Southern District of New York

Attorney General Merrick B. Garland today announced the appointment of 12 U.S. Attorneys to serve on the Attorney General’s Advisory Committee of U.S. Attorneys (AGAC). Created in 1973, the AGAC advises the Attorney General on matters of policy, procedure, and management impacting the Offices of the U.S. Attorneys and elevates the voices of U.S. Attorneys in Department policies. The first meeting of the AGAC will take place later this spring.

The appointees include U.S. Attorney Damian Williams for the Southern District of New York; U.S. Attorney Cindy K. Chung for the Western District of Pennsylvania; U.S. Attorney Darcie McElwee for the District of Maine; U.S. Attorney Trini Ross for the Western District of New York; U.S. Attorney Sandra Hairston for the Middle District of North Carolina; U.S. Attorney Brandon Brown for the Western District of Louisiana; U.S. Attorney Dawn Ison for the Eastern District of Michigan; U.S. Attorney Gregory Harris for the Central District of Illinois; U.S. Attorney Andrew Luger for the District of Minnesota; U.S. Attorney Gary Restaino for the District of Arizona; U.S. Attorney Cole Finegan for the District of Colorado; and U.S. Attorney Matthew Graves for the District of Columbia. An appointee from a district within the jurisdiction of the Eleventh Circuit of the U.S. Court of Appeals will be announced at a later date, once the Senate has confirmed nominees.

U.S. Attorney Damian Williams will serve as the Chair of the AGAC, and U.S. Attorney Cindy Chung will serve as the Vice Chair.

Attorney General Merrick B. Garland said: “These United States Attorneys will represent the views of dedicated federal prosecutors across the country, and provide advice and insight into essential matters facing the Department. I look forward to working alongside them in carrying out the Department’s core priorities of upholding the rule of law, keeping our country safe, and protecting civil rights.”

Attorney General Advisory Committee Chair Damian Williams said: “I am honored and humbled to accept Attorney General Garland’s appointment as Chair of this vital committee. I look forward to the opportunity to offer insight, along with my outstanding U.S. Attorney colleagues around the country, to continue to ensure that the rule of law is carried out fairly and equally for all Americans.”

A brief bio on each appointee is below:

Damian Williams (Chair)

The Senate confirmed Damian Williams’ appointment as U.S. Attorney for the Southern District of New York in October 2021. Williams began his legal career as a law clerk to then-Judge Merrick Garland when he served in the U.S. Court of Appeals for the District of Columbia Circuit from 2007 to 2008. Williams then served as a law clerk for Justice John Paul Stevens of the U.S. Supreme Court from 2008 to 2009. From 2009 to 2012, he was a litigation associate at Paul, Weiss, Rifkind, Wharton & Garrison. From 2012 to 2021, he served as an Assistant U.S. Attorney in the U.S. Attorney’s Office for the Southern District of New York. In the role, he served as a chief of the securities and commodities fraud task force from 2018 to 2021. He received his Bachelor of Arts in economics from Harvard University in 2002, a Master of Philosophy in international relations from Emmanuel College at the University of Cambridge in 2003, and a Juris Doctor from Yale Law School in 2007, where he was also an editor of the Yale Law Journal.

Cindy K. Chung (Vice Chair)

The Senate confirmed Cindy K. Chung’s appointment as U.S. Attorney for the Western District of Pennsylvania in November 2021. In 2002 and 2003, Chung served as a law clerk for Judge Myron H. Thompson in the Middle District of Alabama. She then joined the New York County District Attorney’s Office in 2003, serving as an assistant district attorney until 2007 and as investigation counsel in the Official Corruption Unit from 2007 to 2009. From 2009 to 2014, Chung served as a trial attorney in the U.S. Department of Justice Civil Rights Division. She later joined the U.S. Attorney’s Office for the Western District of Pennsylvania, serving as deputy chief of the major crimes division. From 2014 to 2021, she served as an Assistant U.S. Attorney. Chung earned a Bachelor of Arts from Yale University in 1997 and a Juris Doctor from Columbia Law School in 2002.

Darcie McElwee

The Senate confirmed Darcie McElwee’s appointment as U.S. Attorney for the District of Maine in October 2021. McElwee began her legal career as an assistant district attorney for the Penobscot and Piscataquis counties in Maine from 1998 to 2002. Between 2005 and 2008, McElwee was an adjunct professor of advanced trial advocacy at the University of Maine School of Law. From 2002 to 2021, she served as an Assistant U.S. Attorney in the U.S. Attorney’s Office for the District of Maine. Since 2005, she has been the coordinator of Project Safe Neighborhoods. McElwee received her Bachelor of Arts from Bowdoin College in 1995 and her Juris Doctor from the University of Maine School of Law in 1998.

Trini Ross

The Senate confirmed Trini Ross’s appointment as U.S. Attorney for the Western District of New York in September 2021. Ross began her career as an appellate attorney for the New York Supreme Court. She was an associate at Hiscock & Barclay LLC before joining the Office of Professional Responsibility as assistant counsel. From 1995 to 2018, Ross served as an Assistant U.S. Attorney for the Western District of New York. She has also been an adjunct professor of law at Buffalo Law School. She has also served as director of the investigations for the National Science Foundation Office of Inspector General since 2018. Ross earned a Bachelor of Arts degree from the State University of New York at Fredonia in 1988, a Master of Arts from Rutgers University in 1990, and a Juris Doctor from the University at Buffalo Law School in 1992.

Sandra Hairston

The Senate confirmed Sandra Hairston as U.S. Attorney for the Middle District of North Carolina in November 2021. Hairston previously served as an assistant district attorney in Columbus County, North Carolina, from 1987 to 1989 and as a special assistant district attorney in Guilford County, North Carolina from 1989 to 1990. From 1994 to 1996, she served as Chief of the Criminal Division of the U.S. Attorney’s Office for the Eastern District of North Carolina before returning to the Middle District of North Carolina in 1996. She joined the U.S. Attorney’s Office for the Middle District of North Carolina in 1990 as an Assistant U.S. Attorney. Hairston previously held the position of First Assistant U.S. Attorney for the Middle District of North Carolina from 2014 to 2021. From March 1, 2021, until her Senate confirmation, she served as the Acting U.S. Attorney for the Middle District of North Carolina. Hairston received her Bachelor of Arts from the University of North Carolina at Charlotte in 1981 and her Juris Doctor from North Carolina Central University School of Law in 1987.

Brandon Brown

The Senate confirmed Brandon Brown as U.S. Attorney for the Western District of Louisiana in December 2021. From 2007 to 2012, Brown served as an assistant prosecuting attorney in the Ouachita Parish District Attorney’s Office. He was also an associate at Hammonds, Sills, Adkins & Guice LLP in Baton Rouge, Louisiana. Since 2012, he has served as an Assistant U.S. Attorney in the U.S. Attorney’s Office for the Western District of Louisiana. Brown earned a Bachelor of Arts in 2002 and a Master of Business Administration in 2004 from Louisiana Tech University, followed by a Juris Doctor in 2007 from the Southern University Law Center.

Dawn Ison

The Senate confirmed Dawn Ison as U.S. Attorney for the Eastern District of Michigan in December 2021. In 1989 and 1990, Ison was a prehearing attorney for the Michigan Court of Appeals. In 2002, Ison began serving as an Assistant U.S. Attorney in the U.S. Attorney’s Office for the Eastern District of Michigan. She also served as chief of the Drug Enforcement Task Force Unit. Ison earned a Bachelor of Arts from Spelman College and a Juris Doctor from the Wayne State University Law School.

Gregory Harris

The Senate confirmed Gregory Harris as U.S. Attorney for the Central District of Illinois in December 2021. Harris began his career as a lawyer for the Office of the State Appellate Defender in 1976 where he represented indigent criminal defendants on appeal. From 1979 to 1980, he served as legal counsel for the Illinois Governor’s Office of Manpower and Human Development and later as a staff attorney for the Illinois Department of Commerce and Community Development. From 1980 to 1988, he served as an Assistant U.S. Attorney in the U.S Attorney’s Office for the Central District of Illinois. From 1988 to 2001, he was a lawyer for Giffin, Winning, Cohen & Bodewes in Springfield, Illinois. He later rejoined the Central District of Illinois in 2001, where he served as chief of the Criminal Division and Assistant U.S. Attorney. Harris was born in Washington, D.C. He earned a Bachelor of Arts degree from Howard University in 1971 and a Juris Doctor from the University of Illinois Chicago School of Law in 1976.

Andrew Luger

The Senate confirmed Andrew Luger as the U.S. Attorney for the District of Minnesota in March 2022. He previously served in that role during the Obama administration and briefly during the Trump administration from 2014 to 2017. Prior to his appointment, Luger was a partner in the Minneapolis office of Jones Day from 2017 – 2022. Luger has also served as an Assistant U.S. Attorney for the Eastern District of New York, from 1989 to 1992, and for the District of Minnesota from 1992 to 1995, where he prosecuted a wide variety of narcotics and violent crimes, as well as complex white collar frauds. In 1995, Luger joined the law firm of Greene Espel in Minneapolis, where he was a partner until 2014. Luger earned a Bachelor’s degree from Amherst College and a Juris Doctor from Georgetown University Law Center.

Gary Restaino

The Senate confirmed Gary Restaino as U.S. Attorney for the District of Arizona in November 2021. From 1991 to 1993, Restaino served in Paraguay with the Peace Corps. From 1996 to 1999, he provided legal services to seasonal farm workers as a lawyer with Community Legal Services. From 1999 to 2003, he served as a civil rights lawyer in the Arizona Attorney General's Office. He then served as a trial attorney in the Public Integrity Section of the U.S. Department of Justice’s Criminal Division. Restaino joined the U.S. Attorney's Office for the District of Arizona in 2003. He was nominated to serve as U.S. Attorney in October 2021. Restaino earned a Bachelor of Arts degree from Haverford College in 1990 and a Juris Doctor from the University of Virginia School of Law in 1996.

Cole Finegan

The Senate confirmed Cole Finegan as U.S. Attorney for the District of Colorado in November 2021. From 1991 to 1993, Finegan served both as Chief Legal Counsel and Director of Policy and Initiatives for Colorado Governor Roy Romer. From 1993 to 2003, Finegan was a partner for Brownstein Hyatt Farber Schreck’s Denver office. Finegan joined Hogan Lovells (then Hogan & Hartson) in 2007 as a partner. Finegan acted as an adviser to Governor Hickenlooper and U.S. Senator Michael Bennet. Finegan attended the University of Notre Dame from 1974 to 1978, earning a degree in English. Finegan earned a Juris Doctor from Georgetown University Law Center in 1986.

Matthew Graves

The Senate confirmed Matthew Graves as U.S. Attorney for the District of Columbia in October 2021. After graduating law school, Graves began his legal career as a law clerk for Judge Richard W. Roberts of the U.S. District Court for the District of Columbia. From 2002 to 2007, he was an associate at WilmerHale. From 2007 to 2016, Graves worked as an Assistant U.S. Attorney in the District of Columbia, where he served in the office’s fraud and public corruption section, ultimately serving as the acting chief of the section. Since 2016, he has been a partner at DLA Piper. Graves earned a Bachelor of Arts degree from Washington and Lee University in 1998 and a Juris Doctor from Yale Law School in 2001.

Damian Williams, the United States Attorney for the Southern District of New York, and Patrick Freaney, Special Agent-in-Charge of the New York Field Office of the United States Secret Service (“USSS”), announced the indictment of UWEMEDIMO UMOREN in connection with his role in a fraud and money laundering conspiracy based in Nigeria, involving the theft of millions of dollars from victims across the United States.  UMOREN was previously arrested in Georgia on December 17, 2021.  

U.S. Attorney Damian Williams said:  “Uwemedimo Umoren, as alleged, was a member of a multimillion-dollar fraud enterprise built on the cruel exploitation of elder adults. Among other tactics, members of Umoren’s prolific fraud scheme posed as romantic interests to their victims, with the sole purpose of syphoning their bank accounts. We thank our outstanding law enforcement partners at the United States Secret Service for their continued vigilance in the effort to protect elder Americans from fraud.”      

Secret Service Special Agent-in-Charge Patrick Freaney said:  “As alleged, the defendant participated in multiple fraud schemes, including romance and investment scams that targeted some of our most vulnerable community members, the elderly.  While the defendant in this case will answer the charges brought against him in the Southern District of New York, the threat posed by those who seek to financially victimize the elderly persists.  Although elder fraud endures, the U.S. Secret Service remains vigilant in identifying and investigating those who wish to defraud the elder population out of their retirements and savings.”

According to allegations in the criminal complaint and the indictment filed against UMOREN:[1]

From at least in or about 2016 through at least in or about December 2021, the defendant was a member of a criminal enterprise (the “Enterprise”) based in Nigeria that committed a series of business email compromises and investment and romance scams against individuals and businesses located across the United States.  The objective of the Enterprise’s business email compromise fraud scheme was to trick and deceive businesses and individuals into wiring funds into accounts controlled by the Enterprise through the use of email accounts that “spoofed” or impersonated employees of a victim company or third parties engaged in business with a victim company.  The Enterprise conducted the investment scams by contacting victims by phone and email regarding purported investment opportunities that the members of the Enterprise said could generate millions of dollars in returns.  Finally, the Enterprise conducted the romance scams by using electronic messages sent via email, text messaging, or online dating websites that deluded victims, many of whom were vulnerable older men and women who lived alone, into believing the victim was in a romantic relationship with a fake identity assumed by members of the Enterprise.  Once members of the Enterprise had gained the trust of the victims, they used false pretenses to cause the victims to transfer money to bank accounts controlled by members of the Enterprise.

UMOREN received fraud proceeds from victims of the Enterprise in more than a dozen business bank accounts that he controlled in Georgia.  The business bank accounts were opened in the names of companies formed by the defendant that were purportedly involved in, among other things, automobile sales and health care.  From in or about 2016 through at least in or about December 2021, UMOREN controlled at least 15 bank accounts that received deposits totaling over approximately $8 million. 

Once UMOREN received fraud proceeds in bank accounts under his control, he withdrew, transported, and laundered those fraud proceeds to other members of the Enterprise abroad.  The defendant laundered the fraud proceeds through his businesses by, among other things, using the proceeds to purchase automobiles and other goods from U.S.-based suppliers and distributors of such products and shipping those products to Nigeria and elsewhere.  The defendant’s transactions had the appearance of legitimate business transactions when, in fact, the products had been purchased using the proceeds of fraud schemes.  This trade-based money laundering scheme was designed to obscure the origin of the fraud proceeds as well as the identity of the ultimate beneficiaries of these schemes. 

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UWEMEDIMO UMOREN, 60, of Hoschton, Georgia, is charged with one count of conspiracy to commit wire fraud and one count of conspiracy to commit money laundering, which each carry a maximum sentence of 20 years in prison; and one count of conspiracy to receive stolen money, which carries a maximum sentence of five years in prison.  The case is assigned to U.S. District Judge Victor Marrero.

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

Mr. Williams praised the outstanding investigative work of the USSS.  Mr. Williams also thanked the USSS Field Office in Atlanta, Georgia, for its assistance in the investigation of this case.

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

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

Damian Williams, the United States Attorney for the Southern District of New York, announced that FREEMAN CELVIN, a/k/a “Celvin Freeman,” was convicted today of all seven criminal counts he was charged with for his participation in a fraud and money laundering conspiracy based in the Republic of Ghana (“Ghana”) involving the theft of millions of dollars.  CELVIN was convicted after a jury trial before U.S. District Judge Jed S. Rakoff which lasted approximately one week.  CELVIN was previously arrested on February 17, 2021 and has been detained since his arrest.  

U.S. Attorney Damian Williams said:  “As today’s jury verdict reflects, Freeman Celvin used an auto business in New Jersey as a front to launder millions of dollars in fraud proceeds to online scam artists in Ghana.  The online scams perpetrated by Celvin’s partners in Ghana were lucrative and callous, as they targeted vulnerable, elderly men and women and tricked them into transferring their life savings to the defendant, who then took his laundering fee and sent the money abroad.  Together with our law enforcement partners, we will continue to zealously prosecute online scammers abroad and the U.S.-based money launderers they work in order to protect American victims from these scams.”    

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

From in or about 2014 through in or about February 2021, a criminal enterprise (the “Enterprise”) based in Ghana committed a series of business email compromises and romance scams against individuals and businesses located across the United States, including in the Southern District of New York.  First, the objective of the Enterprise’s business email compromise fraud scheme was to trick and deceive businesses into wiring funds into accounts controlled by the Enterprise through the use of email accounts that “spoofed” or impersonated employees of a victim company or third parties engaged in business with a victim company.  Second, the Enterprise conducted the romance scams by using electronic messages sent via email, text messaging, or online dating websites that deluded victims, many of whom were vulnerable older men and women who lived alone, into believing the victim was in a romantic relationship with a fake identity assumed by members of the Enterprise.  Once members of the Enterprise had gained the trust of the victims using the fake identity, they used false pretenses to cause the victims to wire money to bank accounts the victims believed were controlled by their romantic interests, when in fact the bank accounts were controlled by members of the Enterprise like CELVIN. 

CELVIN received fraud proceeds from victims of the Enterprise in personal bank accounts as well as business bank accounts for his company Freeman Autos LLC, a company purportedly involved in, among other things, automobile sales.  The defendant also received fraud proceeds from other U.S.-based members of the Enterprise either by wire transfer or cash deliveries.  Once CELVIN received fraud proceeds, he took out a percentage fee and then withdrew, transported, and laundered those fraud proceeds to other members of the Enterprise abroad in Ghana.  The defendant primarily laundered the fraud proceeds by using the proceeds to purchase automobiles and other goods and shipping those products to Ghana and elsewhere.  The defendant’s transactions had the appearance of legitimate business transactions when, in fact, the products had been purchased using the proceeds of fraud schemes.  This trade-based money laundering scheme was designed to obscure the origin of the fraud proceeds as well as the identity of the ultimate beneficiaries of these schemes. 

From in or about 2016 through in or about 2021, CELVIN controlled more than eight bank accounts that had deposits that totaled over approximately $5.7 million during that time period.  A vast majority of the deposits consisted of large wire transfers and check or cash deposits from U.S.-based individuals and entities that were victims of fraud schemes of the Enterprise.   

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CELVIN, 48, of East Orange, New Jersey, was convicted by a jury of one count of conspiracy to commit wire fraud, one count of wire fraud, and one count of conspiracy to commit money laundering, which each carry a maximum sentence of 20 years in prison; one count of receipt of stolen money, which carries a maximum sentence of 10 years in prison; one count of conspiracy to receive stolen money, one count of conspiracy to operate an unlicensed money transmitting business, and one count of operating an unlicensed money transmitting business, each of which carries a maximum sentence of five years in prison.

CELVIN is scheduled to be sentenced before Judge Rakoff on July 20, 2022 at 4:00 p.m.

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

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

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

A Chinese national is charged in a criminal complaint, which was unsealed today in the Southern District of New York, with conspiring to act in the United States as an illegal agent of the People’s Republic of China (PRC).

According to court documents, Sun Hoi Ying, aka Sun Haiying, 45, of the PRC, from at least February 2017 through February 2022, acted in the United States as an agent of the PRC government, without notifying the U.S. Attorney General as required by law.

“This case demonstrates, once again, the PRC’s disdain for the rule of law and its efforts to coerce and intimidate those it targets on our shores as part of its Operation Fox Hunt,” said Assistant Attorney General for National Security Matthew G. Olsen. “The defendant allegedly traveled to the United States and enlisted others, including a sworn law enforcement officer, to spy on and blackmail his victims. Such conduct is both criminal and reprehensible.”

“The PRC government launched a campaign dubbed ‘Operation Fox Hunt,’ a global plot to repress dissent and to forcibly repatriate so-called ‘fugitives’ – including citizens living legally in the United States – through the use of unsanctioned, unilateral and illegal practices,” said U.S. Attorney Damian Williams for the Southern District of New York. “We allege Mr. Sun, as part of that campaign, attempted to threaten and coerce a victim into bending to the PRC’s will, even using a co-conspirator who is a member of U.S. law enforcement to reinforce that the victim had no choice but to comply with the PRC government’s demands. Today’s charges reflect this office’s continued commitment, working hand in hand with our partners at the FBI, to combat transnational repression and bringing to justice those who perpetrate it.”

“The Chinese government takes advantage of our freedoms — freedoms they deny their own citizens — to advance their authoritarian regime, and calls uncomfortable truths about their behavior rumors and lies,” said Assistant Director Alan E. Kohler Jr. of the FBI’s Counterintelligence Division. “There’s nothing false about seeing example after example of the Chinese government’s underhanded and illegal behavior here in the United States. I urge anyone to contact the FBI if you feel you’re a victim of the Chinese government’s illegal Fox Hunt activities.”

“As alleged, Sun Hoi Ying, acting at the direction of the PRC government, engaged in a range of activities designed to pressure individuals in the United States to return to the PRC to face charges brought by the Chinese government,” said Assistant Director in Charge Michael J. Driscoll of the FBI’s New York Field Office. “Our commitment to protecting the freedoms enjoyed by all United States residents is steadfast. Today's action is the latest example of our unwavering determination to combat transnational repression in all its forms.”

According to court documents, the FBI has been involved in an investigation of individuals who, working at the direction of the PRC government, have engaged in an international campaign, known alternatively as “Operation Fox Hunt” and “Operation Skynet,” to pressure individuals located in the United States and elsewhere to return to the PRC to face charges or to otherwise reach financial settlements with the PRC government.

As alleged, from approximately October 2016 through May 2017, Sun conducted operations in the United States on behalf of the PRC government to pressure, threaten and collect personal information regarding victims of Operation Fox Hunt. Among other things, as part of his operations and at the direction of the PRC government, Sun hired private investigators in the United States to gather personal information on Operation Fox Hunt targets, labeled as “fugitives” by the PRC government and provided some of that information to the PRC government.

According to the complaint, Sun provided 35 names to a private investigator (P.I.-1) working at a U.S. company (Firm-1) of individuals described as PRC fugitives, including Victim-1, who is a U.S. citizen that previously lived in the PRC, worked at a PRC-owned company, and was subsequently accused by the PRC government of embezzlement. As alleged, P.I.-1 conducted surveillance at Victim-1’s home and provided a report to Firm-1 and Sun. By June 2018, the PRC government had publicly disseminated personal identifying information of Victim-1 – including case details, a photograph and home address – on PRC-based news media websites.

While Sun was collecting information about Victim-1 for the PRC government, Victim-1’s daughter (Victim-2), who is a U.S. citizen and was pregnant at the time, was held against her will in the PRC for approximately eight months. In or about October 2016, Victim-2, her spouse and her minor child attempted to leave the PRC to return to the United States. However, Victim-2 was told by PRC customs officials and a PRC prosecutor (Prosecutor-1) that she could not leave and was subject to an “exit ban.” While Victim-2’s spouse and minor child were able to return to the United States, Victim-2 was told that, since Victim-1 had committed a crime, the “exit ban” on Victim-2 was a consequence of Victim-1’s fugitive status. The PRC prosecutor further told Victim-2: (1) that she would not be permitted to leave the PRC until she helped cause Victim-1 to return to the PRC to resolve Victim-1’s criminal case; (2) that Victim-2 was not to discuss the “exit ban” with the U.S. government; and (3) that the U.S. Embassy was helpless to address Victim-2’s status in the PRC. When Victim-2 explained to Prosecutor-1 that she was pregnant and wished to deliver her baby in the United States, Prosecutor-1 told Victim-2 she would deliver her baby in the PRC if the conditions were not yet met for the “exit ban” to be lifted.

According to the complaint, on or about Dec. 1, 2019, Sun also sought out, located and met with an Operation Fox Hunt target (Victim-3), in New York City, in coordination with a co-conspirator who is a local U.S. law enforcement officer. During the meeting, Sun threatened and pressured the victim, including by threatening that the PRC government would take certain adverse and retaliatory actions if the victim did not comply with the demands of the PRC government.

Sun is charged with one count of conspiring to act as an agent of a foreign government without notifying the Attorney General, which carries a maximum sentence of five years in prison, and one count of acting as an agent of a foreign government without notifying the Attorney General, which carries a maximum sentence of 10 years in prison. A federal district court judge will determine any sentence after considering the U.S. Sentencing Guidelines and other statutory factors.

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

The FBI’s New York Field Office is investigating the case.

A complaint 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, 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 Complaint charging SUN HOI YING, a/k/a “Sun Haiying” (“SUN”), a citizen of the People’s Republic of China (“PRC”), with acting and conspiring to act in the United States as an unregistered agent of the PRC Government. SUN is at large in China.

U.S. Attorney Damian Williams said: “The PRC Government launched a campaign dubbed ‘Operation Fox Hunt,’ a global plot to repress dissent and to forcibly repatriate so-called ‘fugitives’ – including citizens living legally in the United States – through the use of unsanctioned, unilateral, and illegal practices. We allege Mr. Sun, as part of that campaign, attempted to threaten and coerce a victim into bending to the PRC’s will, even using a co-conspirator who is a member of local U.S. law enforcement to reinforce that the victim had no choice but to comply with the PRC Government’s demands. Today’s charges reflect this Office’s continued commitment, working hand in hand with our partners at the FBI, to combat transnational repression and bring to justice those who perpetrate it.”

Assistant Attorney General Matthew G. Olsen said: “This case demonstrates, once again, the PRC’s disdain for the rule of law and its efforts to coerce and intimidate those it targets on our shores as part of its Operation Fox Hunt. The defendant allegedly traveled to the United States and enlisted others, including a sworn law enforcement officer, to spy on and blackmail his victims. Such conduct is both criminal and reprehensible.”

FBI Assistant Director-in-Charge Michael J. Driscoll said: “As alleged, Sun Hoi Ying, acting at the direction of the PRC government, engaged in a range of activities designed to pressure individuals in the United States to return to the PRC to face charges brought by the Chinese government.  Our commitment to protecting the freedoms enjoyed by all United States residents is steadfast.  Today's action is the latest example of our unwavering determination to combat transnational repression in all its forms.”

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

The FBI has been involved in an investigation of individuals who, working at the direction of the PRC Government, have engaged in an international campaign, known alternatively as “Operation Fox Hunt” and “Operation Skynet,” to pressure individuals located in the United States and elsewhere outside the PRC to return to the PRC to face charges brought by the PRC Government or to otherwise reach financial settlements with the PRC Government.

From at least approximately February 2017 to February 2022, SUN acted in the United States as an agent of the PRC Government, without notifying the U.S. Attorney General as required by law. In particular, SUN conducted operations in the United States on behalf of the PRC Government to pressure, threaten, and collect personal information regarding victims of Operation Fox Hunt. Among other things, as part of his operations at the direction of the PRC Government, SUN hired private investigators in the United States to gather personal information on Operation Fox Hunt targets, labeled as “fugitives” by the PRC Government, and provided some of that information to the PRC Government.

For example, at the direction of the PRC Government, SUN used private investigators to conduct surveillance and collect personal information of a U.S. citizen (“Victim-1”) located in New York City who was a target of Operation Fox Hunt.  Personal identifying information of Victim-1 collected by SUN, including Victim-1’s home address and photograph, was later published by the PRC Government in a list of Operation Fox Hunt targets.  During the time SUN was collecting information about Victim-1 for the PRC Government, Victim-1’s daughter (“Victim-2”), a U.S. citizen who was pregnant at the time, was held against her will in the PRC for approximately eight months.  PRC Government representatives told Victim-2 not to request help from the U.S. Government and that she would not be permitted to leave the PRC until Victim-2 helped cause Victim-1 to return to the PRC.

SUN also sought out, located, and met with another Operation Fox Hunt target (“Victim-3”) in New York City, in coordination with a co-conspirator who is a local U.S. law enforcement officer. During those meetings, SUN threatened and pressured Victim-3, including by threatening that the PRC Government would take certain adverse and retaliatory actions if Victim-3 did not comply with the demands of the PRC Government.

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SUN, 53, of China, is charged with one count of conspiring to act as an agent of a foreign government without notifying the Attorney General, which carries a maximum sentence of five years in prison, and one count of acting as an agent of a foreign government without notifying the Attorney General, which carries a maximum sentence of ten years in prison. The maximum potential sentences are prescribed by Congress and are provided here for informational purposes only, as any sentencing of the defendant will be determined by a judge.

Mr. Williams praised the outstanding investigative work of the 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.

The case is being handled by the Office’s National Security and International Narcotics Unit. Assistant U.S. Attorneys Matthew J.C. Hellman 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 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 Complaint, and the description of the Complaint set forth herein, constitute only allegations, and every fact described should be treated as an allegation.

Damian Williams, the United States Attorney for the Southern District of New York, announced that VANIA MAY BELL, the former comptroller and chief compliance officer of Executive Compensation Planners, Inc. (“ECP”), a registered investment adviser and financial planning firm located in New City, New York, pled guilty to participating in a conspiracy with her father, Hector May, the former president of ECP, to defraud certain investment advisory clients (the “Victims”) out of more than $11 million.  BELL pled guilty before U.S. Magistrate Judge Judith C. McCarthy.

U.S. Attorney Damian Williams said: “As Vania May Bell admitted, for years, she and her father, Hector May, violated the trust of ECP’s clients by taking their money intended for investments and instead spending it for personal and business expenses as part of an illegal Ponzi scheme.  In total, Bell and May stole more than $11 million from over 15 victims that included a pension plan, and vulnerable and elderly individuals.  Now, she has confessed to her crime and faces significant time in prison.”

According to Count One of the Indictment, to which BELL pled guilty, and other statements and submissions in made in Court:          

Beginning in 1982, May was the president of ECP and provided financial advisory services to numerous clients. In 1993, BELL joined ECP, where she held various titles including comptroller and chief compliance officer.  ECP worked with a broker dealer (“Broker Dealer-1”), of which May became a registered representative in 1994.  In its role as a broker dealer, Broker Dealer-1 facilitated the buying and selling of securities for clients of Broker Dealer-1’s registered representatives, including clients of May.  Broker Dealer-1 and associated clearing firms maintained securities accounts for ECP’s clients and, through those accounts, held ECP’s clients’ money, executed their securities trades, produced account statements reflecting activity in the clients’ accounts, and forwarded these account statements to ECP’s clients. 

In order to obtain money from the Victims’ securities accounts with Broker Dealer-1, May advised the Victims, among other things, that they should use money from those accounts to have ECP, rather than Broker Dealer-1, purchase bonds on their behalf.  He further represented that by purchasing bonds through ECP directly, the Victims could avoid transaction fees.  Because May lacked the authority to withdraw money directly from the Victims’ accounts with Broker Dealer-1, he persuaded the Victims to withdraw the money themselves and to forward that money to an ECP “custodial” account (the “ECP Custodial Account”), so that he could use the money to purchase bonds on their behalf. 

With BELL’s assistance, May guided the Victims, first, to withdraw their money from their Broker Dealer-1 accounts, and second, to send that money to the ECP Custodial Account by wire transfer or check.  At times, May falsely represented that the funds being withdrawn from Victims’ Broker Dealer-1 accounts were the proceeds of prior bond purchases May had made.  After the Victims sent their money to the ECP Custodial Account, May and BELL did not use the money to purchase bonds.  Instead, BELL and May transferred the money to ECP’s “operating” account and spent it on business expenses, personal expenses, and to make payments to certain Victims in order to perpetuate the scheme and conceal the fraud. 

Specifically, in some cases, BELL and May used Victims’ funds to make purported bond interest payments to other Victims.  In other cases, May used Victims’ funds to make payments to other Victims who wished to withdraw funds from their accounts.  BELL and May also created phony “consolidated” account statements that they issued through ECP and sent to the Victims.  These “consolidated” account statements purported to reflect the Victims’ total portfolio balances and included the names of bonds May falsely represented that he purchased for the Victims and the amounts of interest the Victims were supposedly earning on the bonds.  In order to create the phony consolidated account statements, May provided BELL with bond names and false interest earnings, and BELL created ECP computerized account statements and had them distributed to the Victims.

To keep track of the money that the co-conspirators were taking from the Victims, BELL processed the Victims’ payments for the purported bonds, entered them in a computerized accounting program, and, through that program, kept track of how BELL and May received and spent the Victims’ stolen money.  In this way, from the late 1990’s through March 9, 2018, BELL and May induced Victims to forward them more than $11,400,000.

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BELL, 57, of Montvale, New Jersey, pled guilty to one count of conspiracy to commit wire fraud, which carries a maximum sentence of 20 years in prison and a maximum fine of $250,000 or twice the gross gain or loss from the offense. Sentencing before Judge Nelson S. Román has been scheduled for July 7, 2022.

May, who pled guilty in a separate case in December 2018, to charges of conspiracy to commit wire fraud and investment advisor fraud, was sentenced on July 31, 2019, to thirteen years in prison.  He was also ordered to serve three years of supervised release, pay $8,041,233 in restitution and forfeit $11,452,185.  

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 U.S. Postal Inspection Service, Special Agents of the United States Attorney’s Office, and the Federal Bureau of Investigation.

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

Damian Williams, the United States Attorney for the Southern District of New York, announced that ERIC SPENCER, was convicted yesterday for his participation in a robbery of a luxury retail store in New York, New York on February 2, 2021. SPENCER was convicted after a one-week jury trial before U.S. District Judge Gregory H. Woods.

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

On February 2, 2021, SPENCER robbed a Chanel store located in the SoHo neighborhood in Manhattan. SPENCER and three other co-conspirators entered the store and began ripping handbags off the cables that secured them to store displays. When an armed security guard confronted SPENCER, he reached into his waistband and intimated he had a firearm, causing store personnel to back off as the perpetrators made off with over $200,000 in luxury goods.

In the days after the robbery, SPENCER took photos of the stolen bags on his phone, bragged on his social media account about acquiring so many bags he “COULD OPEN A SMALL BOUTIQUE,” and sent text messages confirming he had sold the stolen merchandise.

Spencer fleeing the scene of the SoHo store robbery with stolen merchandise in his hands

 

A photo taken by Spencer of a bag stolen in the robbery

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SPENCER, 30, of Brooklyn, New York, was convicted by a jury of one count of conspiracy to commit Hobbs Act robbery and one count of Hobbs Act robbery. The maximum potential sentence for each count is 20 years in prison and is provided here for informational purposes only, as the sentencing of the defendant will be determined by the judge. Sentencing is scheduled before Judge Woods for June 30, 2022.

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

The prosecution of this case is being handled by the Office’s General Crimes Unit.  Assistant United States Attorneys Jane Y. Chong, Abigail S. Kurland, and Matthew R. Shahabian are in charge of the prosecution.

Damian Williams, the United States Attorney for the Southern District of New York, and Ricky Patel, Acting Special Agent in Charge of the New York Field Office of Homeland Security Investigations (“HSI”), announced today that STANISLAV TUNKEVIC, of Lithuania, was extradited to the United States on bank fraud and money laundering offenses arising from a scheme to launder money derived from an online vehicle sale scam that took in at least $3.5 million from defrauded consumers.  VLADISLAV NECEAEV, of Brooklyn, New York, recently pled guilty to conspiracy to commit bank fraud in connection with the same scheme.

U.S. Attorney Damian Williams said:  “This case is another reminder that while the Internet has often been a force for the public good, it has also been used by criminals to swindle the unwary.  But online fraudsters who hide behind the anonymity of the Internet still need co-conspirators like Tunkevic and Neceaev, who are willing to launder the loot.  This Office is committed to rooting out both the online scammers and their enablers.”

HSI Acting Special Agent-in-Charge Ricky Patel said:  “As alleged, Tunkevic and Neceaev laundered money for a group of fraudsters that preyed on innocent victims who were simply looking to buy a used car online; an act so common that it allowed the group of crooks to pocket millions off this elaborate scheme from unsuspecting customers.  With the use of Tunkevic and Neceaev’s money laundering services, their criminal partners used fictitious websites to lure victims to fraudulent dealerships, all to profit off the backs of hard-working people looking to make a legitimate purchase.  HSI New York’s El Dorado Task Force coordinated efforts with HSI’s Attaché office in the Hague to assist with this extradition and will work tirelessly to identify and prosecute all co-conspirators that perpetuated this consumer fraud and money laundering scheme.”

As alleged in the Complaint and the Indictments,[1] and based on statements made in court:    

From at least March 2019 through approximately March 2021, STANISLAV TUNKEVIC and VLADISLAV NECEAEV were members of a money laundering crew operating from Brooklyn that was coordinated by NECEAEV’s mother and co-defendant, Natalia Korzha.  Members of that crew, including TUNKEVIC and NECEAEV, opened numerous bank accounts in the name of shell companies for the purpose of laundering money stolen from consumers who were trying to buy vehicles online, in exchange for a cut of the victims’ money.  Other members of the conspiracy, pretending to represent car dealerships, advertised vehicles that they did not own and were not authorized to sell on fake websites with domain names that sounded like legitimate car dealerships, or through online marketplaces like Craigslist and eBay.  Victims who responded to those advertisements and negotiated a purchase price were instructed by the purported sellers to wire payment to accounts that TUNKEVIC, NECEAEV, and other co-conspirators opened.  Once the payments cleared, the account owners, including TUNKEVIC and NECEAEV, quickly withdrew the funds before the victims realized they had been defrauded.  The victims never received the vehicles they thought they had bought or any refunds from the fake sellers.  In total, dozens of victims were defrauded of a total of at least $3.5 million. 

TUNKEVIC was presented today in Manhattan federal court before United States Magistrate Judge Sarah Cave.

NECEAEV pled guilty to one count of conspiracy to commit bank fraud on March 14, 2022, before Magistrate Judge Robert W. Lehrburger.

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STANISLAV TUNKEVIC, 47, of Lithuania, was extradited to the United States on March 25, 2022.  TUNKEVIC is charged with one count of conspiracy to commit bank fraud and one count of conspiracy to commit money laundering. 

VLADISLAV NECEAEV, 28, of Brooklyn, New York, pled guilty to one count of conspiracy to commit bank fraud on March 14, 2022.

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

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

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

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

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

Damian Williams, the United States Attorney for the Southern District of New York, announced today that ERIN VERESPY was sentenced to 66 months in prison for her participation in a widespread, $33 million scheme to misappropriate client healthcare funds and defraud multiple lenders through her role as the Chief Financial Officer of Employee Benefit Solutions LLC (“EBS”), an insurance firm located in Wilton, Connecticut. VERESPY previously pled guilty before U.S. District Judge Cathy Seibel, who imposed today’s sentence.

U.S. Attorney Damian Williams said:  “For nearly two years, Erin Verespy helped manage a sophisticated, widespread scheme to steal millions of dollars of client healthcare funds, including with false and inflated invoices. As part of that scheme, Verespy also defrauded lenders out of millions. In doing so, she abused a position of trust as a fiduciary of client money that was meant to pay for important healthcare expenses. Thanks to the coordinated and tireless efforts of our law enforcement partners to untangle this fraud, Verespy will now serve a significant sentence in federal prison.”

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

From at least July 2017 and continuing through 2019, ERIN VERESPY served as the CFO of EBS, which offered a variety of healthcare insurance-related services to clients. EBS, among other things, provided third party healthcare claims administration (“TPA”) services to clients that elected to “self-fund” (or self-insure) their employee healthcare plans. As a TPA, EBS would purportedly administer, process, and pay healthcare claims for its clients’ employees in exchange for an administrative fee.

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

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

EBS, through VERESPY and her co-conspirators, made decisions on what few Company-1 healthcare claims they did pay based on which healthcare providers were likely to complain if they did not receive payment, or if the claims were connected to Company-1 executives. VERESPY, for example, discussed the timing of payments for Company-1 “VIPs” as well as a “Not VIP” claim that was nonetheless the subject of complaining phone calls.

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

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

In addition to the prison term, ERIN VERESPY, 50, of Trumbull, Connecticut, was sentenced to 5 years of supervised release. The Court also ordered VERESPY to pay $16,053,508.19 in restitution and forfeit $1,066,038.02. On April 14, 2021, VERESPY pled guilty to one count of conspiracy to commit wire fraud and bank fraud, in violation of Title 18, United States Code, Section 1349. 

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

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

Damian Williams, the United States Attorney for the Southern District of New York, Thomas Fattorusso, Special Agent in Charge of the New York Field Office of the Internal Revenue Service, Criminal Investigation (“IRS-CI”), Ricky J. Patel, the Acting Special Agent-in-Charge of the New York Field Office of the Department of Homeland Security (“HSI”), and Daniel B. Brubaker, Inspector-in-Charge of the New York Office of the U.S. Postal Inspection Service (“USPIS”), announced that  ETHAN NGUYEN, a/k/a “Frostie,” a/k/a “Jakefiftyeight,” a/k/a “Jobo,” a/k/a “Joboethan,” a/k/a “Meltfrost,” and ANDRE LLACUNA, a/k/a “heyandre,” were charged in a criminal complaint with conspiracy to commit wire fraud and conspiracy to commit money laundering, in connection with a million-dollar scheme to defraud purchasers of NFTs advertised as “Frosties.”  Rather than providing the benefits advertised to Frosties NFT purchasers, NGUYEN and LLACUNA transferred the cryptocurrency proceeds of the scheme to various cryptocurrency wallets under their control.  Prior to their arrests in Los Angeles, California, NGUYEN and LLACUNA were preparing to launch the sale of a second set of NFTs advertised as “Embers,” which was anticipated to generate approximately $1.5 million in cryptocurrency proceeds. 

U.S. Attorney Damian Williams said: “NFTs have been around for several years, but recently mainstream interest has skyrocketed. Where there is money to be made, fraudsters will look for ways to steal it. As we allege, Mr. Nguyen and Mr. Llacuna promised investors the benefits of the Frosties NFTs, but when it sold out, they pulled the rug out from under the victims, almost immediately shutting down the website and transferring the money. Our job as prosecutors and law enforcement is to protect investors from swindlers looking for a payday.”

IRS-CI Special Agent-in-Charge Thomas Fattorusso said: “NFTs represent a new era for financial investments, but the same rules apply to an investment in an NFT or a real estate development. You can’t solicit funds for a business opportunity, abandon that business and abscond with money investors provided you. Our team here at IRS-CI and our partners at HSI closely track cryptocurrency transactions in an effort to uncover alleged schemes like this one.”

HSI Acting Special Agent-in-Charge Ricky J. Patel said: “The trending market and demand for NFT investments has not only drawn the attention of real artists, but scam artists as well.  The arrested thieves allegedly hid behind online identities where they promised investors rewards, giveaways, and exclusive opportunities before implementing their ‘rug pull’ scheme – leaving investors with empty pockets and no legitimate investment. HSI New York’s Dark Web & Cryptocurrency Task Force worked closely with our IRS-CI partners to identify and shut down these fraudsters as they prepared to launch the sale of yet another NFT project that would have likely scammed countless others.”

USPIS Inspector-in-Charge Daniel B. Brubaker said: “The rise and popularity of various cryptocurrencies have changed the landscape of buying and selling investments, leading to ample opportunities for new fraud schemes. Today’s arrests involved Non-Fungible Tokens (“NFTs"), opening the door to alternative investment options and substantial risk. These assets may seem like a good deal or a way to become wealthy, but in many cases, as in this situation, only lead to the loss of your money. Postal Inspectors will pursue fraudsters with our law enforcement partners in any consumer market and advise consumers to pursue emerging investment trends with diligence and skepticism."

As alleged in the Complaint[1]:

Since in or about January 2022, IRS-CI and HSI have been investigating a NFT fraud scheme based on reports from purchasers of Frosties utility NFTs[2] that they had been defrauded in what is colloquially referred to as a “rug pull.”  As the term suggests, a “rug pull” refers to a scenario where the creator of an NFT and/or gaming project solicits investments and then abruptly abandons a project and fraudulently retains the project investors’ funds.  According to the official Frosties website, Frosties purchasers would be eligible for holder rewards, such as, inter alia, giveaways, early access to a metaverse game, and exclusive mint passes to upcoming Frosties seasons.  In reality, on or about January 9, 2022, NGUYEN and LLACUNA, whose legal identities were disguised to Frosties NFT purchasers, abruptly abandoned the Frosties NFT project within hours after selling out of Frosties NFTs, deactivated the Frosties website, and transferred approximately $1.1 million in cryptocurrency proceeds from the scheme to various cryptocurrency wallets under their control in multiple transactions designed to obfuscate the original source of funds.  A screenshot taken from the Frosties website is shown below:

 

 

Prior to their arrests, NGUYEN and LLACUNA were advertising a second NFT project under the name “Embers,” which, based on similarities to the Frosties NFT project, is believed to be another fraud scheme that was expected to launch on or around March 26, 2022.  A screenshot taken from the Embers website is shown below:

 

 

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ETHAN VINH NGUYEN, 20, and ANDRE MARCUS QUIDDAOEN LLACUNA, 20, are each charged with one count of commit wire fraud, in violation of 18 U.S.C. § 1349, which carries a maximum sentence of 20 years in prison; and one count of conspiracy to commit money laundering, in violation of 18 U.S.C. § 1956(h), which carries a maximum sentence of 20 years in prison.

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

Mr. Williams praised the outstanding investigative work of HSI, IRS-CI, and USPIS. 

The case is being handled by the Office’s Complex Frauds and Cybercrime Unit.  Assistant United States Attorney Danielle M. Kudla is in charge of the prosecution.

If you believe that you have been a victim of this crime, please contact HSI Special Agent Paul Nugent at paul.nugent@ice.dhs.gov.

 

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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 herein should be treated as an allegation as to the defendants charged in the Complaint.

[2] A “utility” NFT offers holders added benefits, such as reward programs, giveaways, and early access to events for NFT holders.

Damian Williams, the United States Attorney for the Southern District of New York, and Keechant L. Sewell, the Commissioner of the New York City Police Department (“NYPD”), announced the filing of a criminal complaint today charging JAMAR BAKER with illegally possessing a firearm and ammunition.  BAKER, who is on federal supervised release for a prior conviction, was arrested yesterday and was presented today before the Honorable Barbara C. Moses.

U.S. Attorney Damian Williams said:  “For no apparent reason, Jamar Baker allegedly decided to pick a fight with an innocent driver heading to work.  Little did he know, the victim we allege he harassed and shot at is an NYPD officer who was on his way to the precinct to begin his shift.  The random attack and senseless criminal behavior not only put the officer in danger, but we also allege Mr. Baker hid the weapon inside a child’s toy, and put it back in the child’s crib.  Mr. Baker will now face federal justice for his reckless actions.”   

NYPD Commissioner Keechant L. Sewell said:  “Gun violence impacts all New Yorkers – including NYPD police officers, both on and off duty.  The NYPD and our law enforcement partners at the U.S. Attorney’s Office for the Southern District of New York vow to use every resource available to ensure that criminals are always held fully accountable for their reckless actions.”

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

Shortly after 6:30 a.m. on March 23, 2022, an off-duty NYPD Officer (“Victim-1”) was driving his personal vehicle to his NYPD precinct in Manhattan to begin his shift.  While crossing from the Bronx into Manhattan on the Macombs Dam Bridge, BAKER’s vehicle struck Victim‑1’s vehicle multiple times.  BAKER then pulled his vehicle alongside Victim-1’s vehicle, spit towards Victim-1, and shouted a slur at Victim-1.  As the vehicles continued driving, BAKER fired a gun at Victim-1, striking the front bumper and tire of Victim‑1’s vehicle.  Officers later recovered two .380-caliber shell casings from the road where the vehicles had traveled.

Law enforcement identified BAKER’s vehicle using license plate reader photographs.  When officers searched an apartment to which BAKER had gone immediately after the shooting, officers found a .380-caliber pistol concealed inside a teddy bear in a child’s crib.  BAKER is currently on federal supervised release in connection with a 2014 robbery conspiracy conviction, for which he served approximately five years in prison.

 

 

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BAKER, 26, of Bronx, New York, was charged with one count of possessing a firearm after having been convicted of a felony, and one count of possessing ammunition after having been convicted of a felony.  Each count carries a maximum sentence of ten years in prison.  The maximum potential penalties are prescribed by Congress and are provided here for informational purposes only, as any sentencing of the defendant would be determined by the judge.

Mr. Williams praised the outstanding investigative work of the NYPD’s 32nd Precinct Detective Unit, the NYPD’s Firearm Suppression Section, and the Special Agents of the United States Attorney’s Office. 

The case is being handled by the Office’s General Crimes Unit.  Assistant United States Attorney Patrick R. Moroney is in charge of the prosecution.

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

Damian Williams, the United States Attorney for the Southern District of New York, Timothy Foley, the Acting Special Agent-in-Charge of the Drug Enforcement Administration’s New York Division (“DEA”), Kevin P. Bruen, the Superintendent of the New York State Police (“NYSP”), and Keechant L. Sewell, the Commissioner of the New York City Police Department (“NYPD”), announced the unsealing of a criminal complaint today charging gang members JERRIN PENA, a/k/a “Rooga,” a/k/a “Perry,” ARIEL OLIVER, a/k/a “8Ball,” a/k/a “Ocho,” JUSTIN DEAZA, a/k/a “Booka,” WILSON MENDEZ, a/k/a “Tati,” JOWENKY NUNEZ, a/k/a “Juju,” BRIAN HERNANDEZ, a/k/a “Malikai,” VICTOR COLON, a/k/a “V,” JOSE GUTIERREZ, a/k/a “G,” ARGENIS TAVAREZ, a/k/a “Nose,” and NIJMAH MARTE, a/k/a “N,” with participating in a conspiracy to traffic narcotics.  Six of the defendants also were charged with using guns in furtherance of that conspiracy.

PENA, MENDEZ, COLON, GUTIERREZ, and MARTE were arrested yesterday in New York, New York and the Bronx, New York and will be presented today before the Hon. Barbara Moses, United States Magistrate Judge for the Southern District of New York.  OLIVER, DEAZA, and HERNANDEZ were already in state custody.  NUNEZ and TAVAREZ remain at large.

U.S. Attorney Damian Williams said:  “As alleged, these defendants were members of a gang that distributed many types of illegal narcotics in a Manhattan neighborhood for years.  Several of the defendants frequently carried firearms while dealing drugs.  Today’s arrests are part of our continued commitment, along with our law enforcement partners, to target narcotics trafficking and firearms use in New York City.” 

DEA Acting Special Agent-in-Charge Timothy Foley said:  “The Own Every Dollar gang used social media to glamorize their drug enterprise, conduct drug transactions and brandish weapons instilling fear in the community.  Our drug trafficking investigations have a way of uncovering links to the threat of gun violence and gang-related criminal activity.  Today’s arrests exemplify law enforcement’s commitment to law and order and people’s right to live without fear.”

NYSP Superintendent Kevin P. Bruen said:  “We have no tolerance for those who bring drugs and the threat of violence to our communities. These arrests are the result of an aggressive strategy to stop the trafficking of narcotics and other deadly drugs on our streets. Together, with our law enforcement partners at all levels, we will continue to work vigilantly to put dangerous individuals like these gang members behind bars.” 

NYPD Commissioner Keechant L. Sewell said:  “The details of this investigation make clear: Criminal gangs, illegal guns, and illicit drugs are a dangerous combination – and will never be tolerated in our city, and any person who deals in the criminal behavior alleged in this case will be held accountable to the fullest extent of the law. I want to thank the U.S. Attorney’s Office for the Southern District of New York, the Drug Enforcement Administration’s New York Division, the New York State Police, and everyone else who worked to take these 10 defendants off our streets, and made New York City safer for all the people we serve.”

As alleged in the Complaint unsealed today[1]:

PENA, OLIVER, DEAZA, MENDEZ, NUNEZ, HERNANDEZ, COLON, GUTIERREZ, TAVAREZ, and MARTE, are members of a criminal gang called “Own Every Dollar” or “OED,” which uses the following logo:

 

 

Between in or about 2019 and in or about 2022, the defendants sold fentanyl, heroin, cocaine, crack cocaine, oxycodone, and marijuana in and around the Washington Heights neighborhood of Manhattan.  The defendants sold drugs to, among others, undercover police officers, and were frequently arrested in possession of drugs packaged for resale.

In addition, PENA, MENDEZ, NUNEZ, HERNANDEZ, COLON, and MARTE each possessed firearms in connection with their drug dealing, and PENA, OLIVER, and NUNEZ regularly posted social media photographs and videos of themselves holding firearms.

On February 24, 2022, DEAZA was arrested in possession of one kilogram of fentanyl.

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JERRIN PENA, 20, ARIEL OLIVER, 22, JUSTIN DEAZA, 20, WILSON MENDEZ, 19, JOWENKY NUNEZ, 19, BRIAN HERNANDEZ, 22, VICTOR COLON, 24, JOSE GUTIERREZ, 20, ARGENIS TAVAREZ, 22, and NIJMAH MARTE, 21, all from New York City, are each charged with conspiracy to distribute and possess with intent to distribute 400 grams and more of fentanyl, in violation of Title 21, United States Code, Section 846, which carries a mandatory minimum sentence of ten years in prison and a maximum sentence of life in prison.  The defendants are also charged with conspiracy to distribute and possess with intent to distribute heroin, cocaine, crack cocaine, oxycodone, in violation of Title 21, United States Code, Section 846, which carries a maximum sentence of 20 years, and conspiracy to distribute and possess with intent to distribute marijuana, also in violation of Title 21, United States Code, Section 846, which carries a maximum sentence of five years.

PENA, MENDEZ, NUNEZ, HERNANDEZ, COLON, and MARTE are also each charged with possessing a firearm in furtherance of the narcotics conspiracy, in violation of Title 18, United States Code, Section 924(c)(1)(A)(i), which carries a maximum sentence of life in prison, with a mandatory minimum sentence of five years in prison, which must run consecutively to any other sentence.

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 would be determined by the judge.

Mr. Williams praised the outstanding investigative work of the DEA, NYSP, and NYPD.  He also thanked the Special Narcotics Prosecutor for the City of New York, the Bronx District Attorney’s Office, the Manhattan District Attorney’s Office, the Massachusetts State Police, and the Worcester County District Attorney’s Office for their assistance in the case.  

The case is being handled by the Office’s Narcotics Unit.  Assistant United States Attorneys Kevin Mead, Sarah L. Kushner, and Ashley Nicolas are in charge of the prosecution.

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

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

Damian Williams, the United States Attorney for the Southern District of New York, and Michael J. Driscoll, Assistant Director-in-Charge of the New York Field Office of the Federal Bureau of Investigation (“FBI”), announced today the unsealing of a superseding indictment charging PATRICK CHELLEL in a conspiracy to commit multiple armed robberies of suspected drug dealers and drug runners in Orange County, New York, the Bronx, New York, and Hartford, Connecticut. CHELLEL was arrested today and was presented before Magistrate Judge Paul E. Davison. The case was assigned to U.S. District Judge Kenneth M. Karas.  

U.S. Attorney Damian Williams said:  “As alleged, Patrick Chellel organized and directed a violent conspiracy to rob suspected drug dealers and associates at gunpoint. Chellel and his robbery crew allegedly engaged in serious acts of violence and sophisticated methods to track their victims, including with a hidden Apple Watch on a victim’s car. Today’s arrest is part of our continued commitment with our law enforcement partners to root out gun violence in our communities.”

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

From at least in or about November 2019 and continuing through at least in or about January 2020, PATRICK CHELLEL, a/k/a “Pat,” DARREN LINDSAY, a/k/a “DJ,” ANTOINE KOEN, a/k/a “Twon,” ROBERT OJEDA, a/k/a “Mini,” ONITAYO ARE, a/k/a “Oni,” INDIGO GRANT, and PATRICIA KONCO, a/k/a “Flacca,” conspired to rob suspected drug dealers and associates of drugs and drug proceeds. As part of the conspiracy, on or about November 14, 2019, CHELLEL organized a plan with LINDSAY to rob suspected drug dealers at their residence in the vicinity of Mount Hope, New York, where the victims were assaulted at gunpoint. Furthermore, on or about December 15, 2019, LINDSAY, KOEN, and OJEDA robbed at gunpoint suspected drug dealers of marijuana at a residence in the Bronx. Finally, on or about January 19, 2020, LINDSAY, KOEN, ARE, GRANT, and KONCO, acting at CHELLEL’s direction, committed a violent gunpoint robbery of a drug runner in a hotel parking garage after surreptitiously tracking the victim’s location with a hidden Apple Watch, resulting in approximately $500,000 in drug proceeds stolen.

CHELLEL, 31, LINDSAY, 31, KOEN, 30, OJEDA, 31, ARE, 29, GRANT, 30, and KONCO, 32, are each charged in the following counts in the Superseding Indictment:

Charge

Defendants

Maximum Possible Sentence

Count One

(Conspiracy to Commit Hobbs Act Robbery, 18 U.S.C. § 1951)

CHELLEL, LINDSAY, KOEN, OJEDA, ARE, GRANT, KONCO

20 years in prison

Count Two

(Hobbs Act Robbery, 18 U.S.C. §§ 1951 and 2) 

CHELLEL, LINDSAY

20 years in prison

Count Three

(Brandishing Firearms During and in Relation to a Crime of Violence, 18 U.S.C. §§ 924(c) and 2)

CHELLEL, LINDSAY

Mandatory minimum sentence of 7 years in prison and maximum sentence of life in prison

Count Four

(Hobbs Act Robbery, 18 U.S.C. §§ 1951 and 2) 

LINDSAY, OJEDA, KOEN

20 years in prison

Count Five

(Brandishing Firearms During and in Relation to a Crime of Violence, 18 U.S.C. §§ 924(c) and 2)

LINDSAY, OJEDA, KOEN

Mandatory minimum sentence of 7 years in prison and maximum sentence of life in prison

Count Six

(Hobbs Act Robbery, 18 U.S.C. §§ 1951 and 2) 

CHELLEL, LINDSAY, KOEN, ARE, GRANT, KONCO

20 years in prison

Count Seven

(Brandishing and Discharging Firearms During and in Relation to a Crime of Violence, 18 U.S.C. §§ 924(c) and 2)

CHELLEL, LINDSAY, KOEN, ARE, GRANT, KONCO

Mandatory minimum sentence of 10 years in prison and maximum sentence of life in prison

Count Eight

(Narcotics Conspiracy, 21 U.S.C. §§ 846, 841(a), 841(b)(1)(A) 

CHELLEL

Mandatory minimum sentence of 10 years in prison and 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 defendants will be determined by the judge.

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

Mr. Williams praised the outstanding investigative work of the FBI, Homeland Security Investigations, the New York State Police, the New York City Police Department, the Town of Crawford Police Department, and the City of Middletown Police Department.

Mr. Williams stated that the investigation is ongoing.  Mr. Williams requests that any individuals with relevant information should contact the Federal Bureau of Investigation at (800)-CALL-FBI.

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

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

A federal jury convicted a New Jersey man for his involvement in a conspiracy to fraudulently obtain U.S. visas for Chinese government employees.

According to court documents and evidence presented at trial, Zhongsan Liu, 59, of Fort Lee, participated in a scheme to fraudulently procure J-1 research scholar visas for employees of the government of the of the People’s Republic of China (PRC) to enable them to unlawfully work for the PRC government in the United States and to conceal that unlawful work from the United States and its agencies.

Liu operated an office of the China Association for the International Exchange of Personnel (CAIEP), an agency of the PRC government, in Fort Lee, New Jersey. Among other activities, CAIEP engages in talent-recruitment for the benefit of the PRC, including recruiting U.S. scientists, academics, engineers and other experts to work in China.

From 2017 up to and including September 2019, Liu worked with others to fraudulently procure J-1 research scholar visas for PRC government employees in order to enable those employees to unlawfully work for CAIEP in the United States and to conceal that unlawful work from the Department of State and the Department of Homeland Security. The J-1 research scholar program permits foreign nationals to come to the United States for the primary purpose of conducting research at a corporate research facility, museum, library, university, or other research institution. Liu worked with others to obtain a J-1 research scholar visa for a prospective CAIEP employee, Sun Li, based on the false representation that Sun Li would conduct research at a U.S. university, and to conceal the unlawful work of another CAIEP employee, Liang Xiao, who was present in the United States on a J-1 visa sponsored by a U.S. university.

In or about April 2018, Liang Xiao applied for and received a J-1 visa to conduct research at that U.S. university. Although Liang represented to the U.S. government that she was entering the United States for the primary purpose of conducting research at the university, Liang’s actual purpose in the United States consisted of working for CAIEP. Liu helped Liang take measures to enhance her false appearance as a research scholar by, among other things, directing Liang to report to the university upon her arrival in the United States; ensuring that Liang obtained a local driver’s license and disguising Liang’s CAIEP salary as a subsidy for a research scholar’s living expenses.

In addition, Liu sought to enable Sun Li to obtain a J-1 research scholar visa under false pretenses. In particular, Liu reached out to contacts at multiple U.S. universities in order to arrange for a university to invite Sun Li to come to the United States as a J-1 research scholar. In truth and in fact, however, Liu intended that Li’s primary purpose in the United States would consist of working for CAIEP.

Liu was convicted of one count of conspiracy to defraud the United States and to commit visa fraud, which carries a maximum sentence of five years. He is scheduled to be sentenced on July 11. A federal district court judge will determine any sentence after considering the U.S. Sentencing Guidelines and other statutory factors.

Assistant Attorney General Matthew G. Olsen of the Justice Department’s National Security Division, U.S. Attorney Damian Williams of the Southern District of New York, Assistant Director Alan E. Kohler Jr. of the FBI's Counterintelligence Division and Assistant Director in Charge Michael J. Driscoll of the FBI's New York Field Office made the announcement.

The FBI investigated the case, with valuable assistance provided by the U.S. Department of State, Department of Homeland Security, Homeland Security Investigations, and the National Security Division’s Counterintelligence and Export Control Section.

Assistant U.S. Attorneys Gillian Grossman and Elinor Tarlow for the Southern District of New York are prosecuting the case.

Damian Williams, the United States Attorney for the Southern District of New York, announced today that ZHONGSAN LIU was convicted yesterday of participating in a conspiracy to defraud the United States by obstructing the lawful functions of the U.S. Department of State and the Department of Homeland Security and with committing visa fraud.  LIU was convicted after a one-week trial before the Honorable Valerie E. Caproni. 

U.S. Attorney Damian Williams stated: “Liu Zhongsan sought to exploit the J-1 research scholar program—which is intended to allow foreign nationals to conduct research at approved U.S. institutions—for the improper purpose of enabling his conspirators to work for the Chinese Government in the United States, against the rules of the research scholar program.  Liu’s conviction reflects this Office’s commitment to holding to account those who seek to defraud this country’s visa system and the agencies responsible for its administration.”

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

LIU participated in a scheme to fraudulently procure J-1 research scholar visas for employees of the government of the of the People’s Republic of China (the “PRC Government”) in order to enable them to unlawfully work for the PRC Government in the United States and to conceal that unlawful work from the United States and its agencies.

LIU operated an office of the China Association for the International Exchange of Personnel (“CAIEP”), an agency of the PRC Government, in Fort Lee, New Jersey.  Among other activities, CAIEP engages in talent-recruitment for the benefit of the PRC, including recruiting U.S. scientists, academics, engineers, and other experts to work in China.

From 2017 up to and including September 2019, Liu worked with others to fraudulently procure J-1 research scholar visas for PRC Government employees in order to enable those employees to unlawfully work for CAIEP in the United States and to conceal that unlawful work from the Department of State and the Department of Homeland Security.  The J-1 research scholar program permits foreign nationals to come to the United States for the primary purpose of conducting research at a corporate research facility, museum, library, university, or other research institution.  LIU worked with others to obtain a J-1 research scholar visa for a prospective CAIEP employee, Sun Li, based on the false representation that Sun Li would conduct research at a U.S. university, and to conceal the unlawful work of another CAIEP employee, Liang Xiao, who was present in the United States on a J-1 visa sponsored by a U.S. university.

In or about April 2018, Liang Xiao applied for and received a J-1 visa to conduct research at that U.S. university.  Although Liang represented to the U.S. Government that she was entering the United States for the primary purpose of conducting research at the university, Liang’s actual purpose in the United States consisted of working for CAIEP.  LIU helped Liang take measures to enhance her false appearance as a research scholar by, among other things, directing Liang to report to the university upon her arrival in the United States; ensuring that Liang obtained a local driver’s license; and disguising Liang’s CAIEP salary as a subsidy for a research scholar’s living expenses.

In addition, LIU sought to enable Sun Li to obtain a J-1 research scholar visa under false pretenses.  In particular, LIU reached out to contacts at multiple U.S. universities in order to arrange for a university to invite Sun Li to come to the United States as a J-1 research scholar.  In truth and in fact, however, LIU intended that Sun Li’s primary purpose in the United States would consist of working for CAIEP.

*                *               *

LIU, 59, of Fort Lee, New Jersey, was convicted of one count of conspiracy to defraud the United States and to commit visa fraud, which carries a maximum sentence of five years.  The maximum potential sentence in this case is prescribed by Congress and is provided here for informational purposes only, as any sentencing of the defendant will be determined by the judge.  Sentencing before Judge Caproni is scheduled for July 11, 2022.

Mr. Williams praised the outstanding investigative work of the FBI, and thanked the U.S. Department of State, Department of Homeland Security, Homeland Security Investigations, and the Counterintelligence and Export Control Section of the U.S. Department of Justice’s National Security Division for their assistance. 

The prosecution of this case is being handled by the Office’s National Security and International Narcotics Unit.  Assistant United States Attorneys Gillian Grossman and Elinor Tarlow are in charge of the prosecution, with assistance from Trial Attorneys Adam Barry and Scott Claffee of the Counterintelligence and Export Control Section.

 

Damian Williams, the United States Attorney for the Southern District of New York, announced the unsealing today of a four-count superseding information charging DEEJAY WHITE with offenses relating to his participation in a May 29, 2019 gunpoint robbery in the Bronx targeting more than 150 kilograms of cocaine, his participation in a conspiracy to smuggle contraband—including narcotics and a firearm—into the Metropolitan Correctional Center (“MCC”), a federal detention facility, and his possession of that firearm while incarcerated.  DEEJAY WHITE pled guilty on July 23, 2021, before U.S. District Judge P. Kevin Castel. 

Mr. Williams also announced the unsealing of a five-count information charging DAWNTIANA WHITE, DEEJAY WHITE’s wife, who pled guilty on July 13, 2021 before U.S. District Judge Katherine Polk Failla to conspiracy to distribute narcotics, conspiracy to provide prison contraband, and conspiracy to commit wire fraud.  DAWNTIANA WHITE also pled guilty on March 17, 2022 before Judge Failla to a one-count superseding information charging her with perjury.

DEEJAY WHITE is scheduled to be sentenced on May 17, 2022, and DAWNTIANA WHITE is scheduled to be sentenced on June 14, 2022.

U.S. Attorney Damian Williams said:  “Deejay White was responsible for a dangerous gunpoint robbery of more than one hundred kilograms of cocaine that left several victims injured.  Even after he was arrested and in jail, facing up to a life sentence on those charges, Deejay White continued to commit crimes.  Deejay White and his wife, Dawntiana White, placed inmates, staff, and court personnel in grave danger by smuggling drugs and a firearm into a federal detention facility.  Individuals who are tempted to defy law and order should be on notice that we will continue working to identify and put an end to their alarming conduct and to hold them accountable.”

According to the Informations unsealed today, court filings, and statements made during earlier court appearances:

In late May 2019, a Bronx-based member of a Puerto Rico-based drug trafficking organization (“DTO”) was expecting a delivery of furniture concealing approximately 176 kilograms of the DTO’s cocaine.  DEEJAY WHITE and others learned of the expected shipment and planned a violent robbery of the DTO’s cocaine.  On May 29, 2019, DEEJAY WHITE parked outside the Bronx apartment where the DTO’s cocaine was stored while four co-conspirators forced entry into the apartment and held up the ten victims, including four children, at gunpoint.  Two victims were pistol-whipped during the robbery and a third sustained serious injuries after jumping out of the apartment’s third-floor window in an attempt to flee to safety.  One of the robbers threw a duffel bag containing kilograms of cocaine into DEEJAY WHITE’s car, which then drove off.

DEEJAY WHITE was arrested on November 25, 2019 on charges relating to the robbery and conspiracy to distribute the stolen cocaine, ordered detained, and housed at the MCC in Manhattan.  Days after entering the MCC, DEEJAY WHITE began using contraband cellphones to conspire with others—including his wife, DAWNTIANA WHITE—to commit additional crimes.  Among other things, DEEJAY WHITE directed DAWNTIANA WHITE to smuggle drugs to DEEJAY WHITE in the MCC, which DAWNTIANA WHITE did on multiple occasions.

In or about January 2020, DEEJAY WHITE conspired with DAWNTIANA WHITE and others to have a firearm (the “Firearm”) and drugs smuggled to DEEJAY WHITE inside the MCC.  After they successfully smuggled the Firearm and contraband into the MCC, DEEJAY WHITE confirmed to DAWNTIANA WHITE that he had received the Firearm. 

On or about February 26, 2020, Bureau of Prisons (“BOP”) officials discovered a contraband cellphone in DEEJAY WHITE’s cell and transferred him to the Specialized Housing Unit (“SHU”).  While in the SHU, DEEJAY WHITE lied to a MCC investigator about his own role in smuggling the Firearm into the MCC and his possession of the Firearm inside the MCC, which led to an extensive lockdown of the MCC while BOP officials searched for the gun and other contraband.  Following a search of the MCC, on or about March 5, 2020, the Firearm, which was loaded, was recovered from inside a wall of DEEJAY WHITE’s MCC cell. 

On or about July 14, 2021, DAWNTIANA WHITE falsely testified before a Grand Jury in the Southern District of New York about how she obtained the Firearm to smuggle to DEEJAY WHITE inside the MCC.

DEEJAY WHITE, 45, of Chappaqua, New York, pled guilty to conspiracy to commit Hobbs Act robbery, which carries a statutory maximum sentence of 20 years in prison; brandishing a firearm in furtherance of a drug trafficking crime, which carries a statutory maximum sentence of life in prison, and a mandatory minimum sentence of seven years in prison to run consecutively to any other term of imprisonment; being a felon in possession of a firearm, which carries a statutory maximum sentence of 10 years in prison; and conspiracy to receive contraband in prison, which carries a statutory maximum sentence of five years in prison.  The maximum potential sentences in DEEJAY WHITE’s case are prescribed by Congress and are provided here for informational purposes only, as any sentencing of DEEJAY WHITE will be determined by the judge.

DAWNTIANA WHITE, 38, of Brooklyn, New York, pled guilty to narcotics conspiracy, which carries a statutory maximum sentence of 20 years in prison; prison contraband conspiracy, which carries a statutory maximum sentence of five years in prison; obstruction of justice, which carries a statutory maximum sentence of 20 years; two counts of wire fraud, each of which carries a statutory maximum sentence of 20 years in prison; and perjury, which carries a statutory maximum sentence of five years in prison.  The maximum potential sentences in DAWNTIANA WHITE’s case are prescribed by Congress and are provided here for informational purposes only, as any sentencing of DAWNTIANA WHITE will be determined by the judge.

This effort 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 prosecutions of DEEJAY WHITE for conspiracy to commit Hobbs Act robbery and brandishing a firearm in furtherance of a drug trafficking crime, and of DAWNTIANA WHITE for narcotics conspiracy and wire fraud, are being handled by the Office’s Narcotics Unit.  Assistant United States Attorneys Juliana N. Murray, Ryan B. Finkel, Peter J. Davis, and Kaylan E. Lasky are in charge of the prosecutions.  Mr. Williams praised the outstanding investigative work of the New York City Police Department (“NYPD”), the Bureau of Alcohol, Tobacco, Firearms and Explosives (“ATF”), the New York Field Division of the Drug Enforcement Administration (“DEA”), the New York Office of the United States Postal Inspection Service, and the New York State Police (“NYSP”) in this investigation.

The prosecutions of DEEJAY WHITE for conspiring to receive contraband in prison and being a felon in possession of a firearm, and of DAWNTIANA WHITE for participating in a prison contraband conspiracy, obstruction of justice, and perjury are being handled by the Office’s Narcotics and Public Corruption Units.  Assistant United States Attorneys Juliana N. Murray, Ryan B. Finkel, Peter J. Davis, Kaylan E. Lasky, Aline R. Flodr, Daniel H. Wolf, and Jonathan E. Rebold are in charge of the prosecutions.  Mr. Williams praised the outstanding investigative work of the New York Office of the Federal Bureau of Investigation, the Department of Justice Office of the Inspector General New York Field Office, Special Agents from the U.S. Attorney’s Office for the Southern District of New York, the U.S. Customs and Border Protection in New York, the DEA, ATF, NYPD, and NYSP in this investigation.

Damian Williams, the United States Attorney for the Southern District of New York, announced the conviction today of ASA SAINT CLAIR, a/k/a “Asa Williams,” a/k/a “Asa Sinclair,” following a one-week trial before the Honorable P. Kevin Castel.  SAINT CLAIR devised an investment scheme in which he defrauded more than 60 victims into providing loans to his organization, the World Sports Alliance, tied to a purported digital coin offering called IGObit.  SAINT CLAIR falsely represented to investors that the World Sports Alliance was a close affiliate of the United Nations and that they would receive guaranteed returns on their investment, but instead diverted the investors’ funds for his personal expenses and benefit. 

U.S. Attorney Damian Williams said:  “As a jury has now found, Asa Saint Clair used lies to defraud everyday people out of their hard-earned money by promising them guaranteed returns if they invested in a IGObit, a digital currency he claimed the World Sports Alliance was developing.  Saint Clair touted the WSA as working closely with the UN to promote the values of sports and peace for a better world, while in reality promoting only the balance of his bank accounts.”   

The defendant was charged and convicted in one count with committing wire fraud, in violation of Title 18, United States Code, Section 1343, from in or around November 2017, through in or around September 2019.  SAINT CLAIR solicited investors for the launch of IGObit through promised investment returns, representations that the World Sports Alliance, a purported intergovernmental organization, was a close affiliate and partner with the United Nations, and representations about the World Sport Alliance’s development projects around the world.  World Sports Alliance did not in fact have any relationship with the United Nations and did not, and had not, participated in any international development projects. 

SAINT CLAIR also represented to investors that their money would be used for the development of IGObit, when he in fact diverted those funds to other entities controlled by him and members of his family, as well as to pay his personal expenses, including dinners at Manhattan restaurants, travel, and online shopping.

SAINT CLAIR defrauded more than 60 victims of hundreds of thousands of dollars.

*                *                *

SAINT CLAIR, 49, of Washington was convicted of one count of wire fraud, which carries a maximum sentence of 20 years in prison.  The maximum potential sentence for the offense of conviction is prescribed by Congress and is provided here for informational purposes only, as the sentencing of the defendants will be determined by the judge.  Sentencing before Judge Castel is scheduled for July 19, 2022.

Mr. Williams praised the work of Homeland Security Investigations.

The prosecution of this case is being handled by the Office’s Money Laundering and Transnational Criminal Enterprises Unit.  Assistant United States Attorneys Tara La Morte, Emily Deininger and Kiersten Fletcher 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 Field Office of the Federal Bureau of Investigation (“FBI”), and Ryan T. Geach, Special Agent-in-Charge of the Department of Justice Office of the Inspector General New York Field Office (“DOJ-OIG”), announced today the unsealing of an indictment charging GREG MCKENZIE, a Bureau of Prisons correctional officer, with obstructing a federal investigation into the smuggling of a firearm into the Metropolitan Correctional Center (“MCC”).  The loaded firearm was recovered from inside the MCC on March 5, 2020.  MCKENZIE was arrested today and will be presented before Magistrate Judge Robert W. Lehrburger later today.  The case has been assigned to U.S. District Judge P. Kevin Castel.

U.S. Attorney Damian Williams said:  “Greg McKenzie is alleged to have obstructed justice by lying to federal agents investigating the smuggling of a firearm into the MCC in 2020.  His alleged use of a prepaid cellphone to communicate secretly with an inmate from whose prison cell the firearm was recovered and subsequent false denials about those communications is a serious crime.”

FBI Assistant Director-in-Charge Michael J. Driscoll said:  “McKenzie allegedly obstructed justice when he lied to federal investigators regarding his contact with a MCC inmate who last occupied a cell in which a loaded firearm was discovered.  As a federal corrections officer, McKenzie was responsible for protecting the welfare of the inmates and his coworkers in the facility.  Instead of fulfilling that duty, he chose to lie to the agents investigating a gravely serious violation of safety protocols.  With today’s charges, he will be forced to face the consequences of his actions.”

DOJ-OIG Special Agent-in-Charge Ryan T. Geach said:  “McKenzie’s alleged lying and obstruction of a federal investigation are serious offenses, especially because a loaded firearm in the hands of an inmate endangers not just the prison, but the entire community.”

According to the Indictment[1] unsealed today:

On or about March 5, 2020, a loaded .22 caliber firearm (the “Firearm”) was recovered from inside an MCC prison cell that had last been occupied by two inmates, including “Inmate-1.”  Several weeks before the Firearm was recovered, Inmate-1 and his wife had each communicated by phone with a particular cellphone used by MCKENZIE (the “McKenzie Prepaid Cellphone”).  However, when law enforcement agents interviewed MCKENZIE regarding the Firearm investigation, MCKENZIE falsely denied having any connection to the McKenzie Prepaid Cellphone.

Specifically, on January 30, 2020, MCKENZIE purchased the McKenzie Prepaid Cellphone from a store in lower Manhattan, just moments after having withdrawn approximately $120 in cash from a nearby ATM.  The next day, MCKENZIE used the McKenzie Prepaid Cellphone to repeatedly exchange calls with Inmate-1 – who was using a contraband cellphone from within the MCC – and Inmate-1’s wife. 

Meanwhile, cellphone location information revealed that the McKenzie Prepaid Cellphone frequently traveled between MCKENZIE’s Danbury, Connecticut residence and the MCC on dates and times consistent with MCKENZIE’s work schedule.  On the evening of January 31, 2020, MCKENZIE and Inmate-1’s wife each briefly traveled to the same location in the Bronx at the same time, and MCKENZIE thereafter traveled directly to the MCC to begin a shift beginning at midnight on February 1, 2020, whereupon he was assigned to the very unit where Inmate-1 was housed and from where the Firearm was later recovered.  

Surveillance video and call detail records further established that after beginning his February 1, 2020, shift, MCKENZIE and a colleague conducted a routine check of Inmate-1’s cellblock.  Moments later, Inmate-1, using a contraband cellphone, called and then texted the McKenzie Prepaid Cellphone.  Within minutes, MCKENZIE briefly returned to Inmate 1’s cellblock – this time alone – while appearing to carry an object under his left arm. 

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

*                *                *

MCKENZIE, 35, of Danbury, Connecticut, is charged with one count of false statements, in violation of 18 U.S.C. § 1001(a)(2), which carries a maximum penalty of five years in prison, and one count of obstruction of justice, in violation of 18 U.S.C. § 1512(c)(2), which carries a maximum penalty of 20 years in prison.

Mr. Williams praised the outstanding work of the FBI, DOJ-OIG, Special Agents from the U.S. Attorney’s Office for the Southern District of New York, and the U.S. Customs and Border Protection in New York.

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

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 therein should be treated as an allegation.  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 ADAM ROGAS, the co-founder and former CEO, CFO, and member of the board of directors of Las Vegas-based cyberfraud prevention company NS8, Inc. (“NS8”), pled guilty today in Manhattan federal court to securities fraud.  ROGAS used fraudulent financial data to obtain over $123 million in financing for NS8, of which he personally obtained approximately $17.5 million. ROGAS pled guilty today before U.S. District Judge John P. Cronan, and is scheduled to be sentenced by Judge Cronan on August 10, 2022. 

U.S. Attorney Damian Williams said:  “Today, Adam Rogas admitted to being the proverbial fox guarding the henhouse.  While claiming to be in the fraud prevention business, Rogas himself defrauded investors in his company of over $100 million.  Now Rogas will be held accountable for his fraudulent scheme.”

According to the Complaint, Indictment, and other publicly-filed documents: 

ADAM ROGAS was a co-founder of NS8, and served as its CEO, CFO, and a member of its board of directors.  ROGAS was also primarily responsible for the company’s fundraising activities.  NS8, which was based in Las Vegas, Nevada, was a cyberfraud prevention company that developed and sold electronic tools to help online vendors assess the fraud risks of customer transactions.  In the fall of 2019 and the spring of 2020, NS8 engaged in fundraising rounds through which it issued Series A Preferred Shares and obtained approximately $123 million in investor funds.

ROGAS maintained control over a bank account into which NS8 received revenue from its customers, and periodically provided monthly statements from that account to NS8’s finance department so that NS8’s financial statements could be created.  ROGAS also maintained control over spreadsheets that purportedly tracked customer revenue, which were also used to generate NS8’s financial statements.

ROGAS altered the bank statements before providing them to NS8’s finance department to show tens of millions of dollars in both customer revenue and bank balances that did not exist.  In the period from January 2019 through February 2020, between at least approximately 40% and 95% of the purported total assets on NS8’s balance sheet were fictitious.  In that same period, the bank statements that ROGAS altered reflected over $40 million in fictitious revenue.

Altered (L) and original (R) bank statements for NS8’s revenue account.  Rogas altered statements for the account to show tens of millions of dollars in revenue (deposits) that did not exist.

ROGAS used these materially misleading financial statements to raise approximately $123 million from investors in the fall of 2019 and the spring of 2020.  During the fundraising process, ROGAS also provided the falsified bank records he had created to auditors who were conducting due diligence on behalf of potential investors.  After these fundraising rounds concluded, NS8 conducted a tender offer with the funds raised from investors, and ROGAS received $17.5 million in proceeds from that tender offer, personally and through a company he controlled.

*                      *                      *

ROGAS, 44, of Las Vegas, Nevada, pled guilty to one count of securities fraud, 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 defendant will be determined by the judge.

Mr. Williams praised the outstanding investigative work of the FBI in this investigation.  Mr. Williams further thanked the Securities and Exchange Commission for its cooperation and assistance in this investigation.  

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

Damian Williams, the United States Attorney for the Southern District of New York announced that the Dominican Republic’s former Consul General to Jamaica, JEREMIAS JIMENEZ CRUZ, was sentenced today to 179 months in prison for using his position and contacts in the government of the Dominican Republic to import cocaine into the United States. JIMENEZ CRUZ was sentenced by U.S. District Judge Kimba M. Wood. JIMENEZ CRUZ previously pled guilty to conspiring to import more than five kilograms of cocaine into the United States.

U.S. Attorney Damian Williams said:  “Jeremias Jimenez Cruz abused his position as a government official to traffic vast amounts of cocaine into the United States. Today Jimenez Cruz was rightly sentenced to 15 years in prison for his crime.”

According to the allegations in the Indictment, prior filings in this case, and statements made in Court:

JIMENEZ CRUZ was a high-ranking government official in the Dominican Republic whose positions have included Vice Consul of the Dominican Republic to Germany, Consul General of the Dominican Republic to Jamaica, and president of the National Christian Movement.  He has also held himself out to be the half-brother of a former two-term president of the Dominican Republic. JIMENEZ CRUZ used his position, connections, and planes to traffic large quantities of cocaine, including for importation to the United States, and to launder drug proceeds. During the course of the investigation, JIMENEZ CRUZ was caught on tape admitting that with his government connections, he had the capacity to move up to 600 kilograms of cocaine by airplane and up to one ton of cocaine by boat. JIMENEZ CRUZ admitted that he was a leader of this conspiracy that involved the importation of over 50 kilograms of cocaine, and that he abused his position of public trust to commit the offense.

*                      *                      *

In addition to the sentence, JIMENEZ CRUZ, age 52, was sentenced to five years of supervised release.

Mr. Williams praised the outstanding investigative work of the DEA. The arrest was the result of an investigation by the New York Strike Force, a crime-fighting unit comprising federal, state, and local law enforcement agencies supported by the Organized Crime Drug Enforcement Task Force (OCDETF) and the New York/New Jersey High Intensity Drug Trafficking Area (HIDTA).  

The Strike Force is housed at the DEA’s New York Division and includes agents and officers of the DEA, the New York City Police Department, the New York State Police, New York City Sheriff’s Office, Immigration and Customs Enforcement – Homeland Security Investigations, the U. S. Internal Revenue Service Criminal Investigation Division, the Bureau of Alcohol, Tobacco, Firearms, and Explosives , U.S. Customs and Border Protection, U.S. Secret Service, the U.S. Marshals Service, New York National Guard, the Clarkstown Police Department, U.S. Coast Guard, Port Washington Police Department, and New York State Department of Corrections and Community Supervision.

The prosecution is being handled by the Office’s Narcotics Unit.  Assistant United States Attorneys Adam S. Hobson and Mollie Bracewell are in charge of the prosecution. 

Damian Williams, the United States Attorney for the Southern District of New York, announced today that SINCERE SAVOY was sentenced to 22 years in prison for his participation in the 2016 murder of Shamoya McKenzie and the affairs of the Goonies street gang.  In September 2021, co-defendant DAVID HARDY was sentenced to 31 years in prison for the murder of McKenzie and his participation in a 2012 shooting.  In July 2021 and November 2021, co-defendants MARQUIS COLLIER and JERMAINE HUGHLEY, respectively, were each sentenced to 27 years in prison for their participation in the McKenzie murder and the affairs of the Goonies gang.

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

Between 2007 and 2017, in the Southern District of New York and elsewhere, HARDY, COLLIER, HUGHLEY, and SAVOY were members of a racketeering enterprise known as the “Goonies.”  In order to fund the enterprise, protect and expand its interests, and promote its standing, members and associates of the Goonies committed, conspired, attempted, and threatened to commit acts of violence, including murder, attempted murder and robbery; they conspired to distribute and possess with the intent to distribute narcotics; and they obtained, possessed, and used firearms, including by brandishing and firing them. 

The Goonies were engaged in a long-standing and violent feud with several rival Mount Vernon street gangs, including, among others, the “Boss Playa Family,” the “Get Money Gangstas,” the “Gunnas,” and the “Much Better Gang”.  On December 31, 2016, HARDY, COLLIER, HUGHLEY and SAVOY attempted to murder a rival gang member in broad daylight by firing multiple shots at him in the vicinity of Tecumseh Avenue and Third Street in Mount Vernon, New York.  The rival gang member suffered gunshot wounds but survived.  One of the bullets, however, missed the intended target and struck the head of 13-year old Shamoya McKenzie, who was in the front passenger seat of a passing car, which was being driven by her mother.  Shamoya McKenzie died as a result.

*                *                *

HARDY, 27, pled guilty to one count of using a firearm in connection with the murder of Shamoya McKenzie in aid of racketeering and one count of using a firearm in connection with an assault with a dangerous weapon in aid of racketeering for committing a separate shooting in 2012 in furtherance of the Goonies.  He was sentenced to 372 months’ in prison.

COLLIER, 30, pled guilty to one count of racketeering conspiracy and one count of discharging a firearm in connection with the murder of Shamoya McKenzie in aid of racketeering.  He was sentenced to 324 months’ in prison.

HUGHLEY, 28, pled guilty to one count of racketeering conspiracy and one count of discharging a firearm in connection with the murder of Shamoya McKenzie in aid of racketeering.  He was sentenced to 324 months’ in prison.  

SAVOY, 25, pled guilty to one count of using a firearm in connection with the murder of Shamoya McKenzie in aid of racketeering. He was sentenced to 264 months’ in prison.

Mr. Williams thanked the Westchester County District Attorney’s Office for their extraordinary cooperation and assistance with this case, and praised the outstanding investigative work of the Mount Vernon Police Department and the FBI Westchester Safe Streets Task Force which includes Special Agents and Task Force Officers from the FBI, U.S. Probation, New York State Police, New York State Department of Corrections and Community Supervision, Westchester County PD, Westchester County DA's Office, Putnam County Sheriff's Office, Rockland County DA's Office, the NYPD and the Yonkers, Mount Vernon, Peekskill, Greenburgh, New Rochelle, White Plains, Clarkstown and Ramapo Police Departments.

The case is being handled by the Office’s White Plains Division.  Assistant United States Attorney Anden Chow is in charge of the prosecution.

Damian Williams, the United States Attorney for the Southern District of New York, announced that GANGADAI RAMPERSAUD AZIM, a/k/a “Julie Azim,” was sentenced today to 24 months in prison for her role in a more than decade-long conspiracy to commit bank fraud, defrauding her employer, a Manhattan-based bank, by intentionally falsifying the bank’s books and records in order to misappropriate approximately $1.7 million. AZIM was sentenced by U.S. District Judge Katherine Polk Failla.

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

Between August 2008 and January 2021, AZIM, a long-time employee of a New York, New York-based bank (“Bank-1”), stole approximately $1.7 million from her employer.  Over the course of approximately 12 years, AZIM executed hundreds of wire transfers of Bank-1 funds to co-conspirators and related companies, who then sent portions of the ill-gotten funds to AZIM’s personal bank account. 

In furtherance of her scheme to defraud Bank-1, AZIM repeatedly made false entries in Bank-1’s systems, misappropriating funds paid to Bank-1 by its clients to satisfy outstanding loan obligations and then extending the maturity dates of those loan obligations, making it appear as though the loan obligations had not yet been paid.  When even the fraudulently extended maturity dates came due, AZIM originated new, fraudulent loans, to help conceal the scheme.  AZIM utilized the proceeds of those fraudulent loans to satisfy the loans for which she had previously stolen the client payments.  Over the course of approximately 12 years, between 2008 and 2020, AZIM caused approximately 200 improper wire transfers of Bank-1’s funds, each for an amount under $10,000, to be sent to third party accounts, including those of co-conspirators and related companies, which then returned portions of those funds to AZIM.  In doing so, AZIM abused her position at Bank-1 and enriched herself at the expense of her employer.   

*                *                *

In addition to the prison sentence, AZIM, 59, of Richmond Hill, New York, was sentenced to three years of supervised release and ordered to pay $1,685,723.18 in restitution and to forfeit $1,523,431.30 in criminal proceeds.

Ms. Williams praised the outstanding investigative work of the New York Field Office of the Federal Bureau of Investigation in this case.

The case is being prosecuted by the Office’s Complex Frauds and Cybercrime Unit.  Assistant U.S. Attorney Katherine Reilly 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 of an indictment against ANDREY MURAVIEV, a/k/a “Andrey Muravyov,” a Russian citizen, charging him with making illegal political contributions as a foreign national, and conspiring to make illegal political contributions as a foreign national in the names of straw donors.  Muraviev is charged with conspiring with Lev Parnas, Andrey Kukushkin, and Igor Fruman, and others, who were convicted at trial or have pleaded guilty to these crimes.      

U.S. Attorney Damian Williams said: “As alleged, Andrey Muraviev, a Russian national, attempted to influence the 2018 elections by conspiring to push a million dollars of his foreign funds to candidates and campaigns.  He attempted to corrupt our political system to advance his business interests.  The Southern District of New York is committed to rooting out efforts by foreigners to interfere with our elections.”

FBI Assistant Director-in-Charge Michael J. Driscoll said:  “As alleged, Muraviev, a Russian foreign national, made illegal political contributions and conspired with Parnas, Kukushkin and Fruman to obscure their true source.  The money Muraviev injected into our political system, as alleged, was directed to politicians with views favorable to his business interests and those of his co-conspirators.  As today’s action demonstrates, we will continue to aggressively pursue all those who seek to illegally effect our nation’s elections.”

As alleged in the indictment against MURAVIEV and as proven during the trial against his co-conspirators:

In the spring of 2018, MURAVIEV, Kukushkin, Fruman, and Parnas decided to launch a business aimed at acquiring retail cannabis and marijuana licenses in the United States. As part of that plan, MURAVIEV agreed to wire $1 million, through a series of bank accounts, to Fruman and Parnas to fund hundreds of thousands of dollars in political contributions they had made or promised to make before the elections in November 2018.  The purpose of the donations was to curry favor with candidates that might be able to help MURAVIEV and his co-conspirators obtain cannabis and marijuana licenses.  MURAVIEV’s money was used to reimburse and fund federal and state political donations in Florida, Nevada, and Texas, and MURAVIEV also agreed that the funds would pay for donations to politicians in New York and New Jersey. MURAVIEV traveled to Nevada as part of these efforts, and received regular updates from Kukushkin about the co-conspirators’ progress politically. To obscure the fact that MURAVIEV was the true donor of the money, the funds were sent to a business bank account controlled by FRUMAN’s brother, and then the donations were made in FRUMAN’s and PARNAS’s names.

*                      *                     *

MURAVIEV, 47, of Russia, is charged with (1) conspiring to make contributions and donations by a foreign national and in the name of another person, which carries a maximum sentence of five years in prison; and (2) making contributions by a foreign national, which carries a maximum sentence of five years in prison.  The maximum statutory penalties are prescribed by Congress and are provided here for informational purposes only, as any sentencing of the defendant would be determined by a judge.

MURAVIEV is believed to be in Russia and remains at large.  The case is assigned to Southern District of New York U.S. District Judge J. Paul Oetken, who presided over the trial of Parnas and Kukushkin.

Mr. Williams praised the outstanding investigative work of the FBI and its New York Field Office.

This case is being handled by the Office’s Public Corruption Unit.  Assistant U.S. Attorneys Rebekah Donaleski, Aline R. Flodr, Nicolas Roos, and Hagan Scotten are in charge of the prosecution.

The charges contained in the Indictment are merely accusations.  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 JOHNNY NUNEZ GARCIA, a/k/a “Superior,” was sentenced today to 200 months in prison for the June 5, 2009 gang-related murder of 17-year-old Jonathan Ruiz in the Bronx, New York.  Today’s sentence is in addition to the 124 months in prison that NUNEZ GARCIA has already served on a prior sentence for related narcotics and firearms offenses.  NUNEZ GARCIA was sentenced by U.S. District Judge Andrew L. Carter, Jr. NUNEZ GARCIA previously pled guilty to murdering Ruiz as part of NUNEZ GARCIA’s participation in the Dominicans Don’t Play (“DDP”) gang.

U.S. Attorney Damian Williams said: “Today’s sentence shows that senseless gang violence will be met with severe consequences.  Johnny Nunez Garcia participated in the horrific murder of Jonathan Ruiz, who was only 17 years old when he died.  For this crime and others, Nunez Garcia will spend 27 years in federal prison.”

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

NUNEZ GARCIA was a member of the “Elder Family” set of the DDP gang—an enterprise that distributed crack cocaine and other drugs, and carried out shootings, robberies, and other acts of violence, on and around Elder Avenue in the Bronx, New York.  On June 5, 2009, members of the DDP gang attended a party and got into an altercation with individuals they understood to be members of the rival Trinitarios gang.  These suspected rivals—who included Jonathan Ruiz—fled down the street, but NUNEZ GARCIA and his accomplices pursued them in a car.  Once the DDPs caught up with Ruiz, one of the DDP members exited the car and shot Ruiz from a distance, causing Ruiz to fall wounded to the ground.  NUNEZ GARCIA then ran over to the wounded Ruiz, stood over him, and shot him again.  NUNEZ GARCIA left Ruiz to bleed out from his injuries.

*                      *                     *

In addition to the prison term, NUNEZ GARCIA, 31 of the Bronx, New York, was sentenced to five years of supervised release.

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

The case is being handled by the Office’s Violent and Organized Crime Unit.  Assistant United States Attorneys Frank Balsamello and Adam Hobson are in charge of the prosecution.

Damian Williams, the United States Attorney for the Southern District of New York, announced that SAMUEL REED, one of three co-founders and a high-ranking executive of purportedly “off-shore” cryptocurrency derivatives exchange the Bitcoin Mercantile Exchange or “BitMEX,” pled guilty today to violating the Bank Secrecy Act (the “BSA”) by willfully failing to establish, implement, and maintain an anti-money laundering (“AML”) program at BitMEX.  Under the terms of his plea agreement, REED agreed to separately pay a $10 million criminal fine representing pecuniary gain derived from the offense.  REED pled guilty today before Chief U.S. District Judge Laura T. Swain, and will be sentenced by U.S. District Judge John G. Koeltl.  The other two founders of BitMEX, Arthur Hayes and Benjamin Delo, previously pled guilty to the same offense in February 2022.

U.S. Attorney Damian Williams said:  “Samuel Reed has now joined his co-founders, Arthur Hayes and Benjamin Delo, in admitting that they caused BitMEX to commit criminal violations of the anti-money laundering laws that govern financial institutions operating in the United States.  As today’s guilty plea reflects, this Office will not permit cryptocurrency exchanges to operate as a shadow financial system that enables criminal actors to move their illicit proceeds without detection, and will vigorously investigate and prosecute the operators of such exchanges who deliberately flout U.S. law.”

According to the Indictment, public court filings, and statements made in court:[1]

REED, together with Arthur Hayes and Benjamin Delo, was one of the three co-founders and the long-time Chief Technology Officer of BitMEX.  BitMEX is an online cryptocurrency derivatives exchange that, during the relevant time period, had U.S.-based operations and served thousands of U.S. customers, notwithstanding false representations to the contrary by the company.  From at least September 2015, and continuing at least through the time of the Indictment in September 2020, REED willfully caused BitMEX to fail to establish and maintain an AML program, including a program for verifying the identify of BitMEX’s customers (or a “know your customer” or “KYC” program).  As a result of its willful failure to implement AML and KYC programs, BitMEX was in effect a money laundering platform.  For example, in about May 2018, REED was notified of allegations that BitMEX was being used to launder the proceeds of a cryptocurrency hack.  Neither REED nor the company filed a suspicious activity report thereafter (indeed, BitMEX filed no suspicious activity reports at all between 2014 and September 2020), nor did BitMEX implement an AML or KYC program in response. 

REED failed to institute AML or KYC programs at BitMEX despite closely following U.S. regulatory developments that made clear his legal obligation to do so if BitMEX operated in the United States, which it did.  Despite repeatedly stating that BitMEX did not serve U.S. customers, including to individuals outside of BitMEX, REED knew that BitMEX’s purported withdrawal from the U.S. market in or about September 2015 was a sham, and that purported “controls” BitMEX put in place to prevent U.S. trading were an ineffective facade that did not, in fact, prevent users from accessing or trading on BitMEX from the United States.  REED not only understood that U.S. customers continued to trade on BitMEX, but derived substantial profits from BitMEX as a result of U.S.-based trading. 

*                *                *

REED, 32, of Massachusetts, pled guilty to one count of violating the Bank Secrecy Act, which carries a maximum penalty of 5 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’s New York Money Laundering Investigation Squad, and thanked the attorneys and investigators at the Commodity Futures Trading Commission whose expertise and diligence were integral to the development of this investigation.

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

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[1] Two of REED’s co-defendants, Arthur Hayes and Benjamin Delo, pled guilty to violating the BSA in February 2022. As to REED’s remaining co-defendant, the entirety of the text of the Indictment, and the description of the Indictment set forth herein, constitute only allegations, and every fact described should be treated as an allegation.

Damian Williams, the United States Attorney for the Southern District of New York, announced today that TERRY FORMER was sentenced this afternoon to 48 months in prison in connection with the laundering of more than $2.2 million in proceeds of a business email compromise scheme.  FORMER pled guilty to conspiring to commit wire fraud on April 2, 2021, before U.S. District Judge P. Kevin Castel, who imposed today’s sentence.

U.S. Attorney Damian Williams said:  “Terry Former played an essential role in a scheme to defraud businesses, by organizing a team of co-conspirators to open shell company bank accounts to accept the victims’ funds and clandestinely transfer them to the fraudsters. Today’s sentence demonstrates the severe consequences that will befall those who facilitate criminal conduct by laundering its proceeds.”

According to the Indictment and other public filings in the case: 

From at least in or about October 2018 through at least in or about October 2019, TERRY FORMER participated in a scheme to defraud businesses and by impersonating individuals and businesses in the course of otherwise ordinary financial transactions, thereby fraudulently inducing counterparties to those transactions to transfer funds to bank accounts controlled by FORMER and his co-conspirators (the “Scheme”).  FORMER was one of the primary individuals responsible for coordinating the money side of the Scheme.  In particular, he directed co-conspirators to open up bank accounts in the names of shell companies, which were purposefully chosen to mirror the names of the true counterparties in the business transactions that were targeted by the Scheme.  FORMER also coordinated between the individuals involved in impersonating the true counterparties and the individuals holding the bank accounts to let them know when the accounts would be funded and to funnel the money out of those accounts once received . 

In reliance on the foregoing false and misleading misrepresentations, one of the victims of the Scheme wired more than $2.2 million into a fraudulent bank account opened at FORMER’s direction.  FORMER and his co-conspirators, knowing the money represented fraud proceeds, transferred a portion of those fraud proceeds out of the fraudulent bank account in transactions designed to conceal and disguise their source, ownership, and control.  FORMER’s efforts to drain the account completely were stopped only when the bank froze the funds.

*                *                *

FORMER, 46, of Texas, was also sentenced to three years of supervised release. 

Mr. Williams praised the work of Homeland Security Investigations for their investigative efforts and ongoing support and assistance with the case.  The prosecution of this case is being handled by the Money Laundering and Transnational Criminal Enterprises Unit. Assistant United States Attorneys Emily Deininger and Tara La Morte are in charge of the prosecution.

Damian Williams, the United States Attorney for the Southern District of New York, and Ricky Patel, Acting Special Agent in Charge of the New York Field Office of Homeland Security Investigations (“HSI”), announced today that JOHN ALBERT LOAR BARKSDALE was arrested abroad on conspiracy, securities fraud, and wire fraud charges.  The charges arise from a scheme perpetrated by BARKSDALE to sell a cryptocurrency token called Ormeus Coin (asset symbol “ORME”) through false representations regarding the size, value, and purported profitability of Ormeus Coin’s cryptocurrency mining assets.  In particular, through a series of marketing materials designed to sell Ormeus Coin, BARKSDALE and others falsely represented, among other things, that Ormeus Coin was secured by a $250 million cryptocurrency mining operation, which would have been one of the largest such operations in the world, and that its mining revenues exceeded $5 million on a monthly basis.    

U.S. Attorney Damian Williams said:  “As alleged, John Barksdale perpetrated a scheme to sell the cryptocurrency Ormeus Coin to investors around the world through a web of lies, which he spread through in-person roadshows, social media, and even a jumbotron in Times Square.  Among other allegedly false statements he made, Barksdale lied that Ormeus Coin was secured by a $250 million cryptocurrency mining operation that had revenues exceeding $5 million per month, when in fact Ormeus’s mining operations never approached such a value or had such revenues.  Together with our law enforcement partners here and abroad, we will work tirelessly to prosecute those who commit frauds against the public in connection with the sale of cryptocurrencies.”

Acting HSI New York Special Agent in Charge Ricky J. Patel:  “As alleged, Barksdale operated like a traveling salesman and peddled lies, overstatements, and misrepresentations regarding a cryptocurrency called Ormeus Coin, which resulted in duping thousands of investors throughout the world and took in over $70 million.  The men and women of HSI will not allow fraudsters to sell dreams of inflated and unrealistic revenues to innocent investors with the goal of lining their own pockets.  By leveraging federal and international partnerships, Barksdale is now facing prosecution in the Southern District of New York for his alleged criminal acts.”

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

From in or about 2017 through at least in or about October 2021, BARKSDALE and his relative (“CC-1”) perpetrated a scheme to sell Ormeus Coin, an ERC-20 compliant smart contract-based token on the Ethereum blockchain, through false representations.  Ormeus Coin was offered to investors throughout the world, including in the United States and the Southern District of New York, through enrollment packages sold by Ormeus Global, a multi-level marketing company controlled by BARKSDALE and CC-1, various digital currency exchanges, and directly from BARKSDALE and his associates.

Through a series of white papers, in-person roadshows, online webinars and videos, social media platforms, and other marketing materials approved by BARKSDALE and CC-1, BARKSDALE and CC-1 falsely represented, among other things, that Ormeus Coin was a digital money system secured by a $250 million cryptocurrency mining operation, which would have been one of the largest such operations in the world.  In order to backstop the false representations regarding the size and value of cryptocurrency mining assets that purportedly secured the value of Ormeus Coin, BARKSDALE, among other things: (i) approved marketing materials that falsely depicted photos of a purported Ormeus Coin mining facility; (ii) deceptively referenced an “Ormeus Reserve Vault” (“ORV”) that stored over 3,000 Bitcoin purportedly derived from Ormeus Coin’s mining operations, which was represented as securing the value of Ormeus Coin; and (iii) falsely stated that Ormeus Coin’s mining revenues exceeded $5 million on a monthly basis.  For example, on or about February 9, 2018, Ormeus Coin ran an advertisement on a jumbotron in Times Square in Manhattan, New York, which proclaimed, in a caption above a giant ORME symbol, “$250 Million Cryptocurrency Mining Farm Revealed in Legal Audit by Ormeus Coin.”  On or about February 12, 2018, a photograph of the Times Square advertisement was posted to Ormeus Global’s Twitter account with the caption “Live from New York City, Ormeus Coin Advertising its $250 million Cryptocurrency Mining Farm in Times Square, Manhattan!”  In truth, Ormeus’s mining operations never approached a value close to $250 million and never produced revenues exceeding one million dollars in any month, and the Bitcoin stored in the “Ormeus Reserve Vault” belonged to a third party.

Numerous investors purchased enrollment packages through Ormeus Global and purchased Ormeus Coin through digital currency exchanges or directly from BARKSDALE and his associates.  Investors made these purchases based at least in part on BARKSDALE’s false representations regarding the size, value, and purported profitability of the cryptocurrency mining assets controlled by Ormeus Global and Ormeus Coin, as well as the purported security that the ORV provided to the value of Ormeus Coin.  Through this scheme, from in or about June 2017 through at least in or about April 2018, Ormeus Global raised at least approximately $70 million from the sale of enrollment packages to more than 8,000 investors around the world.  From in or about June 2017 through at least in or about October 2021, Ormeus Coin was sold to at least approximately 12,000 investors, including at least 200 U.S.-based investors.  At its peak, Ormeus Coin had a market capitalization of approximately $52 million in or about January 2018.

*                      *                      *

BARKSDALE, 40, is charged with one count of conspiracy to commit securities fraud, one count of securities fraud, one count of conspiracy to commit wire fraud, and one count of wire fraud.  Conspiracy to commit securities fraud carries a maximum sentence of five years in prison.  All other charges each carry a maximum sentence of 20 years in prison.  The maximum potential sentences are prescribed by Congress and are provided here for informational purposes only, as any sentencing of the defendants will be determined by the judge.

Any individuals who believe they may have been the victim of the alleged crimes perpetrated in connection with Ormeus Global or Ormeus Coin can contact HSI at https://www.ice.gov/webform/ice-tip-form or ormeus@ice.dhs.gov.

Mr. Williams praised the outstanding investigative work of HSI and USPIS, and thanked the United States Securities and Exchange Commission, which today filed a parallel civil action, for its assistance.  Mr. Williams also thanked the U.S. Department of Justice’s Office of International Affairs of the Department’s Criminal Division, the U.S. Department of State, and the U.S. Marshals Service, who all provided significant assistance in this investigation.  

This case is being handled by the Office’s Complex Frauds and Cybercrime Unit.  Assistant U.S. Attorneys Sarah Lai, Sagar Ravi, and Olga I. Zverovich 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.

A federal court in New York unsealed a complaint today charging a dual Russian and U.S. citizen with acting and conspiring to act in the United States illegally as an agent of the Russian government, willfully failing to register under the Foreign Agents Registration Act (FARA), as well as conspiring to commit visa fraud and making false statements to the FBI.

According to court documents, Elena Branson, 61, beginning in at least 2011, worked on behalf of the Russian government and Russian officials to advance Russian interests in the United States, including by coordinating meetings for Russian officials to lobby U.S. political officials and businesspersons, and by operating organizations in the United States for the purpose of publicly promoting Russian government policies. Branson never notified the Attorney General as she was required to, including by registering under FARA.

“As alleged, Branson engaged in a wide-ranging influence and lobbying scheme with funding and direction from the Russian government – all while deliberately leaving the American people in the dark,” said Assistant Attorney General Matthew G. Olsen of the Justice Department’s National Security Division. “The department will continue to expose these serious crimes and shine a light on foreign malign influence.”

“As alleged, Elena Branson, a dual U.S. - Russian national, actively subverted foreign agent registration laws in the United States in order to promote Russian policies and ideology,” said U.S. Attorney Damian Williams for the Southern District of New York. “The Russian government at its highest levels, up to and including President Vladimir Putin, have made known that aggressive propaganda and recruitment of the Russian diaspora around the world is a Russian priority. In connection with this pursuit, Branson is alleged to have corresponded with Putin himself and met with a high-ranking Russia minister before founding a Russian propaganda center here in New York City, the Russian Center New York. Branson’s promotional outreach, including an ‘I Love Russia’ campaign aimed at American youths, exemplifies her attempts to act at the behest of the Russian government to illegally promote its interests in the United States. All the while, Branson knew she was supposed to register as an agent of the Russian government but chose not to do so and, instead, instructed others regarding how to illegally avoid the same. Particularly given current global events, the need to detect and hinder attempts at foreign influence is of critical importance, and the Southern District of New York is proud to do its part in the fight against tyranny.”

“The evidence gathered in the Branson case shows she is a serial offender in violating the Foreign Agents Registration Act in order to promote Russian interests,” said Assistant Director Alan E. Kohler Jr. of the FBI’s Counterintelligence Division. “While living in the United States for nearly a decade, she allegedly took money and direction from Russian government officials –  including some at the Russian Embassy in Washington, D.C. – as she arranged meetings for Russian officials to lobby U.S. officials. The FBI and our partners will continue to investigate and stop individuals who hide their work for foreign governments, like the one in Moscow.”

According to court documents, the Russian government has sought to spread Russian propaganda and to use Russian citizens in the United States and elsewhere to make connections with U.S. community leaders, politicians and businesspersons, in order to advance Russian government objectives. Russian leaders, including President Vladimir Putin, have made public statements acknowledging this foreign policy strategy of the Russian government. 

As part of that Russian government effort, beginning in at least approximately 2011, Branson, a native of Russia, acted illegally as an agent of the Russian government while living in the United States, by not registering pursuant to FARA or otherwise notifying the Attorney General as required by a separate statute. Among other things, in or about 2012, after receiving approval from the highest levels of the Russian government, Branson incorporated an organization headquartered in Manhattan, New York, named the Russian Center New York (RCNY). She sent correspondence to then-Prime Minister Putin and met with a high-ranking Russian government minister in connection with the initiation of her activities for the Russian government in the United States. 

Branson received tens of thousands of dollars in funding from the Russian government for the RCNY and used the RCNY to host events and engage in public messaging at the direction of the Russian government and Russian officials. Branson was directed to, among other things, host events designed to consolidate the Russian-speaking youth community in the United States in exchange for funding. For example, Branson and the RCNY hosted an annual youth forum which was funded in part by an entity controlled by the government of Moscow.

Throughout her work as a Russian agent in the United States, Branson received funding and direction from the Russian government, including from the Russian Embassy in Washington, D.C., and received tasking from high-level Russian government officials and Russian government-run organizations. At the same time, however, Branson actively sought to hide that the Russian government was providing her with tasking and funding her activity, and she instructed her co-conspirators to do the same. She also cautioned others against using language in describing their activities that would draw attention to FARA registration obligations for herself and the organizations.

As alleged, in or about 2019, Branson coordinated through the RCNY a campaign to lobby Hawaiian officials not to change the name of a fort located on the Hawaiian island of Kauai, which is the last remaining formerly Russian fort in the Hawaiian-islands and is significant to the Russian government. Among other things, Branson provided Hawaiian officials with messages from Russian government officials and organized a trip to Moscow for Hawaiian officials responsible for the potential name change to meet with high-ranking Russian government personnel. 

In addition to the RCNY, Branson served as a chairperson of the Russian Community Council of the USA (KSORS), which is funded at least in part by various Russian government-run entities. Among other things, KSORS coordinated an “I Love Russia” campaign in the United States and organized youth forums focused on the promotion of Russian history and culture to American youths. Branson used the KSORS website to promote messages from the Russian Embassy and organized KSORS events approved by the Russian Ambassador to the United States. When Branson sought financial support from a government of Moscow official for the KSORS website, Branson reported that the purpose of the KSORS website was to spread information “about the activities of organizations created by Russian compatriots to form a positive image of Russia and Moscow among Americans.” 

According to the complaint, Branson’s work on behalf of the Russian government also included arranging meetings for herself and other Russian officials with U.S. government officials and executives at businesses based in the United States. For example, in March 2016, Branson worked to arrange meetings for the head of the Department of Foreign Economic Activity and International Relations for the Government of Moscow with, among others, a New York state senator and the management of certain U.S. companies. 

Branson also participated in a scheme to obtain fraudulent visas for Russian officials and their associates, by providing information about RCNY events to those individuals for using as false pretenses to obtain visas to enter the United States. 

The FBI interviewed Branson on Sept. 29, 2020. During this interview, among other things, Branson falsely claimed that she was never asked by Russian officials to coordinate any meetings between U.S. business leaders or politicians and officials from the government of Moscow. Branson subsequently left the United States for Russia. On or about Oct. 15, 2021, during an interview on a Russian government-controlled television station, Branson stated that she left the United States because she thought it was likely that she would be arrested. 

Branson is charged with: (1) conspiring to act as an agent of a foreign government without notifying the Attorney General, which carries a maximum sentence of five years in prison; (2) acting as an agent of a foreign government without notifying the Attorney General, which carries a maximum sentence of 10 years in prison; (3) conspiring to evade FARA registration, which carries a maximum sentence of five years in prison; (4) willfully failing to register under FARA, which carries a maximum sentence of five years in prison; (5) conspiring to commit visa fraud, which carries a maximum sentence of five years in prison; and (6) making false statements to the FBI, 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.

Branson left the United States for Russia in 2020 and remains at large.

The FBI’s New York Field Office are investigating the case.

Assistant U.S. Attorney Jason A. Richman for the Southern District of New York and Trial Attorney Scott Claffee of the National Security Division’s Counterintelligence and Export Control Section are prosecuting the case.

An indictment is merely an allegation, 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, 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 filing of a Complaint charging ELENA BRANSON, a dual Russian and U.S. citizen, with acting and conspiring to act in the United States illegally as an agent of the Russian government, willfully failing to register under the Foreign Agents Registration Act (“FARA”), as well as conspiring to commit visa fraud and making false statements to the FBI.  As alleged, beginning in at least 2011, BRANSON worked on behalf of the Russian government and Russian officials to advance Russian interests in the United States, including by coordinating meetings for Russian officials to lobby U.S. political officials and businesspersons, and by operating organizations in the United States for the purpose of publicly promoting Russian government policies, and BRANSON never notified the Attorney General as she was required to, including by registering under FARA.

U.S. Attorney Damian Williams said: “As alleged, Elena Branson, a dual U.S. / Russian national, actively subverted foreign agent registration laws in the United States in order to promote Russian policies and ideology.  The Russian government at its highest levels, up to and including President Vladimir Putin, have made known that aggressive propaganda and recruitment of the Russian diaspora around the world is a Russian priority.  In connection with this pursuit, Branson is alleged to have corresponded with Putin himself and met with a high-ranking Russia minister before founding a Russian propaganda center here in New York City, the Russian Center New York.  Branson’s promotional outreach, including an ‘I Love Russia’ campaign aimed at American youths, exemplifies her attempts to act at the behest of the Russian government to illegally promote its interests in the United States.  All the while, Branson knew she was supposed to register as an agent of the Russian government but chose not to do so and, instead, instructed others regarding how to illegally avoid the same.  Particularly given current global events, the need to detect and hinder attempts at foreign influence is of critical importance, and the Southern District of New York is proud to do its part in the fight against tyranny.”

Assistant Attorney General Matthew G. Olsen said: “As alleged, Branson engaged in a wide-ranging influence and lobbying scheme with funding and direction from the Russian government – all while deliberately leaving the American people in the dark. The Department will continue to expose these serious crimes and shine a light on foreign malign influence.”

FBI Assistant Director-in-Charge Michael J. Driscoll said: “As alleged, Branson worked as an illegal agent of the Russian government in circumvention of FARA requirements. At the direction of the Russian government, she led a years long campaign to identify the next generation of American leaders, cultivate information channels, and shape US policy in favor of Russian objectives.  This case highlights the breadth of Russia's relentless intelligence and malign influence activities targeting the United States. The FBI will continue to be just as aggressive in uncovering and dismantling these Russian government networks who seek to harm our national security.”

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

The Russian government has sought to spread Russian propaganda and to use Russian citizens in the United States and elsewhere to make connections with U.S. community leaders, politicians, and businesspersons, in order to advance Russian government objectives.  Russian leaders, including President Vladimir Putin, have made public statements acknowledging this foreign policy strategy of the Russian government. 

As part of that Russian government effort, beginning in at least approximately 2011, BRANSON, a native of Russia, acted illegally as an agent of the Russian government while living in the United States, by not registering pursuant to FARA or otherwise notifying the Attorney General as required by a separate statute. Among other things, in or about 2012, after receiving approval from the highest levels of the Russian government, BRANSON incorporated an organization headquartered in Manhattan, New York, named the Russian Center New York (“RCNY”).  BRANSON sent correspondence to then-Prime Minister Putin and met with a high-ranking Russian government Minister in connection with the initiation of her activities for the Russian government in the United States.  BRANSON received tens of thousands of dollars in funding from the Russian government for the RCNY and has used the RCNY to host events and engage in public messaging at the direction of the Russian government and Russian officials.  BRANSON was directed to, among other things, host events designed to consolidate the Russian-speaking youth community in the United States.  For example, BRANSON and the RCNY hosted an annual youth forum, funded in part by an entity controlled by the Government of Moscow. Throughout her work as a Russian agent in the United States, BRANSON received funding and direction from the Russian government, including from the Russian Embassy in Washington, D.C., and received tasking from high-level Russian government officials and Russian government-run organizations. At the same time, however, BRANSON actively sought to hide that the Russian government was providing her with tasking and funding her activity and she instructed her co-conspirators to do the same. She also cautioned others against using language in describing their activities that would draw attention to FARA registration obligations for herself and the organizations.

As alleged, in or about 2019, BRANSON coordinated through the RCNY a campaign to lobby Hawaiian officials not to change the name of a fort located on the Hawaiian island of Kauai, which is the last remaining formerly Russian fort in the Hawaiian islands and is significant to the Russian government.  Among other things, BRANSON provided Hawaiian officials with messages from Russian government officials and organized a trip to Moscow for Hawaiian officials responsible for the potential name change to meet with high-ranking Russian government personnel. 

In addition to the RCNY, BRANSON has served as a Chairperson of the Russian Community Council of the USA (“KSORS”), which is funded at least in part by various Russian government-run entities.  Among other things, KSORS has coordinated an “I Love Russia” campaign in the United States and organized youth forums focused on the promotion of Russian history and culture to American youths.  BRANSON used the KSORS website to promote messages from the Russian Embassy and organized KSORS events approved by the Russian Ambassador to the United States.  When BRANSON sought financial support from a Government of Moscow official for the KSORS website, BRANSON reported that the purpose of the KSORS website was to spread information “about the activities of organizations created by Russian compatriots to form a positive image of Russia and Moscow among Americans.” 

According to the Complaint, BRANSON’s work on behalf of the Russian government also included arranging meetings for herself and other Russian officials with U.S. Government officials and executives at businesses based in the United States.  For example, in March 2016, BRANSON worked to arrange meetings for the head of the Department of Foreign Economic Activity and International Relations for the Government of Moscow with, among others, a then-New York State Senator and the management of certain U.S. companies.

BRANSON also participated in a scheme to obtain fraudulent visas for Russian officials and their associates, by providing information about RCNY events to those individuals for using as false pretenses to obtain visas to enter the United States. 

The FBI interviewed BRANSON on September 29, 2020.  During this interview, among other things, BRANSON falsely claimed that she had never been asked by Russian officials to coordinate any meetings between U.S. business leaders or politicians and officials from the Government of Moscow.  BRANSON subsequently left the United States for Russia.  On or about October 15, 2021, during an interview on a Russian government-controlled television station, BRANSON stated that she had left the United States because she thought it was likely that she would be arrested. 

*                      *                     *

BRANSON, 61, is charged with (1) conspiring to act as an agent of a foreign government without notifying the Attorney General, which carries a maximum sentence of five years in prison; (2) acting as an agent of a foreign government without notifying the Attorney General, which carries a maximum sentence of ten years in prison; (3) conspiring to evade FARA registration, which carries a maximum sentence of five years in prison; (4) willfully failing to register under FARA, which carries a maximum sentence of five years in prison; (5) conspiring to commit visa fraud, which carries a maximum sentence of five years in prison; and (6) making false statements to the FBI, which carries a maximum sentence of five years in prison.  The maximum statutory penalties are prescribed by Congress and are provided here for informational purposes only, as any sentencing of the defendant would be determined by a judge.

BRANSON left the United States for Russia in 2020 and remains at large.

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.

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

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

Damian Williams, the United States Attorney for the Southern District of New York, and Daniel B. Brubaker, Inspector-in-Charge of the New York Office of the United States Postal Inspection Service (“USPIS”), announced today that SERGIO LORENZO RODRIGUEZ, of Orange County, California, pled guilty to one count of wire fraud in connection with a fraudulent foreclosure rescue scheme that took in at least $5 million in prohibited advance fees from thousands of financially distressed homeowners.  RODRIGUEZ pled guilty before U.S. Magistrate Judge Sarah Netburn.

U.S. Attorney Damian Williams said:  “As he admitted today, for years, Sergio Lorenzo Rodriguez took advantage of desperate homeowners who were facing foreclosure and eviction to collect from them, in the aggregate, millions of dollars in advance fees based on promises that Rodriguez knew he could not, or would not, keep.  He exploited the financial vulnerability of his victims and is now being held accountable for his crime.”

According to the Complaint, the Indictment,[1] and statements made in court, and publicly available documents:    

From approximately mid-2015 through August 2020, SERGIO LORENZO RODRIGUEZ and a co-conspirator (the Defendants) owned and/or managed a series of mortgage modification companies through which they perpetrated a scheme to defraud and attempt to defraud financially distressed consumers who were facing or were at imminent risk of foreclosure through deceptive marketing practices. Those companies included American Home Servicing Center, National Advocacy Center, National Advocacy Group, and Capital Home Advocacy Center (collectively, the “Companies”).  The Defendants tricked desperate homeowners into paying thousands of dollars each in prohibited advance fees through various misrepresentations, including: falsely claiming that the homeowners had been pre-approved by their lender or servicer for a mortgage modification; misrepresenting prohibited advance fees as closing costs or other non-prohibited costs; fraudulently claiming that the Companies achieved success rates of 95 percent or higher for mortgage modifications; and making empty promises of a no-risk money back guarantee.  As a result of their intentional misrepresentations, and misrepresentations that they encouraged their subordinates to make, the Defendants induced thousands of homeowners to pay, in the aggregate, millions of dollars in prohibited advance fees to the Companies, including a large number of consumers who were ultimately denied mortgage modifications or who received modification offers that were less favorable than they had been led to expect at the time they paid advance fees.

In February 2018, the Federal Trade Commission brought a civil lawsuit against the Defendants, among others, in federal court in Santa Ana, California.  That civil action resulted first in a temporary restraining order and then a permanent injunction barring the Defendants from marketing and selling all debt relief products and services.  As alleged in the Indictment, the Defendants flouted those judicial orders by having a relative create another mortgage modification company named 1st Premier Asset Solutions, which the Defendants operated using aliases and some of the same deceptive practices. 

*                *                *

SERGIO LORENZO RODRIGUEZ, 47, of Laguna Niguel, California, pled guilty to one count of wire fraud, which carries a maximum sentence of 20 years in prison and a maximum fine of $250,000 or twice the gross gain or loss from the offense. 

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 and persistent investigative work of the United States Postal Inspection Service and thanked the Federal Trade Commission for their assistance.

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

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[1] As to Rodriguez’s co-defendant Eva Christine Rodriguez, the entirety of the text of the Indictment, and the descriptions of the Indictment set forth herein constitute only allegations and every fact described should be treated as an allegation.

Damian Williams, the United States Attorney for the Southern District of New York, announced that RAKIM BROWN, a/k/a “Rah,” pled guilty yesterday to firearms and narcotics offenses, including for his participation in a January 28, 2018 shooting at a woman in an apartment building vestibule in the University Heights neighborhood of the Bronx.  BROWN pled guilty before U.S. District Judge Sidney H. Stein.

U.S. Attorney Damian Williams said:  “For years, Rakim Brown was a violent drug dealer who sold crack cocaine on the streets of the Bronx.  In order to protect his drug crew’s territory and reputation, Brown resorted to violence, including shooting at a woman associated with a rival drug crew in the vestibule of an apartment building in the Bronx.  Brown now faces significant prison time for his crimes and the harm he inflicted on the victim and his community at large.”

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

RAKIM BROWN, a/k/a “Rah,” was a member of a narcotics conspiracy that operated in and around 183rd Street and Davidson Avenue in the University Heights neighborhood of the Bronx.  BROWN and others sold crack cocaine throughout the neighborhood.  In 2017, a rivalry developed between BROWN’s drug crew and another drug crew when a member of the other drug crew shot and paralyzed BROWN’s brother.  In retaliation, on January 28, 2018, BROWN and others chased an associate of the rival drug crew until they cornered her in the vestibule of an apartment building.  BROWN then entered the vestibule, beat the victim, and shot at her multiple times.  The victim sustained multiple injuries to her face and legs.  

In connection with BROWN’s guilty plea, BROWN specifically admitted that he committed perjury at a pre-trial hearing before Judge Stein and that he possessed crack on particular occasions in 2016 and 2017 in connection with the narcotics trafficking conspiracy.

*              *             *

BROWN, 26, pleaded guilty to narcotics conspiracy, which carries a maximum sentence of twenty years in prison, and using and carrying a firearm, which was brandished and discharged, in furtherance of a drug trafficking crime, which carries a maximum sentence of life and a mandatory minimum sentence of ten years in prison, which must be served consecutively to any other sentence imposed.  BROWN will be sentenced before Judge Stein on June 6, 2022.

The statutory maximum penalties are prescribed by Congress and are 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 New York City Police Department and thanked the Special Agents of the U.S. Attorney’s Office for the Southern District of New York for their assistance with the investigation.

The case is being prosecuted by the Office’s Violent and Organized Crime Unit.  Assistant United States Attorneys Mathew Andrews, Christopher Brumwell, Alexandra Rothman, and Danielle Sassoon are in charge of the prosecution.

A federal court in the Southern District of New York today unsealed the first-ever criminal indictment charging a violation of U.S. sanctions arising from the 2014 Russian undermining of democratic processes and institutions in Ukraine.

According to court documents, John Hanick, aka Jack Hanick, 71, a U.S. citizen, is charged with violations of U.S. sanctions and false statements in connection with his years-long work for the sanctioned Russian oligarch Konstantin Malofeyev.

“The Justice Department will do everything it can to stamp out Russian aggression and interference,” said Assistant Attorney General Matthew G. Olsen of the Justice Department’s National Security Division. “As alleged in the indictment, the Russian oligarch Konstantin Malofeyev was previously sanctioned for threatening Ukraine and providing financial support to the Donetsk separatist region. The defendant Hanick knowingly chose to help Malofeyev spread his destabilizing messages by establishing, or attempting to establish, TV networks in Russia, Bulgaria and Greece, in violation of those sanctions.”

“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 Damien Williams for the Southern District of New York. “The U.S. sanctions on Malofeyev prohibit U.S. citizens from working for or doing business with Malofeyev but as alleged, Hanick violated those sanctions by working directly for Malofeyev on multiple television projects over the course of several years. 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.”

“Sanctions imposed by the U.S. government are in place to protect our national interests, as well as the interests of our allies around the world,” said Assistant Director in Charge of the FBI’s New York Field Office. “As alleged, Mr. Hanick worked for the benefit of Konstantin Malofeyev, a Specially Designated National under Executive Order 13,660 who provided significant financing for Russians promoting separatism in Crimea in 2014. The action we have taken today should serve as an example to all that we will use all the resources at our disposal to aggressively enforce our nation's sanctions.” 

According to court documents, in 2014 the President issued Executive Order 13,660, 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, 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 13,660, 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, OFAC designated Konstantin Malofeyev as a Specially Designated National (SDN) pursuant to Executive Order 13,660. OFAC’s designation of Malofeyev explained that he was one of the main sources of financing for Russians promoting separatism in Crimea, and 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, Hanick worked directly for and for the benefit of Malofeyev from at least in or about 2013 through at least in or about 2017, and continued to engage in this conduct after OFAC listed Malofeyev as a SDN, in violation of the Ukraine-Related Sanctions Regulations. Beginning in at least 2013, Malofeyev began planning to create a new Russian cable television news network (the Russian TV Network), and Hanick began traveling to Russian in early 2013 to meet with Malofeyev regarding these plans. In or about July 2013, Hanick moved to Russia to work for Malofeyev on the Russian television network, after negotiating the terms of his employment directly with Malofeyev, including the salary he would receive, payment for his housing in Moscow, and his Russian work visa.

Hanick continued to work for and report directly to Malofeyev after OFAC designated Malofeyev as a SDN in December 2014. For instance, in January 2015, Hanick wrote an email to Malofeyev that a draft policy for the Russian TV Network was meant “to implement your vision and to provide you with information for you to make decisions … You are the founder and chief architect of the project. We, as board members have the responsibility to direct the staff to implement your instructions.” The Russian TV Network went on the air in Russia in or about April 2015. Hanick played a leadership role at the network, described at various times in emails from 2015 through 2017 as “Board Chairman,” “General Producer,” “chairman of the HR committee,” and “General Advisor” for the Russian TV Network. Hanick reported directly to Malofeyev regarding the network’s operations and was listed on organizational charts directly below Malofeyev. Hanick was paid for his work through two Russian entities that were nominally separate from the Russian TV Network, but his compensation was overseen by Malofeyev, negotiated with Malofeyev, and was for his work for Malofeyev’s Russian TV Network. Hanick wired a portion of the payments he received from a Russian bank account to a bank account he held at a bank located in New York, New York.

Hanick also worked for Malofeyev on a project to establish and run a Greek television network and on efforts to acquire a Bulgarian television network. At Malofeyev’sdirection, Hanick traveled to Greece and to Bulgaria on multiple occasions in 2015 and 2016 to work on these initiatives, andreported 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’sefforts to acquire the Bulgarian television network, Hanick took steps to conceal Malofeyev’s role in the acquisition by arranging to travel to Bulgaria with another person identified by a Greek associate of Malofeyev, so that it would appear the buyer was a Greek national rather than Malofeyev.

In February 2021, FBI agents interviewed Hanick about his work for Malofeyev, and Hanick made false statements about his work for Malofeyev, including the false statements that Malofeyev had no involvement in Hanick’s travel to Bulgaria, and that Hanick did not know that Malofeyev had any connection to the attempt to acquire the Bulgarian television network until afterward. 

Hanick is charged with violating the International Emergency Economic Powers Act, which carries a maximum penalty of 20 years in prison and making false statements which carries a maximum penalty of five years in prison. Pursuant to the request of the United States, Hanick was provisionally arrested on Feb. 3, in London, with a view toward extradition. A federal district judge will determine any sentence after considering the U.S. Sentencing Guidelines and other statutory factors.

The FBI is investigating the case.

Assistant U.S. Attorneys Thane Rehn and Jessica Greenwood for the Southern District of New York are prosecuting the case. 

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.

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 Office of the Federal Bureau of Investigation, announced today the unsealing of the first-ever criminal indictment charging a violation of United States sanctions arising from the 2014 Russian undermining of democratic processes and institutions in Ukraine. JOHN HANICK, a/k/a “Jack Hanick,” a United States citizen, is charged with violations of United States sanctions and false statements in connection with his years-long work for the sanctioned Russian oligarch Konstantin Malofeyev. Pursuant to the request of the United States, HANICK was provisionally arrested on February 3, 2022, in London, the United Kingdom, with a view toward extradition.

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 United States citizens from working for or doing business with Malofeyev but as alleged, Hanick violated those sanctions by working directly for Malofeyev on multiple television projects over the course of several years. 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 Justice Department will do everything it can to stamp out Russian aggression and interference,” said Assistant Attorney General Matthew G. Olsen of the Justice Department’s National Security Division. “As alleged in the indictment, the Russian oligarch Konstantin Malofeyev was previously sanctioned for threatening Ukraine and providing financial support to the Donetsk separatist region. The defendant Hanick knowingly chose to  help Malofeyev spread his destabilizing messages by establishing, or attempting to establish, TV networks in Russia, Bulgaria, and Greece, in violation of those sanctions.”

FBI Assistant Director Michael J. Driscoll said: “Sanctions imposed by the United States government are in place to protect our national interests, as well as the interests of our allies around the world.  As alleged, Mr. Hanick worked for the benefit of Konstantin Malofeyev, a Specially Designated National under Executive Order 13660 who provided significant financing for Russians promoting separatism in Crimea in 2014.  The action we have taken today should serve as an example to all that we will use all the resources at our disposal to aggressively enforce our nation’s sanctions.”

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

In 2014, the President issued Executive Order 13,660, 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 13,660, 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 13,660. 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, HANICK worked directly for and for the benefit of Malofeyev from at least in or about 2013 through at least in or about 2017, and continued to engage in this conduct after OFAC listed Malofeyev as a SDN, in violation of the Ukraine-Related Sanctions Regulations. Beginning in at least 2013, Malofeyev began planning to create a new Russian cable television news network (the “Russian TV Network”), and HANICK began traveling to Russian in early 2013 to meet with Malofeyev regarding these plans. In or about July 2013, HANICK moved to Russia to work for Malofeyev on the Russian television network, after negotiating the terms of his employment directly with Malofeyev, including the salary he would receive, payment for his housing in Moscow, and his Russian work visa.

HANICK continued to work for and report directly to Malofeyev after OFAC designated Malofeyev as a SDN in December 2014. For instance, in January 2015, HANICK wrote an email to Malofeyev that a draft policy for the Russian TV Network was meant “to implement your vision and to provide you with information for you to make decisions … You are the founder and chief architect of the project. We, as board members have the responsibility to direct the staff to implement your instructions.” The Russian TV Network went on the air in Russia in or about April 2015. HANICK played a leadership role at the network, described at various times in emails from 2015 through 2017 as “Board Chairman,” “General Producer,” “chairman of the HR committee,” and “General Advisor” for the Russian TV Network. HANICK reported directly to Malofeyev regarding the network’s operations and was listed on organizational charts directly below Malofeyev. HANICK was paid for his work through two Russian entities that were nominally separate from the Russian TV Network, but his compensation was overseen by Malofeyev, negotiated with Malofeyev, and was for his work for Malofeyev’s Russian TV Network. HANICK wired a portion of the payments he received from a Russian bank account to a bank account he held at a bank located in New York, New York.

HANICK also worked for Malofeyev 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, HANICK took steps to conceal Malofeyev’s role in the acquisition by arranging to travel to Bulgaria with another person identified by a Greek associate of Malofeyev, so that it would appear the buyer was a Greek national rather than Malofeyev.

In February 2021, FBI agents interviewed HANICK about his work for Malofeyev, and HANICK made false statements about his work for Malofeyev, including the false statements that Malofeyev had no involvement in HANICK’s travel to Bulgaria, and that HANICK did not know that Malofeyev had any connection to the attempt to acquire the Bulgarian television network until afterward.

*                *                *

HANICK, 71, is a United States citizen who most recently has resided in London. The sanctions charge carries a maximum penalty of 20 years in prison. The false statements charge carries a maximum penalty of five years in prison. The maximum potential sentence in this case is prescribed by Congress and is provided here for informational purposes only, as any sentencing of the defendant will be determined by the judge.

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.

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 Office of International Affairs in the conduct of this matter.

The prosecution is being handled by the Office’s Money Laundering and Transnational Criminal Enterprises Unit.  Assistant U.S. Attorneys Thane Rehn and Jessica Greenwood 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 that AMEET GOYAL, M.D., (“GOYAL”) an ophthalmologist in Rye, New York, was sentenced today to 96 months in prison for orchestrating a seven-year healthcare fraud scheme by falsely billing for millions of dollars of upcoded procedures, and also for fraudulently obtaining two Government-guaranteed loans intended to help small businesses during the COVID-19 pandemic while he was facing charges on pretrial release for the healthcare fraud scheme.  In imposing the sentence today, U.S. District Judge Cathy Seibel noted, “Fraud doesn’t fully capture how blatant this was and how unjustified this was… This was not about need, it was about greed.”  GOYAL previously pled guilty to all charges in a six-count superseding Indictment before Judge Seibel on September 13, 2021.

In addition to the prison term, GOYAL was sentenced today to five years of supervised release, and ordered to pay forfeiture of $3.6 million and restitution of $3.6 million.  GOYAL has already paid approximately $1.79 million toward these obligations.

U.S. Attorney Damian Williams said: “A prominent ophthalmologist and oculoplastic surgeon who has now surrendered his medical license, AMEET GOYAL was blinded by greed.  Over a seven-year period, he preyed on the trust placed in him and cheated patients and insurance companies of $3.6 million in false charges.  To cover his tracks, he created fictitious operative reports, seeded across hundreds of patient files, violating the integrity of patients’ medical records and making it more difficult for subsequent doctors to evaluate their care.  He sent patients who could not pay the upcoded bills to a collection agency, decimating their credit.  He pressured other doctors to join the scheme and threatened to retaliate against their livelihood and careers. Even after being arrested for this scheme, GOYAL committed a breathtaking new fraud and stole $637,200 from the Paycheck Protection Program in the early days of a devastating pandemic.  For his crimes, GOYAL will serve a substantial sentence in prison.”

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

At all relevant times, GOYAL owned and operated the ophthalmology practice Ameet Goyal M.D. P.C., doing business as Rye Eye Associates, with offices in Rye, Mt. Kisco, and Wappingers Falls, New York, and Greenwich, Connecticut (the “Practice”).  Between 2010 and 2017, GOYAL engaged in widespread healthcare fraud by consistently “upcoding” simpler, lower-paying surgical procedures and examinations as complex, higher-paying major operations in fraudulent billings submitted to Medicare, private insurance companies, and patients.  As a result, GOYAL fraudulently obtained at least $3.6 million in payments for procedures he did not perform.  GOYAL failed to obtain proper and, at times, any consent for the upcoded procedures he falsely claimed to have performed.  As part of the scheme, GOYAL routinely falsified patient medical records, authoring fictitious templated operative reports that matched the complex operation he billed rather than the different minor procedure he actually performed.  GOYAL also pressured other employees in his Practice to engage in the scheme, and threatened the livelihood of employees who refused to comply.  GOYAL caused patients to pay thousands of dollars out of pocket for fraudulently billed charges, and initiated debt collection proceedings against patients who did not pay the full amounts of those false charges.  As a result of his fraudulent billings, GOYAL was the highest-billing doctor in the tri-state area for several of his fraudulently billed codes, one of which he billed seven times more frequently than all doctors in the tri-state area combined.  GOYAL was indicted for the healthcare fraud charges in November 2019 and was released on bail.        

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 Paycheck Protection Program (“PPP”).  Applicants with pending criminal charges are ineligible for PPP loans.  The PPP also limits each eligible borrower to one loan, and a maximum loan amount calculated based on a business’s average monthly payroll expenses. 

In or about April 2020, GOYAL applied to the SBA and Bank-1, a federally insured institution, for over $630,000 in Government-guaranteed loans through the PPP.  Specifically, on or about April 21, 2020, GOYAL applied for a loan in the amount of $358,700 for the business “Ameet Goyal,” with his own social security number and e-mail address. On or about April 29, 2020, GOYAL applied for a second loan in the amount of $278,500, with a business name “Rye eye associates,” using the Employer Identification Number for Ameet Goyal, M.D. P.C and a different email address controlled by GOYAL.  To substantiate each loan, however, GOYAL submitted the exact same underlying payroll expense report, showing the same employees and payroll costs. 

On both applications, GOYAL falsely answered that he was not facing any pending criminal charges, and electronically placed his initials “AG” directly under his “No” response.  GOYAL also falsely certified, among other things, that his business would not receive another PPP loan until the end of the year.  After obtaining approval from Bank-1 and the SBA through his fraudulent misrepresentations, GOYAL executed loan notes for two loans.  On May 4, 2020, GOYAL received the first loan of $358,700, and on May 11, 2021, GOYAL received the second loan of $278,500.  GOYAL used the business checking account into which these funds were deposited to pay business and personal expenses, including by making a payment to a country club in Westchester, New York within days of receiving the first loan, as well as payments to a California vineyard and golf merchandise website.          

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GOYAL, 58, of Rye, New York, pled guilty to all six counts in the Superseding Indictment.  The first count charged healthcare fraud; the second count charged wire fraud; and the third count charged making false statements relating to health care matters.  Counts four, five, and six charged that while on pretrial release, the defendant committed the following offenses, respectively: bank fraud, making false statements on a loan application, and making false statements in a matter within the jurisdiction of the executive branch of the Government of the United States.

Mr. Williams praised the work of the Federal Bureau of Investigation, the U.S. Department of Health and Human Services, Office of Inspector General, and the Office of the Inspector General of the SBA.

This case is being handled by the Office’s White Plains Division.  Assistant U.S. Attorneys Vladislav Vainberg, David Felton, and Margery Feinzig are in charge of the prosecution.  A civil fraud lawsuit relating to healthcare fraud under the False Claims Act is being handled by the Office’s Civil Frauds Unit.  Assistant U.S. Attorney Jeffrey K. Powell is in charge of the pending civil case.

Damian Williams, the United States Attorney for the Southern District of New York, announced that ADEDAYO ILORI, a recidivist fraudster with multiple prior fraud convictions and who continued to engage in fraudulent conduct even following his guilty plea, was sentenced today to 63 months’ imprisonment for his role in a commercial loan fraud and bank bribery scheme.  ILORI’s sentence was imposed by United States District Judge Lewis J. Liman. Codefendants Herode Chancy and Michael Albarella, who at the time of offense were employed as managers at a Manhattan branch of a national bank (“Bank-1”), were previously sentenced to 30 months’ and six months’ imprisonment, respectively.

U.S. Attorney Damian Williams said: “Adedayo Ilori has a history of engaging in fraud using the identities of other people.  Here, Ilori worked with bank insiders to obtain over $1 million in commercial loans for fake businesses.  Ilori used stolen identities to apply for the loans and open bank accounts to receive the loan proceeds.  His co-conspirators used a stolen identity provided by Ilori to launder a portion of the loan proceeds.  Today’s sentence sends the message to Ilori and others engaged in fraud using stolen identities that such conduct will be seriously punished.”

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

From at least in or about March 2019 up to and including at least in or about March 2020, ILORI and Chancy conspired to fraudulently obtain business loans from a third-party commercial lender with the intent not to repay the loans – i.e., with the intent to “bust out” the loans.  ILORI and Chancy together submitted eight fraudulent business loan applications for a total of $1,020,000 in business loans.  The business loan applications submitted by ILORI and Chancy included doctored bank statements and listed the identities of other persons as the loan applicants, including stolen identities provided by ILORI.  ILORI and Chancy also opened bank accounts using the identities of those other persons in order to receive the loan payments from the third-party commercial lender.  ILORI and Chancy subsequently conspired with Albarella to open a bank account at Bank-1 using a stolen identity provided by ILORI to launder approximately $200,000 of the expected proceeds of the loan scheme.  Albarella opened the bank account at Bank-1 using the stolen identity provided by ILORI and Chancy, and Albarella accepted a $10,000 bribe to open the bank account.       

ILORI and Chancy believed that the underwriter for the third-party commercial lender was participating in the scheme and agreed to pay the underwriter a “commission” for the underwriter’s role in the scheme.  In reality, however, the underwriter was an undercover law enforcement officer. 

After pleading guilty in this case, ILORI continued to engage in fraudulent conduct using stolen identities by renting an apartment using a stolen identity, leasing a vehicle using a stolen identity, making purchases using a bank card in the name of a stolen identity, and possessing bank cards and identification cards in the names of several stolen identities.  Separately, ILORI has been indicted in this District in 21 Cr. 746 for engaging in a multi-million dollar COVID-19 loan fraud scheme, and the case is pending before Judge Vyskocil. The charges contained in Indictment 21 Cr. 746 are merely accusations, and the defendant is presumed innocent unless and until proven guilty.   

*                *                *

In addition to the prison term, ILORI, 43 of Queens, New York, was sentenced to three years of supervised release and ordered to forfeit $10,000 in fraudulent proceeds.

Mr. Williams praised the outstanding investigative work of the New York FBI’s Eurasian Organized Crime Task Force and the El Dorado Task Force of Homeland Security Investigations. 

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

Damian Williams, the United States Attorney for the Southern District of New York, announced that defendant CHRISTOPHER OAKES received a sentence of thirty-six months in prison today for his role in the felony drug misbranding and adulteration charges arising from this Office’s investigation of the abuse of animals through the use of performance enhancing drugs and as charged in United States v. Navarro et al., 20 Cr. 160 (MKV).  OAKES’s sentence followed the February 24, 2022, sentencing of thoroughbred trainer MARCOS ZULUETA to a term of thirty-three months in prison, and the guilty plea of harness trainer RICK DANE, JR., on February 18, 2022. OAKES and ZULUETA were each sentenced by U.S. District Judge Mary Kay Vyskocil, who will preside over the sentencing of DANE on June 21, 2022. 

U.S. Attorney Damian Williams said: “These three defendants, Christopher Oakes, Marcos Zulueta, and Rick Dane, Jr., each undertook a duty to care for and protect the health and safety of the animals under their control. Each man flagrantly violated that duty in pursuit of purse money. Oakes’s sentence today, like Zulueta’s sentence, reflects the callousness of their crimes, and the gravity with which this Office takes the kind of abuse that each practiced.”

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

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

OAKES, ZULUETA, and DANE each operated their respective doping operations using customized, misbranded drugs that were intended to be untestable by racing officials. Through his fraud – and using a sham corporation, “Northfork,” to hide his actual financial interest in various horses – OAKES defrauded others of over a million dollars in purse winnings by training and racing horses that he had “doped” using a plethora of adulterated and misbranded performance-enhancing drugs (“PEDs”), including (among others) blood builders, vasodilators, “drenches,” “bleeder” pills, and other drugs not approved by the Food and Drug Administration (“FDA”). OAKES was also willing to engage in surreptitious delivery of drugs to notorious doper and co-defendant Jorge Navarro, who was previously sentenced to five years in prison in this matter.

ZULUETA, like OAKES, supported Navarro’s racehorse doping and likewise administered illegal drugs to his racehorses under his care and control. Navarro and ZULUETA routinely discussed their use of a particular “blood builder” PED they referred to as “Monkey.” On one recorded call between ZULUETA and Navarro, Navarro stated: “the Monkey—the Monkey hits the horses hard,” later confirming, “the Monkey and the orange one . . . As far as I’m concern[ed], the Monkey and the orange one has something similar which is hitting the horses a lot.” On another recorded call, Navarro informed ZULUETA that “‘the Monkey is breaking down the horses . . . It’s breaking down . . . it’s breaking down the horses. It’s making their blood very thick.’” Still, rather than dissuade Navarro from using the product, ZULUETA agreed with Navarro that he could simply lower the dosage he was administering to his horses, while risking the horses “breaking down.” Following that conversation, ZULUETA, too, continued to procure that blood builder for use on his own horses.    

DANE was a New York-based trainer of standardbred horses who regularly obtained misbranded and adulterated PEDs from co-defendant Seth Fishman, and assisted in the distribution of Fishman’s products, including by “vouching” for potential clients of Fishman. Though Fishman was nominally a veterinarian, Fishman did not practice veterinary medicine, but rather used his license as a means of shielding clients, like DANE, from regulatory scrutiny – every drug that Fishman sold to DANE and others, including drugs obtained from various compounding pharmacies, were illegally misbranded, as DANE well knew. A jury convicted Fishman of two counts of misbranding conspiracy on February 2, 2022.

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In addition to the prison sentence, OAKES, 59 of Bear Creek Township, PA and ZULUETA, 54 of Bensalem, PA, were each ordered to pay a forfeiture penalty of $62,821 and $47,525, respectively.

Mr. Williams praised the outstanding investigative work of the FBI New York Office’s Eurasian Organized Crime Task Force and its support of the Bureau’s Integrity in Sports and Gaming Initiative. Mr. Williams also expressed the Office’s appreciation for the Food and Drug Administration, the investigative support and substantive expertise of which was integral to the success of this case.

This case is being handled by the Office’s Money Laundering and Transnational Criminal Enterprises Unit.  Assistant United States Attorneys Sarah Mortazavi, Andrew C. Adams, Anden Chow, and Benet Kearney are in charge of the prosecution.

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[1] As to Oakes’s, Zulueta’s, and Dane’s co-defendants, the entirety of the texts of the Indictments, Informations, and the descriptions of the Indictments and Informations set forth herein constitute only allegations and every fact described should be treated as an allegation.

Damian Williams, the United States Attorney for the Southern District of New York, announced that FERNANDO RA was sentenced to 18 years in prison today in connection with robbery, firearms, and narcotics offenses.  RA previously pleaded guilty on June 2, 2021, before United States District Judge P. Kevin Castel.

U.S. Attorney Damian Williams said: “With today’s sentence, Fernando Ra will spend 18 years in federal prison for his admitted role in the brutal and violent kidnapping and torture of his victims.  This case illustrates yet again how violence goes hand in hand with the illegal drug trade.  We will continue to work with our law enforcement partners to bring to justice those who engage in drug trafficking and violence.”

According to the Superseding Indictment and other publicly filed documents, on October 3, 2020, RA and his co‑conspirators kidnapped, restrained, robbed, and savagely assaulted two victims, using firearms and baseball bats to beat them.  RA also used a knife to carve the letter “Z” into the skin of one of victims, an apparent reference to Los Zetas, the notoriously violent Mexican drug cartel.  RA claimed that the victims owed Los Zetas a narcotics debt, and that he was attacking the victims on behalf of Los Zetas.

In addition to the kidnapping and robbery, RA also participated in a related conspiracy to traffic between 15 and 50 kilograms of cocaine from May 2020 through November 2020.

*                *                *

In addition to today’s prison sentence, RA, 26, of Yonkers, New York, was sentenced to five years of supervised release.

Mr. Williams praised the outstanding investigative work of Special Agents from the New York Division of the DEA, and Special Agents from the U.S. Attorney’s Office for the Southern District of New York.  Mr. Williams also thanked the DEA Buffalo Resident Office and the Paterson (New Jersey) Police Department for their assistance with the investigation.

The case is being handled by the Office’s Narcotics Unit.  Assistant United States Attorneys Rushmi Bhaskaran, Christy Slavik, and Benjamin Woodside Schrier are in charge of the prosecution.

Damian Williams, the United States Attorney for the Southern District of New York, and Scott J. Lampert, Special Agent in Charge of the U.S. Department of Health and Human Services Office of Inspector General (“HHS-OIG”) New York Regional Office announced today the arrest of ZACHARY S. SEID and ANTHONY CRACCHIOLO on charges of conspiracy, health care fraud, wire fraud, and unlawfully receiving kickbacks in connection with Medicare. As alleged in an Indictment unsealed today in Manhattan federal court, SEID and CRACCHIOLO, ran companies dedicated to illegally buying and selling prescriptions for durable medical equipment (“DME”) such as leg, arm, and back braces, and then using those prescriptions to file fraudulent Medicare claims for more than $11 million, as well as selling such prescriptions to other DME supply companies, so that those companies in turn could also file fraudulent Medicare claims. The case has been assigned to U.S. District Judge John P. Cronan. SEID and CRACCHIOLO, who were arrested this morning in Florida, will be presented tomorrow before magistrate judges in the Southern District of Florida. 

U.S. Attorney Damian Williams said:  “Medicare is an invaluable taxpayer-funded program dedicated to providing affordable health care to beneficiaries over 65 or with disabilities, not to enriching those who would defraud the program by buying and selling false prescriptions.”

HHS-OIG Special Agent in Charge Scott J. Lampert said:  “These allegations describe a greed-fueled scheme that undermined our health care system and the people it serves. Such scams threaten patient health, waste taxpayer funds, and drive up healthcare costs for all of us.  Working closely with our law enforcement partners, we will continue to aggressively root out health care fraud and bring criminals to justice.”

As alleged in the Indictment:[1]

From at least July 2019 through at least October 2020, SEID and CRACCHIOLO engaged in a scheme to defraud Medicare in at least three ways.  First, SEID and CRACCHIOLO illegally paid kickbacks of more than $565,000 to purchase fraudulent DME prescriptions, including prescriptions “signed” by doctors who never in fact signed or authorized those prescriptions and were unaware that their names and identities were being so used.  These DME prescriptions were for such equipment as braces for ankles, knees, elbows, wrists, and backs.  Second, SEID and CRACCHIOLO unlawfully received more than $425,000 in kickbacks, reselling some of these prescriptions to DME suppliers, so that those suppliers in turn could fraudulently bill Medicare for the DME.  Finally, in about May and June 2020, SEID and CRACCHIOLO acquired five of their own fraudulent DME supply companies, and used the bogus prescriptions to file more than $11 million in fraudulent Medicare claims, seeking payment to the DME suppliers that SEID and CRACCHIOLO controlled.

Together, SEID and CRACCHIOLO sold to multiple DME supply companies, and established control over at least five DME supply companies of their own, which they used to submit their fraudulent Medicare claims. Those companies were: 1 Medical Supplies Corp., Ameri Med Supplies Corp., One Medical Health Supplies Corp., Sun Med Equip Corp., and Sunrise Med Service Group Corp.  In addition, Seid owned a company called Seid Services, Inc., while Cracchiolo owned a company called Dataco.

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SEID, 35, of Boynton Beach, Florida, and CRACCHIOLO, 42, of Parkland, Florida, are each charged in four counts with conspiracy to commit health care fraud and wire fraud, health care fraud, wire fraud, and receiving kickbacks in violation of the Anti-Kickback Statute.  The conspiracy and wire fraud counts each carry a maximum potential prison sentence of 20 years; the health care fraud count carries a maximum potential prison sentence of 10 years; and the count charging violation of the Anti-Kickback statute carries a maximum potential prison sentence of five years. The maximum potential penalties are prescribed by Congress and are provided here for informational purposes only, as any sentencing of the defendant will be determined by the judge.

Mr. Williams praised the investigative work of HHS-OIG.

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

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

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

Damian Williams, the United States Attorney for the Southern District of New York, Thomas Fattorusso, Special Agent-in-Charge of the New York Field Office of the Internal Revenue Service, Criminal Investigation (“IRS-CI”), Amaleka McCall-Brathwaite, Special Agent-in-Charge, U.S. Small Business Administration, Office of Inspector General, Eastern Region (“SBA-OIG”), and Stephen Donnelly, Acting Special Agent-in-Charge, Office of Inspector General for the Board of Governors of the Federal Reserve System and the Bureau of Consumer Financial Protection, Eastern Region (“FRB-OIG”), announced today that RAFAEL MARTINEZ was arrested on multiple fraud charges and aggravated identity theft in connection with loan and lender applications submitted through the Paycheck Protection Program (the “PPP”) administered by the U.S. Small Business Administration (the “SBA”). 

MARTINEZ used false representations and documents to fraudulently obtain the approval of the SBA for his company, MBE Capital Partners, LLC (“MBE”), to be a non-bank lender through the PPP.  MARTINEZ then used that approval to obtain approximately $932 million in capital to issue PPP loans and earn over approximately $71 million in lender fees.  In addition, MARTINEZ engaged in a scheme to obtain a PPP loan for MBE in the amount of approximately $283,764 through false statements regarding the number of employees of MBE and the wages paid to MBE employees and using the forged signature of MBE’s tax preparer.  MARTINEZ was arrested yesterday and will be presented today in Manhattan federal court before U.S. Magistrate Judge Katharine H. Parker.

U.S. Attorney Damian Williams said:  “As alleged, Rafael Martinez faked his way into building his company MBE Capital Partners into an almost $1 billion PPP lender.  Not only did Martinez allegedly lie to a financial institution to obtain almost $300,000 in PPP loan funding for MBE Capital, he then submitted fraudulent financial statements to get the SBA to approve MBE Capital and to obtain over $800 million to issue PPP loans.  In doing so, Martinez and his company earned over $70 million in lender fees from the SBA, which among other luxury items, he audaciously spent on a villa in the Dominican Republic, a Ferrari, and private jets.  Thanks to the incredible work of our law enforcement partners, our Office will continue to prosecute those who committed fraud through the PPP and other pandemic relief programs.”  

IRS-CI Special Agent-in-Charge Thomas Fattorusso said: “American businesses and their employees have been struggling due to an unprecedented global pandemic, and the Paycheck Protection Program was created to serve as a safety net. Martinez is alleged to have fraudulently obtained funds through this program as both a recipient and a lender, and in effect, stole funds from his fellow Americans so he could purchase a New Jersey mansion, a villa abroad, and several luxury vehicles.”

SBA-OIG Special Agent-in-Charge Amaleka McCall-Brathwaite said:  “OIG stands firm against fraudsters determined to steal SBA program funds meant to uplift and support the nation’s small businesses during the pandemic. OIG remains committed to rooting out bad actors and protecting the integrity of SBA programs. I want to thank the U.S. Attorney’s Office and our law enforcement partners for their dedication and pursuit of justice.”

FRB-OIG Acting Special Agent-in-Charge Stephen Donnelly said:  “We are fully committed to bringing to justice wrongdoers who exploit and defraud financial institutions and the government’s response to the COVID-19 pandemic.”

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

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

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

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

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

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

*                      *                      *

MARTINEZ, 56, of Franklin Lakes, New Jersey, was charged with one count of bank fraud, two counts of wire fraud, and one count of making false statements to a bank, each of which carries a maximum sentence of 30 years in prison; one count of making false statements, which carries a maximum sentence of two years in prison; one count of making false statements to the SBA, which carries a maximum sentence of two years in prison; and one count of aggravated identity theft, which carries a mandatory minimum sentence of two years in prison, which must be served consecutively to any other sentence imposed.  The maximum potential sentences are prescribed by Congress and are provided here for informational purposes only, as any sentencing of the defendant will be determined by the judge.

Mr. Williams praised the outstanding investigative work of IRS-CI, SBA-OIG, and FRB-OIG.  Mr. Williams also thanked Homeland Security Investigations and U.S. Customs and Border Protection for their assistance in the investigation.

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

 

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

Damian Williams, the United States Attorney for the Southern District of New York, announced that DEVON ARCHER was sentenced today by the Honorable Ronnie Abrams to a year and a day in prison for defrauding a Native American tribal entity and various investment advisory clients of tens of millions of dollars in connection with the issuance of bonds by the tribal entity and the subsequent sale of those bonds through fraudulent and deceptive means.   

As established by the evidence at trial:

From March 2014 through April 2016, ARCHER, Bevan Cooney, John Galanis, Jason Galanis, Gary Hirst, Michelle Morton, Hugh Dunkerley, and others engaged in a fraudulent scheme that involved (a) causing the Wakpamni Lake Community Corporation (“WLCC”), a Native American tribal entity, to issue a series of bonds (the “Tribal Bonds”) through lies and misrepresentations; (b) deceptively causing clients of asset management firms controlled by Hirst, Morton, and others to purchase the Tribal Bonds, which the clients were then unable to redeem or sell because the bonds were illiquid and lacked a ready secondary market; and (c) misappropriating the proceeds resulting from those bond sales.

The WLCC was convinced to issue the Tribal Bonds through false and fraudulent representations by John Galanis.  Simultaneously, Jason Galanis, with the backing of ARCHER and others, worked to acquire Hughes Capital Management (“Hughes”), a registered investment adviser.  Morton and Hirst were installed as Hughes’ Chief Executive Officer and Chief Investment Officer, respectively.  Within weeks of taking control of Hughes, Morton and Hirst placed the entire $28 million first series of Tribal Bonds with Hughes clients but failed to disclose material facts about the Tribal Bonds, including the fact that the Tribal Bonds fell outside of the investment parameters set forth in the investment advisory contracts of certain Hughes clients.  In addition, Hughes’ clients were not told about substantial conflicts of interest with respect to the issuance and placement of the Tribal Bonds before the Tribal Bonds were purchased on these clients’ behalf. 

The defendants and their co-conspirators then misappropriated the proceeds of first Tribal Bond issuance.  Specifically, although the Tribal Bonds were supposed to be invested in an annuity, Dunkerley, at the direction of Jason Galanis, transferred significant amounts of the bond proceeds to support the defendants’ business and personal interests.  John Galanis, for example, secretly received $2.35 million in proceeds of the first bond issuance, which he spent on a variety of personal expenses and luxury items, including cars, jewelry, and hotel expenses.  Similarly, Jason Galanis used a portion of the proceeds of the first Tribal Bond issuance to finance the purchase of a $10 million luxury apartment in Tribeca, which, with ARCHER’s consent, he purchased in ARCHER’s name.

In addition, after John Galanis induced the WLCC to issue a second round of Tribal Bonds, ARCHER and others used $20 million of bond proceeds from the first issuance to buy the entirety of the second issuance.  As a result of the use of recycled proceeds to purchase additional issuances of Tribal Bonds, the face amount of Tribal Bonds outstanding increased and the amount of interest payable by the WLCC increased, but the actual bond proceeds available for investment on behalf of the WLCC did not increase.  In order to deposit the bonds at a bank, ARCHER misrepresented the source of the money used to purchase the bonds, falsely claiming that he had obtained it through real estate sales. The bonds purchased by ARCHER and others were then used to meet net capital requirements at two broker dealers in which ARCHER and others had interests.  In addition, millions of dollars in bond proceeds from the first and second issuances were used finance the acquisition of companies which the defendants and their co-conspirators acquired as part of a strategy to build a financial services conglomerate, which ARCHER expected to control.

In the spring of 2015, John Galanis induced the WLCC to issue an additional $16 million worth of Tribal Bonds.  Simultaneously, Jason Galanis, and others purchased a second investment adviser, Atlantic Asset Management (“Atlantic”), and installed Morton as the Chief Executive Officer.  Within days of obtaining control of Atlantic, Morton placed the entirety of the $16 million Tribal Bond issuance with an Atlantic client, without the client’s consent and without disclosing the fact that the Tribal Bonds were outside the client’s investment parameters and that numerous conflicts of interest existed.  The proceeds of the $16 million issuance were again not invested in an annuity as promised, but instead were diverted to, among other things, finance the defendants’ acquisition of another company in furtherance of their plan to build a financial services conglomerate, and make payments to one of the broker dealers in which ARCHER and others had interests.

*                *                *

In addition to the prison term, ARCHER, 47, was sentenced to a year of supervised release.  ARCHER was also ordered to forfeit $15,700,513 and to make restitution in the amount of $43,427,436.

Jason Galanis, who pled guilty to conspiracy to commit securities fraud, securities fraud, and investment adviser fraud, was sentenced to a term of 173 months in prison on August 11, 2017.  Gary Hirst, who pled guilty to securities fraud, conspiracy to commit securities fraud, investment adviser fraud, and conspiracy to commit investment adviser fraud, was sentenced to 84 months in prison on September 7, 2018.  John Galanis, who was convicted after trial of securities fraud and conspiracy to commit securities fraud, was sentenced to 120 months in prison on March 8, 2019. Bevan Cooney, who was convicted after trial of securities fraud and conspiracy to commit securities fraud, was sentenced to 30 months in prison on July 31, 2019. Michelle Morton, who pled guilty to conspiracy to commit securities fraud and investment adviser fraud, was sentenced to 15 months in prison on November 18, 2020.  Hugh Dunkerley, who pled guilty to conspiracy to commit securities fraud, two counts of securities fraud, bankruptcy fraud and falsification of records with the intent to obstruct a government investigation, is also awaiting sentencing. 

Mr. Williams praised the work of the U.S. Postal Inspection Service and the Federal Bureau of Investigation, and thanked the Securities and Exchange Commission.

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

Damian Williams, the United States Attorney for the Southern District of New York, Miriam E. Rocah, Westchester County District Attorney, Michael J. Driscoll, the Assistant Director-in-Charge of the New York Office of the Federal Bureau of Investigation (“FBI”), and John Mueller, the Commissioner of the Yonkers Police Department (“YPD”), announced today that JONATHAN RIVERA and DILICIA AGUIRRE-ORELLANA were charged with production and receipt and distribution of child pornography.  AGUIRRE-ORELLANA was also charged with possession of child pornography. 

RIVERA was arrested on or about February 26 in Manhattan, and will be presented today in federal court in White Plains.  AGUIRRE-ORELLANA was arrested on or about February 22 in Yonkers, presented on local charges on or about February 23, and detained; she will be presented on the federal charges at a later date.

U.S. Attorney Damian Williams said:  “Allegedly at the behest of Jonathan Rivera, Dilicia Aguirre-Orellana is accused of one of the most heinous acts imaginable – the sexual assault of prepubescent children – including the sexual abuse and video recording of her four-year-old son. The harm that child sex abuse can inflict on the most innocent of victims is something no child should bear. We believe there may be more victims of these alleged crimes, and implore anyone who may have information helpful to law enforcement to please call 1-800-CALL-FBI.”

FBI Assistant Director Michael J. Driscoll said:  “The level of depravity alleged in the charges filed today against Mr. Rivera are nearly unfathomable.  The FBI and our partners remain committed to bringing to justice all those who would seek to harm our society’s most vulnerable members.  We are asking anyone with information about Mr. Rivera or his alleged activity to contact us at 1-800-CALL-FBI (225-5324) or online at tips.fbi.gov.”

Westchester County District Attorney Miriam E. Rocah said:  “Crimes committed against children, especially ones perpetrated by a parent or caretaker, are deeply disturbing and those who prey upon and sexually exploit children will be aggressively prosecuted. As alleged in this case, Dilicia Aguirre-Orellana sexually violated and exploited her own child in unspeakable ways. This case shows how law enforcement at the federal, state and local levels can work together to protect the most vulnerable victims. My office is proud to have partnered with the Yonkers Police Department, Federal Bureau of Investigation and United States Attorney’s Office for the Southern District of New York on this remarkable collaborative effort which put an end to the alleged abuse of a young victim, and will help any other potential victims come forward.”  

YPD Commissioner John Mueller said: “It is at the core of every law enforcement officer to protect the vulnerable and innocent, most of all children. We must hold these alleged criminals accountable to the maximum extent of the law for the abuse they inflicted on the smallest members of our society; the Yonkers Police will always continue to put victims first. I am grateful for the sustained multi-agency collaboration on the County, State, and Federal levels that ensures safe communities in Westchester and the City of Yonkers, and applaud the efforts of the investigators and attorneys who worked this case.”

 According to the Complaint[1] filed on February 28, 2022, in White Plains federal court:

In or about December 2021, RIVERA communicated online with AGUIRRE-ORELLANA and persuaded AGUIRRE-ORELLANA to make videos of herself performing sex acts on her four-year-old child (“Victim-1”).  At RIVERA’s direction, AGUIRRE-ORELLANA made videos of herself touching Victim’s genitals and herself performing oral sex on Victim-1, and sent them to RIVERA over a social media messaging application.   In conversations with law enforcement, RIVERA stated that he engaged in similar conversations with other women online.  RIVERA may have used various social media platforms to communicate with victims, including WhatsApp, Badoo, Telegram, and Facebook.  The usernames of some of RIVERA’s various accounts include:

Jriv3ra718

Jriv3ra11

Jaid3nrivera718

Thebrimbrothers

Jano59fifty

Nathan

On or about February 23, 2022, AGUIRRE-ORELLANA was charged in Westchester County with sexual abuse in the first degree and criminal sexual act in the first degree.  The Westchester County District Attorney’s Office will be prosecuting these charges.

Anyone who may have encountered JONATHAN RIVERA (or someone who may have been using the social media usernames identified above), is asked to contact the FBI at 1-800-CALL-FBI (1-800-225-5324).

*                *                *

RIVERA, 33, of Brooklyn, New York, is charged with one count of production of child pornography, which carries a mandatory minimum sentence of 15 years in prison and a maximum sentence of life in prison, and one count of receipt and distribution of child pornography, which carries a mandatory minimum sentence of 5 years in prison and a maximum sentence of 40 years in prison.  The statutory maximum sentence is prescribed by Congress and is provided here for informational purposes only, as any sentencing of the defendant will be determined by the judge.

AGUIRRE-ORELLANA, 22, of Yonkers, New York, is charged with one count of production of child pornography, which carries a mandatory minimum sentence of 15 years in prison and a maximum sentence of life in prison, one count of receipt and distribution of child pornography, which carries a mandatory minimum sentence of 5 years in prison and a maximum sentence of 40 years in prison, and one count of possession of child pornography involving images of a minor who had not yet attained the age of 12, which carries a maximum sentence of 20 years in prison.  The statutory maximum sentence is prescribed by Congress and is provided here for informational purposes only, as any sentencing of the defendant will be determined by the judge.

Mr. Williams praised the efforts of the FBI Westchester Safe Streets Task Force which includes Special Agents and Task Force Officers from the FBI, US Probation, New York State Police, New York State Department of Corrections and Community Supervision, Westchester County PD, Westchester County DA's Office, Putnam County Sheriff's Office, Rockland County DA's Office, the NYPD and the Yonkers, Mount Vernon, Peekskill, Greenburgh, New Rochelle, White Plains, Clarkstown and Ramapo Police Departments.  This investigation is ongoing.

 This case began as an investigation in the YPD Special Victim’s Unit, working jointly with the Special Prosecutions Division Child Abuse Bureau of the Westchester County District Attorney’s Office, including Bureau Chief Christine Hatfield and Acting Deputy Bureau Chief Owein Levin.  The federal prosecution is being handled by the White Plains Division of the U.S. Attorney’s Office.  Assistant United States Attorney Stephanie Simon is in charge of the prosecution.  

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

Damian Williams, the United States Attorney for the Southern District of New York, announced today that STEVEN GALLAGHER pled guilty to one count of securities fraud.  GALLAGHER, using the alias “Alex DeLarge,” created a stock promotion account on Twitter that gained over 70,000 followers, and used that account to tout certain over-the-counter penny stocks.  GALLAGHER disseminated false and misleading information about at least one of those stocks in order to induce his followers to purchase that stock and drive up its price, while he secretly sold his holdings.  GALLAGHER pled guilty in front of United States District Judge Valerie E. Caproni.

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

STEVEN GALLAGHER is an active day trader in over-the-counter securities, or “OTC securities.”  Those securities typically do not trade on centralized exchanges such as the New York Stock Exchange or the NASDAQ Stock Exchange.  OTC securities often trade for less than one dollar per share, and thus are often referred to as “penny stocks.”  Many OTC securities are thinly traded, and therefore are particularly susceptible to stock manipulation schemes.

In September 2019, GALLAGHER created a Twitter account using the alias “Alex DeLarge,” a character from the Anthony Burgess novel A Clockwork Orange and the Stanley Kubrick film of the same name (the “DeLarge Twitter Account”).  As of October 19, 2021, the DeLarge Twitter Account had over 70,000 followers.  GALLAGHER regularly used the DeLarge Twitter Account to tout various penny stocks in which he personally held substantial positions.  GALLAGHER also regularly posted images of his brokerage account balances and trading gains on the DeLarge Twitter Account in order to bolster his reputation and induce his followers to trade in accordance with his suggestions.  

From approximately December 2020 through February 2021, GALLAGHER used the DeLarge Twitter Account to operate a fraudulent pump-and-dump scheme with respect to penny stock issued by a public company known as SpectraScience, Inc. (“SCIE”).   As part of his fraudulent scheme, GALLAGHER began acquiring a substantial volume of SCIE shares in December 2020.  As he acquired shares, GALLAGHER and a few close associates discussed their plans to push the stock price up after they obtained substantial holdings at relatively cheap prices.  GALLAGHER then used the DeLarge Twitter Account to artificially “pump” SCIE stock.  This included both re-tweeting posts that purported to announce potentially positive news for SCIE, such as FDA approvals for their products, and making materially false and misleading statements about GALLAGHER’s own position in SCIE stock.  For example, in or about January 2021, GALLAGHER repeatedly tweeted that he planned on holding and had not sold any of his shares of SCIE.  These statements, however, were false and GALLAGHER had in fact sold millions of shares of SCIE at heightened prices.

While GALLAGHER was engaged in this scheme, he knew or purposely avoided learning that SCIE was a shell company with no actual operations or prospects for success.  For example, in direct messages with some of his followers, GALLAGHER received information suggesting that SCIE was really just a “shell with not guts.”  Nevertheless, GALLAGHER engaged in his Twitter-based pump and dump scheme, thereby earning tens of thousands of dollars in illicit profit.

*                      *                      *

GALLAGHER, 51, of Maumee, Ohio, plead guilty to one count of securities fraud, which carries a maximum sentence of twenty 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.

GALLAGHER is scheduled be sentenced on June 27, 2022, by Judge Caproni.

U.S. Attorney Williams praised the work of the HSI.  Mr. Williams further thanked the Securities and Exchange Commission for their cooperation and assistance in this investigation.  

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

Damian Williams, the United States Attorney for the Southern District of New York, announced that RICKEY JOHNSON was convicted yesterday of threatening a federal official and making interstate threats, following a one-week jury trial before the Honorable Lewis A. Kaplan. JOHNSON threatened to kill United States Senator Joe Manchin and Fox News television hosts Greg Gutfeld and Laura Ingraham in direct messages and publicly posted videos on Instagram.

U.S. Attorney Damian Williams said: “Rather than express his political differences constructively, Rickey Johnson escalated his discord by instilling fear. Johnson's attempts to scare and stifle a U.S. Senator and two Fox News hosts were federal crimes for which he has now been convicted by a New York jury.”

According to court documents and the evidence at trial:

On January 30, 2021, JOHNSON sent direct private messages to Mr. Gutfeld that threatened, “you will be killed.” On February 3, 2021, JOHNSON posted public videos in which he threatened to kill Senator Manchin, Mr. Gutfeld, and Ms. Ingraham. Among other things, JOHNSON declared that Senator Manchin was “dead” and would be “executed”; told Mr. Gutfeld that he was “going to take [his] life”; and said that he would “kill” Ms. Ingraham with his “bare hands.”

*                      *                      *

JOHNSON, 48, of New York, New York, was convicted of two counts of transmitting threatening interstate communications, which each carry a maximum sentence of five years in prison, and one count of threatening a federal official, which carries a maximum sentence of ten years in prison. JOHNSON was also acquitted of one count of threatening a federal official. The maximum potential penalties are prescribed by Congress and are provided here for informational purposes only, as any sentencing of the defendant will be determined by the judge.

JOHNSON is scheduled to be sentenced by Judge Kaplan on May 25, 2022.

Mr. Williams praised the outstanding investigative work of the New York City Police Department (“NYPD”), the NYPD’s Intelligence Bureau, Leads Investigation Unit, and the NYPD’s 23rd Precinct Field Intelligence Team.

The case is being handled by the Office’s National Security and International Narcotics Unit. Assistant United States Attorneys Patrick R. Moroney, Kyle A. Wirshba, and Andrew J. DeFilippis are in charge of the prosecution.

Damian Williams, the United States Attorney for the Southern District of New York, announced that Arthur Hayes and BENJAMIN DELO, founders and executives of purportedly “off-shore” cryptocurrency derivatives exchange the Bitcoin Mercantile Exchange or “BitMEX,” pled guilty today to violating the Bank Secrecy Act (the “BSA”) by willfully failing to establish, implement, and maintain an anti-money laundering (“AML”) program at BitMEX.  Under the terms of their respective plea agreements, HAYES and DELO each agreed to separately pay a $10 million criminal fine representing pecuniary gain derived from the offense.  HAYES and DELO pled guilty today before U.S. District Judge John G. Koeltl.

U.S. Attorney Damian Williams said: “As cryptocurrencies and technologies designed to facilitate their trade proliferate, companies engaged in the virtual currency economy have become critical gatekeepers in efforts to ensure that U.S. markets are fair, efficient, and secure. The opportunities and advantages of operating in the United States are legion, but they carry with them the obligation for those businesses to do their part to help in driving out crime and corruption.  Arthur Hayes and Benjamin Delo built a company designed to flout those obligations; they willfully failed to implement and maintain even basic anti-money laundering policies.  They allowed BitMEX to operate as a platform in the shadows of the financial markets. Today’s guilty pleas reflect this Office’s continued commitment to the investigation and prosecution of money laundering in the cryptocurrency sector.”

According to the Indictment, public court filings, and statements made in court:[1]

HAYES, together with DELO and indicted co-defendant Sam Reed, was one of the three co-founders and the long-time CEO of BitMEX.  DELO was both a co-founder and, during the period from September 2015 up to and including September 2020, held various executive roles at BitMEX, including Chief Operating Officer. BitMEX is an online cryptocurrency derivatives exchange that, during the relevant time period, had U.S.-based operations and served thousands of U.S. customers, notwithstanding false representations to the contrary by the company.  From at least September 2015, and continuing at least through the time of the Indictment in September 2020, HAYES and DELO willfully caused BitMEX to fail to establish and maintain an AML program, including a program for verifying the identify of BitMEX’s customers (or a “know your customer” or “KYC” program).  As a result of its willful failure to implement AML and KYC programs, BitMEX was in effect a money laundering platform.  For example, in May 2018, HAYES was notified of allegations that BitMEX was being used to launder the proceeds of a cryptocurrency hack.  Neither HAYES, DELO, nor their company filed a suspicious activity report thereafter (indeed, BitMEX filed no suspicious activity reports at all between 2014 and September 2020), nor did they implement an AML or KYC program in response.  Unsurprisingly, BitMEX was also a vehicle for sanctions violations: HAYES and DELO both communicated directly with BitMEX customers who self-identified as being based in Iran, an OFAC-sanctioned jurisdiction, but did nothing to implement an AML or KYC program after doing so.

HAYES and DELO failed to institute AML or KYC programs at BitMEX despite closely following U.S. regulatory developments that made clear their legal obligation to do so if BitMEX operated in the United States, which it did.  Despite repeatedly stating that BitMEX did not serve U.S. customers, including to members of the press and others outside of BitMEX, HAYES and DELO both knew that BitMEX’s purported withdrawal from the U.S. market in or about September 2015 was a sham, and that purported “controls” BitMEX put in place to prevent U.S. trading were an ineffective facade that did not, in fact, prevent users from accessing or trading on BitMEX from the United States.  HAYES and DELO not only understood that U.S. customers continued to trade on BitMEX, but derived substantial profits from BitMEX as a result of U.S.-based trading.  HAYES and DELO actively sought out U.S. customers by using U.S.-based cryptocurrency “influencers” to market to new customers through BitMEX’s so-called “Affiliate Program.”  HAYES also conducted U.S. television appearances and marketing stunts that promoted BitMEX’s products in the United States.  DELO allowed a customer to continue to access a BitMEX trading account despite this customer explicitly being “US based,” merely because that customer was “famous in Bitcoin.” DELO falsely changed internal tracking information to reflect that customer’s country of residence as being other than the United States, despite knowing that to be false. 

*                *                *

HAYES, 36, of Miami, Florida, and DELO, 38, of the United Kingdom and Hong Kong, pled guilty to one count each of violating the Bank Secrecy Act, which carries a maximum penalty of 5 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’s New York Money Laundering Investigation Squad, and thanked the attorneys and investigators at the Commodity Futures Trading Commission whose expertise and diligence were integral to the development of this investigation.

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

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[1] As to HAYES’ and DELO’s co-defendants, 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, and Michael J. Driscoll, the Assistant Director-in-Charge of the New York Office of the Federal Bureau of Investigation (“FBI”), and Keechant Sewell, Commissioner of the New York City Police Department (“NYPD”), announced today that EDWARD D. MULLINS, the former President of the Sergeants Benevolent Association (“SBA”), the union that represents all current and former Sergeants of the New York City Police Department, was charged with one count of wire fraud in connection with a scheme to steal hundreds of thousands of dollars from the SBA, through the submission of fraudulent expense reports.  MULLINS surrendered to the FBI in Manhattan this morning, and was presented before U.S. Magistrate Judge Gabriel W. Gorenstein.  The case has been assigned to United States District Judge John G. Koeltl. 

U.S. Attorney Damian Williams said: “As alleged, Edward Mullins, the former President of the SBA, abused his position of trust and authority to fund a lavish lifestyle that was paid for by the monthly dues of the thousands of hard-working Sergeants of the NYPD.  Mullins submitted hundreds of phony expense reports to further his scheme, stealing hundreds of thousands of dollars from the SBA.  This Office is committed to rooting out corruption at all levels of government, and that includes public officials like Mullins who use their positions of power to line their own pockets to the detriment of others.”

FBI New York Assistant Director-in-Charge Michael J. Driscoll said: “As public servants, members of the SBA pay dues to a union that’s supposed to represent their best interests. As SBA president, Mullins allegedly went above and beyond to best serve his own interests. Our NYPD sergeants expect and deserve more from their union leadership than they received. Today, thanks to the joint efforts of those on the FBI/NYPD Public Corruption Task Force, we’re righting that wrong.”

NYPD Commissioner Keechant L. Sewell said: “Ed Mullins allegedly violated the ethics and rules of this department, the trust of 13,000 Sergeants, active and retired whom he represented, and the laws of the United States. The NYPD’s Internal Affairs Bureau, has detectives assigned to the FBI’s Public Corruption Unit and works as a team with agents on matters involving the NYPD.”

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

Overview

For nearly two decades, from in or about 2002 until in or about October 2021, EDWARD D. MULLINS served as President of the SBA, which is the union that represents all current and former Sergeants of the NYPD.  As President, MULLINS was responsible for promoting the general welfare of the SBA’s membership.  Instead, MULLINS orchestrated a scheme to steal hundreds of thousands of dollars from the SBA and its members.

Between in or around 2017 and in or around October 2021, MULLINS defrauded the SBA by using his personal credit card to pay for meals at high-end restaurants and to purchase luxury personal items, among other things, and then submitting false and inflated expense reports to the SBA, seeking reimbursement for those bills as legitimate SBA expenditures when in fact they were not.  Altogether, MULLINS was reimbursed for over $1 million dollars in expenses from the SBA, the majority of which was fraudulently obtained.

The SBA

The SBA is the fifth-largest police union in the United States with its headquarters located in lower Manhattan.  The SBA’s membership consists of all active and retired sergeants of the NYPD, with approximately 13,000 members as of October 2021.  All members are required to pay dues to the SBA.  For active members, dues are deducted bi-weekly from their paychecks, totaling approximately $1,300 annually for each member.  For retired members, dues are required to be paid in a one-time payment of $600 within ninety days of retirement.

The SBA has a Contingent Fund, which is used to pay for the SBA’s “regular, fiscal, and miscellaneous expenses necessary for the transaction of the [SBA’s] business.”  The Contingent Fund is funded primarily through member dues.  Ninety cents of each dollar of member dues are deposited into the Contingent Fund, where they are supposed to be used for the benefit of the SBA and its members.  The President of the SBA is authorized to use the Contingent Fund to “defray miscellaneous expenses incurred in the performance of duties, e.g., travel, lodgings, meals, et cetera.”

The SBA has a written expense reimbursement policy (the “Policy”).  The Policy provides, among other things, that “the SBA will reimburse actual and reasonable meal expenses required to conduct SBA business or fulfill the SBA’s mission.”  In order to be “reimbursable,” expenses “must be closely related to SBA business.”  The Policy further provides that “[r]eceipts are required for any meal,” and that “[r]equests for reimbursement for meals in excess of $50.00 must be accompanied by an attendee list and the subject matter discussed.” 

The SBA is governed by a Board of Officers, consisting of nine officers, including the President, Vice President, and Treasurer, among others, and fourteen directors.  Beginning in or around 2002, MULLINS ran for and was elected President of the SBA for five successive four-year terms.  After the 2014 election, the individual who had been elected Vice President of the SBA assumed responsibility for reviewing and approving the expense reports submitted by SBA officers, including MULLINS.  The Vice President routinely scrutinized expense reimbursement requests and rejected certain expenses if they were too high or were not supported by receipts. 

In or around 2017, the then-Vice President retired as an officer of the SBA.  The Treasurer assumed primary responsibility for reviewing and approving expense reports submitted for reimbursement by SBA officers, including MULLINS.  The Treasurer did not scrutinize the expense reports in the same manner as the prior Vice President had, and, in particular, did not regularly require receipts for MULLINS’s reimbursements in particular.  As set forth below, between 2017 and 2021, the Treasurer approved hundreds of expense reports for MULLINS, totaling more than $1 million dollars.

The Scheme To Defraud the SBA

Beginning in 2017, MULLINS devised a scheme to fund his personal expenses through SBA dollars.  Specifically, MULLINS charged his personal credit card for, among other things, hundreds of high-end meals, clothing, jewelry, home appliances, and a relative’s college tuition.  MULLINS then submitted, typically by email, fraudulent and inflated expense reports to the Treasurer of the SBA, seeking reimbursement for such items purporting to be legitimate SBA expenditures when in fact they were not.  MULLINS rarely included receipts.

The Treasurer processed the expense reports once they were received – almost always without obtaining any receipts – and issued SBA reimbursement checks to MULLINS from the Contingent Fund – i.e., the fund that was made up almost entirely of member dues.  MULLINS then deposited the checks into his bank account or enlisted an individual at the SBA to deposit the checks on MULLINS’s behalf at a bank branch near the SBA’s headquarters in lower Manhattan.  MULLINS then, usually immediately thereafter, paid down his credit card bills with the deposited funds.

As part of this fraudulent scheme, MULLINS made at least three types of misstatements on his expense reports.  First, MULLINS included meals on his expense reports that were not SBA-related.  Second, MULLINS inflated the costs of his meals – whether SBA-related or not.  For example, if the actual cost of a meal was $522.55, MULLINS would seek reimbursement from the SBA for $822.55, and pocket the difference.  At times, MULLINS would even write out these changes on his personal credit card statements that he maintained at his home – i.e., crossing off “522.55” and writing in “822.55”, thereby documenting his false statements.  Third, MULLINS would take personal expenses like supermarket bills and claim them on his expense reports as SBA-related meals for which he also sought reimbursement.  

For example, in November 2019, MULLINS submitted expense reports to the Treasurer for more than $3,000 at a high-end restaurant in Greenwich Village in Manhattan (“Restaurant-1”).  Those charges, however, were not related to any work for the SBA.  Instead, as reflected in text messages that MULLINS exchanged with an employee of Restaurant-1 (the “Employee”), MULLINS was paying, on two separate occasions, for his family members and personal associates to dine at Restaurant-1.  Specifically, MULLINS, purchased two $300 gift cards for Restaurant-1 and then sought reimbursement from the SBA for the gift cards.  Two weeks later, MULLINS texted the Employee to inform the Employee that a relative (“Relative-1”) and Relative-1’s partner “are coming in for dinner tonight” and “I gave [Relative-1] a gift card that I grabbed 2 weeks ago.”  MULLINS sent a similar text message to the Employee the following night when a personal associate (“Associate-1”) was planning to dine at Restaurant-1 and use the other gift card that MULLINS had purchased with SBA funds.

As another example, in October 2020, MULLINS sent a text message to another personal associate (“Associate-2”) asking Associate-2, “Going to place an order at [the Steakhouse] what do u want[?]”  Associate-2 responded by providing MULLINS with a list of several items on the menu.  MULLINS’s October 2020 credit card statement in turn reflected a $744.59 expense at the Steakhouse on the same day.  MULLINS later submitted this fraudulent $744.59 expense, without a receipt, to the Treasurer for reimbursement, claiming the expense as an SBA-related meal when in fact it was not.  

In addition to submitting personal expenses for reimbursement, MULLINS inflated and altered his actual expenses in order to steal more money from the SBA.  MULLINS maintained two copies of his credit card statements in his home office.  The first copy, often labeled with a sticky note bearing the words “Clean Copy,” had no annotations or markings.  The second copy, often labeled with a sticky note bearing the words “Work Copy” or “Work Sheet,” had MULLINS’s handwritten annotations and markings throughout.  In the Work Copy, MULLINS changed the amount and, at times, the type of expense, from a lower amount to a larger amount, or from an item that could not be reimbursed – such as a supermarket bill – to a restaurant name, which would then be reflected in MULLINS’s reimbursement forms submitted to the Treasurer and the SBA.

For example, in April 2021, MULLINS changed a $45.92 charge to an $845.92 charge at a wine bar in New Jersey; a $609.89 charge to a $909.89 charge at the Steakhouse; and a $185.88 charge at a supermarket on Long Island to a $685.88 charge at an Italian restaurant in Manhattan.  MULLINS then submitted those fraudulent expenses, without receipts, to the Treasurer for reimbursement.  Likewise, in August 2021, MULLINS changed a $49.60 charge to a $89.60 charge for a diner on Long Island; a $53.56 charge to a $153.56 charge for a restaurant on Long Island; a $96.16 charge at a supermarket to a $396.16 charge at a restaurant on Long Island; a $152.42 charge to a $352.42 charge at a deli on Long Island; and a $464.00 charge to a $664.00 charge at a pizza place on Long Island.  Once again, MULLINS submitted these fraudulent expenses, without receipts, to the Treasurer, who approved the reimbursements.

Altogether, as a result of the scheme, MULLINS received more than $1 million dollars in expense reimbursements from the SBA, the majority of which was fraudulently obtained.

*                      *                     *

MULLINS, 60, of Port Washington, New York, is charged with one count of wire fraud, which carries a maximum sentence of 20 years in prison.  The maximum potential sentence in this case is prescribed by Congress and is provided here for informational purposes only, as any sentencing of the defendant will be determined by the judge.

Mr. Williams praised the outstanding investigative work of the New York FBI and the FBI/NYPD Public Corruption Task Force. 

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

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

Damian Williams, the United States Attorney for the Southern District of New York, announced that CHARLES ONUS pled guilty to computer fraud in connection with a scheme to conduct cyber intrusions in order to steal payroll deposits from multiple user accounts maintained by a company that provides human resources and payroll services to employers across the United States.  ONUS was previously arrested on April 14, 2021 in San Francisco while traveling to the United States from Nigeria and has been detained since his arrest.  ONUS pled guilty today before U.S. District Judge Paul G. Gardephe.  

U.S. Attorney Damian Williams said:   “Charles Onus admitted to participating in a scheme to steal hundreds of thousands of hard-earned dollars from workers across the United States by hacking into a payroll company’s system and diverting payroll deposits to prepaid debit cards he controlled.  Our Office will continue to work with our law enforcement partners to zealously arrest and prosecute those who seek to commit cybercrimes targeting Americans from behind a keyboard abroad.”

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

From at least in or about July 2017 through at least in or about 2018, ONUS participated in a scheme to conduct cyber intrusions of multiple user accounts maintained by a company that provides human resources and payroll services to employers across the United States (the “Company”), in order to steal payroll deposits processed by the Company.

During the course of the scheme, unauthorized access was obtained to over 5,500 Company user accounts through a cyber intrusion technique referred to as “credential stuffing.”  During a credential stuffing attack, a cyber threat actor collects stolen credentials, or username and password pairs, obtained from other large-scale data breaches of other companies.  The threat actor then systematically attempts to use those stolen credentials to obtain unauthorized access to accounts held by the same user with other companies and providers, to compromise accounts where the user has maintained the same password.

After a Company user account was compromised, the bank account information designated by the user of the account was changed so that ONUS would receive the user’s payroll to a prepaid debit card that was under ONUS’s control. 

From at least in or about July 2017 through at least in or about 2018, at least approximately 5,500 Company user accounts were compromised and more than approximately $800,000 in payroll funds were fraudulently diverted to prepaid debit cards, including those under the control of ONUS.  The compromised Company user accounts were associated with employers whose payroll was processed by the Company, including employers located in the Southern District of New York.

ONUS was arrested on April 14, 2021 at San Francisco International Airport after arriving on a flight from Abuja, Nigeria.  According to statements ONUS made to U.S. Customs and Border Protection at the airport, ONUS was traveling to the United States for a two-week vacation in Las Vegas.

*                *                *

ONUS, 34, a resident and national of the Federal Republic of Nigeria, pled guilty to one count of computer fraud for unauthorized access to a protected computer to further intended fraud, which carries a maximum sentence of five years in prison.  The maximum potential sentence in this case is prescribed by Congress and is provided here for informational purposes only, as any sentencing of the defendant will be determined by the judge.

ONUS is scheduled be sentenced on May 12, 2022, by Judge Gardephe. 

Mr. Williams praised the outstanding investigative work of the FBI and IRS-CI.  Mr. Williams also thanked the New York City Police Department, the FBI New York Cyber Task Force, U.S. Customs and Border Protection, and the FBI Field Office in San Francisco for their assistance in the investigation of this case.

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, the United States Attorney for the Southern District of New York, announced that ARIEL JIMENEZ, a/k/a “Melo,” was convicted today following a two-week jury trial before the Honorable Sidney H. Stein.  As the jury found, between in or about 2009 through in or about 2015, JIMENEZ, the owner of a tax preparation business in the Bronx, New York (the “Business”), sold the stolen identities of minors to his customers so that his customers could claim inflated tax refunds.  The jury convicted JIMENEZ of four counts: conspiracy to defraud the United States, conspiracy to commit wire fraud, aggravated identity theft, and money laundering.

U.S. Attorney Damian Williams said:  “Ariel Jimenez’s tax and identity theft crimes cruelly forced his victims to endure bureaucratic snafus and agonizing delays for their much-needed tax refunds. Jimenez now stands convicted, and now faces years in federal prison. Today’s conviction is a stark reminder that tax fraud results in real-world victims and real-life consequences.”

According to the Indictment, evidence presented during trial, court documents, and statements in open court:

Beginning in or about 2007, JIMENEZ founded the Business.  From the outset, JIMENEZ obtained hundreds of stolen minor identities and, working with his co-conspirators, sold those identities, as fraudulent dependents, to his customers for between $1,000 and $1,500 in cash.  JIMENEZ personally received $1,000 in cash for every identity sold.  JIMENEZ and his co-conspirators callously referred to these stolen identities as “pollitos,” meaning little chickens.  In some years, JIMENEZ sold more than a thousand identities, resulting in personal profits to him of more than $1 million per year.  In addition, JIMENEZ also made hundreds of thousands of dollars every year in the tax fees that his Business charged just to prepare fraudulent tax returns.  In return for their participation in this scheme, the customers received thousands of dollars in inflated tax refunds.

JIMENEZ’s use of stolen identities harmed the actual caretakers of the fraudulently claimed children.  In some cases, the people actually taking care of these children had much-needed tax refunds delayed and were required to prove their actual connection to their own dependent children.

JIMENEZ used the profits from his tax preparation business to acquire millions of dollars of real estate, in addition to funding his lavish lifestyle.  By his own admission, JIMENEZ spent more than $5.5 million of the Business’s proceeds on properties in the United States and abroad, jewelry, cars, and gambling.  In or about March 2016, JIMENEZ transferred several properties purchased with fraud proceeds to his parents, for little to no value, in order to conceal the criminal source of the funds used to purchase the properties. 

One of the primary credits claimed by JIMENEZ and the Business for their clients was the Earned Income Tax Credit (“EITC”).  The EITC is intended to provide tax relief or tax refunds for qualifying low and moderate income working individuals and families.  Between tax years 2009 and 2014, the Business filed approximately 14,199 personal income tax returns claiming the EITC.  In total, these returns claimed approximately $37,910,246 in the EITC alone.  During these years, between 54% and 62% of all personal income tax returns filed by the Business claimed the EITC.  By comparison, approximately 41% of all returns filed by tax preparers in the Bronx and approximately 20% of all returns filed by tax prepares nationwide claimed the EITC.

JIMENEZ was first arrested in November 2018, along with eight of his co-conspirators.  JIMENEZ is the last of the defendants charged to be convicted.  The remaining eight defendants have pleaded guilty to fraud and other offenses.

*                      *                      *

ARIEL JIMENEZ, 38, of Bronx, New York was convicted at trial of one count of conspiracy to defraud the United States with respect to tax returns, which carries a maximum sentence of 10 years; conspiracy to commit wire fraud, which carries a maximum sentence of 20 years; aggravated identity theft, which carries a mandatory consecutive sentence of 2 years; and money laundering, which carries a maximum sentence of 20 years.  The maximum potential sentence in this case is prescribed by Congress and is provided here for informational purposes only, as any sentencing of the defendants will be determined by the judge.  JIMENEZ is scheduled to be sentenced by Judge Stein on June 6, 2022.

Mr. Williams praised the outstanding work of the IRS-Criminal Investigation. 

This case is being handled by the Office’s General Crimes Unit. Assistant U.S. Attorneys Daniel G. Nessim, Ni Qian, Marguerite Colson, and Dina McLeod are in charge of the prosecution.

Damian Williams, the United States Attorney for the Southern District of New York, announced that ARIEL JIMENEZ, a/k/a “Melo,” was convicted today following a two-week jury trial before the Honorable Sidney H. Stein.  As the jury found, between in or about 2009 through in or about 2015, JIMENEZ, the owner of a tax preparation business in the Bronx, New York (the “Business”), sold the stolen identities of minors to his customers so that his customers could claim inflated tax refunds.  The jury convicted JIMENEZ of four counts: conspiracy to defraud the United States, conspiracy to commit wire fraud, aggravated identity theft, and money laundering.

U.S. Attorney Damian Williams said:  “Ariel Jimenez’s tax and identity theft crimes cruelly forced his victims to endure bureaucratic snafus and agonizing delays for their much-needed tax refunds. Jimenez now stands convicted, and now faces years in federal prison. Today’s conviction is a stark reminder that tax fraud results in real-world victims and real-life consequences.”

According to the Indictment, evidence presented during trial, court documents, and statements in open court:

Beginning in or about 2007, JIMENEZ founded the Business.  From the outset, JIMENEZ obtained hundreds of stolen minor identities and, working with his co-conspirators, sold those identities, as fraudulent dependents, to his customers for between $1,000 and $1,500 in cash.  JIMENEZ personally received $1,000 in cash for every identity sold.  JIMENEZ and his co-conspirators callously referred to these stolen identities as “pollitos,” meaning little chickens.  In some years, JIMENEZ sold more than a thousand identities, resulting in personal profits to him of more than $1 million per year.  In addition, JIMENEZ also made hundreds of thousands of dollars every year in the tax fees that his Business charged just to prepare fraudulent tax returns.  In return for their participation in this scheme, the customers received thousands of dollars in inflated tax refunds.

JIMENEZ’s use of stolen identities harmed the actual caretakers of the fraudulently claimed children.  In some cases, the people actually taking care of these children had much-needed tax refunds delayed and were required to prove their actual connection to their own dependent children.

JIMENEZ used the profits from his tax preparation business to acquire millions of dollars of real estate, in addition to funding his lavish lifestyle.  By his own admission, JIMENEZ spent more than $5.5 million of the Business’s proceeds on properties in the United States and abroad, jewelry, cars, and gambling.  In or about March 2016, JIMENEZ transferred several properties purchased with fraud proceeds to his parents, for little to no value, in order to conceal the criminal source of the funds used to purchase the properties. 

One of the primary credits claimed by JIMENEZ and the Business for their clients was the Earned Income Tax Credit (“EITC”).  The EITC is intended to provide tax relief or tax refunds for qualifying low and moderate income working individuals and families.  Between tax years 2009 and 2014, the Business filed approximately 14,199 personal income tax returns claiming the EITC.  In total, these returns claimed approximately $37,910,246 in the EITC alone.  During these years, between 54% and 62% of all personal income tax returns filed by the Business claimed the EITC.  By comparison, approximately 41% of all returns filed by tax preparers in the Bronx and approximately 20% of all returns filed by tax prepares nationwide claimed the EITC.

JIMENEZ was first arrested in November 2018, along with eight of his co-conspirators.  JIMENEZ is the last of the defendants charged to be convicted.  The remaining eight defendants have pleaded guilty to fraud and other offenses.

*                      *                      *

ARIEL JIMENEZ, 38, of Bronx, New York was convicted at trial of one count of conspiracy to defraud the United States with respect to tax returns, which carries a maximum sentence of 10 years; conspiracy to commit wire fraud, which carries a maximum sentence of 20 years; aggravated identity theft, which carries a mandatory consecutive sentence of 2 years; and money laundering, which carries a maximum sentence of 20 years.  The maximum potential sentence in this case is prescribed by Congress and is provided here for informational purposes only, as any sentencing of the defendants will be determined by the judge.  JIMENEZ is scheduled to be sentenced by Judge Stein on June 6, 2022.

Mr. Williams praised the outstanding work of the IRS-Criminal Investigation. 

This case is being handled by the Office’s General Crimes Unit. Assistant U.S. Attorneys Daniel G. Nessim, Ni Qian, Marguerite Colson, and Dina McLeod are in charge of the prosecution.

Damian Williams, United States Attorney for the Southern District of New York, and Darnell D. Edwards, Acting Inspector in Charge of the New York Office of the U.S. Postal Inspection Service (“USPIS”), announced the arrest of VITALY BORKER, the operator of “EyeglassesDepot.com,” an online retailer of purported designer eyewear.  BORKER was arrested pursuant to a complaint charging him with mail and wire fraud and aggravated identity theft in connection with a scheme to defraud customers by misrepresenting the authenticity and condition of eyeglasses sold through the website.  BORKER was arrested this morning and will be presented later today before U.S. Magistrate Judge Stewart D. Aaron.

U.S. Attorney Damian Williams said: “Upon Vitaly Borker’s second conviction by this Office for fraud-related offenses, my predecessor posed the rhetorical question of whether ‘federal prison will impress upon this shady businessman that seeking to make money by fraud and intimidation is a path to prison...’ Apparently, it has not. As alleged, just after his release from federal prison, serial fraudster Vitaly Borker reverted back to his illegal conduct connected to online eyewear businesses.”

USPIS Acting Inspector in Charge Edwards said: “Mr. Borker is allegedly up to his old tricks of bilking those looking for online eyewear. Make no mistake, each time Mr. Borker breaks the law, Postal Inspectors have no problem with bringing him to justice for his continued criminal activity.”

As alleged in the Complaint unsealed today[1]:

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

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

*          *          *

BORKER, 45, of Brooklyn, New York, is charged with mail fraud and wire fraud, each of which carries a maximum sentence of 20 years in prison, and one count of aggravated identity theft, which carries a additional mandatory consecutive two year sentence.  The maximum potential sentences are prescribed by Congress and are provided here for informational purposes only, as any sentencing of these defendants would be determined by a judge.

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

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

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

Damian Williams, the United States Attorney for the Southern District of New York, Michael J. Driscoll, the Assistant Director-in-Charge of the New York Office of the Federal Bureau of Investigation (“FBI”), and Keechant L. Sewell, the Commissioner of the New York City Police Department (“NYPD”), announced the unsealing today of a three-count Indictment charging ERIC LESANE with firearms and drug trafficking offenses.  LESANE was initially charged by Complaint after his arrest on February 1, 2022.  LESANE’s case has been assigned to the Honorable U.S. District Judge Alison J. Nathan.

U.S. Attorney Damian Williams said: “As alleged, the defendant illegally possessed multiple guns, including an untraceable ‘ghost’ gun.  Illegally possessed and untraceable guns pose a serious public safety threat.  Thanks to our law enforcement partners, the defendant’s weapons are now in safe hands.”

Michael J. Driscoll, FBI Assistant Director-in-Charge said: “Mr. Lesane was aware of the conditions attached to his release from prison – he was not allowed to purchase or maintain a firearm.  We allege he possessed several, one of which was an untraceable ghost gun - a class of weapon that poses an increasing threat to our communities. Our goal is to work with our law enforcement partners to get criminals and their weapons off our streets.”

NYPD Commissioner Keechant L. Sewell said: “Convicted previously in a firearms possession case, Eric Lesane now faces federal indictment for allegedly amassing a stockpile of weapons — including an untraceable ghost gun — while on supervised release. Our NYPD investigators, working with our partners and prosecutors in the United States Attorney’s Office, will never stop pursuing these kinds of cases in our continuing effort to eradicate gun violence in New York.”

Michael Fitzpatrick, Chief U.S. Probation Officer said: “On February 1, Probation Officers from the Southern District of New York performed a search of Eric Lesane’s address. These officers seized several firearms and a large amount of ammunition.  This search exemplifies the importance of communication between law enforcement agencies.”

According to the allegations in the Indictment unsealed today in Manhattan federal court and in the Complaint and statements made in open Court: 

On February 1, 2022, the United States Marshals Service arrested LESANE, who was previously convicted of a felony related to illegal firearms possession, after an arrest warrant issued for violations of supervised release.  Following LESANE’s arrest, Probation Officers from the United States Probation Office for the Southern District of New York conducted a search of LESANE’s apartment.  In the course of the search, Probation Officers found:

(1) a Ruger Precision Rifle,

(2) a Mossberg Rifle,

(3) a SWD Model M-11 9mm pistol,

(4) a Typhoon 12 Gauge Semiautomatic Shotgun, and

(5) a black pf940c polymer 80 privately made handgun with no serial number—in other words, a “ghost” gun. 

A photograph of the guns is below:

In the course of the search, Probation Officers also recovered multiple high-capacity magazines each containing more than 15 rounds of ammunition, approximately 75 buckshot shotgun shells, additional ammunition, and a quantity of marijuana. 

Probation Officers also found large amounts of paraphernalia that appears to be associated with the “Crips” street gang, including blue clothing and signs, literature that discusses the Crips, and a black and blue baseball bat with a black and blue bandana tied around it, wrapped in barbed wire.

*                *                *

LESANE, 34, of the Bronx, New York, is charged with: (1) possession of firearms following a felony conviction, which carries a maximum sentence of ten years in prison, (2) marijuana trafficking, which carries a maximum sentence of five years in prison, and (3) possessing firearms in furtherance of a drug trafficking offense, which carries a mandatory minimum sentence of five years in prison, to be served consecutively to any other sentence imposed, 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 defendants will be determined by the judge.

Mr. Williams praised the outstanding investigative work of the FBI and the NYPD.  Mr. Williams also thanked the United States Probation Office for the Southern District of New York, the Bureau of Alcohol, Tobacco, Firearms and Explosives, and the United States Marshals Service for their assistance in this case.

The prosecution is being handled by the Office’s Violent & Organized Crime Unit.  Assistant United States Attorney Elizabeth A. Espinosa 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.

Damian Williams, United States Attorney for the Southern District of New York, announced that SYDNEY SCALES was sentenced today to 27 years in prison for his role as the leader of a violent drug distribution organization that operated in the West Farms neighborhood of the Bronx, including his use of guns and participation in a murder-for-hire conspiracy in June 2017.  SCLAES was sentenced by U.S. District Judge Jed S. Rakoff, after being convicted at trial in August 2021 of conspiring to distribute controlled substances, conspiring to commit murder for hire, and related firearms offenses.

U.S. Attorney Damian Williams said: “Sydney Scales was the leader of a violent drug crew.  He caused at least one drug-related shooting, and he hired a hitman in an attempt to murder rival drug dealers who were having a barbecue in front of a neighborhood barbershop in the Bronx.  Today’s sentence sends a powerful message that people who would commit violent crimes will be arrested, prosecuted, and face serious consequences.”

According to the Superseding Indictment and the evidence at trial:

Between in or about 2016 and in or about 2019, SCALES participated in a conspiracy to distribute crack cocaine, powder cocaine, heroin, fentanyl, and marijuana in the Bronx and elsewhere.  SCALES also used, carried, and possessed firearms, which were brandished and discharged, in connection with the narcotics conspiracy, and aided and abetted such firearms offenses.  For example, the Government offered evidence that on December 1, 2016, SCALES caused a shooting at rival drug dealers standing in front of a convenience store located next to the entrance of the West Farms subway station.

In addition, in or about June 2017, SCALES conspired to commit murder for hire, agreeing to pay another person for locating and killing at least one rival drug dealer. 

*                      *                      *

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

The case is being handled by the Office’s Violent and Organized Crime Unit.  Assistant U.S. Attorneys Frank Balsamello, Mathew Andrews, and Andrew K. Chan are in charge of the prosecution.