directed by STOJANOVICH, these 10 customers paid STOJANOVICH a total of approximately $1,618,000 in bank wires and cryptocurrency transfers.  However, STOJANOVICH failed to provide the Miners and Miner-hosting services that he had agreed to provide and for which he had been paid.

Defrauding 3 More Victims in 2021

In or about August and September 2021, STOJANOVICH induced at least three additional customer-victims to pay him a total of approximately $179,880, as payment for a total of 127 Miners.  Ultimately, STOJANOVICH provided those customers with only 3 of the 127 Miners they had paid for and repaid those customers only approximately $61,000 of the $179,880 they had paid.

The March 2022 Deposition

Several of the victims of the scheme described in the Complaint brought lawsuits against STOJANOVICH in federal court in Manhattan.  In one such lawsuit, Holmes et al. v. Chet Mining, Chet Stojanovich, et ano., Case No. 1:20-CV-04448-LJL (S.D.N.Y.), STOJANOVICH was ordered by the court to appear for a deposition on March 4, 2022.  During that deposition, STOJANOVICH testified falsely on a number of subjects.  For example, in response to several questions, STOJANOVICH testified that he did not know the answers without looking in his personal cellphone, and falsely testified that his phone was downstairs in his rental car or in storage.  The deposition was thereupon adjourned for a half-hour, and STOJANOVICH was instructed to retrieve his cellphone and return to the deposition.  Instead, STOJANOVICH left the deposition and loitered in the vicinity of his car until after everyone else participating in the deposition had left.  Shortly thereafter, he returned to Canada, where he has been residing in recent weeks.

*                *                *

STOJANOVICH, 37, previously of Manhattan but in recent months apparently residing in Canada, is charged with one count of wire fraud, which carries a maximum penalty of 20 years in prison.

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

Mr. Williams praised the outstanding work of the FBI for its assistance in this investigation.

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

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

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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 therein should be treated as an allegation.

Damian Williams, the United States Attorney for the Southern District of New York, and Michael J. Driscoll, Assistant Director-in-Charge of the New York Field Office of the Federal Bureau of Investigation (“FBI”), announced today the unsealing of a criminal indictment charging MOSHE STRUGANO, an Israeli lawyer specializing in the creation of offshore companies, with securities fraud and conspiracy to commit securities fraud in connection with a scheme to commit insider trading based on material, nonpublic information regarding the upcoming public announcement that Ormat Technologies Inc. (“Ormat”), a renewable energy company, would be acquiring U.S. Geothermal, Inc. (“U.S. Geothermal”). The United States intends to seek the extradition of STRUGANO.

U.S. Attorney Damian Williams said:  “As alleged, Moshe Strugano, a corporate lawyer, traded on nonpublic information for personal gain. His charged actions show a brazen disregard for laws intended to keep a level playing field for investors.”

FBI Assistant Director-in-Charge Michael J. Driscoll said:  “Time and again, we see greedy, unscrupulous actors trade securities based upon their access to material non-public information.  As alleged, Mr. Strugano is another in a long series of similar illegal actors.  Today's action is an example of our commitment to insuring our financial markets are fair for all investors.”

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

Ormat is a publicly traded renewable energy company headquartered in Nevada with offices and facilities in Yavne, Israel.

U.S. Geothermal was a publicly traded renewable energy company that operated geothermal power projects in Oregon, Nevada, and Idaho.  U.S. Geothermal’s common stock traded under the symbol “HTM” on the NYSE American.

Between in or about September 2017 and January 2018, Ormat engaged in merger negotiations with U.S. Geothermal.  A co-conspirator not named in the Indictment (“CC-1”) served as Ormat’s Head of Mergers and Acquisitions and was one of Ormat’s principal negotiators for the deal.  In that role, CC-1 had access to material, nonpublic information about the deal.  CC-1 and STRUGANO, who both lived in the vicinity of Tel Aviv, Israel, maintained a personal relationship and friendship.

On or about December 19, 2017, the Ormat board approved acquiring U.S. Geothermal at a price of up to $5.50 per share, which was U.S. Geothermal’s asking price prior to the Ormat board meeting.  Almost immediately after the Ormat board meeting ended, CC-1 tipped off STRUGANO that the Ormat-U.S. Geothermal deal was going to close through a coded WhatsApp message.  Within minutes of receiving that message, STRUGANO placed a failed WhatsApp call to his broker (the “Broker”) for a bank account he controlled at a Swiss bank (“Bank-1”).  STRUGANO then tried to call the Broker another four times over the next four minutes.  Minutes later, STRUGANO placed a telephonic order with Bank-1 to purchase over $20,000 in U.S. Geothermal shares.  This was the first time STRUGANO had ever asked Bank-1 to purchase U.S. Geothermal stock for his accounts. 

Over the next several weeks, STRUGANO directed the Broker to purchase large blocks of U.S. Geothermal shares.  By January 18, 2018, STRUGANO had purchased over $2.7 million in U.S. Geothermal shares, for an approximately 3.8% equity stake in the company.  For the time period from December 19, 2017 through January 18, 2018, STRUGANO was responsible for approximately one third of the total trading volume in U.S. Geothermal stock.

On January 18, 2018, STRUGANO was informed that his account at Bank-1 was in shortfall.  STRUGANO asked the Broker to buy him time to cover the shortfall, asking for a few days, and then on January 24, 2018, for a few more hours.  Less than an hour later, Ormat and U.S. Geothermal announced their merger.  When the market opened that day, the U.S. Geothermal stock price jumped.  After the deal was announced, STRUGANO sold all of his shares and realized profits of approximately $1.2 million.

*                *                *

STRUGANO, 52, of Caesarea, Israel, is charged with one count of conspiracy to commit securities fraud, which has a maximum sentence of five years in prison, and two counts of securities fraud, which have maximum sentences of 20 and 25 years in prison, respectively.

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

Mr. Williams praised the outstanding work of the FBI.  Mr. Williams further thanked the U.S. Securities and Exchange Commission, which today filed a parallel civil action against the defendant, for its assistance and cooperation in this investigation.

This case is being handled by the Office’s Securities and Commodities Fraud Task Force.  Assistant United States Attorneys Matthew R. Shahabian and Jordan Estes 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 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, United States Attorney for the Southern District of New York, announced that SYLVIA ASH, a former justice of the New York State Supreme Court and chair of the Board of Directors of Municipal Credit Union (“MCU”), was sentenced today in Manhattan federal court to 15 months in prison for conspiracy to obstruct justice, obstruction of justice, and making a false statement to a federal agent.  These charges arose from a scheme to impede the federal criminal investigation into fraud and corruption at MCU, a non-profit, multibillion-dollar financial institution, including misconduct committed by Kam Wong, the former chief executive officer (“CEO”), and Joseph Guagliardo, a former New York City Police Department Officer and member of MCU’s Supervisory Committee.  Wong and Guagliardo were charged separately and previously pled guilty to embezzlement from MCU.  ASH was convicted in December 2021 after a two-week jury trial before U.S. District Judge Lewis A. Kaplan, who imposed today’s sentence. 

U.S. Attorney Damian Williams said: “While serving as a sitting state judge, Sylvia Ash took repeated steps, over multiple months, to seek to obstruct the federal criminal investigation into misconduct at MCU that took place during Ash’s tenure as chair of its Board of Directors.  Ash agreed to do so with the now imprisoned former CEO of the credit union, who provided her with a steady stream of benefits from MCU, including after she was directed to resign from MCU’s board.  Today’s sentence sends a clear message that those who attempt to thwart a federal investigation face serious consequences for that corrosive conduct.”

In pronouncing the sentence, Judge Kaplan said ASH’s “crimes struck at the heart of the criminal justice system.”

According to the Complaint, Indictment, Superseding Indictment, publicly available information, court filings, and evidence presented during the trial in Manhattan federal court:

Municipal Credit Union

MCU is a non-profit financial institution headquartered in New York, New York, which is federally insured by the National Credit Union Administration (“NCUA”).  MCU is the oldest credit union in New York State and one of the oldest and largest in the country, providing banking services to more than 590,000 members, and with more than $4.2 billion in member accounts, each of which is insured for at least $250,000 by the National Credit Union Share Insurance Fund, which is administered by the NCUA.  Membership in MCU is generally available to employees of New York City and its agencies, employees of the federal and New York state governments who work in New York City, and employees of hospitals, nursing homes, and similar facilities located within New York State.

At all relevant times, MCU was overseen by a Board of Directors (the “Board”) and a Supervisory Committee, each of which was composed of members of MCU, who were not supposed to be compensated.  As a result of severe deficiencies in the Board’s and the Supervisory Committee’s oversight of the credit union, which came to light in connection with the federal investigation, the New York Department of Financial Services (“DFS”) removed the members of the Supervisory Committee in May 2018 and the Board in June 2018.  Subsequently, DFS appointed NCUA as the conservator for the credit union.  In or about February 2022, MCU successfully emerged from conservatorship under new leadership.

ASH

ASH served as a judge in the New York State court system from approximately 2006 through March 2022, first as a Kings County Civil Court Judge, and then, starting in 2011, as a Kings County Supreme Court Justice.  In or about January 2016, ASH was appointed as the presiding judge in the Kings County Supreme Court’s Commercial Division.  After the charges in this case were unsealed, ASH was suspended from her position.  In or about March 2022, after ASH was convicted, she vacated her judicial office. 

ASH served on MCU’s Board from in or about May 2008 until on or about August 15, 2016, when she resigned.  From in or about May 2015 until her resignation, ASH served as the chair of the Board.  ASH resigned after a complaint was filed against her by the New York State Commission on Judicial Conduct arising from a conflict of interest between her position as a state judge and her membership on MCU’s Board.  More than a year before her resignation, ASH had been instructed to resign from MCU’s Board by the Advisory Committee on Judicial Ethics, which instruction she disregarded.

From at least in or about 2012 through 2016, while serving as an MCU Board member and while Wong was CEO, ASH received annually tens of thousands of dollars in reimbursements and other benefits from MCU, many of which were personal in nature, and not business-related, including airfare, hotels, food and entertainment expenses for her and a guest to attend conferences both domestically and abroad, annual birthday parties at a minor league baseball stadium, payment for phone and cable bills, and electronic devices.  Even after her resignation from the Board, Wong continued to provide or cause MCU to provide ASH with benefits, such as Apple devices and sports tickets.  As a sitting state judge, ASH was required to report both her board service and gifts and benefits she received from any outside sources on an annual state disclosure form.  But between at least 2012 and 2018, ASH never reported her board service nor any gifts or benefits from MCU.

ASH’s Obstruction of Justice

In January 2018, after Wong, MCU’s then-CEO, had been approached by federal law enforcement agents investigating apparent financial misconduct by Wong, in an attempt to protect Wong, ASH agreed to and did sign a false and misleading memorandum purporting to explain and justify millions of dollars Wong had received from MCU.  Wong subsequently provided that false and misleading memorandum to federal agents in an attempt to demonstrate that the millions of dollars had purportedly been orally approved for him to receive by ASH in June 2015, when she was chair of the Board.  However, in truth, neither ASH nor the Board had approved the payment of those funds.

On March 1, 2018, shortly after Wong was placed on administrative leave by MCU, ASH was interviewed about the memorandum she signed for Wong.  During that interview, ASH admitted that the memorandum was not accurate, but attempted to justify the money that Wong received by stating that MCU’s then-current general counsel had told her that Wong’s employment contract gave him the option of receiving such money.  That statement was false.

On March 13, 2018, ASH was served with a federal grand jury subpoena (the “First Subpoena”), which required the production of documents related to various matters, including Wong’s compensation, and any communications with Wong through the date of the First Subpoena.  On April 6, 2018, during a telephonic interview with a federal agent, ASH falsely stated that she did not have any materials responsive to the First Subpoena.

On June 8, 2018—after Wong was charged with embezzlement from MCU and the Government executed a judicially-authorized search of the residence of Guagliardo—ASH was interviewed by telephone for a second time about the First Subpoena.  During that interview, ASH again falsely stated that she did not have any materials responsive to the First Subpoena. 

On June 18, 2018, ASH was served with a second federal grand jury subpoena (the “Second Subpoena”), which required the production of, among other things, all correspondence with Wong and Guagliardo; all documents regarding any criminal investigation, internal investigation, or audit related to Wong; and all documents regarding items of value ASH received from MCU, Wong, or Guagliardo.  Shortly afterward, ASH went to an Apple store and wiped an iPhone X that Wong had provided her in January 2018.  In addition, ASH deleted emails from her Gmail account, including all of her emails with Guagliardo, none of which she produced in response to either of the two federal grand jury subpoenas directed to her.  ASH also later wiped two MCU-issued iPads she had received.

On July 6, 2018, on ASH’s behalf, her then-counsel produced materials to the Government in response to the Second Subpoena.  This production was materially incomplete, and did not contain text messages, emails, and other documents ASH possessed or had under her custody or control that were responsive to the Second Subpoena.

On July 9, 2018, ASH attended a voluntary interview with the U.S. Attorney’s Office.  During this interview, while accompanied by her then-counsel, ASH made multiple false statements, including repeating false statements regarding her purported conversations with MCU’s former general counsel about Wong’s receipt of cash payments and falsely claiming that she and her aunt took a trip to Las Vegas paid for by MCU, including airfare, lodging, and entertainment expenses, after she resigned because all of her travel arrangements were paid for by MCU before she resigned, when in truth all of the expenses were paid for after she resigned.  

On or about October 11, 2019, ASH was arrested, and her cellphone was seized.  After obtaining a judicially authorized search warrant, ASH’s phone was searched, which revealed, among other things, numerous text messages, including with Wong and Guagliardo, that were concealed in response to the First and Second Subpoenas.

*                *                *

In addition to her prison term, ASH, 64, of Brooklyn, New York, was sentenced to a $80,000 fine, and two years of supervised release, including a special condition of twenty hours of community service per week while on supervised release.  The court reserved the decision on restitution to MCU. 

On June 4, 2019, Wong was sentenced to 66 months’ imprisonment for embezzlement from MCU and was ordered to forfeit $9,890,375 and to pay restitution in the same amount to MCU.

On July 23, 2020, Guagliardo was sentenced to 27 months’ imprisonment for embezzlement from MCU and was ordered to forfeit $425,514 and to pay $468,189 in restitution to MCU. 

U.S. Attorney Williams praised the outstanding work of the Special Agents of the United States Attorney’s Office.  Mr. Williams also thanked the New York County District Attorney’s Office and DFS for their assistance.

The case is being handled by the Office’s Public Corruption Unit.  Assistant U.S. Attorneys Eli J. Mark, Daniel C. Richenthal, and Jonathan Rebold are in charge of the prosecution, with the assistance of Special Assistant U.S. Attorney Alona S. Katz from the New York County District Attorney’s Office.

Damian Williams, the United States Attorney for the Southern District of New York, announced that ABDURAMAN ISENI, a/k/a “Diamond” was sentenced to 51 months in prison, based on his leadership of a multi-year racketeering enterprise from in or about 2017 through 2020, and criminal offenses related to threats, money laundering, bank fraud, false statements to a bank, and illegal gambling.  ISENI committed these offenses despite two prior federal convictions in the Southern District of New York for racketeering and money laundering. ISENI previously pled guilty before U.S. District Judge Andrew L. Carter, who imposed today’s sentence.

U.S. Attorney Damian Williams said:  “Serving more than a decade in federal prison should have demonstrated to Abduraman Iseni the consequences of serious crimes.  But instead, after his release he went back to racketeering, threats, money laundering, and other offenses.  Today’s sentence should send a message that this Office will make every effort to hold dangerous, recidivist felons to account.”

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

ISENI oversaw a racketeering enterprise referred to in the Indictment as the “Diamond Enterprise”.  The Diamond Enterprise was an organized criminal group operating under ISENI’s direction.  ISENI offered his protection, connections, and substantial influence in the criminal underworld to other members of the racketeering enterprise, in exchange for a share of their illegal profits.  The Diamond Enterprise thrived in part on the revenues generated by a network of illegal gambling parlors – “Sports Café,” “Friendly Café,” and “Oasis Café” – located throughout Brooklyn, that hosted underground poker games and hosted illegal sports books. Some of these revenues, in turn, were laundered through a series of bank accounts in an effort to conceal and facilitate the Enterprise’s continued operations.

In addition to the Enterprise’s operations, ISENI separately admitted to threatening a victim with physical violence, including an incident where he held a fork close to a co-defendant’s eye and threatened to jab it in, and a host of additional crimes, including money laundering, bank fraud conspiracy, and making false statements to a bank for the purpose of inducing the bank to release funds to which ISENI was not entitled.     

Prior to this more recent conduct, Iseni was twice convicted of federal offenses in the Southern District of New York – a 1996 conviction for racketeering and a 2012 conviction for money laundering – and served over a decade in federal prison.

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In addition to his prison term, ISENI, 56, of Staten Island, was sentenced to three years of supervised release. He was also ordered to forfeit $349,000 and to pay a $5,000 fine.

Mr. Williams praised the outstanding work of FBI New York’s Balkans and Middle East Organized Crime Squad, the FBI’s Newark Office, the United States Customs and Border Protection, the Department of State Diplomatic Security Service, the Small Business Administration Office of the Inspector General, the Social Security Administration Office of the Inspector General, the New York State Liquor Authority, and the New York City Police Department, for their investigative efforts and ongoing support and assistance with the case.  

The prosecution of this case is being overseen by the Office’s Money Laundering and Transnational Criminal Enterprises Unit.  Assistant U.S. Attorneys Samuel L. Raymond and David R. Felton are in charge of the case.

Damian Williams, 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 the indictment of FRANKLIN RAY for conspiracy to commit wire fraud, wire fraud, and aggravated identity theft, in connection with various fraud schemes relating to his operation of a trucking business known as CSA Business Solutions LLC.  RAY, who was previously convicted of wire fraud and bank fraud in the Eastern District of Michigan and was released from prison in 2010, and a co-defendant, JOSEPH WINGET, were arrested in connection with certain of these schemes pursuant to a criminal complaint in early March.

U.S. Attorney Damian Williams said: “We allege Ray used his purported trucking companies as vehicles for fraud, including by submitting fraudulent applications for small business loans during the Covid-19 pandemic, and by fleecing investors into giving him tens of millions of dollars to participate in a business that was a scam. Ray knew that his actions were illegal, having been convicted of similar crimes more than a decade ago. Ray may not learn a lesson from his latest actions, but he will face justice for them.”

FBI Assistant Director-in-Charge Michael J. Driscoll said: “As we allege today, Mr. Ray, who was previously convicted of federal wire and bank fraud charges, operated a Ponzi scheme that defrauded hundreds of investors of more than $40 million.  Mr. Ray was even bold enough to continue his alleged activity subsequent to his most recent arrest.  Today's charges will force him - yet again - to face the consequences of his illegal activity in the federal criminal justice system.”

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

Beginning in at least June 2021, FRANKLIN RAY began to offer investors an opportunity to invest in his trucking and logistics company, CSA Business Solutions LLC (the “Truck Investment Scheme”).  Specifically, RAY and the investors entered into contracts pursuant to which, for each $20,000 contributed by the investor, CSA Business Solutions LLC would procure and operate a truck in its trucking business.  RAY told investors that the trucks would perform delivery services for a multinational e-commerce company and/or a multinational shipping company, and that the investors would be entitled to 77% of the net income of the trucks.  After the investors purchased the rights to trucks from CSA Business Solutions LLC, RAY sent them falsified spreadsheets at regular intervals, purporting to show the performance of their trucks during the relevant period.  In truth and fact, CSA Business Solutions LLC operated few trucks and had minimal revenues from trucking activities.  Instead, investors in the Truck Investment Scheme received payments from new investments into the scheme or from other sources.  RAY ultimately induced approximately 275 investors to purchase over 2,000 trucks, totaling at least $40 million in fraudulent investments.

RAY is also charged with carrying out fraudulent schemes to obtain over $1.9 million in government-guaranteed loans designed to provide relief to small businesses during the COVID-19 pandemic on behalf of CSA Business LLC and another Michigan-based trucking company (the “SBA Loan Fraud Schemes”).  In connection with the SBA Loan Fraud Schemes, RAY submitted false information and forged documents to the SBA and commercial lenders.  RAY claimed that these businesses engaged in significant trucking business, but they had minimal revenues and trucking activity.  A co-defendant, JOSEPH WINGET, is charged with participating in one of the SBA Loan Fraud Schemes, on behalf of CSA Business Solutions LLC, resulting in $1.1 million in fraudulently obtained loans.

Finally, RAY is charged with fraudulently inducing a New York City based real estate company to pay a $175,000 deposit in order to pay for startup costs associated with setting up a joint venture between the company and CSA Business Solutions LLC (the “Joint Venture Fraud”).  RAY induced the company to enter into the Joint Venture by misrepresenting CSA Business Solutions LLC and his own personal business experience.  RAY spent the funds on personal expenses, including private airplane trips.  The Joint Venture was never formed.

RAY and WINGET were arrested in early March 2022, and a CSA Business Solutions LLC bank account was seized at that time.  After his arrest, RAY continued to operate the Truck Investment Scheme.  RAY misled investors about why he did not make expected payments after his arrest and hid the fact of his arrest and the seizure of the bank account.  During this period, RAY caused the opening of new bank accounts on behalf of CSA Business Solutions LLC and continued to solicit and accept investor funds for trucks that did not exist.

*           *           *

RAY, 50, of Canton, Michigan, is charged with conspiracy to commit wire fraud, four counts of wire fraud, and two counts of aggravated identity theft.  The conspiracy to commit wire fraud and three counts of wire fraud each carry a maximum sentence of 20 years in prison.  One of the wire fraud counts relates to a fraud affecting a financial institution, and therefore carries a maximum sentence of 30 years in prison.  The charges for aggravated identity theft each carry an additional mandatory consecutive two-year sentence. 

WINGET, 70, of Imlay City, Michigan, is charged with conspiracy to commit wire fraud and one count of wire fraud, each of which carries a maximum sentence of 20 years in prison, and one count of aggravated identity theft, which carries an additional mandatory consecutive two-year sentence.

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

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

If you believe you have been a victim of the schemes described above, including a victim entitled to restitution, and you wish to provide information to law enforcement and/or receive notice of future developments in the case or additional information, please contact Wendy Olsen-Clancy, the Victim Witness Coordinator at the United States Attorney’s Office for the Southern District of New York, at 866-874-8900 or wendy.olsen@usdoj.gov.

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[1] As the introductory phrase signifies, the entirety of the text of the Indictment and Complaint and the description of the Indictment and 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 Michael J. Driscoll, the Assistant Director-in-Charge of the New York Field Office of the Federal Bureau of Investigation (“FBI”), announced today the unsealing of three indictments charging ten individuals with engaging in a long-running “pump-and-dump” stock manipulation scheme involving the stocks of numerous companies traded on United States-based stock exchanges.  The scheme spanned the globe and the ten defendants charged were residents of Canada, the United Kingdom, Bulgaria, Spain, Monaco, Turkey and the Bahamas.  RONALD BAUER was arrested in the United Kingdom.  CURTIS WILLIAM LEHNER, COURTNEY VASSEUR, and JULIUS CSURGO were arrested in Canada.  ANTHONY KORCULANIC was arrested in Spain.  PETAR MIHAYLOV was arrested in Bulgaria.  Finally, DOMENIC CALABRIGO was arrested in the Bahamas.  The United States intends to seek the extradition of BAUER, LEHNER, VASSEUR, CSURGO, KORCULANIC, MIHAYLOV, and CALABRIGO to the United States.  CRAIG AURINGER, a citizen of Canada and resident of the United Kingdom, HASAN SARIO, a citizen and resident of Turkey, and DANIEL FERRIS, a citizen of the United Kingdom and resident of Monaco, were also charged and remain at large. 

U.S. Attorney Damian Williams said:  “As alleged, for years, the defendants, collectively, made over $100 million by orchestrating ‘pump-and-dump’ stock manipulation schemes of publicly traded shares of U.S.-based issuers.  These pernicious ‘pump-and-dump’ schemes made the defendants rich while causing real harm to ordinary, retail investors who were left swallowing the losses.  These defendants used a web of nominee entities and shell companies located all over the world attempting to disguise their own orchestration of these schemes.  Today’s charges should send a clear message to all of those who think they can make millions running ‘pump-and-dump’ schemes --- no matter where in the world you are located, and no matter how many fake accounts and offshore shell companies you try to hide behind, our Office will vigorously pursue and prosecute you.”

FBI Assistant Director Michael J. Driscoll said:  “Stock manipulation schemes such as the one charged here today serve to undermine confidence in our financial markets and create a playing field designed to illegally benefit a greedy few fraudsters at the expense of many honest investors.  As alleged, the 10 charged defendants operated a global scheme that reaped more than $100 million in illicit proceeds.  Our action today should serve as a reminder of our commitment to insure free and fair markets for all investors.”           

As alleged in the three Indictments unsealed in Manhattan federal court[1]:

The Defendants

United States v. Ronald Bauer et al., 22 Cr. 155

RONALD BAUER, CRAIG AURINGER, PETAR MIHYALOV, and DANIEL FERRIS participated in a conspiracy that, collectively, involved “pump-and-dump” stock manipulation schemes of the securities of at least 12 United States-based issuers, resulting collectively in at least approximately $75 million in total proceeds. 

RONALD BAUER, a/k/a “Patek,” a citizen of Canada and the United Kingdom who resided in the United Kingdom, orchestrated numerous “pump-and-dump” schemes.  BAUER controlled the various aspects of the schemes. 

CRAIG AURINGER, a citizen of Canada who resided in the United Kingdom, participated in multiple “pump-and-dump” schemes including by coordinating stock promotion campaigns and by providing funding in furtherance of the stock manipulation schemes.

PETAR MIHAYLOV, a/k/a “Petar the Bulgarian,” a/k/a “PDM,” a citizen and resident of Bulgaria, participated in multiple “pump-and-dump” schemes by coordinating stock manipulation promotion campaigns and providing funding in furtherance of the stock manipulation schemes.

DANIEL FERRIS, a citizen of the United Kingdom who resided in Monaco, participated in multiple “pump-and-dump” stock manipulation schemes including by opening accounts that were then used to trade shares and transfer funds in furtherance of the schemes and by taking various actions necessary to prepare the publicly traded companies that were used as the vehicles for the stock manipulation schemes. FERRIS also served as the Chief Executive Officer of at least one of the companies whose shares the group thereafter manipulated. 

United States v. Curtis Lehner et al., 21 Cr. 121

CURTIS LEHNER, COURTNEY VASSEUR, HASAN SARIO, and DOMENIC CALABRIGO participated in a conspiracy that, collectively, involved “pump-and-dump” stock manipulation schemes of the securities of at least 9 United States-based issuers, resulting collectively in at least approximately $35 million in total proceeds. 

CURTIS LEHNER, a/k/a “Santa,” a citizen and resident of Canada, and COURTNEY VASSEUR, a/k/a “Black Water Resource Management,” a/k/a “Black Water,” a/k/a “Cyrill Vetsch,” a/k/a “Arctic Shark,” a/k/a “Oscar Devries,” a citizen and resident of Canada, both orchestrated numerous “pump-and-dump” schemes.

HASAN SARIO, a/k/a “Ali,” a/k/a “H,” a citizen of Germany and Turkey who resided in Turkey, furthered the stock manipulation schemes by, among other things, acting as a designated “trading specialist” who directed the group’s stock trading across various nominee entity accounts that the group controlled.  SARIO also utilized a network of nominee entities and nominee entity bank accounts that he controlled in order to both trade shares and transfer funds in furtherance of the schemes.

DOMENIC CALABRIGO, a/k/a “Raider,” a citizen of Canada who resided in the Bahamas, furthered the stock manipulation schemes by, among other things, coordinating stock promotion campaigns.

United States v. Julius Csurgo and Anthony Korculanic, 22 Cr. 190

JULIUS CSURGO and ANTHONY KORCULANIC participated in a conspiracy that collectively, involved “pump-and-dump” stock manipulation schemes of the securities of at least 19 United States-based issuers, resulting collectively in at least approximately $35 million in total proceeds. 

JULIUS CSURGO, a/k/a “Gyula Karoly Csurgo,” a citizen of Canada and Hungary who resided in Canada, orchestrated numerous “pump-and-dump” stock manipulation schemes. In connection with the schemes, CSURGO owned and operated an entity called Antevorta Capital Partners, Ltd. (“Antevorta”), which CSURGO used as a vehicle for the “pump-and-dump” schemes.  CSURGO, directly and through Antevorta, furthered the schemes by purchasing and selling numerous stocks in connection with the scheme and funding certain fraudulent stock promotion campaigns that were used to drive up the share prices as CSURGO and his co-conspirators sold off the shares that they controlled.

ANTHONY KORCULANIC, a/k/a “Remy,” a/k/a “Viper,” a citizen of Canada and Croatia who resided, at certain relevant times, in Spain, participated in multiple “pump-and-dump” schemes including by coordinating stock promotion campaigns and by providing funding in furtherance of the stock manipulation schemes.

Overview of the “Pump-and-Dump” Stock Manipulation Schemes

As alleged, the defendants participated in “pump-and-dump” schemes that followed a typical pattern.  First, the defendants and their co-conspirators secretly amassed control of the vast majority of the stock of certain publicly traded companies that were traded on the over-the-counter (“OTC”) market in the United States. Second, the defendants and their co-conspirators then manipulated the price and trading volume for these stocks, causing the share price and trading volume to become artificially inflated, through coordinated trading and false and misleading promotional campaigns that they funded.  Third, and finally, the defendants sold out of their secretly amassed positions at these inflated values at the expense of the investing public.

In furtherance of the scheme, the defendants used a network of nominee entities to trade shares and funnel proceeds of these schemes back to the defendants and their co-conspirators.  Holding the shares through the network of nominee entities allowed the defendants and their co-conspirators to conceal the fact that, in reality, they controlled the vast majority of the shares of the issuer.

The securities that the defendants and their co-conspirators sought to manipulate were issued by small companies, were thinly traded, and typically traded at less than $2 per share.  These publicly traded shell companies frequently had few, if any, actual assets or actual business operations.  While on paper the defendants and their co-conspirators had no connection to these companies, in reality they exercised substantial control, including installing management at the companies, financing the companies’ operations, and funding payments for attorneys in order to prepare public filings with OTC Markets Group, Inc. and the Securities and Exchange Commission (the “SEC”).  In order to attract investor interest, the defendants and their co-conspirators, at times, caused private businesses to be merged or “vended” into the publicly traded shell companies. The private businesses were often in industries likely to attract the investing public’s interest. 

In connection with the scheme, the defendants and their co-conspirators frequently engaged in manipulative trading activity in order to artificially increase the trading volume and share price of the stocks.  This manipulative trading included, at times, coordinated “match” trades in which the defendants and their co-conspirators caused one nominee entity or other brokerage account subject to their control to sell a certain quantity of shares while causing another nominee entity or brokerage account subject to their control to buy a similar quantity of shares that same day.  These match trades, which often occurred on days when there was low trading volume, had the effect of artificially increasing the share price and trading volume of the stock. 

As part of the “pump-and-dump” schemes, the defendants and their co-conspirators financed and coordinated promotional campaigns through which promotional materials touting the stocks were distributed to the investing public.  These stock promotional materials frequently contained false and misleading claims about the issuer, as well as omitting material information, with the objective of inducing retail investors to purchase the shares of the issuer, which allowed the defendants and their co-conspirators to sell of their substantial positions for a profit.  The defendants and their co-conspirators often expended hundreds of thousands of dollars on these stock promotion campaigns.  Furthermore, certain of the defendants used a “boiler room” to solicit investors, including investors based in the United States, to purchase shares of certain of the companies.  These “boiler rooms” involved multiple individuals working in a coordinated effort to contact potential investors, often through unsolicited “cold calls,” and providing investors with false, misleading, unfounded, and/or exaggerated information about the relevant issuer in order to induce the potential investors to purchase shares.

The defendants and their co-conspirators profited from the scheme by selling their shares into the market at the artificially high prices they had created through their manipulative activities.  By selling their shares while the share price was artificially inflated, the defendants and their co-conspirators were able to realize millions of dollars in illicit profits.  Once the defendants and their co-conspirators had sold off their shares and ceased the stock promotion campaign and their manipulative trading tactics, the share price of the relevant companies typically dropped precipitously.  The defendants and their co-conspirators then laundered the proceeds of the schemes back to themselves in a manner designed to conceal the source of the funds and/or the identity of the recipients.  Such laundering was frequently accomplished through the use of fabricated invoices, contracts and agreements.

*          *          *

Each of the defendants is charged with conspiracy to commit securities fraud, which carries a statutory maximum sentence of five years in prison.  Each of the defendants is further charged with conspiracy to commit wire fraud, which carries a statutory maximum sentence of 20 years in prison.  Each of the defendants is further charged with multiple counts of securities fraud pursuant to Title 15 of the United States Code, which carry a statutory maximum sentence of 20 years in prison per count.  Each of the defendants is further charged with wire fraud, which carries a statutory maximum sentence of 20 years in prison.  Finally, each of the defendants is charged with conspiracy to commit money laundering, which carries a statutory maximum sentence of 20 years in prison. 

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

Mr. Williams praised the investigative work of the FBI. He further thanked the Justice Department’s Office of International Affairs of the Department’s Criminal Division, as well as authorities in the United Kingdom (in particular the National Extradition Unit), Canada (in particular the Royal Canadian Mounted Police, the Alberta Securities Commission, and the Toronto Police Service Fugitive Squad), Spain (in particular the Spanish National Police), Bulgaria (in particular the National Police Service), and the Bahamas (in particular the Royal Bahamas Police Force).  Finally, Mr. Williams also thanked the Securities and Exchange Commission, which initiated civil proceedings against nine of the ten defendants today. 

This case is being handled by the Office’s Securities and Commodities Fraud Task Force. Assistant United States Attorneys Noah Solowiejczyk, Jason Richman, and Vladislav Vainberg are in charge of the prosecution.

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

Russian Legislator Aleksandr Mikhaylovich Babakov and Staff Members Aleksandr Nikolayevich Vorobev and Mikhail Alekseyevich Plisyuk, Allegedly Conspired to Violate U.S. Sanctions, Have a U.S. Citizen Act as an Illegal Agent of Russia, and Fraudulently Obtain Visas to Enter the U.S. in Furtherance of a Global Foreign Influence Scheme for the Russian Government

Three citizens of the Russian Federation (Russia) are charged in an indictment, which was unsealed today, with conspiring to use an agent of Russia in the United States without prior notice to the Attorney General, conspiring to violate U.S. sanctions and conspiring to commit visa fraud.

According to court documents, beginning in or around January 2012 through at least June 2017, Aleksandr Mikhaylovich Babakov, 59; Aleksandr Nikolayevich Vorobev, 52; and Mikhail Alekseyevich Plisyuk, 58, operated an international foreign influence and disinformation network to advance the interests of Russia.

“The indictment alleges that a high-ranking Putin-aligned legislator and his closest staffers, all three of whom are sanctioned, engaged in a global campaign to influence and gain access to U.S. elected officials,” said Assistant Attorney General Matthew G. Olsen of the Justice Department’s National Security Division. “The Department will not hesitate to prosecute those who seek to covertly influence the American political process and evade U.S. sanctions.”

“Russian legislator Aleksandr Babakov and two of his staffers allegedly orchestrated a covert Russian propaganda campaign in the United States in order to advance Russia’s malevolent political designs against Ukraine and other countries, including the United States.,” said U.S. Attorney Damian Williams for the Southern District of New York. “Today’s indictment demonstrates that Russia’s illegitimate actions against Ukraine extend beyond the battlefield, as political influencers under Russia’s control allegedly plotted to steer geopolitical change in Russia’s favor through surreptitious and illegal means in the United States and elsewhere in the West. Such malign foreign interference will be exposed, and we will pursue justice against its perpetrators.”

“This FBI investigation highlights the lengths the Russian government will go to undermine our rule of law,” said Assistant Director Alan E. Kohler Jr. of the FBI’s Counterintelligence Division. “The FBI is committed to protecting the United States from foreign malign influence and upholding the sanctions in place to keep our democracy safe.”

As alleged in the indictment, Babakov, a member of the Russian legislature, Vorobev, his Chief of Staff, and Plisyuk, another member of Babakov’s staff, used a nonprofit organization based in Russia, the Institute for International Integration Studies, as a front for this global foreign influence campaign to advance Russia’s foreign policy objectives. Through these operations aimed at influencing the course of international affairs, the defendants worked to weaken U.S. partnerships with European allies, undermine Western sanctions and promote Russia’s illicit actions designed to destroy the sovereignty of Ukraine. The defendants schemed to affect U.S. policy towards Russia through staged events, paid propaganda and the recruitment of at least one American citizen (CC-1) to do their bidding in an unofficial capacity and without notice to the Attorney General, as required by law. In pursuit of these goals, the defendants sought to co-opt U.S. and European politicians and to influence public opinion in their favor, using American and European citizens as their proxies to validate them, bring them access to power, evade sanctions and obscure their true objective to advance Russia’s foreign policy.

Among other things, the defendants contacted members of the U.S. Congress from 2012 into 2017 to seek meetings and to offer free travel to at least one Congressmember on behalf of Babakov, as well as other foreign officials aligned and associated with Babakov. For example, in 2012, at the direction of the defendants, CC-1 sought to secure a meeting for Babakov with multiple members of Congress, including by offering an “all expenses paid” trip to a particular Congressmember to meet with European politicians and receive “an award.” Congressmembers rebuffed these efforts.

In March 2017, the defendants sought to arrange a meeting for Babakov with a member of the U.S. Congress in pursuit of the objective of “strengthen[ing] the ties of cooperation between” Russia and the United States. To secure that meeting, the defendants, through CC-1, transmitted a letter drafted by CC-1 and signed by Babakov to a particular Congressmember.

Also in March 2017, the defendants contacted at least one member of the U.S. Congress to offer free travel to a Babakov-affiliated conference in Yalta, part of Russia-controlled Crimea, as a service to benefit the purported “Prime Minister of Crimea,” Sergey Aksyonov. Aksyonov was organizing and attending the conference, and had been sanctioned by the Department of Treasury’s Office of Foreign Assets Control (OFAC) as a Specially Designated National (SDN) since 2014 based on his role in actions and policies threatening the sovereignty of Ukraine. The defendants worked together and with their associates to organize, facilitate and promote the Yalta conference, including by soliciting Americans to attend and present at the conference and receive funding from Aksyonov’s organizing committee, for the benefit of Akysonov and his Russia-backed purported government of Crimea. The Congressmember did not accept the offer.

In connection with these foreign influence activities, the defendants also submitted fraudulent visa applications in February 2017 seeking to travel to the United States under the false pretense of each traveling alone for a “vacation,” when in fact they planned to conduct unofficial meetings with U.S. politicians and advisors to further their influence objectives. In June 2017, OFAC sanctioned the three defendants as SDNs. The defendants’ visa applications were ultimately denied in January 2018, disrupting the defendants’ planned meetings in the United States.

Babakov currently serves as the Deputy Chairman of the State Duma, the lower house of the Russian legislature. From approximately September 2014 to October 2021, Babakov served as a member of the Russian Federation Council, the upper house of the Russian legislature, and therefore had the title of Senator. From approximately 2003 to 2014, Babakov served as a member of the State Duma, where he held prominent roles such as Chair of the State Duma Commission on Legislative Provisions for Development of the Military-Industrial Complex of the Russian Federation. In or around 2011, Babakov joined the United Russia party, which is the political party of Russian President Vladimir Putin. On or around June 17, 2012, Putin appointed Babakov to be the Russian Federation’s Special Representative for Cooperation with Organizations Representing Russians Living Abroad. Babakov has become a leader in the “For Truth” party formed in or about 2021, which supports Putin. At all times relevant to the indictment, Vorobev has held the position of Chief of Staff for Babakov, and Plisyuk has served on Babakov’s staff.

Babakov, Vorobev and Plisyuk are charged with one count of conspiring to have a U.S. citizen act as a Russian agent in the United States without notifying the Attorney General, which carries a maximum sentence of five years in prison; one count of conspiring to violate and evade U.S. sanctions, in violation of the International Emergency Economic Powers Act, which carries a maximum sentence of 20 years in prison; and one count of conspiring to commit visa fraud, which carries a maximum sentence of five years in prison. A federal district court judge will determine any sentence after considering the U.S. Sentencing Guidelines and other statutory factors.

The case is being investigated by the FBI’s New York Field Office with valuable assistance provided by the National Security Division’s Counterintelligence and Export Control Section.

Assistant U.S. Attorneys Kimberly J. Ravener and Kyle A. Wirshba for the Southern District of New York are prosecuting the case, with assistance from Trial Attorney Scott Claffee of the National Security Division’s Counterintelligence and Export Control Section.

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

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

This press release has been modified to reflect precise statutory language.

Damian Williams, the United States Attorney for the Southern District of New York, Matthew G. Olsen, the Assistant Attorney General for National Security, and Michael J. Driscoll, the Assistant Director-in-Charge of the New York Field Office of the Federal Bureau of Investigation (“FBI”), announced today the unsealing of an Indictment charging ALEKSANDR MIKHAYLOVICH BABAKOV, ALEKSANDR NIKOLAYEVICH VOROBEV, and MIKHAIL ALEKSEYEVICH PLISYUK, citizens of the Russian Federation (“Russia”), with conspiring to act in the United States as an illegal agent of Russia, conspiring to violate United States sanctions, and conspiring to commit visa fraud.  BABAKOV, a Deputy Chairman in the Russian legislature, VOROBEV, and PLISYUK are based in Russia and remain at large.

U.S. Attorney Damian Williams said: “Russian legislator Aleksandr Babakov and two of his staffers allegedly orchestrated a covert Russian propaganda campaign in the U.S. in order to advance Russia’s malevolent political designs against Ukraine and other countries, including the U.S.  Today’s indictment demonstrates that Russia’s illegitimate actions against Ukraine extend beyond the battlefield, as political influencers under Russia’s control allegedly plotted to steer geopolitical change in Russia’s favor through surreptitious and illegal means in the U.S. and elsewhere in the West. Such malign foreign interference will be exposed, and we will pursue justice against its perpetrators.”

Assistant Attorney General Matthew G. Olsen said: “The indictment alleges that a high-ranking Putin-aligned legislator and his closest staffers, all three of whom are sanctioned, engaged in a global campaign to influence and gain access to U.S. elected officials. The Department will not hesitate to prosecute those who seek to covertly influence the American political process and evade U.S. sanctions.”

FBI Assistant Director-in-Charge Michael J. Driscoll said: “Beginning as far back as 2012, Aleksandr Babakov, an oligarch who has served as a leader in the Russian legislature along with two of his deputies, operated a nonprofit organization as a subterfuge for an international foreign influence and disinformation network to advance the interests of the Russian Government. As alleged, Babakov sought to undermine Western sanctions - including those imposed against him - promote Russia’s illicit actions designed to destroy Ukrainian sovereignty, and co-opt and cultivate relationships with U.S. politicians to advance Russia’s malign foreign policy objectives. Today’s action demonstrates the FBI’s unwavering commitment to the identification and disruption of Russian Government schemes to target the national security and foreign policy of the United States.”

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

Beginning in or around January 2012 and continuing into at least June 2017, Babakov, a member of the Russian legislature, Vorobev, his Chief of Staff, and Plisyuk, another member of Babakov’s staff, operated an international foreign influence and disinformation network to advance the interests of Russia. The defendants used a nonprofit organization based in Russia, the “Institute for International Integration Studies,” as a front for this global foreign influence campaign to advance Russia’s foreign policy objectives. Through these operations aimed at influencing the course of international affairs, the defendants worked to weaken U.S. partnerships with European allies, undermine Western sanctions, and promote Russia’s illicit actions designed to destroy the sovereignty of Ukraine. The defendants schemed to affect U.S. policy towards Russia through staged events, paid propaganda, and the recruitment of at least one American citizen (“CC-1”) to do their bidding in unofficial capacities. In pursuit of these goals, the defendants sought to co-opt U.S. and European politicians and to influence public opinion in their favor, using American and European citizens as their proxies in an effort to validate them, bring them access to power, evade sanctions, and obscure their true objective to advance Russia’s foreign policy.

Among other things, the defendants contacted members of the U.S. Congress from 2012 into 2017 to seek meetings and to offer free travel to at least one Congressmember on behalf of BABAKOV, as well as other foreign officials aligned and associated with BABAKOV. For example, in 2012, at the direction of the defendants, CC-1 sought to secure a meeting for BABAKOV with multiple members of Congress, including by offering a trip to a particular Congressmember “all expenses paid” to meet with European politicians and receive “an award.” Congressmembers rebuffed these efforts.

In March 2017, the defendants sought to arrange a meeting for BABAKOV with a member of the U.S. Congress in pursuit of the objective of “strengthen[ing] the ties of cooperation between” Russia and the United States. To secure that meeting, the defendants, through CC-1, transmitted a letter drafted by CC-1 and signed by BABAKOV to a particular Congressmember.

Also in March 2017, the defendants contacted at least one member of the U.S. Congress to offer free travel to a BABAKOV-affiliated conference in Yalta, part of Russia-controlled Crimea, as a service to benefit the purported “Prime Minister of Crimea,” Sergey Aksyonov, who was organizing and attending the conference, and had been sanctioned by the United States Department of Treasury’s Office of Foreign Assets Control (“OFAC”) as a Specially Designated National since 2014 based on his role in actions and policies threatening the sovereignty of Ukraine. The defendants worked together and with their associates to organize, facilitate, and promote the Yalta conference, including by soliciting Americans to attend and present at the conference and receive funding from Aksyonov’s organizing committee, for the benefit of Akysonov and his Russia-backed purported government of Crimea. The Congressmember did not accept the offer.

In connection with these foreign influence activities, the defendants also submitted fraudulent visa applications in February 2017 seeking to travel to the United States under the false pretense of each traveling alone for a “vacation,” when in fact they planned to conduct unofficial meetings with U.S. politicians and advisors to further their influence objectives. In June 2017, OFAC sanctioned the three defendants as Specially Designated Nationals. The defendants’ visa applications were ultimately denied in January 2018, disrupting the defendants’ planned meetings in the U.S.

BABAKOV currently serves as the Deputy Chairman of the State Duma, the lower house of the Russian legislature. From approximately September 2014 to October 2021, BABAKOV served as a member of the Russian Federation Council, the upper house of the Russian legislature, and therefore had the title of “Senator.” From approximately 2003 to 2014, BABAKOV served as a member of the State Duma, where he held prominent roles such as Chair of the State Duma Commission on Legislative Provisions for Development of the Military-Industrial Complex of the Russian Federation. In or about 2011, BABAKOV joined the United Russia party, which is the political party of Russian President Vladimir Putin. On or about June 17, 2012, Putin appointed BABAKOV to be the Russian Federation’s Special Representative for Cooperation with Organizations Representing Russians Living Abroad. BABAKOV has become a leader in the “For Truth” party formed in or about 2021, which supports Putin. At all times relevant to the Indictment, VOROBEV has held the position of Chief of Staff for BABAKOV, and PLISYUK has served on BABAKOV’s staff.

*                      *                     *

BABAKOV, 59, VOROBEV, 52, and PLISYUK, 58, of Russia, are charged with one count of conspiring to have a U.S. citizen act as an illegal agent in the United States for Russia and Russian officials without notifying the Attorney General, which carries a maximum sentence of five years in prison; one count of conspiring to violate and evade U.S. sanctions, in violation of the International Emergency Economic Powers Act, which carries a maximum sentence of 20 years in prison; and one count of conspiring to commit visa fraud, which carries a maximum sentence of five years in prison. The maximum potential sentences are prescribed by Congress and are provided here for informational purposes only, as any sentencing of the defendants will be determined by a judge.

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

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

The case is being handled by the Office’s National Security and International Narcotics Unit. Assistant U.S. Attorneys Kimberly J. Ravener and Kyle A. Wirshba are in charge of the case, with assistance from Trial Attorney Scott Claffee of the Counterintelligence and Export Control Section.

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

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

This press release has been modified to reflect precise statutory language

Damian Williams, the United States Attorney for the Southern District of New York, announced today that DAVID KAUFMAN, a/k/a “David Khalifa,” a/k/a “John Morray,” a/k/a “Big Man,” a self-identified “Incel,” was sentenced to 30 months in prison, after pleading guilty to stalking multiple victims between October 2019 and August 2020.  U.S. District Judge Nelson S. Román imposed today’s sentence. 

U.S. Attorney Damian Williams said: “David Kaufman, a self-described ‘Incel,’ or ‘Involuntary Celibate,’ expressed his hatred of women by terrorizing and harassing his victims though threats of violence.  The Court’s sentence sends a clear message to the public that perpetrators of violence against women will be held accountable for their crimes.”

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

KAUFMAN self-identifies as an “Incel” or “Involuntary Celibate,” which refers to a group of domestic extremists who adhere to a violent and misogynist ideology of male supremacy.  Incels believe they are entitled to sex with women and to women’s bodies, and they blame women for refusing to have sex with them.  Incels have an active online community and over the last eight years, Incels also have committed acts of violence against women around the world, including in the United States.  For example, in 2014, a self-proclaimed Incel named Elliot Rodger declared a “War on Women” and killed six people and injured fourteen others near a college campus in California.  Prior to these attacks, Rodger posted a video manifesto online, in which he explained that he planned his attack to punish women for rejecting him and for depriving him of sex, and to punish sexually active men because he envied them.

In or about 2019 and 2020, KAUFMAN harassed, threatened, and stalked numerous victims.  In or about February 2019, KAUFMAN sent a bomb, rape, and death threat to a female victim.  A few months later, beginning in or about October 2019, KAUFMAN sent two victims (“Victim-1” and “Victim-2”), among others, violent and threatening messages using over 50 social media accounts.  In these messages, KAUFMAN self-identified as an Incel, expressed his hatred of women, and threatened to commit acts of violence.  For example:

• On or about June 24, 2020, KAUFMAN sent the following message to Victim-1:  “Hey wanna hear a joke?  What’s worse than 10 Stacy’s nailed to one tree?  One Stacy nailed to ten trees [laughing crying face emoji].”  “Stacy” is an Incel term that refers to an attractive female who rejects or refuses to have sex with an Incel, is hated by Incels, and is targeted by Incels for harassment, vitriol, humiliation, and violence.
• On or about June 29, 2020, KAUFMAN sent a series of messages to Victim-2.  These messages included an image of one of Elliot Rodger’s victims, a deceased female who had been stabbed to death, accompanied by the following message:  “This is what happened when a woman said ‘no’ to Elliot Rodger . . . . Hopefully [Victim-1] never said no to someone just like Elliot Rodger.” 
• In or about July 2020, KAUFMAN posted the following messages:  “Don’t piss off BIG MAN” and “When [Victim-1] and I are dead, we’ll be in heaven together forever.”
• On or about July 11, 2020, KAUFMAN sent the following message to Victim-1:  “Women have done nothing but spit in my face.  Soon I’ll be getting a gun.”
• On or about July 12, 2020, KAUFMAN posted the following messages:  “A beautiful environment is the darkest hell, if you have to experience it all alone . . . –Elliot Rodger” and “I don’t think [Victim-1] will be laughing too much later on."

KAUFMAN also created social media accounts using the first and last names of Victim-1 and Victim-2, respectively, and impersonated Victim-1 and Victim-2 online.

In the summer of 2020, law enforcement officers approached KAUFMAN and told him to stop harassing Victim-1 and Victim-2.  On or about July 14, 2020, KAUFMAN was arrested on state criminal charges and an order of protection was issued in Westchester County prohibiting KAUFMAN from, among other things, communicating or contacting Victim-1 or Victim-2. 

Notwithstanding the court order of protection, state charges, and multiple warnings by law enforcement, KAUFMAN continued to harass, threaten, and stalk Victim-1 and Victim-2 until he was federally charged and arrested in August 2020.  KAUFMAN also conducted online surveillance of Victim-1’s residence and researched how to illegally purchase a gun and assemble a semi-automatic rifle.

*                      *                      *

In addition to the prison sentence, KAUFMAN, 28, of Peekskill, New York, was sentenced to 3 years supervised release, with first six months of home detention, the conditions of which include orders of protection prohibiting KAUFMAN from, among other things, contacting certain victims and their family members.

Mr. Williams praised the outstanding investigative work of the Federal Bureau of Investigation’s New York Joint Terrorism Task Force.  Mr. Williams also thanked the New York State Police, the U.S. Postal Inspection Service, the Cortlandt County Police Department, the Stamford Police Department, the Peekskill Police Department, the Mt. Pleasant Police Department, and the Westchester County District Attorney’s Office for their assistance and cooperation.

This prosecution is being handled by the Office’s National Security and International Narcotics Unit.  Assistant U.S. Attorney Jane Kim is in charge of the prosecution.

Damian Williams, the United States Attorney for the Southern District of New York, announced today that APOSTOLOS TROVIAS, a/k/a “The Bull,” pled guilty and was sentenced earlier today to time served, following approximately eleven months in custody, in connection with his scheme to solicit and sell confidential, pre-release earnings, deal, and other information regarding public companies.

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

Since at least in or about December 2016, APOSTOLOS TROVIAS, who identified himself by the pseudonym “The Bull,” had used websites on the Dark Web and encrypted messaging services to solicit and sell confidential, non-public information about publicly traded companies (“Inside Information”) to enrich himself. TROVIAS’s scheme consisted of multiple related efforts to obtain and monetize confidential nonpublic business information, including the sale of pre-release earnings reports and deal information misappropriated from publicly traded companies.

Further, in or about 2020, TROVIAS took steps to design and build a website to facilitate the purchase and sale of material, non-public information for use in stock trading (the “Inside Information Auction Site”). TROVIAS planned to use the Inside Information Auction Site to enrich himself by charging membership fees and commissions from individuals using the Inside Information Auction Site to engage in the unlawful trade of Inside Information.

*                *                *

TROVIAS, 30, of Athens, Greece, had been arrested in the Republic of Peru in May 2021 and arrived in the United States by extradition on March 25, 2021. TROVIAS was ordered to pay forfeiture in the amount of $6,700.

Mr. Williams praised the outstanding work of the FBI. Mr. Williams further thanked the U.S. Securities and Exchange Commission and the Internal Revenue Service for their cooperation and assistance in this investigation.

The prosecution of this case is being overseen by the Office’s Securities and Commodities Fraud Task Force.  Assistant U.S. Attorneys Matthew Podolsky and Andrew Thomas are in charge of the case.

Damian Williams, the United States Attorney for the Southern District of New York, announced today that OSCAR RIOS, a/k/a “Oski,” was sentenced to 115 months in prison for his coordination of an August 29, 2020 armed home invasion robbery in the Bronx, New York.  RIOS pled guilty to one count of conspiracy to commit Hobbs Act robbery on October 6, 2021 before U.S. District Judge John P. Cronan, who imposed today’s sentence. 

RIOS’s co-defendants, SHAWN GARCIA, a/k/a “Ralph Porter,” and SUTHA TAYLOR, a/k/a “Sutha Colon,” carried out the robbery and also pled guilty to conspiracy to commit Hobbs Act robbery.  GARCIA and TAYLOR were previously sentenced to 96 months and 121 months in prison, respectively.

U.S. Attorney Damian Williams said:  “Oscar Rios coordinated a violent home invasion robbery that resulted in one victim being shot and another victim being threatened at gunpoint.  The sentences imposed in this case send a clear message that those who plan and carry out such violent crimes will pay a heavy price.”

According to public filings and statements made in court:

On or about August 29, 2020, RIOS orchestrated an armed home invasion robbery of an apartment in the Bronx, New York (the “Apartment”), which co-defendants GARCIA and TAYLOR, along with a third co-conspirator (“CC-3”), carried out.  Shortly before the robbery took place, RIOS communicated with other uncharged co-conspirators to lure a resident (“Victim-1”) out of the Apartment.  Once RIOS learned that Victim-1 was about to leave, he informed GARCIA and TAYLOR via text message to commit the robbery. 

When Victim-1 opened the door to the Apartment, GARCIA, TAYLOR, and CC-3 ran into the Apartment and physically assaulted Victim-1, including by striking Victim-1 in the head several times with at least one firearm.  During this time, RIOS remained in a nearby building to serve as a lookout.  While the assault on Victim-1 was in progress, another resident of the Apartment (“Victim-2”) was thrown into the bathroom and ordered to remain there.  Victim-1 was then shot in the buttocks.  After the shooting, one of the robbers placed a dark garment over Victim-2’s head and demanded to know where Victim-1 kept his safe, which contained proceeds from Victim-1’s marijuana sales.  Shortly thereafter, RIOS texted GARCIA and TAYLOR to inform them that the area was clear for them to flee.  GARCIA, TAYLOR, and CC-3 then fled the Apartment, stealing a safe with cash proceeds from Victim-1’s marijuana sales, as well as other items found in the Apartment.

As a result of the assault and shooting, Victim-1 was hospitalized for several days.  

*                *                *

In addition to the prison term, RIOS, 28, of the Bronx, New York, was sentenced to three years of supervised release.

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

The prosecution of this case is being handled by the Office’s General Crimes Unit.  Assistant United States Attorney David J. Robles is in charge of the prosecution.

Damian Williams, the United States Attorney for the Southern District of New York and Michael J. Driscoll, the Assistant Director-in-Charge of the New York Field Office of the Federal Bureau of Investigation (“FBI”), announced the unsealing today of an indictment charging SUNI MUNSHANI with operating multiple long-running schemes to defraud a Connecticut-based technology company (the “Victim Company”) of millions of dollars.  As part of the schemes, MUNSHANI and his co-conspirators created companies and then caused the Victim Company to enter into lucrative contracts with those companies, which MUNSHANI and his co-conspirators then used to siphon money from the Victim Company.  SUNI MUNSHANI’s brother, SURESH MUNSHANI, who controlled a bank account used to receive fraud proceeds from the Victim Company and then returned the majority of such proceeds back to SUNI MUNSHANI, was also charged.         

SUNI MUNSHANI was arrested earlier today in the District of Connecticut, and SURESH MUNSHANI was arrested earlier today in the Southern District of New York.  The defendants were presented this afternoon before U.S. Magistrate Judge Ona T. Wang.  The case is assigned to U.S. District Judge Jed S. Rakoff.

U.S. Attorney Damian Williams said:  “We allege Mr. Munshani spent the better part of his seven years as CEO of a company setting up contracts with fake companies that he created and with a company in which he held an undisclosed ownership interest, and then pocketed the checks. Much of the money paid to these companies was for services that were never rendered. Not only do we allege Mr. Munshani benefited from this scheme, his brother did as well. The self-described tech entrepreneur’s pervasive fraud has landed him in federal court facing multiple felony charges.”

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

Between 2011 and 2019, SUNI MUNSHANI, a self-described technology entrepreneur, was the CEO of the Victim Company, which provided data security services to its clients.  Within six months of his appointment as CEO, MUNSHANI began an approximately seven-year scheme to defraud the Victim Company through fraudulent agreements with a purported third-party contractor (“Individual-1”) and a company purportedly controlled by that third-party (the “Individual-1 Company”).  In fact, MUNSHANI and his brother, SURESH MUNSHANI controlled the Individual-1 Company.  To facilitate the scheme, SUNI MUNSHANI, among other things, created an email account purportedly controlled by Individual-1 but in fact controlled by him.  He then used that email account to correspond with the Victim Company concerning services purportedly rendered to the Victim Company by Individual-1 and by the Individual-1 Company.  In fact, Individual-1 and the Individual-1 Company did not provide these services to the Victim Company.  Nevertheless, MUNSHANI caused the Victim Company to pay at least approximately $3 million dollars to Individual-1 and the Individual-1 Company, which funds enriched SUNI MUNSHANI and SURESH MUNSHANI.  In furtherance of the scheme, SUNI MUNSHANI also caused the Victim Company to issue a check for an additional approximately $3.5 million, which MUNSHANI claimed related to a tax liability of the Victim Company.  In fact, no such tax liability existed and MUNSHANI, again with the assistance of SURESH MUNSHANI, also stole this money from the Victim Company.

In addition, between 2013 and 2019, MUNSHANI carried out another scheme to defraud the Victim Company through services agreements between the Victim Company and a software development company (the “Development Company”).  As part of the scheme, MUNSHANI obtained an undisclosed ownership interest in the Development Company and used his personal email account to assist the CEO of the Development Company (“Co-Conspirator-1”) in negotiating favorable terms in its contracts with the Victim Company.  During the scheme, the Development Company transferred at least approximately $2 million to MUNSHANI.

In yet another scheme, between 2018 and October 2020, MUNSHANI defrauded the Victim Company through licensing and reseller agreements between the Victim Company and two other companies (the “Licensing Company” and the “Reseller Company,” respectively).  As part of the scheme, MUNSHANI conspired with others to create the Licensing Company and the Reseller Company and, without disclosing his involvement in the companies to the Victim Company, assisted the companies in their negotiations with the Victim Company.  Thereafter, MUNSHANI attempted to steer an approximately $6.7 million contract to the Licensing Company, and received payments amounting to at least $200,000 from the Reseller Company.   

*          *          *

SUNI MUNSHANI, 60, of Easton, Connecticut, is charged with three counts of conspiring to commit wire fraud, and SURESH MUNSHANI, 57, of Manhattan, New York, is charged with one count of conspiring to commit wire fraud.  Each count carries a maximum sentence of 20 years in prison.

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

Mr. Williams praised the outstanding investigative work of the FBI’s New York Office.

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

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

 

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

Damian Williams, the United States Attorney for the Southern District of New York, announced today that SERGEI POLEVIKOV, a former quantitative analyst, was sentenced late yesterday to 33 months in prison by United States District Judge Lewis J. Liman.  POLEVIKOV pled guilty on December 15, 2021 for his role in a scheme to misappropriate confidential information about pending trades by his former employer, an investment adviser, on behalf of its investment company clients. 

According to the allegations in the Complaint, the Information to which POELVIKOV pled guilty, and statements made during court proceedings:

From at least in or about 2014 through in or about October 2019, SERGEI POLEVIKOV was employed as a quantitative analyst at an asset management firm with headquarters in New York, New York (the “Employer Firm”).  In his role at the Employer Firm, POLEVIKOV had regular access to information regarding contemplated securities trades on behalf of the Employer Firm’s clients, which included investment companies.  During the period charged in the Complaint, POLEVIKOV engaged in a front-running scheme to misappropriate confidential, material, nonpublic information about the securities trade orders of the Employer Firm on behalf of its clients in order to engage in short-term personal securities trading in a brokerage account opened in his wife’s name.  POLEVIKOV’s scheme was designed to profit by executing trades that take advantage of relatively small price movements in a company’s stock that follow from large securities orders executed by the Employer Firm on behalf of its clients.  In total, POLEVIKOV’s scheme yielded more than $8.5 million in illicit profits.     

*                *                *

In addition to his prison sentence, POLEVIKOV, 48, of Port Washington, New York, was ordered to pay forfeiture in the amount of $8,564,977 and a fine of $10,000.

Mr. Williams praised the outstanding work of the Federal Bureau of Investigation.  Mr. Williams further thanked the U.S. Securities and Exchange Commission for its assistance and cooperation in this investigation. 

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

Damian Williams, the United States Attorney for the Southern District of New York, announced today that VIRGIL GRIFFITH, a U.S. citizen who conspired to provide services to the Democratic People’s Republic of Korea (“DPRK” or “North Korea”), including technical advice on using cryptocurrency and blockchain technology to evade sanctions, was sentenced to 63 months after pleading guilty to conspiracy to violate the International Emergency Economic Powers Act (“IEEPA”). U.S. District Judge P. Kevin Castel imposed today’s sentence.

U.S. Attorney Damian Williams stated: “There is no question North Korea poses a national security threat to our nation, and the regime has shown time and again it will stop at nothing to ignore our laws for its own benefit. Mr. Griffith admitted in court he took actions to evade sanctions, which are in place to prevent the DPRK from building a nuclear weapon. Justice has been served with the sentence handed down today.”

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

Pursuant to the IEEPA and Executive Order 13466, United States persons are prohibited from exporting any goods, services, or technology to the DPRK without a license from the Department of the Treasury, Office of Foreign Assets Control (“OFAC”).

GRIFFITH, a cryptocurrency expert, began formulating plans as early as 2018 to provide services to individuals in the DPRK by developing and funding cryptocurrency infrastructure there, including to mine cryptocurrency. GRIFFITH knew that the DPRK could use these services to evade and avoid U.S. sanctions, and to fund its nuclear weapons program and other illicit activities.

In April 2019, GRIFFITH traveled to the DPRK to attend and present at the “Pyongyang Blockchain and Cryptocurrency Conference” (the “DPRK Cryptocurrency Conference”). Despite the fact that the U.S. Department of State had denied GRIFFITH permission to travel to the DPRK, GRIFFITH delivered presentations at the DPRK Cryptocurrency Conference, tailored to the DPRK audience, knowing that doing so violated sanctions against the DPRK.

At the DPRK Cryptocurrency Conference, GRIFFITH and his co-conspirators provided instruction on how the DPRK could use blockchain and cryptocurrency technology to launder money and evade sanctions. GRIFFITH’s presentations at the DPRK Cryptocurrency Conference had been approved by DPRK officials and focused on, among other things, how blockchain technology such as “smart contracts” could be used to benefit the DPRK, including in nuclear weapons negotiations with the United States. GRIFFITH and his co-conspirators also answered specific questions about blockchain and cryptocurrency technologies for the DPRK audience, including individuals whom GRIFFITH understood worked for the North Korean government.

After the DPRK Cryptocurrency Conference, GRIFFITH pursued plans to facilitate the exchange of cryptocurrency between the DPRK and South Korea, despite knowing that assisting with such an exchange would violate sanctions against the DPRK. GRIFFITH also attempted to recruit other U.S. citizens to travel to North Korea and provide similar services to DPRK persons and attempted to broker introductions for the DPRK to other cryptocurrency and blockchain service providers. At no time did GRIFFITH obtain permission from OFAC to provide goods, services, or technology to the DPRK.

*                      *                     *

In addition to the prison sentence, GRIFFITH, 39, was sentenced to three years supervised release.

Mr. Williams praised the outstanding investigative work of the Federal Bureau of Investigation and its New York Field Office, Counterintelligence Division, and thanked the Department of Justice’s National Security Division, Counterintelligence and Export Control Section, the Department of Justice’s Office of International Affairs, and the Singapore Police Force for their assistance.

The case is being handled by the Office’s National Security and International Narcotics Unit. Assistant U.S. Attorneys Kimberly Ravener and Kyle A. Wirshba are in charge of the case, with assistance from Trial Attorney Matthew J. McKenzie of the Counterintelligence and Export Control Section.

A U.S. citizen who conspired to provide services to the Democratic People’s Republic of Korea (DPRK or North Korea), including technical advice on using cryptocurrency and blockchain technology to evade sanctions, was sentenced to 63 months in prison after pleading guilty to conspiracy to violate the International Emergency Economic Powers Act (IEEPA).

According to court documents, Virgil Griffith, 39, began formulating plans as early as 2018 to provide services to individuals in the DPRK by developing and funding cryptocurrency infrastructure there, including to mine cryptocurrency. Griffith knew that the DPRK could use these services to evade and avoid U.S. sanctions, and to fund its nuclear weapons program and other illicit activities.

Pursuant to the IEEPA and Executive Order 13466, U.S. persons are prohibited from exporting any goods, services or technology to the DPRK without a license from the Department of the Treasury, Office of Foreign Assets Control (OFAC).

In April 2019, Griffith traveled to the DPRK to attend and present at the “Pyongyang Blockchain and Cryptocurrency Conference” (the DPRK Cryptocurrency Conference). Even though the Department of State had denied Griffith permission to travel to the DPRK, Griffith delivered presentations at the DPRK Cryptocurrency Conference, tailored to the DPRK audience, knowing that doing so violated sanctions against the DPRK.

At the DPRK Cryptocurrency Conference, Griffith and his co-conspirators provided instruction on how the DPRK could use blockchain and cryptocurrency technology to launder money and evade sanctions. Griffith’s presentations at the DPRK Cryptocurrency Conference had been approved by DPRK officials and focused on, among other things, how blockchain technology such as “smart contracts” could be used to benefit the DPRK, including in nuclear weapons negotiations with the United States. Griffith and his co-conspirators also answered specific questions about blockchain and cryptocurrency technologies for the DPRK audience, including individuals whom Griffith understood worked for the North Korean government.

After the DPRK Cryptocurrency Conference, Griffith pursued plans to facilitate the exchange of cryptocurrency between the DPRK and South Korea, despite knowing that assisting with such an exchange would violate sanctions against the DPRK. Griffith also attempted to recruit other U.S. citizens to travel to North Korea and provide similar services to DPRK persons and attempted to broker introductions for the DPRK to other cryptocurrency and blockchain service providers. At no time did Griffith obtain permission from OFAC to provide goods, services or technology to the DPRK.

Assistant Attorney General Matthew G. Olsen of the Justice Department’s National Security Division and U.S. Attorney Damian Williams for the Southern District of New York made the announcement.

The FBI’s New York Field Office investigated the case, with valuable assistance provided by the National Security Division’s Counterintelligence and Export Control Section, the Justice Department’s Office of International Affairs, and the Singapore Police Force.

Assistant U.S. Attorneys Kimberly Ravener and Kyle A. Wirshba for the Southern District of New York and Trial Attorney Matthew J. McKenzie of the National Security Division’s Counterintelligence and Export Control Section are prosecuting the case.

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 Jocelyn E. Strauber, Commissioner of the New York City Department of Investigation (“DOI”), announced today that BRIAN BENJAMIN, the Lieutenant Governor of the State of New York, was charged with bribery and related offenses.  In particular, BENJAMIN is charged with bribery, honest services wire fraud, and conspiracy to commit those offenses, based on BENJAMIN’s use of his official authority while a New York state senator to direct a state-funded grant to an organization controlled by a real estate developer (“CC-1”) in exchange for campaign contributions made and procured by CC-1. BENJAMIN is also charged with two counts of falsifying records in connection with the preparation of contribution forms that falsely reported certain contributions made by CC-1 as being made by other individuals, and false statements BENJAMIN made in a questionnaire he submitted while seeking to become Lieutenant Governor.  BENJAMIN surrendered to the FBI in Manhattan this morning and was presented before United States Magistrate Judge Ona T. Wang.  The case has been assigned to United States District Judge J. Paul Oetken. 

U.S. Attorney Damian Williams said:  “As alleged, Brian Benjamin used his power as a New York state senator to secure a state-funded grant in exchange for contributions to his own political campaigns. By doing so, Benjamin abused his power and effectively used state funds to support his political campaigns. My Office and our partners at the FBI and DOI will continue to ensure that politicians who put themselves over the public interest will be prosecuted.”

FBI New York Assistant Director-in-Charge Michael J. Driscoll said:  “Exploiting one’s official authority by allocating state funds as part of a bribe to procure donations to a political campaign, and engaging in activity to cover up the bribe, is illegal. As we allege today, Benjamin’s conduct in this scheme directly circumvents those procedures put in place to keep our systems fair.”

DOI Commissioner Jocelyn E. Strauber said:  “As charged, Lieutenant Governor Benjamin, while a New York State senator, used his official position to obtain donations to his political campaigns.  He allegedly allocated public grant funds to a non-profit controlled by a co-conspirator in exchange for campaign contributions, and then lied to hide this illegal scheme.  In so doing, he served his own interests at the expense of his constituents, a betrayal of the public trust and a violation of federal law.  DOI stands with our law enforcement partners in the United States Attorney’s Office for the Southern District of New York and the FBI in the fight to expose and prevent corruption.”

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

Overview

From at least in or about 2019, up to and including at least in or about 2021, BENJAMIN participated in a scheme to obtain campaign contributions from CC-1 in exchange for BENJAMIN’s use of his official authority and influence as a New York State senator to obtain a $50,000 state-funded grant (the “Grant”) for a non-profit organization controlled by CC-1 (“Organization-1”). BENJAMIN and others acting on his behalf or at his direction then engaged in a series of lies and deceptions to cover up his scheme, including by falsifying campaign donor forms, misleading city regulators, and providing false information on vetting forms he completed while seeking to be the Lieutenant Governor of New York State.

The Bribery Scheme

In or about March 2019, BENJAMIN met with CC-1, told CC-1 that he was running for the office of New York City Comptroller, and asked that CC-1 procure a number of small-dollar contributions from different individuals for that campaign (the “Comptroller Campaign”). CC-1 told BENJAMIN that CC-1 did not have experience bundling political contributions in that manner; that CC-1 focused CC-1’s fundraising efforts on Organization-1; and that CC-1’s ability to procure numerous contributions for BENJAMIN’s Comptroller Campaign was limited, including because potential donors from whom CC-1 was likely to solicit contributions were the same donors from whom CC-1 had solicited and intended to further solicit contributions for Organization-1.  In response, BENJAMIN told CC-1, “Let me see what I can do.”

In or about February 2019, before the above-described meeting, BENJAMIN had formally requested funding from the Majority Leader of the New York State Senate for certain organizations and entities in his district, including another Harlem-based educational organization (“Organization-2”). Organization-1 was not on that list, even though BENJAMIN had been aware of Organization-1 and its educational work since at least 2018.

On or about May 30, 2019, the Senate Majority Leader and her staff informed certain senators, including BENJAMIN, that they had been awarded additional discretionary funding that each could allocate to organizations in their districts for specified purposes. That additional funding included, among other things, up to $50,000 that BENJAMIN could allocate to school districts, libraries, or non-profit organizations for educational purposes. BENJAMIN then called CC-1, told CC-1 he would be obtaining a $50,000 grant for Organization-1, and directed that the $50,000 be allocated to Organization-1. BENJAMIN chose not to allocate that funding to Organization-2, despite the fact that Organization-2 had not received the funding BENJAMIN requested in the February 2019 letter.

On or about June 19, 2019, the New York State senate approved a resolution that, among other things, allocated $50,000 to Organization-1. The following day, BENJAMIN sent a text message to CC-1 with a screenshot of the resolution and stated, among other things, “I will call to discuss!”

On or about July 8, 2019, BENJAMIN met with CC-1. CC-1 provided BENJAMIN with three checks totaling $25,000 made out to BENJAMIN’s New York State senate campaign (the “Senate Campaign”). Two of the checks were written in the names of relatives of CC-1 who did not share CC-1’s last name, and the third was written in the name of a limited liability corporation that CC-1 controlled (the “CC-1 LLC”). CC-1 made the contributions in the names of two other individuals and the CC-1 LLC to conceal any connection between CC-1 and the contributions. Because BENJAMIN had not yet filed a certification regarding his Comptroller Campaign with the New York City Campaign Finance Board (“CFB”), BENJAMIN could accept campaign contributions only to his senate campaign. As a state campaign, the senate campaign was not eligible for public matching funds available in New York City municipal races. BENJAMIN also gave CC-1 contributor forms to complete, and CC-1 completed them in BENJAMIN’s presence, signing the names of CC-1’s relatives.  BENJAMIN reviewed and accepted the forms and contributions, even though he knew that the listed relatives were not in fact funding the contributions.

During the same meeting, BENJAMIN reminded CC-1 of the State Grant for Organization-1 and that BENJAMIN still expected CC-1 to procure numerous small contributions for his Comptroller Campaign. BENJAMIN later reminded CC-1 of his expectations again, including by presenting CC-1 with a novelty check representing the $50,000 at a fundraiser for Organization-1 held just one week before BENJAMIN became eligible to receive contributions for his Comptroller Campaign, and by calling CC-1 shortly thereafter to specify the kinds of contributions he needed.

Between October 2019 and January 2021, CC-1 obtained numerous contributions for BENJAMIN’s Comptroller Campaign, many of which were fraudulent (the “CC-1 Contributions”). BENJAMIN communicated with CC-1 about CC-1’s fundraising efforts during that period. BENJAMIN also communicated with his staff and advisors about CC-1’s fundraising efforts, and specifically described certain contributions as having been procured by CC-1. And BENJAMIN personally met with CC-1 on more than one occasion to receive some of the contributions CC-1 had purportedly collected from others.

Alleged Lies and Deception

Between 2019 up through and including the period of his application for and service as Lieutenant Governor of New York, BENJAMIN and others acting at his direction or on his behalf, engaged in a series of lies and deceptions in order to conceal the bribery scheme and BENJAMIN’s connection to CC-1.

In or about November 2019, the New York State Board of Elections (“BOE”) notified BENJAMIN’s senate campaign that it had failed to file certain forms required to identify owners of certain limited liability companies (“LLCs”) that had made contributions to the Senate Campaign.  This included the LLC through which CC-1 had made a $5,000 contribution during the July 8, 2019, meeting. A member of BENJAMIN’s staff sent BENJAMIN an email listing LLCs requiring additional disclosures, specifically identifying the LLC used by CC-1 as being associated with CC-1, and asked BENJAMIN for help obtaining ownership information those LLCs. BENJAMIN responded to that email by asking, “What happens if someone refuses to provide the information?” Ultimately, BENJAMIN’s senate campaign provided the BOE with ownership information about certain LLCs, but not the LLC used by CC-1.

In or about February 2020, the CFB informed BENJAMIN’s Comptroller Campaign that certain of the CC-1 Contributions had been deemed ineligible for matching funds because, among other reasons, they were funded by sequentially-numbered money orders. In response, in or about July 2020, the Comptroller Campaign submitted to the CFB forms indicating that certain of the CC-1 Contributions had been procured by a particular individual (“Individual-1”), even though BENJAMIN knew the contributions had been procured by CC-1.

On or about January 4, 2021, a news outlet published an article raising questions about the legitimacy of certain contributions to BENJAMIN’s Comptroller Campaign, including certain of the CC-1 Contributions. The next day, BENJAMIN’s Comptroller Campaign submitted a misleading letter to the CFB stating there had been no reason to question the legitimacy of the contributions purportedly procured by Individual-1 in light of, among other things, Individual-1’s reputation in the community. At the time the letter was submitted, however, BENJAMIN knew that the CC-1 Contributions had in fact been procured by CC-1, not Individual-1.

On or about August 17, 2021, while being considered to be the next Lieutenant Governor of the State of New York, BENJAMIN submitted responses to an executive appointment questionnaire that contained questions addressing, among other things, BENJAMIN’s relationship with political contributors. Despite BENJAMIN’s efforts to procure $50,000 for Organization-1 and his solicitation of contributions from CC-1, BENJAMIN falsely stated, among other things, that he had never “directly exercised [his] governmental authority (either as a Legislator or Executive official) concerning a matter of a donor [he] directly solicited.” And approximately two hours after submitting his responses to that questionnaire, BENJAMIN called CC-1 for the first time in six months.

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BENJAMIN, 45, of Harlem, New York, is charged with one count of federal program bribery, which carries a maximum sentence of 10 years in prison; one count of honest services wire fraud, which carries a maximum sentence of 20 years in prison; one count of conspiracy to commit those offenses, which carries a maximum sentence of 5 years in prison; and two counts of falsification of records, each of which carries a maximum sentence of 20 years in prison.  

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

Mr. Williams praised the outstanding investigative work of the FBI and DOI, and thanked the CFB for their assistance in this investigation. 

This case is being handled by the Office’s Public Corruption Unit.  Assistant United States Attorneys Jarrod L. Schaeffer, Alison Moe, Tara La Morte, and David Abramowicz are in charge of the prosecution.

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

 

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[1] As the introductory phrase signifies, the entirety of the text of the Indictment, and the description of the Indictment set forth herein, constitute only allegations, and every fact described should be treated as an allegation. Where specific statements are described herein, they are described in substance and in part.

Damian Williams, the United States Attorney for the Southern District of New York, announced that HENRY PEREZ was sentenced today to more than seven years in prison for leading a multi-year cellphone account takeover fraud and identity theft conspiracy.  PEREZ impersonated legitimate cellphone accountholders in order to fraudulently obtain smartphones and electronic devices that he charged to compromised accounts.  The fraud scheme also caused more than 300 victims across the United States to lose cellphone service for a period of time; during the time that PEREZ controlled victims’ phone numbers, “inbound” text messages intended for victims were instead received by PEREZ.  PEREZ’s sentence was imposed by U.S. District Judge Richard M. Berman, before whom PEREZ previously pled guilty to conspiracy to commit wire fraud.

U.S. Attorney Damian Williams said:  “Henry Perez led a sophisticated cellphone fraud and identity theft scheme.  He impersonated victims, changed victims’ account information so victims would not receive fraud alerts, charged purchases to victims’ accounts, and deprived victims of cellphone service.  Today’s sentence sends a clear message: Those who exploit victims’ identifying information for financial gain will pay a heavy price.”

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

From June 2017 through December 2019, PEREZ was the leader of a criminal fraud ring that committed cellphone account takeover fraud and identity theft across the United States, including in the Southern District of New York.  The scheme’s primary objective was to obtain new, valuable electronic devices, including iPhones, and charge these purchases to victims’ accounts, without the knowledge or consent of the victim accountholders.  Over the course of the conspiracy, participants in the scheme attempted to fraudulently obtain more than $1 million worth of devices and, in fact, fraudulently obtained more than $530,000 worth of such devices (e.g., iPhones, iPads, and AirPods), by charging purchases to victims’ accounts.

To perpetrate the scheme, members of the conspiracy, including PEREZ, used stolen identity information to impersonate victims who had cellphone accounts with a particular cellphone service provider (“Provider-1”).  Members of the conspiracy then called customer service representatives of Provider-1 and used social engineering techniques to take over accounts by making various misrepresentations, including impersonating accountholders and expressing a purported need to regain access to their accounts.  Through these misrepresentations, conspirators were able to gain unauthorized access to, and control of, accounts belonging to victim accountholders.  Once they gained access, members of the conspiracy made various unauthorized changes to victim accounts, so that fraud alerts and emails relating to account changes were sent to a conspiracy member, rather than to the legitimate accountholders.  Participants in the conspiracy then purchased new electronic devices, which they charged to victim accounts, without the knowledge or consent of the victims. 

In many instances, conspirators arranged for the fraudulently ordered devices to be shipped to more than 50 different addresses.  In other instances, members of the scheme, including PEREZ, personally entered stores operated by Provider-1 to pick up fraudulently obtained devices.  In total, participants in the conspiracy conducted in-store pickups of fraudulently obtained devices in at least 10 different states.

Once they had successfully exploited a particular victim’s account, members of the conspiracy typically relinquished control of that account, and moved on to exploiting other victim accounts.  During the period in which the conspiracy compromised, and retained control of, a particular victim’s cellphone number, that victim typically lost cellphone service.  In total, the scheme caused more than 300 victims across the United States to lose cellphone service for a period of time.  During the time that a victim lost cellphone service, their phone line remained in service—but it was controlled by PEREZ’s conspiracy, rather than the victim; thus, during that time, “inbound” text messages intended for that victim were instead received by PEREZ.

PEREZ was integrally involved in all aspects of the scheme, including using victims’ personal identifying information to dupe Provider-1; gaining unauthorized access to victim accounts; making unauthorized changes to victim accounts; receiving fraudulently obtained devices; and recruiting, directing, and paying a subordinate, including supplying that subordinate with victim information.  In addition, PEREZ gained access to victims’ sensitive information, including their addresses, certain financial information, and in some cases, their relatives’ names.

In addition to his prison sentence of 88 months, PEREZ, 34, of Fort Lee, New Jersey, was sentenced to three years of supervised release.  He was also ordered to pay restitution of $539,654.96 and forfeiture of $532,374.96.

*                *                *

Mr. Williams praised the New York Office of Homeland Security Investigations and its El Dorado Task Force for its outstanding work on this case.

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

Damian Williams, the United States Attorney for the Southern District of New York, announced that former New York City Police Department (“NYPD”) officer and Bronxville, New York resident JOHN CICERO was sentenced today by U.S. District Judge Kenneth M. Karas to 10 years in prison for distributing large quantities of imported gamma-butyrolactone (known as “GBL”) and methamphetamine in Westchester County and New York City.  CICERO previously pled guilty on October 13, 2021 before U.S. Magistrate Judge Andrew E. Krause, to one count of conspiring to distribute GBL and 50 grams of methamphetamine.

U.S. Attorney Damian Williams said:  “A former NYPD police officer once sworn to protect the public, John Cicero spent years betraying his former law enforcement partners, enriching himself, and endangering the community by importing GBL, a dangerous liquid date-rape drug, from China and methamphetamine from Mexico and trafficking massive amounts of both throughout Westchester and New York City, including in Hell’s Kitchen and midtown-Manhattan around Penn Station.  Thanks to the tireless efforts of law enforcement, Cicero will serve a substantial sentence in prison for his callous crimes.”      

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

Beginning in at least 2017 and lasting until his arrest in February 2020, CICERO and his co-conspirators stockpiled and sold liters of GBL and kilograms of methamphetamine in apartments, hotel rooms, and storage units in the heart of midtown Manhattan, and a residence in Bronxville, New York.  CICERO played a prominent and leadership role in the conspiracy, as the conspiracy’s top importer of GBL from China, and as someone who had direct access to the Mexico-based source of supply and with whom he arranged the receipt of and payment for methamphetamine.  CICERO also created and used fake identity documents and stolen credit cards to pay for, among other things, the luxury Manhattan hotel rooms where drugs were trafficked and used.  CICERO repeatedly brokered large-scale narcotics transactions over recorded prison calls with an inmate then in New York State custody.  U.S. Customs and Border Protection has previously seized GBL sent from China to CICERO’s address in New York.  CICERO held a supervisory role in the criminal activity, which involved over three kilograms of methamphetamine and 750 liters of GBL.  The charged conduct began years after CICERO left the NYPD.

On February 19, 2020, CICERO was arrested in a Wall Street hotel, in a room he had rented under a false identity.  In addition to methamphetamine and GBL, law enforcement recovered from CICERO’s room a bank card and a fake ID, bearing CICERO’s photograph, all in the name of the false identity to whom the room was rented.  As part of CICERO’s arrest, law enforcement also recovered detailed drug ledgers, sophisticated credit card making equipment, and notebooks full of victims’ personally identifiable information.

*                *                *

In addition to the prison sentence, CICERO, 40, of Bronxville, New York, was sentenced to four years of supervised release and ordered to pay a forfeiture penalty of $216,262.50.

Earlier in the case, three of CICERO’s co-defendants pled guilty for their roles in the same conspiracy.  MARCO CASO, 50, of New York, New York and IRMA MATERASSO, 38, of New Rochelle, New York, previously pled guilty to one count of conspiring to distribute GBL and 50 grams of methamphetamine and MATTHEW MATEO, 25, of the Bronx, New York, previously pled guilty to one count of conspiring to distribute GBL and 500 grams of methamphetamine.

Mr. Williams praised the outstanding investigative work of the FBI Westchester County Safe Streets Task Force, which comprises agents and detectives from the FBI, Westchester County District Attorney’s Office, Westchester County Police Department, Yonkers Police Department, Peekskill Police Department, Mount Vernon Police Department, New York Police Department, and U.S. Probation.  He also thanked the Drug Enforcement Administration, U.S. Customs and Border Protection, and the New York State Department of Corrections Office of Special Investigations for their assistance.

This case is being prosecuted by the Office’s White Plains Division.  Assistant U.S. Attorneys David R. Felton and Daniel G. Nessim are in charge of the prosecution.

Damian Williams, United States Attorney for the Southern District of New York, announced that DAVID HU, former managing partner and chief investment officer of the Manhattan-based investment advisory firm International Investment Group (“IIG”), was sentenced today to 12 years in prison for his role in an over $120 million scheme to defraud IIG’s clients and investors.  HU pled guilty in January 2021 to investment adviser fraud, securities fraud, and wire fraud offenses.  U.S. District Judge Alvin K. Hellerstein announced today’s sentence, which will be formally imposed following the conclusion of forfeiture and restitution proceedings in the case. 

U.S. Attorney Damian Williams said:  “David Hu shirked his fiduciary responsibilities and defrauded IIG funds and investors for more than a decade.  Hu’s lies caused millions of dollars of losses.  Hu mismarked millions of dollars of loan assets, falsified paperwork to create fake loans, sold overvalued and fake loans, used the proceeds from those sales to pay off earlier investors, and falsified paperwork to deceive auditors and avoid scrutiny.  Today’s sentence sends the message that brazen fraud does not pay and will be appropriately punished.”

According to the Information and based on statements made and documents filed in  federal court in this case:

Background of IIG

HU and co-conspirator MARTIN SILVER founded IIG in 1994.  HU was a managing partner and the chief investment officer of IIG.  IIG, an SEC-registered investment adviser, provided investment management and advisory services, including for three private funds that it operated: (1) the IIG Trade Opportunities Fund N.V. (“TOF”); (2) the IIG Global Trade Finance Fund, Ltd. (“GTFF”); and (3) the IIG Structured Trade Finance Fund, Ltd. (“STFF”).  IIG also advised the Venezuela Recovery Fund (“VRF”), a fund that managed the remaining assets of a failed Venezuelan bank (VRF, together with TOF, GTFF, and STFF, the “IIG Funds”).  In March 2018, IIG reported to the SEC that it had approximately $373 million in assets under management.

IIG advertised itself as specializing in global trade financing, particularly in providing trade finance loans to small and medium-sized businesses.  IIG’s principal investment advisory strategy, including with respect to the IIG Funds, was investing in trade finance loans that it also originated.  Trade finance loans are used by small and medium-sized companies, typically exporters and importers, to facilitate international trade.  IIG’s purported expertise was in trade finance loans to borrowers located in Central or South America, and in a variety of industries, with a stated focus on “soft commodities,” such as coffee, agriculture, fishing, and other food products.  IIG’s trade finance loans were purportedly secured by collateral, such as the underlying traded goods, assets held by the borrowers, or expected payments by third parties.

Investments in TOF, STFF, and GTFF were marketed by IIG to institutional investors, such as pension funds, hedge funds, and insurers.  In offering memoranda and communications with investors, IIG advertised strict risk controls, such as promises to use diligence to carefully select borrowers or issuers with trusted management and marketable assets, and portfolio concentration limits based on borrower, developing country, and industry.

IIG purported to value the trade finance loans in the IIG Funds on a regular basis.  IIG and, in turn, HU, received a performance fee with respect to the IIG Funds, as well as a management fee, which was calculated as a percentage of the assets under management held in the Funds.

The Scheme

From approximately 2007 to 2019, HU conspired to defraud investors in IIG-managed funds by: (i) overvaluing distressed loans held by the IIG Funds, (ii) falsifying paperwork to create a series of fake loans that were classified, fraudulently, as positively performing loans, and to otherwise hide losses, (iii) selling overvalued and fake loans to a collateralized loan obligation trust and new private funds established and advised by IIG, and (iv) using the proceeds from those fraudulent sales to generate liquidity required to pay off earlier investors in a Ponzi-like manner.

The scheme HU participated in involved, among other things:

• Mismarking the value of multiple loans that had, in reality, defaulted (the “Defaulted Loans”).  
• Mismarking multiple loans that were distressed (the “Distressed Loans”).  These Distressed Loans included, for example, loans for which the borrowers had missed multiple scheduled payments.  
• Creating fictitious loans in order to hide the losses resulting from the Defaulted Loans, including from auditors reviewing TOF’s financials, by removing the Defaulted Loans from the TOF portfolio and replacing them with tens of millions of dollars in fictitious loans to purported borrowers in foreign countries (the “Fake Loans”). 
• Using a collateralized loan obligation trust (the “CLO Trust”) to create liquidity through investments in fraudulent loans. 
• Using the CLO Trust and Panamanian shell entities to cover up losses.  Specifically, HU caused the creation of shell entities domiciled in Panama (“Panamanian Shell Entities”) that were controlled by an IIG nominee.  Then, HU caused the CLO Trust to enter into fake loan transactions with the Panamanian Shell Entities.  HU caused the creation of fake promissory notes and other paperwork to conceal the fraudulent nature of the loans to the Panamanian Shell Entities.  Finally, under the guise of the fake loan transactions with the Panamanian Shell Entities, the CLO Trust disbursed funds that HU diverted to TOF in order to pay off TOF’s various debts and obligations.
• Generating liquidity by selling fraudulent loans to two new private IIG managed funds: GTFF and STFF.  A foreign institutional investor provided $70 million as the seed investment for GTFF, and, later, $130 million as the seed investment for STFF. 
• Inducing a retail mutual fund to invest in a fictitious $6 million loan.  Specifically,  in or about December 2012, IIG became an investment adviser to an open-ended mutual fund marketed to retail investors (the “Retail Fund”). As an investment adviser to the Retail Fund, IIG made investment recommendations, including recommendations that the Retail Fund invest in trade finance loans originated by IIG.  In or about February 2017, a borrower (the “Argentine Borrower”) had failed to pay the principal on an approximately $6 million loan (“Loan-1”) in which the Retail Fund had invested and which was nearing its maturity date.  In or about March 2017, HU caused approximately $6 million to be transferred into an account associated with the Argentine Borrower from the account of a different borrower (“Borrower-1”), and further directed the funds from Borrower-1’s account to pay off the debt owed by the Argentine Borrower to the Retail Fund.  To replace the funds from Borrower-1’s account that were used to make it appear as though the Argentine Borrower had repaid its debt to the Retail Fund, HU fraudulently induced the Retail Fund to invest in a new, fake $6 million loan to the Argentine Borrower (the “New Loan”).  HU then directed that the proceeds from the fraudulently induced New Loan be transferred into Borrower-1’s account, effectively reimbursing the account for the earlier $6 million transfer to the Retail Fund.  To further conceal the fraudulent nature of the New Loan, HU caused the creation of forged documents to make it appear as though the New Loan was a legitimate loan to the Argentine Borrower.

*                      *                      *

In addition to the prison sentence, HU, 64, of West Orange, New Jersey, was ordered to serve three years of supervised release.  The Court also announced that it would impose restitution to victims and forfeiture of the proceeds of the offenses, with the amounts to be determined at a later date. 

SILVER pled guilty to investment adviser fraud, securities fraud, and wire fraud offenses in April 2021 and his sentencing is pending. 

Mr. Williams praised the investigative work of the FBI and also thanked the U.S. Securities and Exchange Commission for its assistance. 

This case is being handled by the Office’s Securities and Commodities Fraud Task Force. Assistant U.S. Attorneys Drew Skinner, Negar Tekeei, and Alex Rossmiller are in charge of the prosecution.

Damian Williams, the United States Attorney for the Southern District of New York, announced today the conviction of JULIO MARQUEZ-ALEJANDRO, a/k/a “Chino,” and LUIS BLONDET for racketeering conspiracy, murder in aid of racketeering, murder while engaged in a drug crime, and murder through the use of a firearm.  After less than a day of deliberations, the unanimous jury convicted MARQUEZ-ALEJANDRO and BLONDET yesterday of every count presented to the jury after a three-week trial before U.S. District Judge Jesse M. Furman.  

U.S. Attorney Damian Williams said:  “Yesterday’s verdict brings justice for the more than a dozen victims of the defendants’ years-long campaign of brutal violence.  Using murder after murder and bribery of corrupt Puerto Rico police officers, the defendants profited from distributing tons of cocaine throughout Puerto Rico and other places in the United States, including drugs sold out of a children’s daycare center in the Bronx. Thanks to the tremendous work of our law enforcement partners and the career prosecutors in the Southern District of New York, the defendants’ reign of terror has ended.”

According to the Indictment and the evidence at trial:

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

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

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

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

In addition, evidence was presented at trial of MARRQUEZ-ALEJANDRO and BLONDET ordering, committing, or otherwise participating in more than a dozen other murders, some of which include:

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

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

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

*                *                *

MARQUEZ-ALEJANDRO, 52, of San Juan, Puerto Rico, and BLONDET, 47, of San Juan, Puerto Rico, were returned to the custody of the U.S. Marshals following the return of the verdict. MARQUEZ-ALEJANDRO and BLONDET were convicted of racketeering conspiracy, which carries a maximum of life in prison. With respect to the murder of Crystal Martinez-Ramirez, BLONDET was convicted of murder in aid of racketeering, which carries a mandatory sentence of life in prison, and murder through the use of a firearm, which carries a mandatory minimum sentence of five years and a maximum sentence of life in prison, which must run consecutively to any other term of imprisonment imposed. With respect to the murders of Israel-Crespo-Cotto and Carlos Barbosa, MARQUEZ-ALEJANDRO was convicted of two counts of murder in aid of racketeering, each of which carries a mandatory sentence of life in prison; two counts of murder while engaged in a drug crime, each of which carries a mandatory minimum of twenty years in prison and a maximum of life in prison; and two counts of murder through the use of a firearm, each of which carries a mandatory minimum sentence of five years and maximum sentence of life in prison, which must run consecutively to any other term of imprisonment 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 a judge.

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

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

Damian Williams, the United States Attorney for the Southern District of New York, announced today that JELANI WRAY, a senior leader of a conspiracy in which he and his co-conspirators bribed 911 operators, medical personnel, and police officers for the confidential information of tens of thousands of motor vehicle accident victims, was sentenced today to 84 months in prison.  WRAY was sentenced by United States District Judge Paul G. Gardephe.  He previously pled guilty on October 12, 2021, to making payments of bribes and gratuities to an agent of a federally funded organization. 

U.S. Attorney Damian Williams said: “Jelani Wray and the other leaders of this scheme brazenly exploited New York’s no fault automobile insurance laws by lining their pockets with millions of dollars in illegal profits.  In the process, they corrupted 911 operators, hospital workers and police officers; injured accident victims by depriving them of a choice in medical providers and attorneys, lying to them, and subjecting these victims to unwanted medical treatments; and caused licensed drivers in the state of New York to suffer higher insurance premiums by enabling the submission of millions of dollars in false medical reimbursement claims.  Wray and his coconspirators will now pay for their crimes, and this Office will never stop pursuing those who seek to profit by corrupting our public institutions.”

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

JELANI WRAY was one of several leaders of a massive no fault automobile insurance scheme spanning New York and New Jersey from at least in or about 2013 through in or about 2019.  As part of the scheme, WRAY personally bribed and arranged for others to bribe 911 operators, medical personnel, and police officers for the confidential information of tens of thousands of motor vehicle accident victims.  Using this information, WRAY and his co-conspirators contacted victims, lied to them, and steered them to clinics and lawyers handpicked by WRAY and his associates.  These clinics and lawyers then paid WRAY and his associates kickbacks for these referrals, which they distributed to coconspirators as payments and bribes.

 Specifically, in approximately 2013, while WRAY was working as the manager of a medical clinic, WRAY and a coconspirator, ANTHONY ROSE, a/k/a “Todd Chambers,” reached an agreement that for each patient ROSE sent to the clinic, WRAY would pay him approximately $2,000 to $3,000 in illegal referral fees.

Thereafter, in or about 2016, WRAY began to recruit and acquire his own “lead sources,” which were individuals willing to sell the confidential information of motor vehicle accident victims.  From approximately 2016 through in or about December 2017, WRAY bribed at least five NYPD 911 operators to provide him with the names and numbers of motor vehicle accident victims.  WRAY then transferred this information to an illegal call center that was operated by ROSE and funded in part by WRAY.  ROSE’s call center called the unsuspecting accident victims, lied to them, and then steered them to particular clinics and lawyers that were part of ROSE and WRAY’s illegal referral network.  The clinics and lawyers then paid ROSE and WRAY kickbacks by cash and check.  WRAY also similarly recruited attorneys and clinics to participate in this portion of the scheme.

Among other things, WRAY concealed his bribery of the 911 operators by providing them with prepaid “burner” phones, using encrypted messaging applications to communicate with them, and by assigning them code names.  ROSE and WRAY also received further kickbacks for steering accident victims to a particular magnetic resonance imaging (MRI) facility.  In addition, in or about 2017, ROSE, WRAY, a paralegal (“Paralegal-1”), and a physician (“Physician-1”) agreed to open a medical clinic in the Bronx (“Clinic-1”). WRAY funded Clinic-1, steered accident victims to Clinic-1, and exercised substantial control over its medical operations, which is illegal under New York law, because WRAY is not a physician. 

WRAY received millions of dollars in illegal profits from his involvement in the various aspects of this scheme.  In addition to his prison sentence, WRAY, 37 of Brooklyn, New York, was sentenced to 3 years of supervised release.  He was also ordered to forfeit $2,200,000 and pay a fine of $250,000.

*                *                *

The United States Attorney’s Office charged JELANI WRAY and 26 other defendants in November 2019.  All 27 defendants admitted guilt; 25 of 27 defendants pleaded guilty and the remaining two defendants had their prosecutions deferred.  WRAY is the sixteenth defendant to have been sentenced; ten defendants have been sentenced to serve time in prison.  The principal aspects of each defendant’s sentence are reflected in the chart below.  To date, the defendants have also been ordered to pay approximately $5 million in forfeiture from this scheme. 

Mr. Williams praised the work of the FBI, the New York State Police, the New York City Police Department, the New York City Department of Financial Services, the Westchester County District Attorney’s Office, and the National Insurance Crime Bureau. 

This case is being handled by the Office’s Complex Frauds and Cybercrime Unit, and the White Plains Division.  Assistant United States Attorneys Mathew Andrews and Louis A. Pellegrino are in charge of the prosecution.

Defendant

Age

Hometown

Principal Aspects of  Sentence

 

JELANI WRAY,

a/k/a “Lani,”

a/k/a “J.R.” 

37

Brooklyn, NY

 

• 7 years prison
• 3 years supervised release
• $250,000 fine
• $2,200,000 forfeiture ordered

 

 

NATHANIEL COLES,

a/k/a “Nat”

 

69

Cortlandt Manor, NY

 

• 5 years prison
• 3 years supervised release
• $100,000 fine
• $2,594,000 forfeiture ordered

 

 

ANTHONY ROSE, Jr.,

a/k/a “Sean Wells”

34

Cambria Heights, NY

 

• 2 years prison
• 2 years supervised release
• $69,000 forfeiture ordered

 

 

CHRISTINA GARCIA,

a/k/a “Cindy”

37

Jersey City, NJ

 

• 366 days prison
• 3 years supervised release
• $3,000 fine
• $30,000 forfeiture ordered

 

 

LEON BLUE,

a/k/a “Boochie”

56

Brooklyn, NY

 

• Time served prison (approx. two years)
• 3 years supervised release
• $8,310 forfeiture ordered

 

 

CLARENCE FACEY,

a/k/a “Face”

36

Brooklyn, NY

 

• 6 months prison
• 2 years supervised release
• $25,000 forfeiture ordered

 

 

ANGELA MELECIO,

a/k/a “Angie,”

a/k/a “P5”

 

43

Amityville, NY

 

• Time served prison
• 3 years supervised release, with 6 months’ home confinement
• 250 hrs. community service
• $8,000 forfeiture ordered

 

 

STEPHANIE PASCAL,

a/k/a “Steph,”

a/k/a “P2”

49

Brooklyn, NY

• Time served prison
• 2 years supervised release
• $2,000 forfeiture ordered

 

EDWARD ABAYEV,

a/k/a “Eddie”

 

54

 

Staten Island, NY

 

• 366 days prison
• 3 years supervised release
• $20,000 fine
• $18,000 forfeiture ordered

 

 

TONJA LEWIS,

a/k/a “J1”

 

55

Belleville, NJ

 

• Time served prison
• 2 years supervised release
• 250 hrs. community service
• $8,310 forfeiture ordered

 

 

BERLISA BRYAN,

a/k/a “Lisa”

 

55

Edison, NJ

 

• Time served prison
• 3 years supervised release
• 250 hrs. community service
• $20,000 forfeiture ordered

 

 

ANGELA MYERS,

a/k/a “Angie”

 

40

Brooklyn, NY

 

• Time served prison
• 2 years supervised release
• 250 hrs. community service
• $10,000 forfeiture ordered

 

 

SHAKEEMA FOSTER

 

29

Brooklyn, NY

 

• Time served prison
• 2 years supervised release
• 250 hrs. community service
• $3,000 forfeiture ordered

 

 

KOURTNEI WILLIAMS

 

35

Brooklyn, NY

 

 

• 6 months prison
• 2 years supervised release
• $20,000 forfeiture ordered

 

 

 

MAKKAH SHABAZZ, a/k/a “Mecca”

 

45

Long Island City, NY

 

• 6 months prison
• 2 years supervised release
• $36,000 forfeiture ordered

 

 

YANIRIS DELEON, a/k/a “Jen”

             

32

New York, NY

• 6 months prison
• 2 years supervised release
• $10,000 forfeiture ordered

 

 

Damian Williams, the United States Attorney for the Southern District of New York, announced that MAY SALEHI, a former State Department employee, was sentenced today to 12 months in prison for conspiring to commit honest services fraud.  SALEHI was a longtime State Department employee who was involved in evaluating bids for critical overseas government construction projects such as U.S. embassies and consulates.  SALEHI gave confidential inside bidding information to a Government contractor, and received $60,000 in kickback payments in return. SALEHI was sentenced by United States District Judge Jed S. Rakoff.

U.S. Attorney Damian Williams said:  “As a State Department employee, May Salehi was entrusted to serve the public.  Instead, she abused her position to line her own pockets.  Salehi revealed, and traded on, confidential information—corrupting the bidding process and receiving lucrative kickbacks in return.  Thanks to our partners at the State Department’s Office of Inspector General, Salehi’s crime of deception has been uncovered, and Salehi has now been sentenced to prison.”

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

From 1991 until mid-2021, MAY SALEHI was a State Department employee.  For many years, SALEHI worked as an engineer in the State Department’s Overseas Building Operations division (“OBO”), which directs the worldwide overseas building program for the State Department and the U.S. Government community serving abroad. 

In 2016, the State Department solicited bids for a multimillion-dollar construction project known as a compound security upgrade to be performed at the U.S. Consulate in Bermuda (the “Bermuda Project”).  The bidding process involved the submission of blind, sealed bids from various bidders.  Six companies submitted sealed bids, one of which was named Montage, Inc. (“Montage”). 

SALEHI was involved in the Bermuda Project in several respects.  Among other things, SALEHI served as the Chair of the Technical Evaluation Panel (“TEP”)—a panel of experts that evaluates the technical aspects of bids, including whether they meet the State Department’s structural and security needs.  In connection with the Bermuda Project, the TEP determined that five bids—including Montage’s bid—were technically acceptable.

In September 2016, the State Department’s employees who evaluate the cost of bids gave these five bidders—including Montage—the opportunity to re-bid, if they wished to do so.  Montage had two days to decide whether to submit a re-bid.  During that two-day window, Montage’s principal, Sina Moayedi, contacted SALEHI by phone to seek confidential inside bidding information about the relationship between Montage’s bid and those of its competitors.  SALEHI agreed to meet Moayedi in person during the work day.  In response to Moayedi’s inquiry, SALEHI told him that all five bids were low, and that his bid was lowest by about a million dollars.  Moayedi said that he would give SALEHI 1% of the contract value if he won; and as she walked away, SALEHI proposed a cover story by stating: “I have rugs to sell.”  SALEHI knew that it was unlawful to provide this confidential bidding information to a bidder.  After Moayedi received this inside information from SALEHI, Montage immediately increased its bid by nearly $1 million.  In its revised bid to the State Department, Moayedi and Montage lied as to the reason it had increased its bid by nearly $1 million, falsely claiming that it had discovered “an arithmetic error” in its estimates.  Montage was ultimately awarded the Bermuda Project with a revised bid of $6.3 million. 

In the months that followed, Moayedi provided SALEHI a total of $60,000 in kickbacks, which he paid in three installments.  In making these kickback payments, Moayedi used intermediaries to obscure the link between him and SALEHI.  To conceal the true purpose of the kickback payments, as she had suggested, SALEHI gave Moayedi a Persian rug, by providing it to an intermediary who passed it to Moayedi.  SALEHI did not report the $60,000 kickback payments on her taxes, her State Department financial disclosure forms, or her application to renew her top-secret national security clearance.

*                *                *

In addition to her prison sentence, SALEHI, 66, of Washington, D.C., was sentenced to three years of supervised release.  SALEHI was also ordered to forfeit $60,000 and to pay a $500,000 Fine.

Sina Moayedi has been charged with wire fraud, conspiracy to commit wire fraud, conspiracy to commit honest services wire fraud, and major fraud against the United States.  The charges against Moayedi are pending.  See 22 Cr. 188 (JSR).

Mr. Williams praised the outstanding investigative work of the State Department OIG, Special Agents from the United States Attorney’s Office for the Southern District of New York, and IRS‑CI. 

The Office’s Complex Frauds and Cybercrime Unit is handling this criminal case.  Assistant U.S. Attorneys Michael D. Neff and Louis A. Pellegrino are in charge of the prosecution.

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 arrests of TAKESHI EBISAWA, SOMPHOP SINGHASIRI, SUKSAN JULLANAN, a/k/a “Bobby,” and SOMPAK RUKRASARANEE, for international narcotics and weapons trafficking offenses. EBISAWA, a Japanese national, JULLANAN, a United States and Thai national, and RUKRASARANEE, a Thai national, were arrested in Manhattan on April 4, 2022. SINGHASIRI, a Thai national, was arrested in Manhattan on April 5, 2022. EBISAWA, JULLANAN, and RUKRASARANEE were presented before Magistrate Judge Jennifer Willis on April 5, 2022, and were ordered detained, and SINGHASIRI was presented before Judge Willis on April 6, 2022, and was ordered detained.

U.S. Attorney Damian Williams said: “We allege Mr. Ebisawa and his co-conspirators brokered deals with an undercover DEA agent to buy heavy-duty weaponry and sell large quantities of illegal drugs. The drugs were destined for New York streets, and the weapons shipments were meant for factions in unstable nations. Members of this international crime syndicate can no longer put lives in danger and will face justice for their illicit actions.”

DEA Administrator Anne Milgram said: “The expansive reach of transnational criminal networks, like the Yakuza, presents a serious threat to the safety and health of all communities. Ebisawa and his associates intended to distribute hundreds of kilograms of methamphetamine and heroin to the United States, using deadly weapons to enable their criminal activities, at a time when nearly 300 Americans lose their lives to drug overdose every day. These arrests represent the unwavering determination of the DEA, together with our U.S. and international partners, to target and bring to justice violent criminals who lead transnational drug trafficking organizations that continue to flood our country with dangerous drugs.”

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

Since at least in or about 2019, the DEA has been investigating EBISAWA, a leader within the Japanese transnational organized crime syndicate also known as Yakuza, in connection with large-scale narcotics and weapons trafficking. The Yakuza is a network of highly organized, transnational crime families with affiliates in Asia, Europe, and the Americas, and is involved in various criminal activities, including weapons trafficking, drug trafficking, human trafficking, fraud, and money laundering. Over the course of the investigation, EBISAWA introduced an undercover DEA agent (“UC-1”), posing as a narcotics and weapons trafficker, to associates in EBISAWA’s international criminal network, which spans Japan, Thailand, Burma, Sri Lanka, and the United States, among other places, for the purpose of arranging large-scale narcotics and weapons transactions. EBISAWA and his associates—including SINGHASIRI, JULLANAN, and RUKRASARANEE—have negotiated multiple narcotics and weapons transactions with UC-1.

EBISAWA, JULLANAN, and RUKRASARANEE conspired to broker the purchase from UC-1 of United States-made surface-to-air missiles (“SAMs”), as well as other heavy-duty weaponry, for multiple ethnic armed groups in Burma, and to accept large quantities of heroin and methamphetamine for distribution as partial payment for the weapons. EBISAWA, JULLANAN, and RUKRASARANEE understood the weapons to have been manufactured in the United States and taken from United States military bases in Afghanistan and planned for the narcotics to be distributed in the New York market.

In addition, EBISAWA and SINGHASIRI conspired to sell 500 kilograms of methamphetamine and 500 kilograms of heroin to UC-1 for distribution in New York. In furtherance of that transaction, on or about June 16, 2021, and on or about September 27, 2021, SINGHASIRI provided samples of approximately one kilogram of methamphetamine and approximately 1.4 kilograms of heroin. SINGHASIRI conspired to possess and use firearms, including machine guns, to protect narcotics shipments. EBISAWA also worked to launder $100,000 in purported narcotics proceeds from the United States to Japan.

* * *

A table containing the charges and maximum penalties for EBISAWA, 57, of Japan; SINGHASIRI, 58, of Thailand; JULLANAN, 53, of the United States and Thailand; and RUKRASARANEE, 55, of Thailand, is set forth below. The maximum potential sentences in this case are prescribed by Congress and are provided here for informational purposes only, as any sentencing of the defendants will be determined by a judge.

COUNT

DEFENDANT(S)

MAX. TERM OF IMPRISONMENT

Count One: narcotics importation conspiracy (21 U.S.C. § 963)

EBISAWA and SINGHASIRI

Life imprisonment; Mandatory minimum sentence of ten years’ imprisonment

Count Two: conspiracy to possess firearms, including machine guns and destructive devices (18 U.S.C. § 924(o))

SINGHASIRI

Life imprisonment

Count Three: conspiracy to acquire, transfer, and possess SAMs (18 U.S.C. § 2332g)

EBISAWA, JULLANAN, and RUKRASARANEE

Life imprisonment; Mandatory minimum sentence of 25 years’ imprisonment

Count Four: narcotics importation conspiracy (21 U.S.C. § 963)

EBISAWA, JULLANAN, and RUKRASARANEE

Life imprisonment; Mandatory minimum sentence of ten years’ imprisonment

Count Five: conspiracy to possess firearms, including machine guns and destructive devices (18 U.S.C. § 924(o))

EBISAWA, JULLANAN, and RUKRASARANEE

Life imprisonment

Count Six: money laundering (18 U.S.C. § 1956)

EBISAWA

20 years’ imprisonment

Mr. Williams praised the outstanding efforts of the DEA’s Special Operations Division Bilateral Investigations Unit. Mr. Williams also thanked the DEA Tokyo Country Office, DEA Bangkok Country Office, DEA Chiang Mai Resident Office, DEA Jakarta Country Office, DEA Copenhagen Country Office, DEA New York Field Office, DEA New Delhi Country Office, the Counterterrorism Section of the Department of Justice’s National Security Division, the Office of International Affairs of the Department of Justice’s Criminal Division, the Japanese Narcotics Control Department, the Royal Thai Police Narcotics Suppression Bureau, Japan Police, and the Indonesian National Police Satuan Tugas Khusus Merah Putih/Merah Putih Special Task Force for their assistance.

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.

The case is being handled by the Office’s National Security and International Narcotics Unit. Assistant United States Attorneys Kaylan E. Lasky and Alexander Li are in charge of the prosecution, with assistance from Trial Attorney Lauren B. Goddard of the Counterterrorism Section.

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

“Twelve years ago, Larry Ray moved into his daughter’s dorm room at Sarah Lawrence College.  And when he got there, he met a group of friends who had their whole lives ahead of them.  For the next decade, he used violence, threats, and psychological abuse to try to control and destroy their lives.  He exploited them. He terrorized them. He tortured them. Let me be very clear. Larry Ray is a predator. An evil man who did evil things. Today’s verdict finally brings him to justice.  

This verdict would not have been possible without the victims who testified in court.  We are in awe of their bravery in the face of incredible trauma.  I also want to thank the career prosecutors in my Office, the Southern District of New York, and our law enforcement partners, who stood with those victims and worked tirelessly to ensure that justice was done. Thank you.” 

A Russian national is charged with violating U.S. sanctions arising from the 2014 Russian undermining of democratic processes and institutions in Ukraine.

According to the indictment, which was unsealed today in the Southern District of New York, Konstantin Malofeyev, 47, of Russia, is charged with conspiracy to violate U.S. sanctions and violations of U.S. sanctions in connection with his hiring of an American citizen, Jack Hanick, to work for him in operating television networks in Russia and Greece and attempting to acquire a television network in Bulgaria. As alleged, Malofeyev also conspired with Hanick and others to illegally transfer a $10 million investment that Malofeyev made in a U.S. bank to a business associate in Greece, in violation of the sanctions blocking Malofeyev’s assets from being transferred. Along with the indictment, the United States issued a seizure warrant for Malofeyev’s U.S. investment. Malofeyev remains at large and is believed to be in Russia.

“The Justice Department will work relentlessly to counter Russian aggression, including by enforcing U.S. sanctions law,” said Assistant Attorney General Matthew G. Olsen of the Justice Department’s National Security Division. “As alleged in the indictment, Konstantin Malofeyev is a Russian oligarch who has been sanctioned since 2014 for threatening Ukraine and providing financial support to the Donetsk separatist region. Malofeyev knowingly violated U.S. sanctions by paying for services of a U.S. person and by seeking to transfer money that had been invested in the United States.”

“Konstantin Malofeyev is closely tied to Russian aggression in Ukraine, having been determined by OFAC to have been one of the main sources of financing for the promotion of Russia-aligned separatist groups operating in the sovereign nation of Ukraine,” said U.S. Attorney Damian Williams for the Southern District of New York. “The United States sanctions on Malofeyev prohibit him from paying or receiving services from United States citizens, or from conducting transactions with his property in the United States. But as alleged, he systematically flouted those restrictions for years after being sanctioned. The indictment unsealed today shows this office’s commitment to the enforcement of laws intended to hamstring those who would use their wealth to undermine fundamental democratic processes. This office will continue to be a leader in the Justice Department’s work to hold accountable actors who would support flagrant and unjustified acts of war.”

“The allegations in this case go back many years showing just how much effort the FBI and its partners put into investigating these crimes,” said Assistant Director Alan E. Kohler Jr. of the FBI’s Counterintelligence Division. “According to the indictment, the defendant used shell companies and other means to hide his deceptions and evade important sanctions meant to ensure the territorial integrity of Ukraine. While this case is about violating sanctions, it’s also about bringing people to justice who think they can violate our laws with impunity.”

“Kremlin-linked Russian oligarch Konstantin Malofeyev played a leading role in supporting Russia’s 2014 invasion of eastern Ukraine, continues to run a pro-Putin propaganda network, and recently described Russia’s 2022 military invasion of Ukraine as a ‘holy war,’” said Assistant Director Michael J. Driscoll of the FBI’s New York Field Office. “The FBI works tirelessly to protect our national interests, and we will continue to use all the resources at our disposal to aggressively counter Russia’s malign activity around the world.”

According to court documents, in 2014, the President issued Executive Order 13660, which declared a national emergency with respect to the situation in Ukraine. To address this national emergency, the President blocked all property and interest in property that came within the United States or the possession or control of any U.S. person, of individuals determined by the Secretary of the Treasury to be responsible for or complicit in actions or policies that threatened the peace, security, stability, sovereignty or territorial integrity of Ukraine, or who materially assist, sponsor or provide financial, material or technological support for, or goods and services to, individuals or entities engaging in such activities.

Executive Order 13660, along with certain regulations issued pursuant to it (the Ukraine-Related Sanctions Regulations) prohibits, among other things, making or receiving any funds, goods or services by, to, from or for the benefit of any person whose property and interests in property are blocked.

On Dec. 19, 2014, the Department of Treasury’s Office of Foreign Assets Control (OFAC) designated Konstantin Malofeyev as a Specially Designated National (SDN) pursuant to Executive Order 13660. OFAC’s designation of Malofeyev explained that he was one of the main sources of financing for Russians promoting separatism in Crimea, and has materially assisted, sponsored, and provided financial, material, or technological support for, or goods and services to or in support of the so-called Donetsk People’s Republic, a separatist organization in the Ukrainian region of Donetsk.

As alleged in the indictment, Malofeyev hired a U.S. citizen named Jack Hanick in 2013 to work on a new Russian cable television news network (the Russian TV Network) that Malofeyev was creating. Malofeyev negotiated directly with Hanick regarding Hanick’s salary, payment for Hanick’s housing in Moscow, and Hanick’s Russian work visa, and Malofeyev paid Hanick through two separate Russian entities through the end of 2018.

After OFAC designated Malofeyev as a SDN in December 2014, Malofeyev continued to employ Hanick on the Russian TV Network, in violation of the Ukraine-Related Sanctions Regulations. Malofeyev also dispatched Hanick to work on a project to establish and run a Greek television network and on efforts to acquire a Bulgarian television network. At Malofeyev’s direction, Hanick traveled to Greece and to Bulgaria on multiple occasions in 2015 and 2016 to work on these initiatives and reported directly back to Malofeyev on his work. For instance, in November 2015, Hanick wrote to Malofeyev that the Greek television network would be an “opportunity to detail Russia’s point of view on Greek TV.” In connection with Malofeyev’s efforts to acquire the Bulgarian television network, Malofeyev instructed Hanick to take steps to conceal Malofeyev’s role in the acquisition by conducting the negotiations through a Greek associate of Malofeyev (the Greek Business Associate), so that it would appear the buyer was a Greek national rather than Malofeyev.

Malofeyev also employed Hanick to assist Malofeyev in transferring a $10 million investment in a Texas-based bank holding company (the Texas Bank) to the Greek Business Associate in violation of the Ukraine-Related Sanctions Regulations. In 2014, Malofeyev used a shell company to make the investment, and beginning in or about March 2015, Malofeyev began making plans to transfer ownership of the shell company to the Greek Business Associate as a means to transfer the investment in the Texas Bank. In or about May 2015, Malofeyev’s attorney drafted a Sale and Purchase Agreement that purported to transfer the shell company to the Greek Business Associate in exchange for one U.S. dollar. In June 2015 Malofeyev had Hanick physically transport a copy of Malofeyev’s certificate of shares in the Texas Bank from Moscow to Athens to be given to the Greek Business Associate. Malofeyev signed the Sale and Purchase Agreement in June 2015, but the agreement was fraudulently backdated to July 2014 to make it appear that the transfer had taken place prior to the imposition of U.S. sanctions. Malofeyev’s attorney then falsely represented to the Texas Bank that the transfer had taken place in July 2014, even though Malofeyev and his attorney well knew that the transfer of the shell company was executed in June 2015.

Along with the unsealed indictment, a seizure warrant was issued in the Southern District of New York for Malofeyev’s Texas Bank investment, which had been converted by the Texas Bank in 2016 to cash held in a blocked U.S. bank account. The United States recovered those funds pursuant to the warrant and will seek forfeiture of those funds as property that constitutes or is derived from proceeds traceable to the commission of the offenses alleged in the indictment.

Each of the two sanctions charges in the indictment carry a maximum penalty of 20 years in prison. A federal district court judge will determine any sentence after considering the U.S. Sentencing Guidelines and other statutory factors.

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

Assistant U.S. Attorneys Thane Rehn, Jessica Greenwood, and Vladislav Vainberg for the Southern District of New York are prosecuting the case, with valuable assistance provided by Trial Attorney Nathan Swinton of the National Security Division’s Counterintelligence and Export Control Section.

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, announced today the unsealing of a criminal indictment charging a violation of United States sanctions arising from the 2014 Russian undermining of democratic processes and institutions in Ukraine. KONSTANTIN MALOFEYEV is charged with conspiracy to violate United States sanctions and violations of United States sanctions in connection with his hiring of an American citizen, Jack Hanick, to work for him in operating television networks in Russia and Greece and attempting to acquire a television network in Bulgaria. MALOFEYEV also conspired with Hanick and others to illegally transfer a $10 million investment that MALOFEYEV had made in a United States bank to a business associate in Greece, in violation of the sanctions blocking MALOFEYEV’s assets from being transferred. Along with the Indictment, the United States Attorney announced the seizure of MALOFEYEV’s United States investment.

U.S. Attorney Damian Williams said: “Konstantin Malofeyev is closely tied to Russian aggression in Ukraine, having been determined by OFAC to have been one of the main sources of financing for the promotion of Russia-aligned separatist groups operating in the sovereign nation of Ukraine. The United States sanctions on Malofeyev prohibit him from paying or receiving services from United States citizens, or from conducting transactions with his property in the United States.  But as alleged, he systematically flouted those restrictions for years after being sanctioned. The Indictment unsealed today shows this Office’s commitment to the enforcement of laws intended to hamstring those who would use their wealth to undermine fundamental democratic processes. This Office will continue to be a leader in the Justice Department’s work to hold accountable actors who would support flagrant and unjustified acts of war.”

FBI Assistant Director Michael J. Driscoll said: “Kremlin-linked Russian oligarch Konstantin Malofeyev played a leading role in supporting Russia’s 2014 invasion of eastern Ukraine, continues to run a pro-Putin propaganda network, and recently described Russia’s 2022 military invasion of Ukraine as a ‘holy war.’  The FBI works tirelessly to protect our national interests, and we will continue to use all the resources at our disposal to aggressively counter Russia’s malign activity around the world.”

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

In 2014, the President issued Executive Order 13660, which declared a national emergency with respect to the situation in Ukraine. To address this national emergency, the President blocked all property and interest in property that came within the United States or the possession or control of any United States person, of individuals determined by the Secretary of the Treasury to be responsible for or complicit in, or who engaged in, actions or policies that threatened the peace, security, stability, sovereignty, or territorial integrity of Ukraine, or who materially assist, sponsor, or provide financial, material, or technological support for, or goods and services to, individuals or entities engaging in such activities. Executive Order 13660, along with certain regulations issued pursuant to it (the “Ukraine-Related Sanctions Regulations”) prohibits, among other things, making or receiving any funds, goods, or services by, to, from, or for the benefit of any person whose property and interests in property are blocked. 

On December 19, 2014, the Department of Treasury’s Office of Foreign Assets Control (“OFAC”) designated KONSTANTIN MALOFEYEV as a Specially Designated National (“SDN”) pursuant to Executive Order 13660. OFAC’s designation of MALOFEYEV explained that he was one of the main sources of financing for Russians promoting separatism in Crimea, and has materially assisted, sponsored, and provided financial, material, or technological support for, or goods and services to or in support of the so-called Donetsk People’s Republic, a separatist organization in the Ukrainian region of Donetsk.

As alleged in the Indictment, MALOFEYEV hired a United States citizen named Jack Hanick in 2013 to work on a new Russian cable television news network (the “Russian TV Network”) that MALOFEYEV was creating. MALOFEYEV negotiated directly with Hanick regarding Hanick’s salary, payment for Hanick’s housing in Moscow, and Hanick’s Russian work visa, and MALOFEYEV paid Hanick through two separate Russian entities through the end of 2018.

After OFAC designated MALOFEYEV as a SDN in December 2014, MALOFEYEV continued to employ Hanick on the Russian TV Network, in violation of the Ukraine-Related Sanctions Regulations. MALOFEYEV also dispatched Hanick to work on a project to establish and run a Greek television network and on efforts to acquire a Bulgarian television network. At MALOFEYEV’s direction, Hanick traveled to Greece and to Bulgaria on multiple occasions in 2015 and 2016 to work on these initiatives, and reported directly back to MALOFEYEV on his work. For instance, in November 2015, Hanick wrote to MALOFEYEV that the Greek television network would be an “opportunity to detail Russia’s point of view on Greek TV.” In connection with MALOFEYEV’s efforts to acquire the Bulgarian television network, MALOFEYEV instructed Hanick to take steps to conceal MALOFEYEV’s role in the acquisition by conducting the negotiations through a Greek associate of MALOFEYEV (the “Greek Business Associate”), so that it would appear the buyer was a Greek national rather than MALOFEYEV.

MALOFEYEV also employed Hanick to assist MALOFEYEV in transferring a $10 million investment in a Texas-based bank holding company (the “Texas Bank”) to the Greek Business Associate in violation of the Ukraine-Related Sanctions Regulations. In 2014, MALOFEYEV had used a shell company to make the investment, and beginning in or about March 2015, MALOFEYEV began making plans to transfer ownership of the shell company to the Greek Business Associate as a means to transfer the investment in the Texas Bank. In or about May 2015, MALOFEYEV’s attorney drafted a Sale and Purchase Agreement that purported to transfer the shell company to the Greek Business Associate in exchange for one U.S. dollar. In June 2015 MALOFEYEV had Hanick physically transport a copy of MALOFEYEV’s certificate of shares in the Texas Bank from Moscow to Athens to be given to the Greek Business Associate. MALOFEYEV signed the Sale and Purchase Agreement in June 2015, but the agreement was fraudulently backdated to July 2014 to make it appear that the transfer had taken place prior to the imposition of United States sanctions. MALOFEYEV’s attorney then falsely represented to the Texas Bank that the transfer had taken place in July 2014, even though MALOFEYEV and his attorney well knew that the transfer of the shell company was executed in June 2015.

Along with the unsealed Indictment, the United States Attorney announced the issuance of a seizure warrant for MALOFEYEV’s Texas Bank investment, which had been converted by the Texas Bank in 2016 to cash held in a blocked United States bank account. The United States recovered those funds pursuant to the warrant and will seek forfeiture of those funds as property that constitutes or is derived from proceeds traceable to the commission of the offenses alleged in the Indictment.

*                *                *

MALOFEYEV, 47, of Russia, remains at large, and is believed to be in Russia. Each of the two sanctions charges in the Indictment carries a maximum penalty of 20 years in prison. The maximum potential sentence in this case is prescribed by Congress and is provided here for informational purposes only, as any sentencing of the defendant will be determined by the judge.

Mr. Williams praised the outstanding investigative work of the Federal Bureau of Investigation and thanked the support and expertise of the Department of Justice’s National Security Division and Office of International Affairs in the conduct of this matter.

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

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

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[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 today the conviction in federal court of LAWRENCE RAY, a/k/a “Lawrence Grecco,” for racketeering conspiracy, a violent crime in aid of racketeering, extortion, sex trafficking, forced labor, tax evasion, and money laundering offenses.  After less than a day of deliberations, the unanimous jury convicted RAY of every count presented to the jury after a four-week trial before U.S. District Judge Lewis J. Liman. 

U.S. Attorney Damian Williams said:  “Twelve years ago, Larry Ray moved into his daughter’s dorm room at Sarah Lawrence College.  And when he got there, he met a group of friends who had their whole lives ahead of them.  For the next decade, he used violence, threats, and psychological abuse to try to control and destroy their lives.  He exploited them.  He terrorized them.  He tortured them.  Let me be very clear.  Larry Ray is a predator.  An evil man who did evil things. Today’s verdict finally brings him to justice.  This verdict would not have been possible without the victims who testified in court.  We are in awe of their bravery in the face of incredible trauma.  I also want to thank the career prosecutors in my Office, the Southern District of New York, and our law enforcement partners, who stood with those victims and worked tirelessly to ensure that justice was done.”

According to the Indictment and the evidence at trial:

From in or about 2010 through the present, LAWRENCE RAY, a/k/a “Lawrence Grecco,” the defendant, subjected a group of college students and other victims to sexual and psychological manipulation and physical abuse.  RAY’s tactics included sleep deprivation, psychological and sexual humiliation, verbal abuse, threats of physical violence, physical violence, threats of criminal legal action, alienating the victims from their families, and exploiting the victims’ mental health vulnerabilities. 

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

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

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

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

*                *                *

RAY, 62, of Piscataway, New Jersey, was returned to the custody of the U.S. Marshals following the return of the verdict.  RAY was convicted of the following crimes: racketeering conspiracy, which carries a maximum of life in prison; conspiracy to commit extortion, which carries a maximum sentence of 20 years in prison; extortion, which carries a maximum sentence of 20 years in prison; sex trafficking, which carries a maximum sentence of life in prison, and a mandatory minimum sentence of 15 years in prison; obtaining forced labor, which carries a maximum sentence of 20 years in prison; forced labor trafficking, which carries a maximum sentence of 20 years in prison; conspiracy to obtain forced labor, which carries a maximum sentence of 20 years in prison; violating the Travel Act, which carries a maximum sentence of five years in prison; four counts of tax evasion, each of which carries a maximum of 5 years in prison, and money laundering, which carries a maximum sentence of 20 years in prison.

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

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

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

Damian Williams, the United States Attorney for the Southern District of New York, announced today that PUNEET DIKSHIT, a former partner in McKinsey & Company, was sentenced today to 24 months in prison by U.S. District Judge Colleen McMahon.  DIKSHIT pled guilty on December 15, 2021, to one count of securities fraud in connection with his scheme to commit insider trading based on material, nonpublic information regarding the upcoming public announcement that The Goldman Sachs Group, Inc. – which DIKSHIT and McKinsey were advising – would be acquiring GreenSky, Inc. 

U.S. Attorney Damian Williams said:  “With today’s sentence, Puneet Dikshit must face the consequences of his egregious crime.  We will continue to vigorously protect the integrity of our capital markets and hold accountable those who cheat by trading on inside information.  This conviction shows Wall Street and Main Street that corporate advisors who steal information entrusted to them and use it for their personal gain will be caught and prosecuted.”

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

GreenSky was a publicly traded financial technology company that provided technology to banks and merchants to make loans to consumers for home improvement, solar, healthcare, and other purposes.  GreenSky’s common stock traded under the symbol “GSKY” on the NASDAQ.

Between November 2019 and July 2020, and again between April 2021 and September 2021, Goldman Sachs, the investment bank, engaged McKinsey, the management consulting firm, to provide services related to the potential acquisition of GreenSky by Goldman Sachs and the post-acquisition integration of GreenSky.  DIKSHIT was one of the McKinsey partners leading these engagements.  In that role, he had access to material nonpublic information, which he misappropriated and, in violation of the duties that he owed to Goldman Sachs and McKinsey, used to trade GreenSky call options. 

DIKSHIT engaged in this trading between July 26 and September 15, 2021 – at the same time he was leading the McKinsey team that was advising Goldman Sachs about its potential acquisition of GreenSky.  At various times between July 26 and September 13, 2021, DIKSHIT purchased and sold relatively small numbers of GreenSky call options, which had expiration dates weeks or months from the time of purchase.  However, in the two days before the September 15, 2021, public announcement that Goldman Sachs would be acquiring GreenSky, DIKSHIT sold all of these longer-dated GreenSky call options and purchased approximately 2,500 out-of-the-money GreenSky call options that were due to expire just a few days later, on September 17, 2021.  After the deal to purchase GreenSky was announced on September 15, 2021, DIKSHIT sold these options and realized profits of approximately $450,000.

*                *                *

In addition to his prison sentence, DIKSHIT, 41, of New York, New York, was ordered to pay forfeiture in the amount of $455,017.

Mr. Williams praised the outstanding work of the Federal Bureau of Investigation.  Mr. Williams further thanked the U.S. Securities and Exchange Commission for its assistance and cooperation in this investigation. 

This case is being handled by the Office’s Securities and Commodities Fraud Task Force.  Assistant United States Attorneys Joshua A. Naftalis and Matthew Podolsky are in charge of the prosecution. 

Damian Williams, the United States Attorney for the Southern District of New York, announced that ALVIN MAXWELL pled guilty today to one count of conspiracy to commit wire fraud in connection with a scheme to fraudulently obtain over $30 million in Government-guaranteed loans designed to provide relief to small businesses during the COVID-19 pandemic.  MAXWELL is the fifth defendant to plead guilty in the case.  Four other defendants—APOCALYPSE BELLA, a/k/a “Dias Yumba,” MACKENZY TOUSSAINT, a/k/a “Mack,” BRANDON JACKSON, and AMOS MUNDENDI, a/k/a “Mos,” a/k/a “El Ashile Mundi”—pled guilty earlier this year.  TOUSSAINT, JACKSON, and MUNDENDI each pled guilty to one count of conspiracy to commit wire fraud on March 8, March 30, and April 4, 2022, respectively.  BELLA pled guilty to one count of money laundering conspiracy on March 21, 2022.  All of the defendants pled guilty before U.S. District Judge Paul A. Engelmayer.

According to allegations in the Complaints, the Indictments, and the Superseding Information, filed in the case:

APOCALYPSE BELLA, a/k/a “Dias Yumba,” MACKENZY TOUSSAINT, a/k/a “Mack,” AMOS MUNDENDI, a/k/a “Mos,” a/k/a “El Ashile Mundi,” and ALVIN MAXWELL, were involved in an extensive scheme to prepare and submit fraudulent applications to the Small Business Administration (“SBA”) and to at least one company which processes loan applications under the SBA’s Paycheck Protection Program (“PPP”), in order to fraudulently obtain at least approximately $30 million in government-guaranteed loans for various companies through the PPP, designed to provide financial relief to qualifying companies during the COVID-19 pandemic. 

This scheme resulted in the approval of fraudulently procured loans for two companies (“Company-1” and “Company-2”), both located in the Southern District of New York, totaling approximately $4 million, and the distribution of the proceeds of these fraudulently obtained funds to a series of bank accounts located in the United States and elsewhere, including bank accounts controlled by TOUSSAINT and BELLA. 

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

BELLA, TOUSSAINT, and MUNDENDI devised and executed this fraudulent scheme by conspiring with individuals who owned, operated or otherwise were affiliated with businesses, such as Company-1 and Company-2.

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

*                      *                      *

TOUSSAINT, MUNDENDI, MAXWELL, and JACKSON, all residents of Texas, pled guilty to one count of conspiracy to commit wire fraud, which carries a maximum sentence of 20 years.  BELLA, an Oregon resident, pled guilty to one count of money laundering conspiracy, which carries a maximum sentence of 20 years in prison.

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

BELLA is scheduled to be sentenced at 10:30 a.m. on July 7, 2022.  TOUSSAINT is scheduled to be sentenced at 10:30 a.m. on June 16, 2022.  JACKSON is scheduled to be sentenced at 11:00 a.m. on August 17, 2022.  MAXWELL is scheduled to be sentenced at 11:00 a.m. on September 8, 2022.  MUNDENDI is scheduled to be sentenced at 11:00 a.m. on September 9, 2022.  Each of the defendants will be sentenced by U.S. District Judge Paul A. Engelmayer.

Mr. Williams praised the outstanding work of the FBI, SBA-OIG and IRS-CI.

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

Damian Williams, the United States Attorney for the Southern District of New York, and Ricky J. Patel, the Acting Special Agent-in-Charge of the New York Field Office of Homeland Security Investigations (“HSI”), announced the unsealing of an Indictment charging MELVILLE TEN CATE with tender offer fraud, securities fraud, and wire fraud in connection with several schemes on behalf of his company, Xcalibur Aerospace Ltd. (“Xcalibur”), including a fraudulent tender offer worth more than $14 billion.  TEN CATE remains at large.

U.S. Attorney Damian Williams said: “Fraudsters talk big and hope no one looks too closely at the bottom line. We allege Mr. ten Cate attempted to make his company look profitable and bluffed his way through the proposed purchase of a multi-billion dollar company. But it was all based on a lie. Instead of collecting on a hefty payday, he’s now facing serious federal charges.”

HSI Acting Special Agent-in-Charge Ricky J. Patel said: “The filing of this indictment alleges that ten Cate sold lies to raise cash - swindling investors and companies along the way through multiple fraud schemes. Time and time again this fraudster believed he could outsmart unwitting pools of investors, luring them with phony stock tenders and a variety of false promises.  Justice caught up with him and he is now facing charges for his criminal acts.  HSI will never stop in its mission to pursue these unscrupulous actors anywhere in the world to keep the public safe and to preserve and protect the American financial system.”

According to the allegations contained in the Indictment filed today in Manhattan federal court:

From in or about August 2019 until in or about November 2020, MELVILLE TEN CATE, the defendant, executed fraudulent schemes designed to induce others to invest in, or otherwise transfer money to, Xcalibur and TEN CATE.  First, TEN CATE attempted to secure $500 million in debt financing from U.S. banks and third-party debt issuers. In doing so, TEN CATE materially misrepresented Xcalibur’s business activities and finances to the banks and other potential investors, including by falsely claiming that Xcalibur’s financial records had been audited by an international accounting firm, that Xcalibur had outside investors, and that Xcalibur had cash reserves of almost £9.8 billion.

In a second scheme, in and about November 2020, TEN CATE placed an advertisement in a national newspaper (the “Newspaper”) in which he falsely claimed that Xcalibur had secured billions of dollars in financing and was making a tender offer to acquire a multibillion-dollar U.S. corporation (the “Target Company”).  In furtherance of his scheme to issue the false tender offer for the Target Company, TEN CATE sent fabricated payment confirmations to the Newspaper and to a New York, New York-based printer (the “Printer”) that TEN CATE had hired to file the false tender offer with the U.S. Securities and Exchange Commission (“SEC”).  The Newspaper published the false tender offer, but neither the Newspaper nor the Printer ever received payment and TEN CATE never completed the tender offer.    

*                *                *

TEN CATE, 53, of Dubai, United Arab Emirates, is charged with one count of tender offer fraud, one count of securities fraud, and two counts of wire fraud.  TEN CATE faces a maximum sentence of 20 years’ imprisonment on each count.   

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

Mr. Williams praised the investigative work of HSI.  Mr. Williams also thanked the Securities & Exchange Commission, which brought a related civil action against TEN CATE that was filed today.

This case is being handled by the Office’s Securities and Commodities Fraud Task Force.  Assistant U.S. Attorneys Kiersten A. Fletcher and Andrew Jones 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.

Damian Williams, the United States Attorney for the Southern District of New York, announced that JONATHAN SKOLNICK pled guilty today to child enticement and possession of child pornography.  SKOLNICK pled guilty today before U.S. District Judge Colleen McMahon who will also sentence the defendant.  

U.S. Attorney Damian Williams said: “Jonathan Skolnick, a teacher and former middle school associate principal, admitted today to reprehensible crimes connected to his coercing of own students, minor children, to sending him nude photos of themselves. No parent should ever need to worry about the safety of their children from child predators when sending them off to school; I commend our law enforcement partners for their efforts in bringing Skolnick’s career as an educator to an end.”  

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

Between in or around August 2012 and in or around June 2018, SKOLNICK worked as a high school teacher at a school in Brooklyn, New York (“School-1”).  In or around July 2018, SKOLNICK became an associate principal at a middle school in the Bronx, New York (“School-2”), where he worked until in or around September 2019. 

Over the course of approximately seven years, SKOLNICK induced, enticed, and coerced minor children (the “Minor Victims”) to send him nude and sexually explicit photographs and videos of themselves over the Internet.  SKOLNICK abused his position of trust as a teacher and mentor at School-1 and School-2 in order to access Minor Victims. 

Between in or around 2012 and in or around September 2019, the Minor Victims sent SKOLNICK nude and sexually explicit photographs and videos that he possessed.

*                *                *

SKOLNICK, 39, of the Bronx, New York, pled guilty to: (1) one count of child enticement, which carries a mandatory minimum sentence of 10 years in prison and a maximum sentence of life in prison; and (2) one count of possession of child pornography, which carries a maximum sentence of 10 years in prison.  The maximum potential sentences in this case are prescribed by Congress and are provided here for informational purposes only, as any sentencing of the defendants will be determined by the judge. Sentencing is scheduled for September 22, 2022.

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

The prosecution is being handled by the Office’s General Crimes Unit.  Assistant United States Attorneys Elizabeth A. Espinosa and Rebecca T. Dell are in charge of the prosecution. 

Damian Williams, the United States Attorney for the Southern District of New York, today announced the appointment of Andrea Griswold as Chief Counsel to the United States Attorney. 

Since March 2013, Ms. Griswold has served as an Assistant U.S. Attorney in the Southern District of New York.  Since June 2020, she has served as the Deputy Chief and then Co-Chief of the Securities and Commodities Fraud Task Force.  Prior to assuming a supervisory position in that unit, Ms. Griswold investigated and prosecuted a wide variety of significant securities fraud and public corruption cases, and also served as an Acting Chief of the Narcotics Unit.  Prior to her public service, she worked for more than five years as an associate at Simpson Thacher & Bartlett.  Ms. Griswold received her B.A. from Georgetown University and her J.D. from New York University School of Law.   

In making the appointment, U.S. Attorney Damian Williams said: “I am thrilled to have Andrea Griswold join my senior leadership team as Chief Counsel to the United States Attorney.  Andrea is a star.  She is a brilliant lawyer, a natural leader, and a wise counselor.  I am confident that she will bring her trademark excellence to this new role.”    

Ms. Griswold will continue to serve as Co-Chief of the Securities and Commodities Fraud Task Force for the next several months as she transitions into her new position.

Damian Williams, the United States Attorney for the Southern District of New York, Ricky J. Patel, the Acting Special Agent-in-Charge of the New York Field Office of the Department of Homeland Security (“HSI”), Keechant L. Sewell, Commissioner of the New York City Police Department (“NYPD”), and Jocelyn E. Strauber, the Commissioner of the New York City Department of Investigation (“DOI”), announced today the unsealing of an Indictment charging KAI JOHNSON with racketeering conspiracy, murder in aid of racketeering, attempted murder and assault with a deadly weapon in aid of racketeering, being a felon in possession of ammunition, and firearms offenses, relating to JOHNSON’s participation in: (1) the murders of Price Tunstall and Malik Tunstall in the vicinity of the James Monroe Houses in the Bronx on August 31, 2021; and (2) a non-fatal shooting of a 16-year-old in the vicinity of the James Monroe Houses in the Bronx on April 4, 2021.

JOHNSON was already in state custody relating to other charges and will be presented today before Magistrate Judge Sarah L. Cave.  The case is assigned to U.S. District Judge Lewis J. Liman.

U.S. Attorney Damian Williams said:  “As alleged in the indictment, the defendant is responsible for the cold-blooded murders of Price Tunstall and Malik Tunstall, just a few months after shooting and injuring a 16-year-old in the same neighborhood.  We continue our daily work with our law enforcement partners to keep our communities safe and to vigorously investigate and prosecute those who bring violence to our streets.”

HSI Acting Special Agent-in Charge Ricky J. Patel said:  “It is alleged that Johnson participated in multiple shootings in and around public housing facilities in the Bronx, including a double murder. The residents of New York City’s public housing developments deserve a safe living space, free from violence and the influence of dangerous gang members’ desire to instill fear throughout the community. This indictment against Johnson is an example of bringing the strength of federal racketeering statutes in the fight to secure the streets of New York and stem the tide of violence plaguing the citizens of New York City. HSI is proud to partner in this fight with our colleagues at the United States Attorney’s Office for the Southern District of New York, the New York City Police Department, and the New York City Department of Investigation.”

NYPD Commissioner Keechant L. Sewell said:  “At a time of rising violent crime, increasing numbers of shootings, and too many young people victimized by illegal guns, today’s federal indictment illustrates the NYPD’s commitment to using the combined strength of all of our tools to help New Yorkers, hold trigger-pullers accountable, and attain justice for victims. We commend our investigators, our federal law enforcement partners and the work of the prosecutors of the United States Attorney’s Office in the Southern District of New York for their sustained work in this important case.”   

DOI Commissioner Jocelyn E. Strauber said:  “Gang violence terrorizes New Yorkers and destabilizes communities.  The allegations in this Indictment make clear the dangerous impact of gang warfare in the Soundview neighborhood of the Bronx and the critical need to protect all of New York City’s neighborhoods.  I am proud that DOI’s partnership with the United States Attorney’s Office for the Southern District of New York, the New York City Police Department, and the New York Office of Homeland Security Investigations led to these charges, and we will continue to work together with our law enforcement partners to prioritize and promote public safety.” 

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

KAI JOHNSON is a member or associate of a racketeering enterprise known as the Stevenson Commons Crew.  In order to fund the enterprise, protect and expand its interests, and promote its standing, members and associates of the Stevenson Commons Crew committed, conspired, attempted, and threatened to commit acts of violence against rival gangs, 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 August 31, 2021, JOHNSON murdered Malik Tunstall and Price Tunstall in the vicinity of 805 Taylor Avenue in the Bronx, New York.

On April 4, 2021, JOHNSON shot at rival gang members in the vicinity of 877 Taylor Avenue in the Bronx, New York, which resulted in a 16-year-old being grazed in the head with a bullet.

*                *                *

JOHNSON, 27, is charged with one count of racketeering conspiracy, which carries a statutory maximum sentence of life in prison; two counts of murder in aid of racketeering, which carries a statutory maximum sentence of the death penalty or life in prison, and a mandatory minimum sentence of life in prison; two counts of murder through use of a firearm, which carries a statutory maximum sentence of the death penalty or life in prison, and a mandatory minimum sentence of five years in prison; two counts of being a felon in possession of ammunition, which carries a statutory maximum of ten years in prison; and one count of using and carrying a firearm in furtherance of a crime of violence, which was brandished and discharged, which carries a statutory maximum of life in prison and a mandatory minimum sentence of ten years in prison. 

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

Mr. Williams praised the investigative work of HSI, DOI, and the NYPD.

This case is being handled by the Office’s Violent & Organized Crime Unit.  Assistant United States Attorneys Andrew K. Chan, Emily A. Johnson, and Justin V. Rodriguez 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, United States Attorney for the Southern District of New York, Keechant L. Sewell, the Commissioner of the New York City Police Department (“NYPD”), and Ricky J. Patel, Acting Special Agent-in-Charge of Homeland Security Investigations (“HSI”) in New York, announced the unsealing of a fifteen-count indictment today charging ten individuals—ANDREW DONE, a/k/a “Caballo,” VICTOR ALMONTE, a/k/a “Flaco Capone,” MOISES FONTANEZ, a/k/a “Goya,” OLBENY DIAZ, a/k/a “Sosbrito,” FRAILYN CAPELLAN, a/k/a “Frek,” JOEL ORTIZ, a/k/a “Brooklyn,” EDWIN JIMENEZ, a/k/a “Pac,” MALVIN RESTITUYO, a/k/a “Puto,” and ANDERSON BURDIER, a/k/a “Canela,” and JOSEPH RIVERA, a/k/a “Shorty,”—with racketeering conspiracy, murder, attempted murder, firearms offenses, and narcotics conspiracy.  The defendants are charged for their roles in the “Shooting Boys” gang and an associated narcotics conspiracy.  Among other crimes, DONE is charged for the November 5, 2020 murder of Angel Barreiro in the Bronx.  The crimes charged against each of the ten defendants are specified in the chart below.  The case is assigned to United States District Judge Jed S. Rakoff. 

In a coordinated operation, eight defendants were arrested in New York and Pennsylvania earlier this morning.  The defendants arrested in New York will be presented later this afternoon before U.S. Magistrate Judge Sarah L. Cave in Manhattan federal court.  CAPELLAN will be presented in federal court in Philadelphia.  FONTANEZ was in custody on state charges and was transferred to federal custody today.  DONE and ALMONTE remain at large.

U.S. Attorney Damian Williams said:  “As alleged, the ‘Shooting Boys’ are responsible for a rampage of violence in the Bronx, including a murder and several other shootings.  Today’s arrests will protect the public from these defendants and send a message to others who would commit violence:  law enforcement is watching and you will be prosecuted.”   

NYPD Commissioner Keechant L. Sewell said:  “Dismantling gangs and targeting the illegal acts associated with their activities continues to be one of the highest priorities for the NYPD and our law enforcement partners. Today’s charges again show that we are accurately identifying and arresting the relatively small percentage of people responsible for the majority of the violence in New York – and we will remain relentless in our pursuit of meaningful consequences for these criminals.”

HSI Acting Special Agent-in-Charge Ricky J. Patel said:  “The allegations in these indictments show the unrepentant violence of the ‘Shooting Boys’ and their complete disregard for human life. Today, members of violent gangs are put on notice that HSI and the New York City Police Department will not sit idly by as gangs and violent criminals terrorize our communities.  HSI will continue the mission to dismantle violent criminal gangs, and along with the NYPD and its partners, will work together to eradicate the fear caused by these organizations.”

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

The “Shooting Boys” gang is a criminal organization based in the University Heights section of the Bronx.  Since at least 2017, gang members sold drugs, used guns, and committed numerous acts of violence against members of rival gangs.  Originally associated with the “Trinitarios” gang, the “Shooting Boys” broke off from the “Sunset” chapter of the “Trinitarios” in about 2018.  ANDREW DONE, a/k/a “Caballo,” is the leader of the “Shooting Boys.” 

The “Shooting Boys” sold crack, cocaine, heroin, and marijuana primarily in two areas:  near 192nd Street and Aqueduct Avenue, and 155 Father Zeiser Place in the Bronx.  Only members of the “Shooting Boys” and those authorized by them were permitted to sell drugs in these locations and the gang protected its drug territory through violence and intimidation relying primarily on the use of firearms.

In addition to multiple non-fatal acts of violence against rival gang members and innocent bystanders, the rivalry between the “Shooting Boys” and other chapters of the “Trinitarios” led to the murder of Angel Barreiro, a/k/a “Jay La Sombra” on November 5, 2020. The indictment alleges that DONE shot and killed Barreiro opposite 1365 Cromwell Avenue in the Bronx. 

*              *             *

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

Mr. Williams praised the outstanding investigative work of the NYPD and HSI.    

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

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

CHARGE

DEFENDANTS

MAXIMUM/MINIMUM PENALTIES

Count One

Racketeering Conspiracy

18 U.S.C. § 1962(d)

 

ANDREW DONE,

VICTOR ALMONTE,

MOISES FONTANEZ,

OLBENY DIAZ,

FRAILYN CAPELLAN,

JOEL ORTIZ,

EDWIN JIMENEZ,

MALVIN RESTITUYO, and

ANDERSON BURDIER

Maximum as to all defendants except RESTITUYO: Life in prison

Maximum as to RESTITUYO: 20 years in prison

 

 

Count Two

Murder in Aid of Racketeering

18 U.S.C. § 1959(a)(1)

 

ANDREW DONE

 

Mandatory life in prison or death

 

Count Three

Murder through Use of a Firearm

18 U.S.C. § 924(j)

 

ANDREW DONE

 

Maximum: Life in prison or death

Minimum: 5 years in prison, which much be consecutive to any other term imposed.

Count Four

Attempted Murder and Assault with a Dangerous Weapon in Aid of Racketeering

18 U.S.C. §§ 1959(a)(5), 1959(a)(6), 1959(a)(3)

ANDREW DONE

VICTOR ALMONTE

FRAILYN CAPELLAN

 

Maximum: 20 years in prison

Count Five

Firearms Offense

18 U.S.C. § 924(c)

ANDREW DONE

VICTOR ALMONTE

FRAILYN CAPELLAN

 

Maximum: Life in prison

Minimum: 10 years in prison, which much be consecutive to any other term imposed.

Count Six

Attempted Murder and Assault with a Dangerous Weapon in Aid of Racketeering

18 U.S.C. §§ 1959(a)(5), 1959(a)(6), 1959(a)(3)

OLBENY DIAZ

Maximum: 20 years

Count Seven

Firearms Offense

18 U.S.C. § 924(c)

OLBENY DIAZ

Maximum: Life in prison

Minimum: 10 years in prison, which much be consecutive to any other term imposed.

 

Count Eight

Attempted Murder and Assault with a Dangerous Weapon in Aid of Racketeering

18 U.S.C. §§ 1959(a)(5), 1959(a)(3)

MALVIN RESTITUYO

Maximum: 20 years

Count Nine

Firearms Offense

18 U.S.C. § 924(c)

MALVIN RESTITUYO

Maximum: Life in prison

Minimum: 10 years in prison, which much be consecutive to any other term imposed.

 

Count Ten

Attempted Murder and Assault with a Dangerous Weapon in Aid of Racketeering

18 U.S.C. §§ 1959(a)(5), 1959(a)(3)

MOISES FONTANEZ

Maximum: 20 years

Count Eleven

Firearms Offense

18 U.S.C. § 924(c)

MOISES FONTANEZ

Maximum: Life in prison

Minimum: 10 years in prison, which much be consecutive to any other term imposed.

 

Count Twelve

Assault with a Dangerous Weapon in Aid of Racketeering

18 U.S.C. § 1959(a)(3)

ANDREW DONE

MOISES FONTANEZ

OLBENY DIAZ

JOEL ORTIZ

Maximum: 20 years

Count Thirteen

Firearms Offense

18 U.S.C. § 924(c)

 

ANDREW DONE

MOISES FONTANEZ

OLBENY DIAZ

JOEL ORTIZ

 

Maximum: Life in prison

Minimum: 7 years in prison, which much be consecutive to any other term imposed.

 

Count Fourteen

Narcotics Conspiracy

21 U.S.C. § 846, 841(b)(1)(A), 841(b)(1)(C), 841(b)(1)(D),

 

ANDREW DONE

VICTOR ALMONTE

MOISES FONTANEZ

OLBENY DIAZ

FRAILYN CAPELLAN

JOEL ORTIZ

EDWIN JIMENEZ

ANDERSON BURDIER

JOSEPH RIVERA

 

Maximum: Life in prison

Minimum: 10 years in prison

 

Count Fifteen

Firearms Offense

18 U.S.C. § 924(c)

 

ANDREW DONE

VICTOR ALMONTE

MOISES FONTANEZ

OLBENY DIAZ

FRAILYN CAPELLAN

JOEL ORTIZ

EDWIN JIMENEZ

ANDERSON BURDIER

JOSEPH RIVERA

 

Maximum: Life in prison

Minimum: 10 years in prison, which much be consecutive to any other term imposed.

 

 

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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 that NACHMAN HELBRANS and MAYER ROSNER were sentenced today to 12 years in prison for child sexual exploitation offenses and kidnapping.  The defendants, leaders of an extremist religious sect called Lev Tahor, masterminded 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.  The defendants then smuggled the children across the U.S. border to Mexico, where they reunited Minor-1 with her adult “husband” to allow him to continue his illegal sexual relationship with Minor-1.  HELBRANS and ROSNER were convicted in November 2021 following a four-week jury trial before U.S. District Judge Nelson S. Román. 

U.S. Attorney Damian Williams stated: “No mother should ever have to wake up to find her children missing.  And no child should ever be forced into a sexual relationship.  Today’s sentencings send a clear message: those who kidnap and sexually exploit children will be prosecuted and punished to the full extent of the law.”

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

NACHMAN HELBRANS and MAYER ROSNER are U.S. citizens and senior leaders of Lev Tahor, an extremist religious sect that has been located in several different jurisdictions, including New York, Israel, Canada, Mexico, and Guatemala.  HELBRANS became the leader of Lev Tahor in or about 2017 and ROSNER served as a top lieutenant.  After HELBRANS and his leadership team took over, they seized tight control over the group and embraced several extreme practices, including child marriages and underage sex.

In or about 2017, HELBRANS arranged for his then-12-year-old niece, Minor-1, to be “married” to a then-18-year-old man.  Though they were never legally married, they were religiously “married” the following year, when Minor-1 was 13 and her “husband” was 19.  Lev Tahor leadership, including HELBRANS and ROSNER, required young brides such as Minor-1 to have sex with their husbands, to tell people outside Lev Tahor that they were not married, and to lie about their ages.  For example, HELBRANS and ROSNER instructed child brides to  deliver babies inside their homes instead of at a hospital, to conceal the mothers’ young ages from outsiders.

In or about October 2018, the mother of Minor-1 determined that it was no longer safe for her children to remain in the Lev Tahor community, which was then living in Guatemala.  The mother escaped from the group’s compound and arrived in the United States in early November 2018, and was eventually joined by all six of her children, including Minor-1.  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, HELBRANS and ROSNER devised a plan to kidnap Minor-1, then 14 years old, to return her to Guatemala and to her then-20-year-old “husband.”  In December 2018, they kidnapped Minor-1 and her brother in the middle of the night from a home in upstate New York and transported them through various states and, eventually, to Mexico.  In order to carry out the kidnapping, the defendants used disguises, aliases, drop phones, fake travel documents, and an encrypted application.  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 entities, Minor-1 and Minor-2 were recovered in Mexico and returned to New York.  In or about March 2019 and March 2021, members of Lev Tahor again tried to kidnap the children but were unsuccessful.

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In addition to the prison sentences, NACHMAN HELBRANS, 40, and MAYER ROSNER, 45, were sentenced to five years of supervised release.

Mr. Williams praised the outstanding work of the FBI, the New York State Police, the Sullivan County District Attorney’s Office, United States Customs and Border Protection, the Rockland County Sheriff’s Department, the Village of Spring Valley Police Department, Special Agents with the U.S. Attorney’s Office for the Southern District of New York, the Department of State, the Transportation Security Administration, 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, Tim Foley, the Acting Special Agent-in-Charge of the New York Division of the Drug Enforcement Administration (“DEA”), and Kirk Imperati, the Acting Sheriff of the Dutchess County Sheriff’s Office, announced today the unsealing of a criminal complaint in White Plains federal court charging ALLEN PELOQUIN, a/k/a “Ace,” with distributing fentanyl-laced heroin that resulted in the death of a woman in Carmel, New York (“Victim-2”) on or about February 12, 2020 and a man in Poughkeepsie, New York (“Victim-4”) on or about May 10, 2020.  The complaint also charges PELOQUIN with participating in a narcotics conspiracy that distributed fentanyl-laced heroin that resulted in the deaths of Victims-2 and -4 as well as in the death of a man in Poughquag, New York (“Victim-1”) on or about January 2, 2020 and the death of a woman in Poughkeepsie, New York (“Victim-3”) on or about May 4, 2020.  PELOQUIN was arrested this morning in Poughkeepsie, New York, and was presented this afternoon before United States Magistrate Judge Judith C. McCarthy.

U.S. Attorney Damian Williams said: “As alleged, the defendant and others distributed heroin laced with the deadly synthetic opioid fentanyl and caused the death of four victims.  The defendant is now in custody and facing serious federal charges.  Working with our state, county, and local law enforcement partners, we will continue to hold accountable the dealers who push this lethal poison, exploit addiction, and further the devastating impact of the opioid crisis in our communities.”

DEA Acting Special Agent-in-Charge Tim Foley said: “With a daily rate of nearly 300 drug overdose deaths, it has never been more important to warn the public of the dangers of today’s illegal drugs.  Synthetic drugs like fentanyl are mixed intentionally with other street drugs causing two thirds of overdose deaths.  I applaud the diligent work by all of our law enforcement partners throughout this investigation which has led to Peloquin’s arrest.”

Acting Dutchess County Sheriff Kirk Imperati said: “The prosecution of Mr. Peloquin in connection with these tragic deaths comes as the result of the partnership between various law enforcement agencies and their strong commitment to holding those who sell drugs in our communities responsible.  Distributing illegal narcotics that take lives, and ruin others, will not be tolerated and the prosecution of Mr. Peloquin sends a strong message that law enforcement will stop at nothing to hold those who engage in this activity accountable.”

As alleged in the Complaint:[1]

From at least in or about January 2020 up to and including at least in or about May 2020, PELOQUIN and others distributed and sold fentanyl-laced heroin throughout Dutchess County in glassine bags stamped with distinctive red images and wording and were responsible for the overdose deaths of at least four individuals:  Victims-1, -2, -3 and -4.  After the deaths of Victims-1 and -2, the wording and image of the red stamp changed in an apparent effort to evade law enforcement while continuing to distribute the same lethal narcotics.  Upon further investigation by law enforcement—including several undercover purchases of fentanyl-laced heroin from PELOQUIN and certain of his co-conspirators in which the stamps on the bags purchased matched those on the bags found with Victims-1 and -2—PELOQUIN was identified as the particular dealer who sold fold fentanyl-laced heroin to Victims-2 and -4, which resulted in their deaths.

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ALLEN PELOQUIN, a/k/a “Ace,” 34, of Poughkeepsie, New York is charged with two counts of narcotics distribution resulting in the deaths of Victim-2 and Victim-4.  PELOQUIN is also charged with one count of conspiring to distribute and possess with intent to distribute fentanyl and heroin resulting in the deaths of Victims-1, -2, -3, and -4.  Each the foregoing counts carries a mandatory minimum sentence of 20 years in prison and a maximum sentence of life in prison.  The maximum potential sentences in this case are prescribed by Congress and are provided here for informational purposes only, as any sentencing of the defendant will be determined by a judge.

Mr. Williams praised the outstanding work of the DEA, the Dutchess County Drug Task Force (“DCDTF”), the Dutchess County District Attorney’s Office, the New York State Police, the Town of Kent Police Department, the City of Poughkeepsie Police Department, the Dutchess County Probation Department, and the Putnam County Sheriff’s Office.  DCDTF includes agents and officers of the Dutchess County Sheriff’s Office, the City of Beacon Police Department, the Town of Hyde Park Police Department, and the Town of East Fishkill Police Department.  Mr. Williams also thanked the Ulster County Sheriff’s Office, the Town of Lloyd Police, and the Ulster County Regional Gang Enforcement Narcotics Team (“URGENT”) for their invaluable assistance in this case.  URGENT includes agents and officers of the Ulster County Sheriff’s Office, Town of Lloyd Police, Town of Plattekill Police, Town of Woodstock Police, Town of Shandaken Police, Town of New Paltz Police, Village of Ellenville Police, Town of Marlborough Police, the Ulster County District Attorney, and Ulster County Probation.  Mr. Williams noted that the investigation is ongoing.

The case is being prosecuted by the Office’s White Plains Division.  Assistant U.S. Attorneys Michael D. Maimin and Kevin Sullivan are in charge of the prosecution.

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

 

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