Southern District of New York

Damian Williams, United States Attorney for the Southern District of New York, and Michael J. Driscoll, the Assistant Director-in-Charge of the New York Office of the Federal Bureau of Investigation (“FBI”), announced that JAMES VELISSARIS, the founder and former chief investment officer of Infinity Q Capital Management (“Infinity Q”), a New York based investment adviser that ran a mutual fund and a hedge fund that purported to have approximately $3 billion in assets under management, was charged with securities fraud and obstruction of justice for orchestrating a scheme to lie to investors and falsify documents.  VELISSARIS made false and misleading statements to investors and others concerning Infinity Q’s process for valuing certain over-the-counter (“OTC”) derivative positions that made up a substantial portion of the holdings of the mutual and hedge funds, and also fraudulently mismarked those securities in ways that did not reflect their fair value. VELISSARIS committed the mismarking scheme in order to inflate the value of the investment funds as reported to investors, to attract and retain capital, and to increase his own compensation. In order to avoid detection of the scheme, VELISSARIS provided both Infinity Q’s auditor and the Securities and Exchange Commission (“SEC”) with falsified or altered documents, including providing the auditor with altered term sheets that served to provide fabricated support for the fraudulently inflated values.  VELISSARIS surrendered to FBI agents in Atlanta, Georgia this morning and is expected to be presented later today.

U.S. Attorney Damian Williams said:  “As alleged, James Velissaris violated his obligation to put the interests of his investors before his own profits.  In order to attract and retain investments in the funds that he operated, Velissaris lied about the independence of the process that he used to value fund assets, and he manipulated that process to convince investors that the funds were performing much better than they were.  He then tried to cover his tracks by submitting fabricated or altered documents to the funds’ auditor and the SEC.  This case further demonstrates the Office’s continued commitment to stamping out financial fraud, whether it be in private funds or the public markets.”

FBI Assistant Director Michael J. Driscoll said: "Investment fraud schemes may seem like a tried and true way to get rich quick, but the perpetrators are often too confident in their abilities to hide their illegal activity from investigators. As was the case with Velissaris, the truth caught up with him, and his alleged lies were exposed. Today he faces the consequences of his actions."

According to the allegations contained in a six-count Indictment unsealed today in Federal court and other publicly-available information:[1]

Background

VELISSARIS was the founder and chief investment officer of Infinity Q, an investment adviser that ran both a mutual fund (the “Mutual Fund”), started in about 2014, and a hedge fund (the “Hedge Fund,” and collectively the “Investment Funds”), started in about 2017.  As of 2021, the two funds purported to have approximately $3 billion in assets under management.  Infinity Q was headquartered in New York, New York, and employed a small staff including a chief compliance and chief risk officer (“Employee-1”). 

A major component of both the Mutual Fund and the Hedge Fund’s holdings were over-the-counter (“OTC”) derivative positions that involved customized contracts that allowed the counterparties to take positions on the volatility, or price movement, of underlying assets or indices.  VELISSARIS, through Infinity Q, represented to its investors that it valued these OTC derivative positions based on fair value, and that in order to do so, it utilized the services of an independent third-party provider.  In particular, Infinity Q represented to investors and other stakeholders that it used Bloomberg Valuations Service (“BVAL”) to independently calculate the fair value of these positions, in accordance with the terms of the underlying derivative contracts.  These OTC derivative positions comprised hundreds of millions of dollars of the Investment Funds’ portfolios.   

Velissaris’ Scheme to Lie to Investors and Inflate Derivative Swap Positions

In fact, however, VELISSARIS defrauded Infinity Q’s investors by taking an active role in the valuation of Infinity Q’s positions, and by modeling the positions in ways that were not based on the actual terms of the underlying contracts and were inconsistent with fair value.  VELISSARIS’ input into the BVAL valuation process was inconsistent with Infinity Q’s representations about the independence of the process and allowed VELISSARIS to fraudulently mismark positions in BVAL.  VELISSARS engaged in the mismarking of positions in BVAL by making false entries in BVAL’s system including by secretly altering the computer code employed by BVAL that caused BVAL to alter and disregard certain critical terms.  Altering and disregarding terms in this fashion caused BVAL to report values that were artificially inflated and, often, much higher than fair value. 

By manipulating OTC derivative positions in BVAL in this way, VELISSARIS caused numerous positions in the Investment Funds to have anomalous and, at times, impossible valuations.  For example, at times, VELISSARIS made manipulations in either the Mutual Fund and/or the Hedge Fund that caused certain identical positions that were held by both the Mutual Fund and the Hedge Fund (namely, a position where all the material terms are the same) to have substantially divergent values.  In other cases, some of VELISSARIS’ manipulations caused certain positions held by the Investment Funds to have impossible values, such as where under the true terms of the swap, the value adopted by VELISSARIS could only be true if volatility were negative – a condition which is mathematically impossible.

Ultimately, after VELISSARIS’ mismarking scheme was uncovered in or about February 2021, Infinity Q liquidated the Investment Funds and sold its OTC derivative positions.  These positions were sold for hundreds of millions of dollars less than their purported market values in BVAL thereby resulting in substantial losses to the investors in the Investment Funds.

Velissaris Lies to Auditors and Obstructs the SEC’s Investigation

In order to hide this scheme and prevent its detection, VELISSARIS lied to numerous outside stakeholders and regulators.  First, in order to prevent Infinity Q’s outside auditor (the “Auditor”) from discovering the fraud VELISSARIS provided the Auditor with falsified term sheets from counterparties that he had altered to change the true terms of certain OTC derivative positions.  In particular, in connection with a number of audits, the Auditor selected certain OTC positions that it would independently value in order to confirm the reasonableness of Infinity Q’s values from BVAL.  In order to ensure that the Auditor would not arrive at materially different results when independently valuing positions that VELISSARIS had manipulated in BVAL, VELISSARIS altered the terms of certain deal documents and provided them to the Auditor.  After receiving these falsified documents and relying on them in its independent evaluation, the Auditor confirmed the reasonableness of VELISSARIS’ valuations in BVAL.

Furthermore, beginning in May 2020, the SEC opened an inquiry and later an investigation into Infinity Q’s valuation practices.  In connection with that investigation, VELISSARIS provided false and misleading information to the SEC.  For example, when the SEC asked for original documents that had been provided to investors, VELISSARIS altered the documents before providing them to the SEC, including certain alterations that would help hide his mismarking scheme.  For example, Infinity Q’s original investor materials stated that “[o]nce a price is established for a portfolio security, it shall be used for all Funds that hold the security.”  As explained above, this was untrue and on numerous occasions, manipulations in BVAL made by VELISSARIS caused the same positions in the Mutual Fund and the Hedge Fund to have substantially different values.  To conceal the falsity of Infinity Q’s disclosures, VELISSARIS along with Employee-1 removed this line from investor documents that were provided to the SEC.

In June 2020, the SEC requested that Infinity Q provide additional materials, including documents regarding Infinity Q’s valuation committee and all of its meeting minutes.  Infinity Q’s investor materials had represented that Infinity Q had a valuation committee, including VELISSARIS, that the committee would meet monthly or more often, and that VELISSARIS would be responsible for preparing minutes of such meetings.  In fact, however, VELISSARIS had not kept notes of any such meetings.  Accordingly, days before responding to the SEC, VELISSARIS made up notes purporting to be from valuation committee meetings in 2019 and 2020 and submitted them to the SEC.

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VELISSARIS, 37, of Atlanta, Georgia, is charged with securities fraud, wire fraud, lying to auditors, and obstruction of justice, each of which carries a maximum sentence of 20 years in prison; and investment adviser fraud and conspiracy to obstruct justice, each of which carries a maximum sentence of 5 years in prison.  The maximum potential sentences in this case are prescribed by Congress and are provided here for informational purposes only, as any sentencing of the defendant will be determined by a judge.

Mr. Williams praised the work of the Federal Bureau of Investigation.  He further thanked the Securities and Exchange Commission and the Commodity Futures Trading 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 Daniel Loss and Daniel Tracer are in charge of the prosecution.   

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

Damian Williams, the United States Attorney for the Southern District of New York, announced that JAMES JEREMY BARBERA was convicted today following a one-week jury trial before the Honorable John G. Koeltl.  As the jury found, between 2013 and 2020, BARBERA, the founder and former chief executive officer of a New York-based nanotechnology company, Nanobeak Biotech, Inc. (“Nanobeak”), lied to investors and misappropriated investors’ funds.  The jury convicted BARBERA of three counts:  securities fraud, wire fraud, and conspiracy.

U.S. Attorney Damian Williams said:  “As the jury unanimously determined, James Jeremy Barbera lied to investors about his company’s technology and stole millions of dollars of investor funds intended for research and development.  Barbera then tried to cover up his misconduct by providing false financial information to investors and the company’s board of directors.  Now he awaits sentencing for his crimes.”

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

From in or about 2013 and in or about 2019, BARBERA was the founder and CEO of Nanobeak, a privately held nanotechnology company that represented to investors that the company had developed a breathalyzer sensor technology that could detect cancer and narcotics in human breath.

From at least in or about 2013 through in or about 2020, BARBERA and others perpetrated a scheme to defraud dozens of investors out of at least approximately $8.4 million (i) by soliciting investments through false and misleading statements, (ii) by failing to use investors’ funds as promised, and (iii) by converting investors’ money to his own use.  BARBERA and others made false and misleading representations to actual and potential investors, including as set forth below:

BARBERA falsely represented that Nanobeak had developed a breathalyzer sensor that could detect narcotics and cancer in a person’s breath, and that the company was expected to earn millions of dollars in sales revenue through distribution contracts.  In truth and in fact, Nanobeak never developed the purported technology, and it was impossible for the company to generate revenue because there was no breathalyzer device to sell and accordingly, no distribution contracts.

BARBERA also falsely represented that Nanobeak would soon have an initial public offering (“IPO”), which would result in large profits to investors.  In truth and in fact, the company was not close to an IPO, and BARBERA was permanently barred from serving as the CEO of a public company as a result of a prior, unrelated proceeding brought by the U.S. Securities and Exchange Commission (“SEC”).

BARBERA falsely represented that he had undergraduate and graduate degrees in physics from New York University, and that he had a business degree from the Massachusetts Institute of Technology.  In truth and in fact BARBERA never finished college and never attended MIT.

BARBERA converted to his own use at least approximately $3.3 million of the approximately $8.4 million in investor funds in the form of cash withdrawals and to pay personal expenses, including private school and college tuition for his children, mortgage payments on his Central Park West apartment, and for his other personal items, such as credit card bills, jewelry, automobiles, and daily living expenses.

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BARBERA, 65, of New York, New York, was convicted at trial of one count of securities fraud, one count of wire fraud, and one count of conspiracy to commit securities fraud and wire fraud.  BARBERA faces a maximum sentence of 20 years in prison on each of the securities and wire fraud counts and a maximum sentence of five years in prison on the conspiracy count.  The maximum potential sentences in this case are prescribed by Congress and provided here for informational purposes only, as any sentence imposed upon BARBERA will be determined by the judge.  BARBERA is scheduled to be sentenced by Judge Koeltl on June 15, 2022.

Mr. Williams praised the outstanding work of the Federal Bureau of Investigation and NASA’s Office of Inspector General, and also thanked the SEC for its assistance.

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

Damian Williams, the United States Attorney for the Southern District of New York, announced that FRED ASANTE pled guilty to conspiracy to commit money laundering for his role in a criminal enterprise based in the Republic of Ghana (“Ghana”) involving the theft of tens of millions of dollars.  ASANTE was arrested on February 17, 2021 in Virginia and pled guilty today before U.S. District Judge Jed S. Rakoff.  ASANTE has been detained since his arrest.

U.S. Attorney Damian Williams said:  “Fred Asante admitted today to laundering money from victims of various fraud schemes, including cruel scams targeting elderly online daters searching for companionship. Compounding the disappointment of learning their potential soulmate was indeed nonexistent, Asante’s victims later found they were also targets of a Ghana-based criminal enterprise netting over $35 million in illegal proceeds. We implore the millions of Americans looking for someone special online to use extra caution, and be especially beware if solicited for money or other personal information.”     

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

From at least in or about 2013 through at least in or about 2020, ASANTE was a member of a criminal enterprise (the “Enterprise”) based in Ghana that committed a series of frauds against individuals and businesses located across the United States, including in the Southern District of New York.  The frauds perpetrated by the Enterprise have consisted of, among other frauds, business email compromises, romance scams, and fraud schemes related to the novel coronavirus/COVID-19 pandemic.  First, the objective of the Enterprise’s business email compromise fraud scheme was to trick and deceive businesses into wiring funds into accounts controlled by the Enterprise through the use of email accounts that “spoofed” or impersonated employees of a victim company or third parties engaged in business with a victim company.  Second, the Enterprise conducted the romance scams by using electronic messages sent via email, text messaging, or online dating websites that deluded victims, many of whom were vulnerable older men and women who lived alone, into believing the victim was in a romantic relationship with a fake identity assumed by members of the Enterprise.  Once members of the Enterprise had gained the trust of the victims using the fake identity, they used false pretenses to cause the victims to wire money to bank accounts the victims believed were controlled by their romantic interests, when in fact the bank accounts were controlled by members of the Enterprise.  Finally, the Enterprise submitted fraudulent loan applications through a loan program of the United States Small Business Administration (the “SBA”) designed to provide relief to small businesses during the COVID-19 pandemic, namely the Economic Injury Disaster Loan (“EIDL”) Program.  The Enterprise submitted fraudulent EIDL applications in the names of actual companies to the SBA and when an EIDL loan was approved, the funds were ultimately deposited in bank accounts controlled by members of the Enterprise. 

ASANTE and other members of the Enterprise received fraud proceeds from victims of the Enterprise in dozens of business bank accounts that they controlled in New York, New Jersey, and Virginia.  The business bank accounts were opened in the names of companies formed by ASANTE and other members of the Enterprise that were purportedly involved in, among other things, automobile sales, food imports and exports, and freight trucking and shipping.  Once ASANTE received fraud proceeds in bank accounts under his control, he withdrew, transported, and laundered those fraud proceeds to other members of the Enterprise abroad.  The defendant primarily laundered the fraud proceeds through his business by using the proceeds to purchase automobiles, food products, and other goods from U.S.-based suppliers and distributors of such products and shipping those products to Ghana and elsewhere.  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.  In total, from in or about 2016 through in or about 2020, the defendant controlled over a dozen business bank accounts with deposits totaling over $35 million. 

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FRED ASANTE, 36, of Fredericksburg, Virginia, pled guilty to one count of conspiracy to commit money laundering, 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. 

Under the terms of his plea agreement, ASANTE agreed to pay a money judgment of $647,488 and to forfeit his interest in approximately $323,646 seized by the Government from his bank accounts as well as a 2021 Mercedes-Benz GLE AMG seized by the Government.

ASANTE will be sentenced on May 18, 2022, by Judge Rakoff.  ASANTE’s co-conspirator, LORD ANING, pled guilty to conspiracy to commit wire fraud on October 15, 2021, and will be sentenced on February 28, 2022 at 4:30 p.m. before Judge Rakoff. 

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

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

Damian Williams, the United States Attorney for the Southern District of New York, Timothy Foley, the Acting Special Agent in Charge of the Drug Enforcement Administration’s New York Division (“DEA”), and Keechant L. Sewell, the Commissioner of the New York City Police Department (“NYPD”), announced the unsealing of a Superseding Indictment today charging JESUS CABRERA, a/k/a “Gee,” MICHAEL AMAYA, a/k/a “Miz,” and ALBERTO CONCEPCION, a/k/a “Chino,” with participating in a conspiracy to distribute fentanyl that resulted in the August 25, 2021, death of Malik Rahman in the Bronx, New York. HUMBERTO BORGES, a/k/a “Berto,” FRANKIE CAPELLAN, a/k/a “Nitty,” WILLIE HARRIS, a/k/a “Light,” LUIS RAMIREZ, a/k/a “Flaco Construction,” a/k/a “Lou,” and JOSE FIGUEROA, a/k/a “Chelo,” were also charged in the Superseding Indictment as members of the conspiracy.  CABRERA, CONCEPCION, and BORGES were arrested today in the Bronx, FIGUEROA was arrested today in Brooklyn, and RAMIREZ was arrested today in West New York, New Jersey.  AMAYA, who was charged in the original Indictment, was already in federal custody.  CAPELLAN and HARRIS remain at large.  The defendants who were arrested today will likely be presented this afternoon before United States Magistrate Judge Gabriel W. Gorenstein.

U.S. Attorney Damian Williams said: “As alleged, the defendants operated a network for the distribution of highly addictive and dangerous drugs.  Despite knowing about the deadly effects of fentanyl, Cabrera and his crew continued to sell countless doses throughout the Bronx.  As alleged, glassines stamped with the defendants’ logo were found at the scene of multiple overdoses over the past year.  Today’s arrests are part of our continued commitment, along with our law enforcement partners, to stop the flow of fentanyl onto the streets of New York City and to bring to justice the dealers and suppliers who push this poison.”

DEA Acting Special Agent in Charge Timothy Foley said: “Zeroing in on drug trafficking organizations responsible for fueling the increasing overdose death rates is our focus. This action marks the first arrests in New York under DEA's newly announced Operation Overdrive, which targets drug-related violence and overdose deaths across the United States. Allegedly, Jesus Cabrera and his criminal network built a foothold for drug distribution in the Bronx adding fentanyl to their fire and branded their drugs for distribution throughout the Bronx with labels like ‘Supreme,’ ‘Off-White,’ and ‘Thriller,’ to not only highlight the potency of their drugs, but to appeal to users. DEA will continue our important work with our law enforcement partners to remove these dangerous criminals from our streets and restore the safety and health of our communities.”

NYPD Commissioner Keechant L. Sewell said:  “When you allegedly brazenly peddle illegal narcotics that threaten the lives of innocent New Yorkers, the collective vigor of our law enforcement assets will find you and stop you — no matter who you are, where you operate, or who your illicit operations harm. This is critically important work and I praise our partners, and the leadership of the prosecutors in the United States Attorney’s Office in the Southern District of New York, for working together to achieve some measure of justice for the many victims affected in this case.”

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

CABRERA, AMAYA, CONCEPCION, BORGES, CAPELLAN, HARRIS, RAMIREZ, and FIGUEROA are members of a drug trafficking organization (“DTO”) that operates principally from a block on 142nd Street between Brook Avenue and St. Ann’s Avenue in the Bronx (the “Set”), where its members sell glassines of fentanyl in bulk to dealers who then re-distribute the DTO’s product on the Set and in other areas of the Bronx. Members of the DTO also sell individual glassines to users who line up on the Set on an almost daily basis. CABRERA is the leader of the DTO, and, until recently, AMAYA managed and oversaw the DTO’s various street-level dealers, baggers, and lookouts, including the other charged defendants.  In the fall and winter of 2021 alone, the DTO distributed an estimated five to six kilograms of fentanyl per month. 

The DTO has frequently used a signature “stamp” on the glassines of fentanyl it sells. For many months, the DTO stamped its glassines with a “Supreme” logo.  Starting in or around December 2021, the DTO began using an “Off White” logo, and, recently, the DTO switched to a “Thriller” logo.  

Despite the DTO’s leadership’s awareness of the potential deadly impact of fentanyl, members of the DTO continued pushing the DTO’s product.  Indeed, as early as on or about January 2019, CABRERA sent AMAYA a link to a news article that described law enforcement’s crackdown on heroin dealers in the Bronx who were “pushing a deadly cut of heroin . . . using a new drug known as fentanyl,” which had led to a rash overdose deaths.

On or about August 25, 2021, CONCEPCION sold a quantity of loose “Supreme”-stamped glassines to an individual on the Set (“Individual-1”), who subsequently provided one of those glassines to Rahman. Rahman died from an overdose shortly after ingesting the substances in the “Supreme”-stamped glassine, the residue of which later tested positive for, among other things, fentanyl.  Both CABRERA and AMAYA were directly involved in overseeing CONCEPCION’s narcotics sales at that time.  Indeed, in the days leading up to Rahman’s fatal overdose, AMAYA and CABRERA exchanged text messages referencing certain quantities of narcotics that were going to CONCEPCION for resale on the Set.

Including Rahman’s fatal overdose, between in or around March 2021 and in or around December 2021, there were at least six confirmed fatal overdoses in the Bronx at which “Supreme”-stamped glassines were found on the scene and two additional suspected overdose deaths at which the “Supreme”-stamped glassines were found on the scene.   In or around January 2022, there was a ninth fatal suspected overdose in the Bronx at which a “Thriller”-stamped glassine was found on the scene.

During the course of this morning’s arrests and pursuant to judicially authorized search warrants and consent searches, law enforcement recovered, among other items, approximately 1.5 kilograms of mixtures and substances containing suspected fentanyl, numerous “Thriller” glassines, ledgers reflecting the DTO’s weekly drug inventory, a firearm, and over $120,000 in cash.

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JESUS CABRERA, a/k/a “Gee,” 42, MICHAEL AMAYA, a/k/a “Miz,” 40, ALBERTO CONCEPCION, a/k/a “Chino,” 50, HUMBERTO BORGES, a/k/a “Berto,” 45, FRANKIE CAPELLAN, a/k/a “Nitty,” 40, WILLIE HARRIS, a/k/a “Light,” 52, LUIS RAMIREZ, a/k/a “Flaco Construction,” a/k/a “Lou,” 36, and JOSE FIGUEROA, a/k/a “Chelo, 57, are each charged with conspiracy to distribute and possess with intent to distribute 400 grams and more of fentanyl, which carries a mandatory minimum sentence of ten years in prison and a maximum sentence of life in prison. CABRERA, AMAYA, and CONCEPCION are also charged with causing the deaths of a victim in connection with the narcotics conspiracy, which carries a mandatory minimum sentence of twenty years in prison and a maximum sentence of life in prison. The statutory minimum and maximum penalties are prescribed by Congress and are provided here for informational purposes only, as any sentencing of the defendants will be determined by the judge

Mr. Williams praised the outstanding investigative work of the NYPD and DEA, and the New York/New Jersey High Intensity Drug Trafficking Area (“HIDTA”) Intelligence Analysts for their support and assistance in this matter.   He also thanked the Bronx District Attorney’s Office for its assistance in the case.

The case is being handled by the Office’s Narcotics Unit. Assistant United States Attorneys David J. Robles and Kaylan E. Lasky are in charge of the prosecution.

The charge contained in the Superseding Indictment is merely an allegation, and the defendants are presumed innocent unless and until proven guilty.

[1] As the introductory phrase signifies, the entirety of the text of the Superseding Indictment and other court papers and proceedings, and the description of the Superseding Indictment Superseding Indictment and other court papers and proceedings 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 announced that PHILIP REICHENTHAL, a disbarred attorney, pled guilty in Manhattan federal court today to conspiracy to commit wire fraud, in connection with a scheme to defraud investors who believed they were purchasing Bitcoin.  Reichenthal engaged in the scheme with Randy Craig Levine, a/k/a “Viktor Lapin,” a/k/a “Andre Santiago Santos Galindo,” a/k/a “Alexander Martinez Lavrov,” a/k/a “Alexander Kozlov,” a/k/a “Hristo Danielov Marinov,” an international fugitive who fraudulently induced victims to send millions of dollars to REICHENTHAL, who was a licensed attorney at the time of the fraud.  REICHENTHAL falsely represented that he would act as an escrow agent for the transactions, but instead, he sent a substantial portion of the money to Levine, before any Bitcoin was provided by Levine to investors.  Neither Levine nor REICHENTHAL ever provided any Bitcoin or refunded the investors’ money.

REICHENTHAL was arrested on September 14, 2020, and pled guilty today before U.S. Magistrate Judge Debra Freeman.    

U.S. Attorney Damian Williams said: “As a licensed attorney and escrow agent, Philip Reichenthal was entrusted to keep investors’ money safe. But as he admitted today, he betrayed that trust by siphoning millions of dollars of investor money.  Now he stands guilty of wire fraud and awaits sentencing for his crime.”

As alleged in the Complaint and Indictment filed against REICHENTHAL, as well as his co-conspirator Levine,[1] and other statements made in open court:

The charges against Levine and REICHENTHAL involve two fraudulent schemes.  In the first fraudulent scheme, in approximately June and July 2018, Levine induced another individual, the principal of a purported cryptocurrency escrow firm (“Individual-1”), to wire to REICHENTHAL over $3 million of funds from an over-the-counter cryptocurrency broker (“Company-1”) to fund the purchase of Bitcoin after falsely telling Individual-1 that Levine would sell thousands of Bitcoin, when in truth and in fact, Levine never intended to sell Bitcoin.  After receiving the $3 million, REICHENTHAL, in turn, wired over $2 million to bank accounts in Guatemala held in the name of one of Levine’s aliases.  Levine then lied to Individual-1 for days about why the deal had not worked out, the status of the purported Bitcoin, and the location of Company-1’s money, which was never returned.

In the second fraudulent scheme, from approximately February 2019 to May 2019, Levine induced a Florida resident involved in brokering Bitcoin transactions (“Individual-2”) to cause investors to send to REICHENTHAL over $2 million of the investors’ money to fund the purchase of Bitcoin.  Again, Levine told Individual-2 that Levine would sell Bitcoin, when in truth and in fact, Levine never had any intention of selling Bitcoin to the investors. After receiving the funds from the investors, REICHENTHAL, in turn, sent over $1.9 million to bank accounts in Mexico controlled by Levine; the money was then wired to a bank account in Russia held in the name of one of Levine’s aliases.  Levine then lied to Individual-2 and an investor about the status of the investors’ funds, which were never returned. 

In connection with the above transactions, Levine used, among other things, various false aliases to communicate with the individuals sending funds to REICHENTHAL and foreign bank accounts held in his false names.  REICHENTHAL used bank accounts held in the name of his law firm and an attorney trust account to receive the funds and the pass them to Levine, before he or investors received the Bitcoin, contrary to REICHENTHAL’s and Levine’s promises.  

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REICHENTHAL, 78, of Homestead, Florida, pled guilty to one count of conspiracy to commit wire fraud.  This charge carries a maximum term 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.

REICHENTHAL will be sentenced at a later date by the Honorable Lewis A. Kaplan.         

Extradition proceedings against Levine are pending.

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

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

[1] As the introductory phrase signifies, as to Levine, 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, United States Attorney for the Southern District of New York, Ricky J. Patel, Special Agent in Charge of Homeland Security Investigations (“HSI”) in New York, and Keechant L. Sewell, the Commissioner of the New York City Police Department (“NYPD”), announced the unsealing of an indictment today charging QUINCY HILLIARD, a/k/a “Tut,” CURTIS HILLIARD, a/k/a “Curt,” GARY BROWN, a/k/a “Gleme,” TERRENCE TURNER, a/k/a “Storm,” KASIEN ADDERLEY, a/k/a “Kaz,” TIRAN BRANCH, PEDRO RIVERA, a/k/a “Dro,” DERRICK LATIMORE, a/k/a “Derrick Lattimore,” a/k/a “Cone,” and ANTWAN ANDREWS, a/k/a “Antawan Andrews,” a/k/a “Twan,” with participating in a conspiracy to distribute cocaine in New York and New Jersey. 

U.S. Attorney Damian Williams said: “As alleged in the Indictment, the defendants distributed vast quantities of cocaine in New York and New Jersey.  Thanks to the extraordinary work of our partners at NYPD and HSI, the defendants now face federal charges for their crimes.”

HSI Acting Special Agent in Charge Ricky J. Patel said: “The individuals arrested today were allegedly part of an organization that coordinated a cocaine pipeline to pour directly into the streets of New York City. HSI and the NYPD stand together in the fight to rid our communities of individuals responsible for dangerous narcotics flooding the streets with blatant disregard for the ripple effect that drug addiction has on millions of Americans.  Working with our law enforcement partners, HSI will continue to prevent the flow of harmful drugs coming into our neighborhoods.”

NYPD Commissioner Keechant L. Sewell said: “Today’s federal indictment highlights how our NYPD investigators stop at nothing in their work to swiftly arrest anyone accused of distributing illegal narcotics in our city and region. I would like to thank the United States Attorney’s Office in the Southern District of New York, and all of our law enforcement partners, for their outstanding work in this important case.”

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

From at least in or about 2020 to in or about February 2022, QUINCY HILLIARD, a/k/a “Tut,” CURTIS HILLIARD, a/k/a “Curt,” GARY BROWN, a/k/a “Gleme,” TERRENCE TURNER, a/k/a “Storm,” KASIEN ADDERLEY, a/k/a “Kaz,” TIRAN BRANCH, PEDRO RIVERA, a/k/a “Dro,” DERRICK LATIMORE, a/k/a “Derrick Lattimore,” a/k/a “Cone,” and ANTWAN ANDREWS, a/k/a “Antawan Andrews,” a/k/a “Twan,” operated a large-scale cocaine trafficking organization.  This organization, which its members dubbed the “Downtown Mafia,” distributed wholesale quantities of cocaine in New Jersey and in the New York City area, including Harlem and the Bronx. 

*                           *                           *

QUINCY HILLIARD, a/k/a “Tut,” 39, CURTIS HILLIARD, a/k/a “Curt,” 44, GARY BROWN, a/k/a “Gleme,” 43, TERRENCE TURNER, a/k/a “Storm,” 43, TIRAN BRANCH, 38, PEDRO RIVERA, a/k/a “Dro,” 38, DERRICK LATIMORE, a/k/a “Derrick Lattimore,” a/k/a “Cone,” 42, and ANTWAN ANDREWS, a/k/a “Antawan Andrews,” a/k/a “Twan,” 36, were arrested today and will be presented before United States Magistrate Judge Debra Freeman.  KASIEN ADDERLEY, a/k/a “Kaz,” 39, remains at large.  This case is assigned to United States District Judge Colleen McMahon. 

All defendants are charged with conspiracy to distribute and possess with intent to distribute five kilograms and more of cocaine and 28 grams and more of cocaine base, which carries a minimum sentence of ten years 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 a defendant would be determined by the judge.

This prosecution is part of an Organized Crime Drug Enforcement Task Forces (OCDETF) investigation.  OCDETF identifies, disrupts, and dismantles the highest-level drug traffickers, money launderers, gangs, and transnational criminal organizations that threaten the United States by using a prosecutor-led, intelligence-driven, multi-agency approach that leverages the strengths of federal, state, and local law enforcement agencies against criminal networks.

Mr. Williams praised the outstanding investigative work of the Department of Homeland Security, Homeland Security Investigations, and the New York City Police Department.  Mr. Williams also thanked the Drug Enforcement Administration, the Drug Enforcement Administration’s New York – John F. Kennedy Airport Group, the United States Secret Service’s New York Field Office, the United States Marshals Service, United States Customs and Border Protection, the New York State Police, the New York City Department of Investigation, and the New York City Housing Authority for their assistance in the investigation. 

The prosecution of this case is being handled by the Office’s Narcotics Unit.  Assistant United States Attorneys Alexander Li, Andrew Rohrbach, and Ashley Nicolas are in charge of the prosecution.

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

Damian Williams, the United States Attorney for the Southern District of New York, announced today that VICTOR AHAIWE was sentenced to 84 months in prison today for participating in a multi-million-dollar conspiracy to launder the proceeds of business email compromise frauds targeting businesses and non-profit organizations and romance frauds targeting individual victims.  AHAIWE was convicted by a jury in June 2021 of bank fraud conspiracy, money laundering conspiracy, and aggravated identity theft in a trial presided over by U.S. District Judge Denise L. Cote, who also imposed today’s sentence. 

U.S. Attorney Damian Williams said: “The defendants in this case were part of a wide-reaching conspiracy to launder over $10 million stolen from businesses and individuals. The sentences imposed on the ten defendants send a message: that this type of activity will be prosecuted and punished to the full extent of the law.”

According to court filings and statements made in court proceedings, including the trial at which AHAIWE was convicted:

From at least in or about March 2018 up to and including at least in or about January 2020, AHAIWE and his coconspirators conspired to launder the proceeds of numerous business email compromise schemes and romance schemes, in which corporate, organizational, and individual victims were fraudulently induced to send over $10 million to bank accounts controlled by members of the conspiracy, in the mistaken belief that those accounts belonged to the intended recipients of the funds.  Members of the conspiracy received the victim funds by opening bank accounts in the names of the intended recipients, transferred the funds through additional accounts to hide the origin and fraudulent nature of the proceeds, and ultimately transferred most of those proceeds to foreign bank accounts or withdrew them in cash.

AHAIWE participated in the scheme by stealing the identity of a recently deceased friend and using that identity to open and operate bank accounts to launder a portion of the proceeds from a $500,000 business email compromise fraud against a foreign public agency that provides health insurance and pension benefits.  AHAIWE also previously laundered hundreds of thousands of dollars of proceeds from other business email compromise frauds and, in connection with those activities, stole and used the identities of several other individuals.  In imposing today’s sentence, Judge Cote also found that AHAIWE engaged in obstruction of justice in connection with his sentencing by submitting fabricated sentencing letters. 

AHAIWE was the tenth defendant to be sentenced for participating in the money laundering conspiracy.  The nine previously sentenced defendants, each of whom pleaded guilty, received the following sentences:

Defendant

Age

Hometown

Sentence

PRINCE UKO

46

Jonesboro, GA

41 months (prison)

SUNDAY OKORO

41

Jonesboro, GA

41 months (prison)

IKECHUKWU ELENDU

41

San Leandro, CA

41 months (prison)

ARINZE OBIKA

33

Queens, NY

33 months (prison)

BRITT JACKSON

43

Columbus, GA

33 months (prison)

HERMAN BASS

37

Hawthorne, CA

30 months (prison)

JACOB SAGIAO

47

Oxnard, CA

30 months (prison)

MARYLYNN PENEUETA

46

Oxnard, CA

12 months (prison)

JOSHUA FITTEN

25

Hacienda Heights, CA

5 years (probation)

*                *                *

In addition to the prison sentence, AHAIWE was ordered to pay restitution in the amount of $514,063, as recompense to the victims affected, and to pay forfeiture in the amount of $590,123, reflecting criminal proceeds that he received in connection with his money laundering and identity theft.

Mr. Williams praised the outstanding investigative work of the Secret Service and its Electronic Crimes Task Force, the FBI, CBP, and special agents of the United States Attorney’s Office for the Southern District of New York.  The prosecution of this case is being handled by the Office’s General Crimes Unit.  Assistant United States Attorneys Jun Xiang, Kevin Mead, and Michael McGinnis are in charge of the prosecution.

Damian Williams, the United States Attorney for the Southern District of New York, announced today that KEVIN TAYLOR was sentenced by U.S. District Court Judge Jed S. Rakoff to 28 years in prison for his role in the October 31, 2011, murder of Joshua Rubin in Brooklyn, New York.  Judge Rakoff previously sentenced co-defendants GARY ROBLES and MICHAEL MAZUR to 28 and 18 years in prison, respectively, for their roles in Rubin’s murder.

U.S. Attorney Damian Williams said: “Today’s sentencing brings long-awaited closure to the family of Joshua Rubin for the horrific events from more than a decade ago when Taylor, Robles and Mazur killed Rubin during a planned drug robbery, and then burned and abandoned Rubin’s body in a deserted field in Pennsylvania.  This case is another example of this Office’s commitment to seeking justice for victims, even if the road to justice is long.  I want to thank our law enforcement partners and the Special Agents of the U.S. Attorney’s Office for persevering in this case until justice was achieved for the victim’s family.”

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

On or about October 31, 2011, KEVIN TAYLOR, GARY ROBLES, and MICHAEL MAZUR planned to rob Joshua Rubin of a pound of marijuana. ROBLES agreed to bring a firearm to the robbery.  TAYLOR lured Rubin to a Brooklyn apartment where, under the guise of purchasing the marijuana, the trio planned to rob Rubin of the drugs.  On the night of the robbery, TAYLOR and ROBLES waited inside the apartment while MAZUR was positioned outside to serve as a lookout.  After Rubin entered the apartment, TAYLOR and ROBLES demanded that Rubin surrender the marijuana.  When Rubin refused, ROBLES shot and killed him.

After the murder, TAYLOR, ROBLES, and MAZUR placed Rubin’s body into the trunk of a car and drove to rural Pennsylvania.  Once there, TAYLOR, ROBLES, and MAZUR placed Rubin’s body in a garbage can, doused it with an accelerant, and set the body on fire.  TAYLOR, ROBLES, and MAZUR then drove back to New York in the early morning hours of November 1, 2011.  After the murder, TAYLOR arranged to have Rubin’s credit cards used to purchase items from retail establishments in Orange County, New York. 

In addition, in 2019 and 2020, TAYLOR attempted to impede the federal murder investigation by paying thousands of dollars to a potential witness, and offering another witness hundreds of thousands of dollars if that witness refused to speak with law enforcement.

*                *                *

TAYLOR, 29, pled guilty to one count of robbery, in violation of 18 U.S.C. §§ 1951 and 2, one count of conspiracy to commit robbery, in violation of 18 U.S.C. § 371, and one count of conspiracy to commit witness tampering, in violation of 18 U.S.C. § 371. In connection with his guilty plea, TAYLOR admitted to his role in the murder.  In addition to his prison sentence, TAYLOR, was sentenced to three years of supervised release.

ROBLES, 39, pled guilty to one count of robbery, in violation of 18 U.S.C. §§ 1951 and 2, one count of conspiracy to commit robbery, in violation of 18 U.S.C. § 371, and one count of narcotics conspiracy, in violation of 21 U.S.C. §§ 846 and 841(b)(1)(D). In connection with his guilty plea, ROBLES admitted to his role in the murder. In addition to his prison sentence, ROBLES, was sentenced to three years of supervised release.

MAZUR, 27, pled guilty to one count of Hobbs Act robbery, in violation of 18 U.S.C. § 1951, and in connection with his guilty plea admitted to his role in the murder.  In addition to his prison sentence, MAZUR, was sentenced to three years of supervised release.

Mr. Williams praised the outstanding work of the Federal Bureau of Investigation, the New York City Police Department, and the Special Agents of the United States Attorney’s Office for the Southern District of New York.  He also thanked the Lehigh County District Attorney’s Office, the Pennsylvania State Police, and the South Whitehall Township Police Department for their assistance in the investigation.

The case is being prosecuted by the Office’s Violent and Organized Crime Unit.  Assistant United States Attorneys Alexandra N. Rothman, Mollie Bracewell, and Dominic A. Gentile are in charge of the prosecution.

Damian Williams, the United States Attorney for the Southern District of New York, announced that Andres Bello pled guilty today in Manhattan federal court to the April 18, 2020 murder of Jorge Miguel Cabrera.  U.S. District Judge P. Kevin Castel accepted the defendant’s guilty plea.

U.S. Attorney Damian Williams said: “In the early morning of April 18, 2020, Andres Bello was involved in a shooting that ultimately killed Miguel Cabrera in connection with a failed drug transaction.  This case is yet another tragic reminder of the violence that often accompanies narcotics trafficking. We continue our daily work with our law enforcement partners to keep our communities safe by vigorously investigating and prosecuting acts of violence and drug trafficking.”

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

On or about April 18, 2020, BELLO and other members of a Bronx-based narcotics trafficking organization, including Humberto Rodriguez, a/k/a “El Bori,” and Jason Tavarez, a/k/a “RATATAA,” attempted to purchase one kilogram of cocaine on East 175th Street in the Bronx.  After obtaining the buyers’ money, the sellers attempted to flee the scene.  At that point, BELLO passed a firearm to Humberto Rodriguez who fired the gun at the sellers’ vehicles, striking Cabrera in the spine.  Cabrera ultimately died from the gunshot wound. 

*                *                *

BELLO, 32, pled guilty to one count of murder through the use of a firearm, in violation of Title 18, United States Code, Sections 924(j) and 2, which carries a maximum term of life in prison and a mandatory minimum term of five years’ imprisonment. 

On February 9, 2022, co-defendant Jason Tavarez, a/k/a “RATATAA,” 38, pled guilty to one count of conspiring to distribute five kilograms and more of mixtures and substances containing a detectable amount of cocaine, which carries a mandatory minimum sentence of 10 years in prison and a maximum sentence of life in prison. 

On November 22, 2021, co-defendant Humberto Rodriguez, a/k/a “El Bori,” pled guilty to one count of murder through the use of a firearm. On July 27, 2021, co-defendant, Alex Melendez, pled guilty to narcotics and firearms offenses.  On November 11, 2021, co-defendant, Sharone Lewis pled guilty to a narcotics offense. 

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

The prosecution is being handled by the Office’s Narcotics Unit.  Assistant United States Attorneys Peter J. Davis, Nicholas W. Chiuchiolo, and Kevin Mead are in charge of the prosecution. 

Damian Williams, the United States Attorney for the Southern District of New York and Michael J. Driscoll, the Assistant Director-in-Charge of the New York Field Office of the Federal Bureau of Investigation (“FBI”), today announced the unsealing of an indictment charging ARDAE HINES, a/k/a “Young Money,” a/k/a “YM,” a leader of a street and drug gang known as “Southside” in the City of Newburgh, New York, with the August 2016 murder of Deandric Little.  HINES is currently in federal custody serving a 2019 sentence for racketeering and narcotics conspiracy, and was presented in White Plains federal court today. The case is assigned to U.S. District Judge Cathy Seibel.

U.S. Attorney Williams said: “Ardae Hines, a leader of the violent street gang, ‘Southside,’ is alleged to have engaged in and promoted violence in furtherance of Southside’s activities, including directing a fellow gang member to commit murder. We thank our FBI partners for their continued efforts in eliminating gang violence, which affects everyone in communities where it exists, victimizing innocent New Yorkers by instilling fear and apprehension in many going about their daily lives.”

FBI Assistant Director Michael J. Driscoll said:  "Levels of criminal street gang activity in Newburgh, NY remain high, similar to other areas in this country recently. Unfortunately, shootings, drugs, and murders have become all too familiar for the community, which has been battling the rise in violence for years. We work daily with our partners at the Newburgh City Police Department and other members of the Hudson Valley Safe Streets Task Force, to ensure those responsible for the violence face justice.”

As alleged in the Indictment filed today in White Plains federal court[1]:

From at least 2014 through June 2017, the Southside Gang was a criminal enterprise centered in and around the intersection of South Street and Chambers Street in an area of Newburgh known as the “Southside.” In order to gain funds for the gang, protect the gang’s territory, and promote the gang’s standing, members of Southside engaged in, among other things, narcotics trafficking, robbery, and acts involving murder.  To that end, Southside members sold heroin, crack cocaine, and marijuana in the gang’s territory, promoted their gang affiliation on social media sites such as Facebook, possessed firearms, and engaged in shootings as part of their gang membership.  As alleged in the Indictment, on or about August 1, 2016, ARDAE HINES argued with Deandric Little in Newburgh, and in the course of that argument, instructed another person (“CC-1”) to shoot and kill Little, which CC-1 did. 

*                 *                  *

ARDAE HINES, 33, is charged with (1) murder in aid of racketeering, which carries a mandatory sentence of life in prison, (2) murder in connection with a drug crime, which carries a mandatory minimum sentence of twenty years in prison and maximum sentence of life imprisonment, and (3) murder through use of a firearm, which carries a mandatory minimum sentence of five years in prison and a maximum sentence of life in prison.  The mandatory minimum and maximum potential sentences in this case are prescribed by Congress and are provided here for informational purposes only, as any sentencing of the defendant will be determined by a judge.

Mr. Williams praised the outstanding investigative work of the FBI and the City of Newburgh Police Department.  Mr. Williams thanked the Orange County District Attorney’s Office for its invaluable ongoing assistance in the case.  Mr. Williams also thanked the Bureau of Alcohol, Tobacco, Firearms, and Explosives, Town of Newburgh Police Department, the New York State Police, the Orange County Sheriff’s Department, the Town of New Windsor Police Department, and the New York Department of Corrections and Community Supervision for their assistance in the case. 

This case is being handled by the Office’s White Plains Division.  Assistant United States Attorneys Lindsey Keenan, Jacqueline Kelly, and Samuel Raymond are in charge of the prosecution.

[1] As the introductory phrase signifies, the entirety of the text of the Indictment and the descriptions 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, and Michael J. Driscoll, the Assistant Director-in-Charge of the New York Office of the Federal Bureau of Investigation (“FBI”), announced today the unsealing of an Indictment in White Plains federal court charging SUSANA RIVERA, the former Director of Accounting and Human Resources for a kitchen remodeling firm located in Westchester County and Greenwich, Connecticut, with wire fraud and aggravated identity theft in connection with her embezzlement of more than $550,000 from her employer.  RIVERA was arrested this morning and will be presented in White Plains federal court later today. 

U.S. Attorney Damian Williams said: “Susana Rivera abused the trust her employer placed in her by stealing more than $500,000 in hundreds of individual thefts over 22 months.  She stole and used her employer’s identity to further her scheme.  She will now be held accountable for her thefts.”

FBI Assistant Director Michael J. Driscoll said: “No more than one month after joining the company she allegedly defrauded, Susana Rivera started down a path of embezzlement that would eventually result in more than half a million dollars in losses to her victim. Spending this money on a variety of luxury and personal items, she jumped headfirst into this scheme with seemingly no signs of slowing down—until we showed up to levy the charge. Financial fraud schemes wreak havoc on private businesses and the economy alike. Any attempt to defraud a victim in this way will most certainly be met with consequences in our justice system.”

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

In October 2019, RIVERA was hired as the Director of Accounting and Human Resources at the victim company, a family owned kitchen design and remodeling business in Mamaroneck, Bedford and Greenwich, Connecticut.  Starting in November 2019, RIVERA made hundreds of unauthorized charges in a total amount exceeding $175,000 to the victim company’s credit cards for personal expenses, including jewelry, beauty treatments, laser treatments, travel, pets, cosmetic surgery, clothing and cars, including a partial payment on a  $100,000 Corvette.  RIVERA also caused the victim company’s payroll company to make unauthorized payments in a net amount of more than $370,000 to a fake vendor that RIVERA created to receive the money.  RIVERA also caused unauthorized transfers from the victim company’s bank account in an amount exceeding $2,900 to pay her personal utility bills.  To get restrictions on the use of the victim company’s credit cards removed, RIVERA posed as an owner of the victim company in telephone calls with the company’s credit card company.  RIVERA also sent the credit card company photographs of the owner’s driver’s license to cause credit card company personnel to believe she was the owner.

RIVERA, 40, of the Bronx, New York, is charged with one count of wire fraud, which carries a maximum sentence of 20 years in prison, and one count of aggravated identity theft, which carries a mandatory sentence of two years in prison.  The maximum potential sentences in this case are prescribed by Congress and is provided here for informational purposes only, as any sentencing of the defendant will be determined by the judge.

*                      *                      *

Mr. Williams praised the investigative work of the FBI.

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

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

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

Damian Williams, 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”), and John Condon, Special Agent in Charge of the Tampa Office of Homeland Security Investigations (“HSI”), announced today the unsealing of an Indictment charging ROBERT LENARD BOOTH, a/k/a “Trevor Nicholas,” MICHAEL D’URSO, ALYSSA D’URSO, JAY GARNOCK, and ANTONELLA CHIARAMONTE with conspiracy to commit securities fraud and operate unlicensed money transmitting businesses, conspiracy to commit wire fraud, conspiracy to commit money laundering, and operation of unlicensed money transmitting businesses, in connection with a scheme to defraud victim investors in countries around the world and launder the proceeds of the fraud.  The case is assigned to U.S. District Judge Jed S. Rakoff.

BOOTH was arrested in August 2021 at John F. Kennedy International Airport and was previously indicted for his role in the scheme.  MICHAEL D’URSO, ALYSSA D’URSO, and CHIARAMONTE were arrested in Glen Cove, New York this morning and will be presented before the Honorable Debra Freeman, United States Magistrate Judge for the Southern District of New York, later today. GARNOCK was arrested in West Palm Beach, Florida this morning and will be presented before the Honorable Bruce E. Reinhart, United States Magistrate Judge for the Southern District of Florida later today.

U.S. Attorney Damian Williams said: “Hiding behind fake investment firms and a network of shell companies, these defendants preyed on victims around the world and cheated them of their hard-earned savings. In selling their victims fake investments in American companies, the defendants abused the confidence and trust that investors worldwide have in American securities and American banks. Thanks to the tireless efforts of our law enforcement partners, these defendants now find themselves in hot water, being held accountable for their crimes.”

HSI Tampa SAC John Condon said: “This case is an example of how HSI is uniquely positioned to disrupt transnational criminal organizations allegedly profiting from cross-border crime. Thanks to the partnership with HSI and IRS-CI, an international criminal conspiracy has been stopped.”

IRS-CI SAC Thomas Fattorusso said: “Criminals have become extremely sophisticated in preying on unsuspecting victims, and this alleged boiler room scheme is no exception. This team of fraudsters allegedly went to great lengths to create fake marketing materials, fake contact information, and fake companies to dupe victim-investors and then laundered the funds for personal gain. This case demonstrates that IRS-CI, and its law enforcement partners like Homeland Security Investigations, will work across the globe to track down perpetrators of financial crimes.”

As alleged in the Indictment unsealed today[1]:

Beginning in at least June 2019 and lasting through August 2021, ROBERT LENARD BOOTH, a/k/a “Trevor Nicholas,” MICHAEL D’URSO, ALYSSA D’URSO, JAY GARNOCK, and ANTONELLA CHIARAMONTE participated in a sophisticated international mass-marketing investment fraud scheme to defraud investors from around the world of millions of dollars, and to launder the fraud proceeds and distribute those proceeds among the conspirators.

BOOTH ran a boiler room operation in Thailand that lied to investors and told them the boiler room was in fact a Manhattan-based investment firm. BOOTH and his co-conspirators propped up their lies with fake identities and false and misleading webpages, email addresses, and phone numbers. While purporting to sell investors from around the world securities in privately held and publicly traded American companies, BOOTH stole more than $1 million from victim-investors, depriving them of their savings.

MICHAEL D’URSO, ALYSSA D’URSO, GARNOCK, and CHIARAMONTE (the “D’URSO Crew”) ran a network of shell companies and associated bank accounts in New York. Using these shell companies, the D’URSO Crew partnered with multiple boiler rooms, including BOOTH’s, to receive the stolen “investment” funds from victims and then launder the money and distribute it to the various conspirators. All told, the D’URSO Crew used its shell companies to receive more than $8.4 million that was stolen from victims of the scheme. They then used their shell companies to launder more than $4.6 million of the stolen money and send it back overseas.

*          *          *

BOOTH, 68, of Brooklyn, New York, MICHAEL D’URSO, 54, of Glen Cove, New York, ALYSSA D’URSO, 28, of Glen Cove, New York, GARNOCK, 75, of Glen Cove, New York, and CHIARAMONTE, 36, of Glen Cove, New York, are each charged with one count of conspiracy to commit securities fraud and operate unlicensed money transmitting businesses, in violation of 18 U.S.C. § 371, which carries a maximum sentence of 5 years in prison; one count of conspiracy to 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, which carries a maximum sentence of 20 years in prison. MICHAEL D’URSO is further charged with three counts, and ALYSSA D’URSO, GARNOCK, and CHIARAMONTE are further charged with one count each, of operating an unlicensed money transmitting business, in violation of 18 U.S.C. § 1960, which carries a maximum sentence of 5 years in prison. 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 HSI and IRS-CI. Mr. Williams further thanked the U.S. Securities and Exchange Commission, which today filed a parallel civil action, for its assistance and cooperation in this investigation.

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

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

Damian Williams, the United States Attorney for the Southern District of New York, announced today that DEJAN MEDIC pled guilty to participating in a business email compromise scheme that stole over $3.7 million from 15 victim companies in the United States and Europe. MEDIC pled guilty to one count of wire fraud before U.S. District Judge Gregory Woods, to whom his case is assigned.

U.S. Attorney Damian Williams said: “As he admitted in court today, Dejan Medic participated in a scheme to defraud Americans, and others worldwide, from thousands of miles away. Medic’s plea today should serve as a warning to those who think they can victimize others and hide behind the anonymity of the internet at a safe distance: the United States and its international partners will find you and hold you accountable.”      

According to the Indictment and other documents filed in the case, including the defendant’s statements under oath during his guilty plea:

From in or about July 2018, until approximately March 2019, the defendant engaged in a business email compromise scheme that used fraudulent phone calls and spoofed email accounts to obtain money from at least 15 victim businesses in the United States (the “Victim Companies”).  The scheme was typically initiated through a telephone call placed to the U.S.-based Victim Company from a European telephone number.  During this call, the caller posed as either a senior executive or a board member of the Victim Company’s Europe-based parent company.  During the call, the caller requested the Victim Company’s assistance with a purportedly urgent wire transfer of funds regarding purported debts of the parent company.  After the call, the Victim Company then received an initial follow-up email from an email address with a domain name that was either the same, or misleadingly similar to, the Victim Company’s foreign parent company email—a process known as email “spoofing.”  The members of the scheme would continue conversations using the spoofed and other email accounts regarding the payment of the alleged debt by the Victim Company’s European parent.  The members of the scheme then provided wire transfer information and worked to fraudulently induce the Victim Company into wiring funds to accounts controlled by a member of the scheme.

At least 15 Victim Companies suffered a total loss of approximately $3.7 million through the course of the scheme.  In addition, the investigation revealed that the scheme also attempted to obtain approximately $6.8 million in additional fraudulent payments from U.S.-based Victim Companies that were unsuccessful. 

As part of the scheme, at least several Victim Companies were fraudulently induced to send funds directly to Hungarian bank accounts opened and controlled by MEDIC.  In addition, some of the Victim Companies sent proceeds to other European bank accounts that were converted to gold.  Thereafter, on or about April 27, 2019, MEDIC was arrested by Hungarian authorities attempting to cross the border into Serbia in possession of, among other things, three serialized gold bars that were proceeds of the fraud scheme.

*                *                *

 MEDIC, 49, a resident of Szabadk, Serbia, pled guilty to one count of wire fraud, which carries a maximum prison term 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 defendant will be determined by the judge.

Mr. Williams praised the FBI for their outstanding investigative work on this case.

The Justice Department’s Office of International Affairs provided significant assistance in the investigation and securing the extradition of MEDIC from Hungary.

This case is being handled by the Office’s Complex Frauds and Cybercrime Unit. Assistant United States Attorneys Jilan Kamal and Louis A. Pellegrino are in charge of the prosecution.

Damian Williams, the United States Attorney for the Southern District of New York, announced today that GEOVANNY FUENTES RAMIREZ was sentenced today to life in prison for cocaine-importation and weapons offenses.  A jury convicted FUENTES RAMIREZ in March 2021 after a two-week trial.  The sentence was imposed by the Honorable P. Kevin Castel, who also presided over the trial.   

U.S. Attorney Damian Williams said: “Geovanny Fuentes Ramirez was convicted of importing tons of cocaine into the United States and protecting his illicit drug business with machineguns. In committing his narcotics crimes, Fuentes Ramirez bribed high-ranking Honduran officials and was responsible for brutal acts of violence and murder. Fuentes Ramirez’s path of destruction, both in violence and flooding the United States with cocaine, has finally come to an end, and he will now spend his life in federal prison.”

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

Beginning in or about 2009, FUENTES RAMIREZ and others established and operated a cocaine laboratory in the Cortés Department of Honduras, where they produced hundreds of kilograms of cocaine each month.  FUENTES RAMIREZ worked with others to receive cocaine shipments sent to Honduras over air and maritime routes, and to transport cocaine that he produced at the laboratory.  FUENTES RAMIREZ provided security for the facility, and for the transportation of cocaine, using heavily armed workers and Honduran police and military personnel.  On several occasions between approximately 2010 and 2013, FUENTES RAMIREZ helped arrange or directly participated in drug-related violence.  In or about 2012, for example, after FUENTES RAMIREZ’s cocaine laboratory was raided by law enforcement, FUENTES RAMIREZ beat and tortured a law enforcement official who FUENTES RAMIREZ believed to have been involved in the investigation of the laboratory.  FUENTES RAMIREZ murdered the officer by shooting him in the head with what FUENTES RAMIREZ described as “mercy shots.”  FUENTES RAMIREZ also furthered his drug trafficking operation by bribing high-ranking Honduran officials.  

*                *                *

In addition to the prison term, FUENTES RAMIREZ, 52, was sentenced to five years of supervised release.

Mr. Williams praised the outstanding efforts of the DEA’s Special Operations Division Bilateral Investigations Unit, New York Strike Force, and Tegucigalpa Country Office, as well as the U.S. Department of Justice’s Office of International Affairs.

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

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

Damian Williams, the United States Attorney for the Southern District of New York, announced that ALEXANDER ARGUEDAS, a/k/a “Reckless,” pled guilty today before U.S. Magistrate Judge Debra Freeman in connection with his role as a Godfather of the Black Stone Gorilla Gang (“BSGG”), a violent Bloods street gang whose members and associates had engaged in murders, assaults, robberies, narcotics trafficking, fraud, and witness tampering.  ARGUEDAS also admitted that he participated in the December 9, 2012 murder of Gary Rodriguez.

U.S. Attorney Damian Williams said: “For years, Alexander Arguedas stood at the top of a violent gang that flooded the streets of New York City with violence, drugs, shootings, assaults, and murder.  Now, Arguedas faces significant prison time for his crimes and the harm he inflicted on the community, including his role in murdering Gary Rodriguez.  We continue our daily work with our law enforcement partners to keep our communities safe and to vigorously investigate acts of gang violence.”

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

ALEXANDER ARGUEDAS, a/k/a “Reckless,” was previously one of the Godfathers of the Black Stone Gorilla Gang, a racketeering enterprise that operated principally in the New York City metropolitan area and in the jails and prisons of New York City and the State of New York.  In order to enrich the enterprise, preserve and protect the power of the enterprise, and enhance its criminal operations, BSGG members and associates committed, conspired, attempted, and threatened to commit acts of violence, including murder and assaults; distributed and possessed with intent to distribute narcotics; committed robberies; engaged in bank fraud and wire fraud; and obtained, possessed, and used firearms.  BSGG members also evaded prosecution by law enforcement authorities through acts of intimidation and violence against potential witnesses to crimes committed by the gang.

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

*                      *                     *

ARGUEDAS, 32, of the Bronx, pleaded guilty to racketeering conspiracy, which carries a maximum sentence of life; narcotics conspiracy, which carries a maximum sentence of life and a mandatory minimum sentence of 10 years in prison; and using and carrying a firearm in furtherance of drug trafficking, which carries a maximum sentence of life and a mandatory minimum sentence of 5 years in prison, which must be served consecutively to any other sentence imposed.  ARGUEDAS will be sentenced before Judge Rakoff later this year.

The statutory maximum penalties are prescribed by Congress and are provided here for information purposes only, as any sentencing of the defendant would be determined by Judge Rakoff.

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

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

Damian Williams, the United States Attorney for the Southern District of New York, announced that ELLIOT SMERLING pled guilty today to a bank fraud scheme that caused the issuance of approximately $140 million in collateralized loans on the basis of forged documents, including subscription agreements from purported limited partners, audit letters attesting to his private equity firm’s finances, and falsified bank account statements.  SMERLING also pled guilty to securities fraud in connection with his solicitation of investments in his private equity funds through materially false and misleading statements.  SMERLING pled guilty before U.S. District Judge Denise L. Cote, to whom his case is assigned.

U.S. Attorney Damian Williams said: “As he admitted today, Elliot Smerling used false documents and deceit to obtain over $100 million in fraudulent loans on behalf of his private equity funds. This Office is committed to protecting the integrity of the U.S. financial system, and going after fraudsters who seek to manipulate it for their personal gain. Thanks to our valued partners at the FBI, Smerling now awaits sentencing for his crimes.”

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

From at least in or about January 2019 through at least in or about March 2021, ELLIOT SMERLING, the defendant, solicited and obtained loans totaling approximately $140 million on behalf of his private equity funds, which were secured by purported capital commitments made by limited partners in the funds.  SMERLING obtained the loans on the basis of falsified documents and material misrepresentations, including:  (1) a forged audit letter, purportedly prepared by an international network of accounting, audit, tax, and professional services firms, attesting to audited financial statements; (2) forged subscription agreements that falsely represented, among other things, that the investment fund of a private university based in New York, New York, and the chief investment officer of that fund had committed $45 million, and that the investment management division of a banking and financial services firm headquartered in New York, New York, and the chief executive officer of that firm had committed $40 million; and (3) falsified bank records purporting to attest to wire transfers from purported limited partners to Smerling’s funds.  

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

*                *                *

SMERLING, 52, of Lake Worth, Florida, pled guilty to one count of bank fraud, which carries a maximum penalty of thirty years in prison, and one count of securities fraud, which carries a maximum penalty of twenty years in prison.  The statutory maximum sentences are prescribed by Congress and are provided here for informational purposes only, as SMERLING’s sentence will be determined by the judge.  SMERLING’s sentencing is scheduled for May 13, 2022 at 12:00 p.m. before Judge Cote.

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

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

Damian Williams, the United States Attorney for the Southern District of New York, announced today that STEPHEN M. CALK was sentenced to one year and one day of imprisonment for corruptly using his position as the head of a federally-insured bank to issue millions of dollars in high-risk loans to Paul Manafort in exchange for personal benefit: CALK’s placement on the Donald J. Trump 2016 presidential campaign and assistance from Manafort in trying to obtain a senior position with the incoming presidential administration.  On July 13, 2021, CALK was found guilty of financial institution bribery and conspiracy to commit financial institution bribery following a three-week trial before U.S. District Judge Lorna G. Schofield, who also imposed today’s sentence.

U.S. Attorney Damian Williams said: “Stephen Calk abused his position as the CEO of a federally-insured bank to try to buy himself prestige and power by trading millions of dollars in high-risk loans for influence with a presidential campaign and consideration for positions at the highest levels of the Defense Department.  Today’s sentence sends the message that those who corrupt federally regulated financial institutions will be held to account.”

As reflected in the Indictment, documents previously filed in the case, and evidence introduced at trial:

CALK, The Federal Savings Bank, and Paul Manafort

STEPHEN M. CALK was the chairman and chief executive officer of The Federal Savings Bank, a federal savings association headquartered in Chicago, Illinois, with an office in New York, New York.  The Bank was owned in its entirety by National Bancorp Holdings, a Chicago-based bank holding company, and CALK was the chairman, chief executive officer, and owner of approximately 67% of the holding company.

Paul Manafort was a lobbyist and political consultant.  Beginning in or about March 2016, Manafort held a senior role with Donald J. Trump’s 2016 presidential, and from June 2016 through August 2016, he served as chairman of the presidential campaign.  After Manafort’s formal role with the presidential campaign concluded in or about August 2016, Manafort continued to be informally involved in the campaign.  Beginning in or about November 2016, when Donald J. Trump was elected President of the United States, Manafort provided informal input to the presidential transition team.

The Corrupt Scheme

Between in or about July 2016 and January 2017, CALK engaged in a corrupt scheme to exploit his position as the head of the Bank and the holding company in an effort to secure a valuable personal benefit for himself, namely, Manafort’s assistance in obtaining for CALK a senior position in the presidential administration.  During this time period, Manafort sought millions of dollars in loans from the Bank.  CALK understood that Manafort urgently needed these loans in order to terminate or avoid foreclosure proceedings on multiple properties owned by Manafort and Manafort’s family.  Further, CALK believed that Manafort could use his influence with the presidential transition team to assist CALK in obtaining a senior administration position.

CALK thus sought to leverage his control over the Bank and the loans sought by Manafort to his personal advantage.  Specifically, CALK offered to, and did, cause the Bank and holding company to extend $16 million in loans to Manafort in exchange for Manafort’s requested assistance in obtaining a high-level position in the presidential administration.  For example, and while Manafort’s loans were pending approval, CALK provided Manafort with a ranked list of the governmental positions he desired, which started with Secretary of the Treasury, and was followed by Deputy Secretary of the Treasury, Secretary of Commerce, and Secretary of Defense, as well as 19 ambassadorships similarly ranked and starting with the United Kingdom, France, Germany, and Italy.

In approving these loans to Manafort, CALK was aware of significant red flags regarding Manafort’s ability to repay the loans, such as his history of defaulting on prior loans.  Moreover, given the size of the loans, Manafort’s debt became the single largest lending relationship at the Bank.  In order to enable the Bank to issue these loans without violating the Bank’s legal limit on loans to a single borrower, CALK authorized a maneuver never before performed by the Bank, in which the holding company—which CALK also controlled—acquired a portion of the loans from the Bank.

During the same time period, Manafort provided CALK with valuable personal benefits.  First, in or about the summer of 2016, during the presidential campaign—and just days after CALK and the rest of the Bank’s credit committee conditionally approved a proposed $9.5 million loan to Manafort — Manafort appointed CALK to a prestigious economic advisory committee affiliated with the campaign.  And second, in or about late November and early December 2016—after Donald J. Trump had been elected President, after Manafort’s first loan from the Bank had been issued, and while a second set of loans worth $6.5 million sought by Manafort was pending approval by the Bank— Manafort used his influence with the presidential transition team to assist Calk, recommending CALK for an administration position.  Due to Manafort’s efforts, CALK was formally interviewed for the position of Under Secretary of the Army on January 10, 2017 at the presidential transition team’s principal offices in New York, New York.  CALK was not ultimately hired.

To conceal the unlawful nature of his scheme, CALK made false and misleading statements to the Office of the Comptroller of the Currency regarding the loans to Manafort.  For example, CALK falsely stated to the OCC regulators that he had not known that the Manafort’s properties had been in foreclosure prior to issuing the loans.  CALK also stated that he had never desired a position in the presidential administration. 

*                *                *

In addition to the prison term, CALK, 56, was sentenced to two years of supervised release and 800 hours of community service.  CALK was also ordered to pay a $1 million fine on Count 1 and a $250,000 fine on Count 2. 

Mr. Williams praised the outstanding investigative work of the Federal Bureau of Investigation and Federal Deposit Insurance Corporation’s Office of Inspector General.

This case is being handled by the Office’s Public Corruption Unit.  Assistant U.S. Attorneys Paul M. Monteleoni, Hagan Scotten, Benet Kearney, Alexandra N. Rothman are in charge of the prosecution.

As an attorney and fiduciary, Michael Avenatti pledged to advise his clients and act in good faith. As evidenced by his second conviction by this Office in just three years, this time for stealing a book advance from his client, he did just the opposite. Rather than advise his clients in their best interests, Avenatti instead used his law degree as a license to steal. Michael Avenatti has once again been convicted by a unanimous jury for blatant abuse of his privilege to practice law and for betraying his solemn responsibility to his clients.

Damian Williams, United States Attorney for the Southern District of New York, announced today that THOMAS CAPUTO, a longtime employee of the Long Island Rail Road (“LIRR”) who in 2018 was the highest paid employee of the entire Metropolitan Transportation Authority (“MTA”) due to extraordinarily high volumes of overtime pay, was sentenced to eight months in prison for conspiracy to commit federal program fraud by submitting time reports falsely claiming to have worked hundreds of hours of overtime that he did not in fact work, including for time he spent participating in a bowling league.  CAPUTO previously pled guilty on August 26, 2021, before United States District Judge Paul A. Engelmayer, who also imposed the sentence.  Judge Engelmayer had earlier sentenced two of CAPUTO’s coconspirators, JOHN NUGENT, and JOSEPH BALESTRA, to terms of imprisonment for their participation in the scheme.  NUGENT, who pled guilty on July 27, 2021, was sentenced on November 4, 2021 to a five-month term of imprisonment.  BALESTRA, who pled guilty on September 14, 2021, was sentenced on January 4, 2022 to a three-month term of imprisonment.

U.S. Attorney Damian Williams said: “The sentences the court imposed on the participants in this egregious overtime fraud scheme send a clear message: If you commit overtime fraud, you will go to prison.  The public expects that public employees will show up and receive honest pay for an honest day’s work, not line their pockets with double-time or time-and-a-half pay while out bowling.”

In sentencing CAPUTO’s codefendant NUGENT, Judge Engelmayer remarked that the defendant participated in “an orgy of overtime fraud that was carried out on an epic scale,” and remarked that “Just punishment requires a substantial sentence including real prison time” and that “The message has to be, if you get caught faking overtime, there will be significant consequences and you will spend time in prison.”

According to the allegations in the Complaint and Indictment filed in federal court, and the statements made in connection with the sentencings of CAPUTO, NUGENT, and BALESTRA and the prosecution of coconspirators JOSEPH RUZZO and FRANK PIZZONIA:

CAPUTO, RUZZO, NUGENT, BALESTRA, and PIZZONIA schemed to fraudulently receive thousands of dollars in compensation from the MTA by falsely claiming to have worked hundreds of voluntary overtime hours that in fact they did not work.  The overtime pay the defendants claimed led to significant increases in their salary and led to them being among the highest-paid MTA employees, and in the case of CAPUTO, the highest-paid MTA employee in 2018.  The defendants frequently volunteered for overtime and then claimed to have been working lucrative overtime shifts at times when they were in fact at home or at other non-work locations, such as, in the case of CAPUTO, a bowling alley.

The Defendants’ Employment at the MTA

The MTA runs North America’s largest transportation network, providing bus, subway and rail service to a population of more than 15 million people in New York City and the surrounding areas.  The MTA’s operating agencies include the LIRR, a commuter railroad providing service between Manhattan and locations on Long Island. 

CAPUTO, RUZZO, NUGENT, BALESTRA, and PIZZONIA are current or former LIRR employees.  CAPUTO was an LIRR employee responsible for track inspection, RUZZO, NUGENT, and BALESTRA were all LIRR foremen, and PIZZONIA is an LIRR track worker. 

In addition to their regular duties, CAPUTO, RUZZO, NUGENT, BALESTRA, and PIZZONIA each volunteered to work and were assigned a number of lucrative overtime shifts during which they were required to, among other things, support third-party contractors working on construction projects on or around LIRR properties.  These voluntary overtime shifts were offered to LIRR employees in order of their seniority under the applicable union collective bargaining agreements, enabling CAPUTO, RUZZO, NUGENT, BALESTRA, and PIZZONIA to be assigned large numbers of voluntary overtime shifts due to their seniority.

At all relevant times, CAPUTO, RUZZO, NUGENT, BALESTRA, and PIZZONIA received hourly rates for their regular schedule, and were then entitled to be paid higher “overtime” rates – typically one and a half or two times the regular hourly rate, depending on the circumstances –  for additional hours worked.  At all relevant times, CAPUTO, RUZZO, NUGENT, and BALESTRA were required to self-report their time.

The Defendants’ Excessive Overtime Claims and Frequent Absences from Work

In 2018, CAPUTO was paid approximately $461,000 by the MTA.  Of that amount, approximately $117,000 comprised his base salary and other forms of compensation apart from overtime, while the additional approximately $344,000 was paid for overtime that CAPUTO ostensibly worked.  In total, this made CAPUTO the highest paid employee at the MTA during 2018 – higher than, for example, the Chairman of the MTA.

In 2018, CAPUTO claimed to have worked approximately 3,864 overtime hours, on top of 1,682 regular hours.  That is, if CAPUTO had worked every single calendar day in 2018 including weekends and holidays (although he did not), that would average out to approximately 10 hours of overtime every day for an entire year in addition to his regular, 40-hour work week. 

Similarly, RUZZO, NUGENT, BALESTRA, and PIZZONIA also claimed to have worked and were paid for an excessive number of overtime hours in 2018.  Each of them was paid over $200,000 in overtime alone, putting each of them within the top 30 highest paid employees at the MTA during 2018.  These payments were based on reported amounts of overtime hours ranging from 2,918 to 3,914, which if the defendants had worked every calendar day in 2018 would average out to approximately 8 to 10 hours for every single day, in addition to the employee’s regular 40-hour work week. 

The defendants’ claimed overtime, however, was inflated by numerous hours in which the defendants claimed to be at work but in fact were absent without authorization.  Staffers from the Office of the MTA Inspector General (“MTA OIG”) worked with criminal investigators to perform a detailed review of the hours claimed to have been worked by the defendants in or around calendar year 2018.  This investigation, among other things, compared the time records for CAPUTO, RUZZO, NUGENT, BALESTRA, and PIZZONIA with various records that established their true whereabouts, such as location information for their cellular phones, bank records, MTA building access card data, work and personal emails and social media records, and records from third parties such as a bowling alley where CAPUTO participated in bowling league games despite claiming to work an average of 10 hours of overtime every single day of 2018.

*                *                *

In addition to the prison sentences, CAPUTO, 56, of Holbrook, New York, was sentenced to three years of supervised release with six months of home confinement and 200 hours of community service; NUGENT, 50, of Rocky Point, New York, was sentenced to three years of supervised release with five months of home confinement and 200 hours of community service; and BALESTRA, 51, of Blue Point, New York, was sentenced to three years of supervised release with three months of home confinement and 200 hours of community service, and all were ordered to pay restitution in the amount of $109,641.74.

Mr. Williams praised the FBI and the MTA-OIG for their outstanding investigative work on this case.

This case is being handled by the Office’s Public Corruption Unit.  Assistant U.S. Attorneys Paul M. Monteleoni, Thomas A. McKay, and Aline R. Flodr, are in charge of the prosecution.

Damian Williams, the United States Attorney for the Southern District of New York, announced today that WILLIAM VAZQUEZ-BAEZ, a former member of the Puerto Rico Police Department (“PRPD”), was sentenced by U.S. District Judge Jesse M. Furman to 30 years in prison. VAZQUEZ-BAEZ previously pled guilty to one count of participating in a racketeering conspiracy and one count of participating in a conspiracy to commit murder for hire, in connection with his agreement to assist a drug-trafficking organization that shipped drugs to New York and distributed them from a Bronx daycare center.  

U.S. Attorney Damian Williams said: “William Vazquez Baez abused his position as a police officer to help a vicious drug organization distribute massive amounts of cocaine and massacre citizens he had sworn to protect. Today Vazquez-Baez was rightly sentenced to 30 years in prison for his horrific crimes.”

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

From approximately 1994 until his arrest in connection with this case in May 2017, VAZQUEZ-BAEZ was an active police officer with the PRPD. From in or about 2004 until in or about 2016, members of La ONU distributed thousands of kilograms of cocaine, including cocaine that was shipped from Puerto Rico to New York and then distributed out of a Bronx daycare center, and protected their territory and trade through numerous acts of violence. Members of La ONU paid VAZQUEZ-BAEZ a salary to corruptly use his position as a police officer to further the interests of La ONU. For example, VAZQUEZ-BAEZ provided narcotics and intelligence, including information obtained from the police narcotics unit. Members of La ONU would also contact VAZQUEZ-BAEZ, among others, when transporting large quantities of cocaine within the San Juan, Puerto Rico area to ensure the shipment avoided areas of police activity.  VAZQUEZ-BAEZ also distributed payments to other corrupt police officers who assisted La ONU.

VAZQUEZ-BAEZ also assisted La ONU in acts of violence:

In or about 2006 or 2007, VAZQUEZ-BAEZ alerted La ONU members that Freddy Mendez-Rivera, a local resident, had complained to police about drug dealing occurring in his neighborhood, which led to members of La ONU kidnapping and then killing Mendez-Rivera.  Around the same time, VAZQUEZ-BAEZ alerted a senior member of La ONU that the kidnapping was being reported over the police radio. VAZQUEZ-BAEZ advised that, because the fact that Mendez-Rivera had spoken with the police was known throughout the Carolina Narcotics division, it was important that the body never be discovered. When later updated about what had happened, VAZQUEZ-BAEZ laughed and remarked, in substance, that Mendez-Rivera would not be giving the police information any further.

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

In or about 2007, VAZQUEZ-BAEZ delivered a confidential informant, who was in VAZQUEZ-BAEZ’s custody, to members of La ONU, who pretended to be other police officers. Those members of La ONU then shot and killed the informant.

*                *                *

In addition to the prison term, Judge Furman sentenced VAZQUEZ-BAEZ, 53, of Puerto Rico, to three years of supervised release.

Mr. Williams praised the investigative work of the U.S. Postal Inspection Service, the Drug Enforcement Administration, the Bureau of Alcohol, Tobacco, Firearms and Explosives, and the New York City Police Department.  Mr. Williams also thanked the United States Attorney’s Office in the District of Puerto Rico and the Puerto Rico Police Department for their support in this ongoing investigation.

The prosecution is being handled by the Office’s Violent and Organized Crime Unit.  Assistant U.S. Attorneys Jamie E. Bagliebter, Jacob R. Fiddelman, Lara Pomerantz, Justin V. Rodriguez, and Andrew Thomas are in charge of the prosecution.

Damian Williams, the United States Attorney for the Southern District of New York, announced today that PAUL THOMPSON was sentenced to 110 months in prison for his participation in a 2018 non-fatal shooting and 2020 possession of a loaded firearm.  THOMPSON pled guilty on March 31, 2021, before U.S. District Judge Lewis J. Liman, who imposed today’s sentence. 

According to public filings and statements made in court:

On or about September 27, 2018, approximately two weeks after THOMPSON had been placed on federal supervised release following a 180-month prison sentence for narcotics and firearms offenses, THOMPSON got into a physical altercation with another individual (“Victim-1”) in the Bronx, New York.  During the altercation, THOMPSON shot Victim-1 and fled the scene.  THOMPSON then became a fugitive for approximately two years. 

On or about June 13, 2020, following a suspected drug deal with another individual (“Victim-2”) in the Bronx, THOMPSON threatened Victim-2 with a loaded firearm and also bit Victim-2’s face.  THOMPSON then attempted to discard the firearm and was apprehended by law enforcement.  While THOMPSON was being arrested, he told others on the scene to make sure Victim-2 and Victim-2’s family “get it,” because Victim-2 “snitched on me.” 

THOMPSON pled guilty to one count of being a felon in possession of ammunition in connection with the 2018 shooting and one count of being a felon in possession of a firearm in connection with the 2020 assault.  In connection with his guilty plea, THOMPSON further stipulated to his involvement in the 2018 shooting.    

*                *                *

THOMPSON, 39, of the Bronx, New York, was sentenced to 110 months in prison for the 2018 shooting and the 2020 assault, to be followed by a consecutive sentence of 26 months in prison for his violation of the terms of supervised release in connection with the same conduct.  In addition to the prison term, THOMPSON was sentenced to three years of supervised release.

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

This case is being handled by the Office’s General Crimes Unit.  Assistant United States Attorney David Robles is 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 that the United States filed and settled a civil fraud lawsuit against THE DOOR—A CENTER OF ALTERNATIVES (“The Door” or “Defendant”). The Government’s Complaint-in-Intervention (the “Complaint”) alleges that The Door, a healthcare provider in New York City, violated the False Claims Act by fraudulently overreporting the number of visits to its healthcare facility.  This overreporting resulted in The Door receiving excessive funding from the Indigent Care Pool, which is a program funded by both the federal government and New York State, that reimburses certain healthcare providers for uncompensated care rendered to low-income New Yorkers.

Under the settlement, approved by U.S. District Judge Alvin K. Hellerstein, The Door will pay $2,725,514.51 to the United States and has admitted and accepted responsibility for conduct alleged by the Government in the Complaint as further described below.  The Door has also agreed to pay $10,222,297.89 to the State of New York to resolve the State’s claims, for a total recovery of $12,947,812.40.

U.S. Attorney Damian Williams said: “This Office will remain vigilant in protecting public funds that are designated to help low-income New Yorkers.  The Indigent Care Pool is a limited source of funding meant to be shared among healthcare providers throughout New York State in order to further the goal of providing healthcare to all who need it.  Through its misconduct, The Door received an excessive share of this funding at the expense of other healthcare providers that were similarly trying to provide services to low-income New Yorkers, and has now been held to account.”   

HHS-OIG Special Agent in Charge Scott Lampert said: “Healthcare providers must be held to a high standard of ethical behavior. We will continue to ensure that those individuals and entities that receive funding from the federal government and/or the State of New York to care for low-income individuals operate in an honest manner.”

As described in the Complaint, The Door was required to report the number of threshold visits (“Threshold Visits”) to its facility on cost reports (“Cost Reports”) annually filed with the New York State Department of Health (“DOH”).  This metric determined, in large part, the amount of funding that The Door received from the Indigent Care Pool.  A Threshold Visit is defined, by regulation, as occurring “each time a patient crosses the threshold of a facility to receive medical care without regard to the number of services provided during that visit.”

From 2009 to 2016 (the “Covered Period”), The Door falsely reported the number of Threshold Visits to its facility, thereby causing it to receive excessive funding from the Indigent Care Pool.  Specifically, instead of reporting the number of times a patient crossed the threshold to its facility, The Door based its reporting of Threshold Visits on the number of services provided to the patient during a given visit, thus leading to an inflated number of Threshold Visits.  As a result, The Door received substantial funding from the Indigent Care Pool to which it was not entitled.

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

• During the Covered Period, The Door maintained multiple, internal versions of the Cost Reports.  One version reflected an accurate accounting of the Threshold Visit statistic, while other versions reflected an inaccurate accounting of the Threshold Visit statistic because they reported multiple services provided during a given visit.
• The Door was aware of the definition of Threshold Visits contained in the Cost Report instructions and 10 NYCRR § 86-4.9(b), which permitted The Door to count only one Threshold Visit each time a patient crossed its threshold to obtain medical care, regardless of the number of services the patient may have received during that visit. 
• On December 4, 2014, The Door’s then-serving Chief Financial Officer (who served in this capacity throughout the Covered Period) sent an email to a data analyst employed by The Door noting that Threshold Visits must be counted based upon the number of visits to the facility, not based upon the number of services provided during a visit or the number of visits unduplicated by individual cost center. 
• During the Covered Period, by submitting Cost Reports to DOH that calculated the number of Threshold Visits based on the number of services provided during a given visit, rather than the number of times the patient crossed the threshold to the facility, The Door caused the Indigent Care Pool to pay funds to The Door to which it was not entitled. 

Mr. Williams praised the outstanding investigative work of HHS-OIG.  This case is being handled by the Office’s Civil Frauds Unit.  Assistant U.S. Attorney Alexander J. Hogan is in charge of the case.

Damian Williams, United States Attorney for the Southern District of New York, announced that LAURENCE F. DOUD III, the former Chief Executive Officer of Rochester Drug Co-Operative, Inc. (“RDC”), was convicted today in Manhattan federal court of conspiring to distribute unlawfully oxycodone and fentanyl and conspiring to defraud the Drug Enforcement Administration (“DEA”).  DOUD was convicted after a two-week jury trial before U.S. District Judge George B. Daniels.

U.S. Attorney Damian Williams said:  “In a first of its kind prosecution, Laurence Doud was held responsible for contributing to the opioid epidemic in the country by conspiring with others in his company to ship massive amounts of dangerous and highly-addictive oxycodone and fentanyl to pharmacies that he knew were illegally dispensing those controlled substances to drug dealers and addicts.  The Southern District of New York will continue to bring to justice those responsible for the opioid epidemic – whether they are street level dealers or boardroom executives.”

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

Violations of the Federal Narcotics Laws

From 2012 through March 2017, DOUD knowingly and intentionally violated the federal narcotics laws by distributing, through RDC, dangerous, highly addictive opioids to pharmacy customers that it knew were being sold and used illicitly.  At the direction of its senior management, including DOUD, RDC supplied large quantities of oxycodone, fentanyl, and other dangerous opioids to pharmacy customers that its own compliance personnel determined were dispensing those drugs to individuals who had no legitimate medical need for them.  RDC, at the direction of DOUD and others, distributed controlled substances to those pharmacies even after identifying “red flags” of diversion, including dispensing highly abused controlled substances in large quantities; dispensing primarily controlled substances; dispensing quantities of controlled substances in amounts consistently higher than accepted medical standards; accepting a high percentage of cash for controlled substance prescriptions; dispensing to out-of-state patients; and filling controlled substances prescriptions issued by practitioners acting outside the scope of their medical practice, under investigation by law enforcement, or on RDC’s “watch list.”  In addition, and at DOUD’s direction, RDC frequently brought on pharmacy customers that had been terminated by other distributors. 

Conspiracy to Defraud the DEA

From 2012 through March 2017, DOUD took steps to conceal RDC’s illicit distribution of controlled substances from the DEA and other law enforcement authorities.  Among other things, DOUD made the deliberate decision not to investigate, monitor, or report to the DEA pharmacy customers that DOUD and others at RDC knew were diverting controlled substances for illegitimate use.  Because they knew that reporting these pharmacies would likely result in the DEA investigating and shutting down RDC’s customers, RDC’s senior management, including DOUD, directed the company’s compliance department not to report them, and instead to continue supplying those customers with dangerous controlled substances that the company knew were being dispensed and used for illicit purposes.  Among other things, pursuant to DOUD’s instructions, and contrary to the company’s representations to the DEA, RDC opened new customer accounts without conducting due diligence, and supplied those customers – some of whom had been terminated by other distributors – with dangerous controlled substances.  Additionally, DOUD caused RDC to avoid filing suspicious order reports with the DEA as required by law.  As a result, the DEA’s ability to identify and prevent the illicit dispensing of highly addictive controlled substances by several of RDC’s pharmacy customers was impeded.

*                      *                      *

LAURENCE F. DOUD III, 78, of New Smyrna, Florida, was convicted by a jury of one count of conspiracy to distribute controlled substances, which carries a maximum sentence of life in prison and a mandatory minimum sentence of 10 years, and one count of conspiracy to defraud the United States, which carries a maximum prison term of five years.  The maximum potential sentence is prescribed by Congress and is provided here for informational purposes only, as the sentencing of the defendant will be determined by the judge. 

DOUD is scheduled to be sentenced on June 29, 2022.

Mr. Williams praised the outstanding investigative work of the DEA’s Westchester Tactical Diversion Team and thanked Special Agents of United States Attorney’s Office for their assistance.

The prosecution of this case is being handled by the Office’s Narcotics Unit.  Assistant United States Attorneys Thomas Burnett, Nicolas Roos, and Alexandra Rothman are in charge of the prosecution and represented the Government at trial.  Assistant United States Attorneys Stephanie Lake and Louis Pellegrino also participated in the investigation into RDC and DOUD.

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

U.S. Attorney Damian Williams said:  “The jury’s swift conviction of Seth Fishman reflects the overwhelming evidence of his guilt as displayed through this trial. As an ostensible veterinarian – sworn to the care and protection of animals – Fishman cynically violated his oath in service of corrupt trainers and in the pursuit of profits. Through the sale of untested, unsafe, and unstable drugs, Fishman’s illegal drug business was a platform for both fraud and animal abuse. Today’s conviction appropriately condemns the danger inherent in Fishman’s crimes and underscores the seriousness with which this Office takes the kind of abuse that Fishman practiced.”

As established by the evidence at trial:[1]

FISHMAN was charged in United States v. Navarro, 20 Cr. 160 (MKV), a case arising from an investigation of widespread schemes by racehorse trainers, veterinarians, PED distributors, and others to manufacture, distribute, and receive adulterated and misbranded PEDs and to secretly administer those PEDs to racehorses competing at all levels of professional horseracing. By evading PED prohibitions and deceiving regulators and horse racing officials, participants in these schemes sought to improve race performance and obtain prize money from racetracks throughout the United States and other countries, including in New York, New Jersey, Florida, Ohio, Kentucky, and the United Arab Emirates (“UAE”), all to the detriment and risk of the health and well-being of the racehorses.  Trainers who participated in the schemes stood to profit from the success of racehorses under their control by earning a share of their horses’ winnings, and by improving their horses’ racing records, thereby yielding higher trainer fees and increasing the number of racehorses under their control. Indicted veterinarians profited from the sale and administration of these medically unnecessary, misbranded, and adulterated substances. FISHMAN, acting as the manufacturer of customized PEDs designed specifically to evade anti-doping controls, reaped millions of dollars from the sale of his drugs to trainers around the United States and across the globe.

FISHMAN specifically targeted clients in the racehorse industry, peddling dozens of unsafe and untested drugs that purported to have performance-enhancing effects on racehorses.  FISHMAN created and marketed these drugs as “untestable” under typical anti-doping drug screens and extolled the virtues of these illegal drugs by describing his method of creating customized products for individual customers in order to silo product lines to reduce the likelihood that detection of doping by trainer would undermine the remainder of FISHMAN’s corrupt clientele.

In the course of nearly twenty years during which he operated his doping company, Equestology, FISHMAN took additional efforts to mislead and lie to regulatory authorities in an effort to shield his illegal activity. FISHMAN incorporated a sham business in Panama designed to appear as if his drug operation was outside the jurisdiction of U.S. authorities; he pressured employees to sign non-disclosure agreements intended to gag them if questioned by regulators; he designed labels that would provide no hint as to the provenance of the unsafe drugs shipped across the country; and he lied to state investigators regarding the nature of his business when asked directly about his role in Equestology during a Delaware state investigation in 2011, while also bragging to others that he had called in a “personal political favor” to quash that investigation.

While claiming to practice as a legitimate veterinarian, FISHMAN used his veterinary license as another form of cover for his illegal drug manufacturing business. In fact, FISHMAN sold illicit drugs, including prescription drugs, under sham prescriptions for animals that he never saw or discussed. Those drugs included intravenous and intramuscular injectables that FISHMAN sold to laypeople for injection into the horses under their purported “care,” many of which were seized at premises throughout the country at the time of the original indictments in this case, including barns located in New York. Those included “blood building” drugs (for example, “BB3” and other Epogen-mimetic substances), vasodilators (for example, “VO2Max”), and bags filled with scores of “bleeder pills,” each designed to covertly increase performance in affected horses.

FISHMAN was convicted of one count of conspiracy to commit misbranding and drug adulteration in connection with the doping operation of convicted co-defendant Jorge Navarro. Among the horses that FISHMAN aided Navarro in doping XY Jet, a thoroughbred horse that won the 2019 Golden Shaheen race in Dubai before dying of sudden heart attack in January 2020. As established at trial, FISHMAN sold tens of thousands of dollars’ worth of PEDs to Navarro over the course of several years, and Navarro specifically credited FISHMAN for XY Jet’s performance at the Golden Shaheen.  

FISHMAN was further convicted of a second count of conspiracy to commit misbranding and drug adulteration in connection with the operation of Equestology, which included FISHMAN’s continuation of that offense even following his release on bail following his initial arrest in October 2019. FISHMAN faces a total of up to 20 years in prison for his convictions. The statutory maximum penalty is prescribed by Congress and is provided here for informational purposes only, as any sentencing of FISHMAN will be determined by the judge.

* * *

Mr. Williams praised the outstanding investigative work of the FBI New York Office’s Eurasian Organized Crime Task Force and its support of the Bureau’s Integrity in Sports and Gaming Initiative. Mr. Williams also 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, and Anden Chow are in charge of the prosecution.

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

Damian Williams, the United States Attorney for the Southern District of New York, and Keechant Sewell, the Commissioner of the New York City Police Department (“NYPD”), announced that IRVIN CARTAGENA, a/k/a “Green Eyes,” was charged in a criminal complaint unsealed yesterday in Manhattan federal court with a narcotics conspiracy in which he distributed the fentanyl-laced heroin that resulted in the death of Michael K. Williams.  In another criminal complaint unsealed today, co-conspirators HECTOR ROBLES, a/k/a “Oreja,” LUIS CRUZ, a/k/a “Mostro,” and CARLOS MACCI, a/k/a “Carlito,” were charged as members of the fentanyl and heroin conspiracy.  CARTAGENA was arrested in Puerto Rico yesterday and is expected to be presented tomorrow in federal court in Puerto Rico.  ROBLES, CRUZ, and MACCI were arrested yesterday and will be presented today in Manhattan federal court before United States Magistrate Judge Stewart D. Aaron.

U.S. Attorney Damian Williams said: “Michael K. Williams, a prominent actor and producer, tragically overdosed in his New York City apartment from fentanyl-laced heroin. Today, along with our law enforcement partners at the NYPD, we announce the arrests of members of a drug crew, including Irvin Cartagena, the man who we allege sold the deadly dose of drugs to Michael K. Williams.  This is a public health crisis.  And it has to stop.  Deadly opioids like fentanyl and heroin don’t care about who you are or what you’ve accomplished.  They just feed addiction and lead to tragedy.  The Southern District of New York and our law enforcement partners will not give up.  We will bring every tool to bear.  And we will continue to hold accountable the dealers who push this poison, exploit addiction, and cause senseless death.”

NYPD Commissioner Keechant Sewell said:  “As these federal charges show, the NYPD’s narcotics and precinct detectives in Brooklyn North lived this case, never relenting in their investigation until they could bring a measure of justice to Michael K. Williams and his family. It is a level of dedication the NYPD carries out in every case, from beginning to end, in every instance where criminals peddle narcotics and prey on the innocent, and where people die from illegal drugs. I commend our NYPD investigators, working closely with their federal partners in the United States Attorney’s Office, in the Southern District of New York, for their work to clean up this long-embattled block in Williamsburg, Brooklyn, and for their sustained commitment to follow every lead this case wrought, from New York City to Puerto Rico and back.”

According to the allegations in the complaints[1]:

Since at least in or about August 2020, a drug trafficking organization (the “DTO”) has been operating in the vicinity of 224 South 3rd Street in the Williamsburg neighborhood of Brooklyn, New York.  The DTO sells heroin laced with fentanyl and a fentanyl analogue on the street in front of, and from an apartment inside of, the apartment building located at 224 South 3rd Street, among other places.  On or about September 5, 2021, members of the DTO sold Michael K. Williams heroin, which was laced with fentanyl and a fentanyl analogue, with CARTAGENA executing the hand-to-hand transaction, as shown in the below screenshots from surveillance video.

Williams died as a result of using that fentanyl-laced heroin.  Despite knowing that Williams died after being sold the DTO’s product, CARTAGENA, ROBLES, CRUZ, and MACCI continued to sell fentanyl-laced heroin, in broad daylight, amidst residential apartment buildings, in Brooklyn and Manhattan.     

*                *                *

CARTAGENA, 39, of Brooklyn, New York; ROBLES, 57, of Brooklyn, New York; CRUZ, 56, of Brooklyn, New York; and MACCI, 70, of Brooklyn, New York, are each charged with conspiracy to distribute and possess with intent to distribute fentanyl analogue, fentanyl, and heroin, which carries a mandatory minimum sentence of 5 years in prison and a maximum sentence of 40 years in prison.  CARTAGENA is also charged with causing the death of Williams in connection with the narcotics conspiracy, which carries a mandatory minimum sentence of 20 years in prison and a maximum sentence of life in prison.  The statutory minimum and maximum penalties are prescribed by Congress and are provided here for informational purposes only, as any sentencing of the defendants will be determined by the judge.

Mr. Williams praised the outstanding investigative work of the NYPD and the New York/New Jersey High Intensity Drug Trafficking Area (HIDTA) Intelligence Analysts.  Mr. Williams also thanked the Organized Crime Drug Enforcement Task Force (“OCDETF”) New York Strike Force, the United States Marshals Service, the New York/New Jersey Regional Fugitive Task Force, and the New York Division of the DEA for their assistance in this case.

This case is being handled by the Office’s Narcotics Unit.  Assistant United States Attorneys Micah Fergenson and David Robles are in charge of the prosecution.

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

[1] As the introductory phrase signifies, the entirety of the text of the complaints, and the description of the complaints 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 Anne Milgram, the Administrator of the U.S. Drug Enforcement Administration (“DEA”), announced today that charges have been unsealed in Manhattan federal court against MAXIMILIANO DAVILA-PEREZ for conspiring to import cocaine into the United States and a related weapons offense involving conspiring to use and possess machineguns.  The defendant is currently detained in Bolivia.  The case is assigned to U.S. District Court Judge Denise L. Cote.

The U.S. Department of State, through its Narcotics Rewards Program, is offering a reward of up to $5,000,000 for information leading to the conviction of DAVILA-PEREZ.  Anyone with information that may lead to the conviction of DAVILA-PEREZ can email the DEA at Bolivia.Tips@usdoj.gov, or message the DEA at 1-202-480-9038 using text message or WhatsApp.

U.S. Attorney Williams said:  “As alleged, Davila-Perez, a former senior Bolivian government official, was entrusted with leading Bolivia’s anti-narcotics agency.  Instead of rooting out drug trafficking in that country, Davila-Perez worked in partnership with Bolivian drug labs and sought to send more than a thousand kilograms of cocaine to the United States.  Davila-Perez further abused his position by using Bolivian law enforcement officers, armed with machineguns, to guard and transport cocaine shipments.  This Office and the DEA will not stand idly by while corrupt officials in Bolivia seek to import poison into the United States.”

DEA Administrator Anne Milgram said:  “Today’s announcement of charges against Maximiliano Davila-Perez and his designation under the U.S. Department of State’s Narcotics Rewards Program reaffirm our commitment to bring anyone who acts to threaten the safety and health of Americans to justice.  Davila-Perez is alleged to have betrayed his oath to combat dangerous drugs and the violence associated with drug trafficking, and used his position to further his own criminal activities.  I am grateful to the DEA agents who relentlessly pursued the investigation. Today’s announcement should serve as a reminder to anyone who threatens the safety and well-being of Americans, that DEA stands at the ready to protect our communities.”

According to the Superseding Indictment and court filings in this case:[1]

DAVILA-PEREZ was previously the Director of Bolivia’s chief anti-narcotics law enforcement agency, Fuerza Especial de Lucha Contra el Narcotráfico (“FELCN”).  As part of the conspiracies charged in the Superseding Indictment, DAVILA-PEREZ exploited his official position at FELCN to secure access to Bolivian airfields for cocaine transport and to arrange for members of Bolivian law enforcement under his command—including individuals armed with machineguns—to provide protection for those drug loads. DAVILA-PEREZ also worked in partnership with large-scale cocaine suppliers who operate cocaine labs in Bolivia, and agreed to ship more than a thousand kilograms of Bolivian cocaine to New York.

*                      *                      *

DAVILA-PEREZ, 57, is charged with:  (1) conspiring to import cocaine into the United States; and (2) conspiring to use and carry machineguns during, and to possess machineguns in furtherance of, the cocaine importation conspiracy.  If convicted, DAVILA-PEREZ faces a mandatory minimum sentence of 10 years in prison and a maximum term of life in prison on Count One, and a maximum term of life in prison on Count Two.  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 efforts of the Special Operations Division of the DEA Bilateral Investigations Unit, and the U.S. Department of Justice’s Office of International Affairs for their ongoing assistance.

This prosecution is being handled by the Office’s National Security and International Narcotics Unit.  Assistant U.S. Attorneys Sam Adelsberg, Matthew Hellman, and David Robles are in charge of the prosecution.

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

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

Damian Williams, the United States Attorney for the Southern District of New York, announced that defendant ARIFUL HAQUE pleaded guilty today to participating in a conspiracy that exploited victims, including elderly victims, by remotely accessing their computers and convincing victims to pay for computer support services they did not need, and which were never actually provided.  HAQUE registered a purported technical support company, which defrauded more than 100 victims.  HAQUE pleaded guilty to conspiracy to commit wire fraud before U.S. District Judge Paul A. Crotty, to whom his case is assigned.

U.S. Attorney Damian Williams said:  “As he admitted today, Ariful Haque participated in a conspiracy that caused pop-up windows to appear on victims’ computers—pop-up windows that claimed, falsely, that a virus had infected the victim’s computer.  Through this and other misrepresentations, this fraud scheme deceived scores of victims, including some of society’s most vulnerable members, into paying hundreds of thousands of dollars to the perpetrators.  Thanks to our partners at Homeland Security Investigations, Haque now awaits sentencing for his crime.”

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

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

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

The Fraud Ring operated through at least 15 fraudulent entities.  In November 2017, HAQUE registered one of these fraudulent entities in New York State.  HAQUE’s entity defrauded more than approximately 100 victims as part of this scheme.  As part of his involvement in the scheme, HAQUE opened U.S. bank accounts to receive funds from victims, and HAQUE repeatedly provided a co-conspirator in India (“CC-1”) with authentication codes so that CC-1 could wire funds out of these bank accounts.  HAQUE, a former bank branch manager in New York City, also made suggestions to CC-1 about which victim checks should, and should not, be deposited, noting in messages that it was “Not a good idea to deposit” certain specified checks.  HAQUE also assisted another co-conspirator (“CC-2”), who had registered a different fraudulent entity that was part of the Fraud Ring, as well.  In total, as he admitted in his plea agreement, HAQUE is responsible for losses exceeding $600,000.

*                *                *

HAQUE, 36, of Queens, New York, pled guilty to one count of conspiracy to commit wire fraud, which carries a maximum penalty of five years in prison.  The statutory maximum sentence is prescribed by Congress and is provided here for informational purposes only, as HAQUE’s sentence will be determined by the judge.  HAQUE’s sentencing is scheduled for May 4, 2022 at 12:00 p.m. before Judge Crotty.

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

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

Damian Williams, the United States Attorney for the Southern District of New York, Timothy Foley, the Acting Special Agent in Charge of the Drug Enforcement Administration’s New York Division (“DEA”), and Ricky J. Patel, the Acting Special Agent-in-Charge of the New York Field Office of the Department of Homeland Security (“HSI”), and Keechant L. Sewell, Police Commissioner for the City of New York (“NYPD”), announced today that CARLOS LAUREANO, a/k/a “Gordo,” and NNANDI BEN-JOCHANNAN, a/k/a “BJ,” were charged with the August 12, 2014 murder of Luis Perez in Harlem. LAUREANO and BEN-JOCHANNAN were arrested today and will be presented this afternoon in Manhattan federal court. The case has been assigned to United States District Judge Paul A. Crotty.

U.S. Attorney Damian Williams said: “Carlos Laureano and Nnandi Ben-Jochannan allegedly participated in the premeditated murder of Luis Perez over eight years ago in connection with a drug debt. Now, thanks to the hard work of the DEA and NYPD, the defendants have been charged for this heinous crime. We hope that today’s charges bring some measure of comfort to the family of Luis Perez and make clear that this Office and our law enforcement partners will continue to be relentless in our pursuit of anyone who takes another person’s life.”

Acting DEA Special Agent in Charge Timothy Foley said:  “Drugs and violence are a constant threat to the quality of life for New Yorkers.   This investigation demonstrates DEA and our law enforcement partners’ resolve to bring justice to victims of violence and to identify and disrupt the drug trafficking organizations that spread poison throughout our neighborhoods.”

Acting Special Agent-in-Charge of HSI New York Ricky Patel said: “Communities are being terrorized and the uptick in violent crime has instilled fear across New York City.  Today’s arrest for a 2014 unsolved murder is a testament to HSI New York’s commitment to protect the public from highly addictive and often deadly drugs, and rid our communities of those who perpetrate street violence and murder. The partnership that HSI shares within the OCDETF Strikeforce in New York City is crucial to combat the distribution of narcotics that often leads to extreme violence, overdoses, and loss of life.  HSI will continue to pursue organized criminal networks to make neighborhoods in New York City safer.”

NYPD Commissioner Keechant L. Sewell said: “This case involves a homicide from 2014. What this case highlights is that neither investigative challenges nor the passage of time will deter us from pursuing justice. We long ago learned that narcotics and guns, money and murder go hand-in-hand to bring fear to communities. The joint efforts of federal and state prosecutors and investigators in this case are yet another example that we will be relentless to end this violence”

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

On or about August 12, 2014, in the vicinity of 501 West 147th Street in Harlem, New York, LAUREANO and BEN-JOCHANNAN shot and killed Perez in connection with a conspiracy to distribute heroin and marijuana.

*          *          *

LAUREANO, 33, and BEN-JOCHANNAN, 28, both of the Bronx, New York, are charged with one count of using a firearm to commit murder during a drug-trafficking crime, which carries a maximum sentence of death or life in prison, and a mandatory minimum term of five years in prison; and one count of murder in connection with a drug crime, which carries a maximum sentence of death or life in prison, and a mandatory minimum term of 20 years in prison.

LAUREANO is also charged with one count of conspiring to distribute narcotics, which carries a maximum sentence of life in prison, and a mandatory minimum term of ten years in prison; and one count of possessing a firearm during a drug-trafficking crime, which carries a maximum sentence of life in prison, and a mandatory minimum term of five years, which must run consecutively to any other sentence imposed.

The maximum and minimum 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 DEA, HSI, and NYPD. He also thanked the Manhattan District Attorney’s Office for its assistance.

The case is being handled by the Office’s Violent and Organized Crime Unit. Assistant United States Attorney Christopher Clore is in charge of the prosecution.

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

[1] As the introductory phrase signifies, the entirety of the text of the indictment and the description of the indictment set forth 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, Tim Foley, the Acting Special Agent-in-Charge of the New York Division of the Drug Enforcement Administration (“DEA”), and Keechant Sewell, the Commissioner of the New York City Police Department (“NYPD”), announced that BILLY ORTEGA, a/k/a “Jason,” and KAYLEN RAINEY were charged in a criminal complaint unsealed today in Manhattan federal court with narcotics conspiracy resulting in the deaths of Julia Ghahramani, Ross Mtangi, and Amanda Scher in Manhattan, New York.  WILLIAM DRAYTON was also charged in the complaint as a member of the conspiracy.  ORTEGA, RAINEY, and DRAYTON, were arrested today and will be presented this afternoon before United States Magistrate Judge Stewart D. Aaron.

U.S. Attorney Damian Williams said:  “As alleged, the defendants operated an on-demand delivery service for the distribution of highly addictive and dangerous drugs.  The cocaine distributed by defendants Ortega and Rainey on behalf of their delivery service was laced with the deadly synthetic opioid fentanyl, and as alleged, caused the deaths of three victims on a single day.  Thanks to the tireless efforts of law enforcement, the defendants’ deadly delivery service is out of business.”       

NYPD Commissioner Keechant Sewell said: “As this federal complaint makes clear, our NYPD investigators will stop at nothing in their work to arrest anyone accused of selling illegal, fentanyl-laced narcotics without regard for their deadly consequences. I would like to thank the United States Attorney’s Office in the Southern District of New York, and all of our law enforcement partners, for achieving a measure of justice in this important case.”

DEA Acting Special Agent in Charge Timothy Foley said:  “Allegedly, through this illegal drug distribution network, death was delivered to New Yorkers.  Fentanyl has added additional danger to recreational drug use.  DEA will continue to investigate those responsible for distributing illegal drugs throughout our communities in an effort to save lives.” 

According to the allegations in the complaint[1]:

From at least in or about 2020 to at least in or about 2021, ORTEGA, RAINEY, and DRAYTON operated a narcotics delivery service (the “Delivery Service”) in the New York City area.  ORTEGA was the central contact who, like a dispatcher, coordinated narcotics deliveries with his couriers and his customers.   RAINEY and DRAYTON were two of ORTEGA’s drug couriers.  In the course of a single day – March 17, 2021 – RAINEY, after being dispatched by ORTEGA, delivered fentanyl-laced cocaine to Ghahramani, Mtangi, and Scher at three separate locations in Manhattan.  All three victims died after consuming the drugs distributed by ORTEGA and RAINEY.  DRAYTON was another courier who delivered narcotics to Ghahramani and others, on other occasions, on behalf of the Delivery Service.

*                *                *

BILLY ORTEGA, 35, of West Milford, New Jersey; KAYLEN RAINEY, 30, of Manhattan, New York; and WILLIAM DRAYTON, 30, of Hackensack, New Jersey, are each charged with conspiracy to distribute and possess with intent to distribute fentanyl and cocaine.  ORTEGA and RAINEY are also charged with causing the deaths of the three victims in connection with the narcotics conspiracy, with carries a mandatory minimum sentence of 20 years in prison and a maximum sentence of life in prison.  The statutory minimum and maximum penalties are prescribed by Congress and are provided here for informational purposes only, as any sentencing of the defendants will be determined by the judge.

Mr. Williams praised the outstanding investigative work of the NYPD, the Organized Crime Drug Enforcement Task Force (“OCDETF”) New York Strike Force, and the New York/New Jersey High Intensity Drug Trafficking Area (“HIDTA”) Intelligence Analysts for their support and assistance in this matter.  The OCDETF New York Strike Force is a crime-fighting unit comprising federal, state, and local law enforcement agencies supported by OCDETF and HIDTA.  The Strike Force is affiliated with the DEA’s New York Division and includes agents and officers of the DEA, NYPD, New York State Police, Homeland Security Investigations, U.S. Internal Revenue Service Criminal Investigation Division, Bureau of Alcohol, Tobacco, Firearms and Explosives, U.S. Customs and Border Protection, U.S. Secret Service, U.S. Marshals Service, New York National Guard, Clarkstown Police Department, U.S. Coast Guard, Port Washington Police Department, and New York State Department of Corrections and Community Supervision.  Mr. Williams also thanked the West Milford Police Department for their invaluable assistance in this case.

This case is being handled by the Office’s Narcotics Unit.  Assistant United States Attorneys Micah Fergenson and Michael Herman are in charge of the prosecution.

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

[1] As the introductory phrase signifies, the entirety of the text of the complaint, and the description of the complaint set forth 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 JAMES MOORE was sentenced today to 140 months in prison for helping design and operate a scheme to defraud more than 800 investors of more than $57 million by making false and fraudulent representations about, among other things, the management, profitability, and operations of a co-working space company called Bar Works Inc. and related entities (“Bar Works”).  On June 7, 2019, MOORE was found guilty of wire fraud and conspiracy to commit wire fraud following a week-long jury trial before United States District Judge Richard M. Berman, who also imposed today’s sentence.

U.S. Attorney Damian Williams said: “James Moore partnered with notorious fraudster Renwick Haddow to design a massive Ponzi scheme that lured hundreds of unsuspecting investors from around the world, and from which Moore and affiliated companies siphoned 65 percent of each of their recruited victims’ investments.  Moore then obstructed justice and lied about the scheme to federal agents.  Today’s lengthy sentence sends a clear message that perpetrators of investment fraud will be prosecuted and held accountable.”

According to the allegations contained in the Indictment filed against James Moore and statements made in related court filings and proceedings, including his trial:

In late 2009, MOORE partnered with Renwick Haddow, who is also a British citizen, to sell investments in a hotel scheme in which investors lost money.  Haddow had been disqualified as a director of any U.K. company for eight years, and later sued by the Financial Conduct Authority, a British regulator, for operating investment schemes through misrepresentations that lost investors substantially all of their money.  These sanctions and lawsuit were publicized extensively online.

Beginning in 2015, MOORE chose to partner with Haddow again, this time to solicit investments into Bar Works through material misrepresentations concerning, among other things, the identity of Bar Works’ management and the financial condition of that company. 

In order to conceal his role at Bar Works because of the negative publicity on the internet related to past investment schemes and government sanctions in the United Kingdom, Haddow adopted the alias “Jonathan Black.”  Notwithstanding Haddow’s control over Bar Works, Moore and others knowingly distributed the Bar Works offering materials listing Black as the chief executive officer of Bar Works and claiming that Black had an extensive background in finance and past success with start-up companies.  As MOORE well knew, “Jonathan Black,” was an entirely fictitious person, created to mask Haddow’s control of Bar Works. 

Among other things, MOORE helped devise and distribute pitch materials that contained the misrepresentations.  MOORE and an affiliated Spanish-based company, United Property Group, coordinated a substantial sales force to recruit investors knowing that the materials contained the falsehood.  MOORE advised Haddow as to how to continue to conceal the truth concerning the identity of “Jonathan Black,” and affirmatively represented to potential sales partners that he was communicating with CEO “Jonathan Black.”  MOORE also advised Haddow how to evade foreign law enforcement authorities.  MOORE personally received approximately $1.6 million from Bar Works before helping to launch a competing co-working space investment project. 

MOORE repeatedly lied to the United States Securities Exchange Commission (SEC) and federal law enforcement agents to cover up his role in the Bar Works scheme. On August 11, 2016 – while the Bar Works scheme was still operating – MOORE participated in a recorded phone interview with the SEC and reiterated that Jonathan Black was a real person who he understood to be the CEO of Bar Works, notwithstanding knowing that Black was fake. MOORE claimed that he never asked to speak to Jonathan Black, even though in the prior months, MOORE had been misrepresented to multiple agents that he was working closely with Black.

On February 15, 2017, MOORE was interviewed by Internal Revenue Service (IRS) agents following his arrest for a separate investment scheme in connection with a development project he was promoting in Florida. In a videotaped interview, MOORE lied and told agents he had not done anything for money since 2010, even though he had gotten approximately $1.6 million from Bar Works alone.

Moore’s conviction is his second federal felony conviction related to property investments.  He was previously convicted in 2018 of misprision of a felony for his role in a property investment fraud in Florida, for which he was sentenced to 18 months in prison.

In addition to the prison term, MOORE, 60, was sentenced to 3 years of supervised release.  MOORE was also ordered to pay restitution of $57,579,790.00, forfeiture of $1,599,257.46, and a fine of $50,000.

Renwick Haddow, 53, pled guilty on May 23, 2019, to one count each of wire fraud and wire fraud conspiracy relating to the Bar Works scheme, and one count each of wire fraud and wire fraud conspiracy relating to a separate investment scheme involving Bitcoins.  Haddow’s sentencing is scheduled for April 8, 2022.

Savraj Gata-Aura, 35, pled guilty on November 18, 2019, to one count of wire fraud conspiracy for his participation in the scheme, and was sentenced to 48 months in prison on July 27, 2020, by Judge Jed. S. Rakoff.

Mr. Williams praised the investigative work of the Federal Bureau of Investigation and thanked the Securities and Exchange Commission, which has separately brought civil actions against MOORE, Haddow, and Gata-Aura, for its assistance. 

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

Damian Williams, the United States Attorney for the Southern District of New York, Joleen D. Simpson, the Special Agent-in-Charge of the Boston Field Office of the Internal Revenue Service, Criminal Investigation (“IRS-CI”), and Michael J. Driscoll, Assistant Director-in-Charge of the New York Field Office of the Federal Bureau of Investigation (“FBI”), announced today that EUGENI TSVETNENKO, a/k/a “Zhenya,” a dual citizen of Australia and Russia, was extradited from Australia and arrived in the United States this morning.  TSVETNENKO was extradited on charges of conspiracy to commit wire fraud, wire fraud, aggravated identity theft, and conspiracy to commit money laundering, stemming from the defendant’s alleged participation in a scheme to charge mobile phone customers millions of dollars in monthly fees for unsolicited, recurring text messages about topics such as horoscopes, celebrity gossip, and trivia facts, without the customers’ knowledge or consent—a practice referred to as “auto-subscribing.”  The portion of the fraudulent scheme that TSVETNENKO and his co-conspirators orchestrated defrauded mobile phone users of approximately $41,389,725, and netted TSVETNENKO and his co-conspirators more than $20 million in proceeds.  TSVETNENKO will be presented today before U.S. Magistrate Judge Ona T. Wang.  The case is assigned to U.S. District Judge Analisa Torres.

U.S. Attorney Damian Williams said: “Eugeni Tsvetnenko is alleged to have surreptitiously subscribed hundreds of thousands of cell phone users to a $9.99 per-month charge for recurring text messages they did not approve or want. As a result of their auto-subscribing scheme, Tsvetnenko and his co-conspirators are alleged to have silently drained over $41 million in illegal proceeds from their unknowing victims. Thanks to the continued efforts and coordination with our Australian law enforcement counterparts, Tsvetnenko, an Australian national, has now been extradited to the U.S. to answer the call of American justice.”

IRS-CI Special Agent in Charge Joleen D. Simpson said: “Today's extradition is clear proof that Mr. Tsvetnenko's vast fortune and residence on another continent did little to shield him from answering the charges brought against him by American authorities. The defendants in this case have learned the hard way that the reach of Federal law enforcement extends far beyond the borders of the United States.” 

FBI Assistant Director-in-Charge Michael J. Driscoll said: “Tsvetnenko and his co-conspirators concocted a scheme that turned thousands of mobile phone customers into unwitting subscription service participants, as alleged. These customers incurred monthly charges for services they never subscribed to and, in many cases, disregarded as spam until the charges turned up on their monthly statements. Ultimately, as we allege, the defendants were able to steal more than $40 million and realize more than $20 million in profits. Today's case is a reminder for all of us to maintain awareness of the charges we incur on our financial statements. No matter how insignificant a fraudulent charge may seem, the bigger picture often tells a different story.”

According to allegations in the Superseding Indictment against TSVETNENKO, evidence presented at the trial of co-conspirators Darcy Wedd (Wedd) and Fraser Thompson (Thompson), and other public filings:

From at least in or about 2012 through in or about 2013, TSVETNENKO, Wedd, Thompson, and others engaged in a multimillion-dollar scheme to defraud consumers by placing unauthorized charges for premium text messaging services on consumers’ cellular phone bills through a practice known as auto-subscribing.  TSVETNENKO owned and operated several content provider companies and mobile industry companies in Australia that, among other things, created and sold premium text messaging content to consumers.  Wedd operated Mobile Messenger, a U.S. aggregation company in the mobile phone industry that served as a middleman between content providers (such as some of TSVETNENKO’s companies) and mobile phone carriers.  Mobile Messenger was responsible for assembling monthly charges incurred by a particular mobile phone customer for premium text-messaging services and placing those charges on that customer’s cellular phone bill.     

Beginning in or about early 2012, Wedd, Thompson, who was the Senior Vice President of Strategic Operations for Mobile Messenger, and two other senior executives of Mobile Messenger (CC-3 and CC-4) recruited TSVETNENKO to their auto-subscribing scheme to increase revenues at Mobile Messenger.  TSVETNENKO agreed and established two new content providers based in Australia, CF Enterprises and DigiMobi, to auto-subscribe on Mobile

Messenger’s aggregation platform.  CC-3 furnished lists of phone numbers to TSVETNENKO, along with an auto-subscribing  “playbook,” which provided TSVETNENKO with guidance on how to auto-subscribe without being caught.  The “playbook” described how to conceal the fraud scheme by making it appear as if the customers had, in fact, elected to purchase the text-messaging services, when in truth they had not.

The consumers who received the unsolicited text messages typically ignored or deleted the messages, often believing them to be spam.  Regardless, the consumers were billed for the receipt of the messages, at a rate of $9.99 per month, through charges that typically appeared on the consumers’ cellular telephone bills in an abbreviated and confusing form, such as with nonsensical billing descriptors that often consisted of random letter and numbers.  The $9.99 charges recurred each month unless and until consumers noticed the charges and took action to unsubscribe.  Even then, consumers’ attempts to dispute the charges and obtain refunds from CF Enterprises or DigiMobi were often unsuccessful.  Wedd, to whom CC-3, CC-4, and Thompson all reported, oversaw the scheme at Mobile Messenger.

TSVETNENKO, with the assistance of Wedd, Thompson, CC-3, and CC-4, started

auto-subscribing consumers in approximately April of 2012.  TSVETNENKO’s auto-subscribing

activities, which continued into 2013, victimized hundreds of thousands of mobile phone customers, who were auto-subscribed through Mobile Messenger and charged a total of approximately $41,389,725 for unwanted text messaging services.  Wedd, Thompson, CC-3, and CC-4 agreed that TSVETNENKO would keep approximately 70% of the auto-subscribing proceeds generated by CF Enterprises and DigiMobi, and that the remaining 30% of the auto-subscribing proceeds would be divided evenly among Wedd, Thompson, CC-3, and CC-4.

After obtaining proceeds of the fraud scheme, TSVETNENKO worked with other co-conspirators to launder the proceeds.  TSVETNENKO and his co-conspirators distributed the proceeds of the fraud scheme among themselves and others involved in the scheme by, among other things, causing funds to be transferred through the bank accounts of a series of shell companies and companies held in the names of third parties.  This was done to conceal the nature and source of the payments and TSVETNENKO and his co-conspirators’ participation in the fraud.

Through their successful orchestration of this fraud scheme, TSVETNENKO and his co-conspirators generated more than $20 million in fraud proceeds for themselves.  TSVETNENKO personally retained approximately $15.4 million in fraud proceeds for his role in the scheme.

*                *                *

TSVETNENKO 41, of Perth, Australia, is charged with one count of conspiracy to commit wire fraud, which carries a maximum penalty of 20 years in prison; one count of wire fraud, which also carries a maximum penalty of 20 years in prison; one count of aggravated identity theft, which carries a mandatory sentence of two years in prison, consecutive to any other sentence imposed; and one count of conspiracy to commit money laundering, 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 IRS-CI and the FBI.  In addition, Mr. Williams thanked law enforcement partners in Australia, especially the Australian Attorney-General’s Department and the Australian Federal Police, well as the U.S. Department of Justice’s Office of International Affairs, for their significant support and assistance with the defendant’s extradition. 

The prosecution of this case is being handled by the Office’s Complex Frauds and Cybercrime Unit.  Assistant U.S. Attorneys Jilan Kamal and Olga I. Zverovich are in charge of the prosecution. 

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

Damian Williams, the United States Attorney for the Southern District of New York, announced today that RAHEEM JONES, a/k/a “Trigga,” was sentenced to 25 years in prison for participating in the 2014 murder of Dean Daniels and his participation multiple other shootings in furtherance of the gang.  In November 2021, co-defendant MARKEL OVERTON, a/k/a “Kellz,”was sentenced to 20 years in prison for his participation in the Daniels murder and other violent 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, JONES and OVERTON 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.  Both JONES and OVERTON held senior status in the Goonies gang.

In the afternoon of September 22, 2014, OVERTON and JONES accompanied two Goonies associates to retaliate against Dean Daniels for robbing one of the Goonies associates of his car.  When they spotted Daniels, OVERTON and JONES waited in the car while the two Goonies associates left the vehicle with a gun to confront Daniels.  The Goonies associates shot Daniels twice in the vicinity of Park Avenue in Mount Vernon, New York before running back to the vehicle to flee the scene.  Daniels died as a result of the gunshot wounds.

*                *                *

JONES, 33, pled guilty to one count of racketeering conspiracy and one count of using a firearm in connection with an assault with a dangerous weapon in aid of racketeering, whichcarried a maximum penalty of life in prison, and a mandatory minimum sentence of five years in prison.

OVERTON, 32, pled guilty to one count of racketeering conspiracy, which carried a maximum penalty of twenty years in prison.

Mr. Williams praised the outstanding investigative work of the Mount Vernon Police Department and the FBI’s Westchester County Safe Streets Task Force, which comprises agents and detectives from the FBI, Yonkers Police Department, Westchester County District Attorney’s Office, Westchester County Police Department, Peekskill Police Department, Mount Vernon Police Department, New York City Police Department, and U.S. Probation. 

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, United States Attorney for the Southern District of New York, and Thomas Fattorusso, the Special Agent-in-Charge of the New York Field Office of the Internal Revenue Service, Criminal Investigation (“IRS-CI”), announced today that TODD KOZEL, the former Chief Executive Officer (“CEO”) of a multi-national foreign oil company, was sentenced in Manhattan federal court to 60 months in prison following KOZEL’s guilty plea to five counts of willful failure to file individual income tax returns for the calendar years 2011 through 2015.  U.S. District Judge Kimba M. Wood, who previously accepted Kozel’s guilty plea, imposed today’s sentence.

U.S. Attorney Damian Williams said:  “For years, Todd Kozel failed to file income tax returns, or pay the federal tax liabilities that were owed under those returns, despite earning millions of dollars in compensation as the CEO of an overseas oil company.  Today’s sentence shows that no one is above the law—all citizens must pay their fair share of taxes, including Americans who earn compensation from working in foreign countries.”

IRS Criminal Investigation Special Agent-in-Charge Tom Fattorusso said:  “U.S. citizens are required to pay taxes on worldwide income from all sources, including income earned overseas. Kozel earned tens of millions of dollars, and as a result, was required by law to pay taxes – more than $20 million – on those earnings. By not paying his fair share, he cheated the American people out of millions of dollars.” 

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

Pursuant to the Internal Revenue Code and attendant regulations, all United States citizens and residents who had annual income in excess of a threshold amount are required to report accurately their income, tax obligations, and, where appropriate, any claim for a refund on a United States Individual Income Tax Return, Form 1040 (“Form 1040”), which must be filed annually with the Internal Revenue Service (“IRS”).  This obligation applies to all sources of income, including income earned through overseas employment and from foreign financial accounts.

From at least in or about 2004 through at least in or about 2014, TODD KOZEL was the co-founder and CEO of a London-based petroleum company with operations in the Kurdistan Region of Iraq (the “Oil Company”).  During the period 2011 through 2015, KOZEL, a United States citizen, earned substantial compensation as the CEO of the Oil Company, totaling more than approximately $66 million during the five-year period.  But despite earning this substantial income, KOZEL willfully failed timely to file any personal federal income tax returns for calendar years 2011 through 2015, resulting in well over $20 million in unpaid federal tax liabilities.  As part of his criminal conduct, KOZEL used sophisticated offshore structures, trusts, and bank accounts to conceal a portion of his undeclared income from the U.S. government.

*                *                *

In addition to the prison sentence, KOZEL, 55, of New York, New York, was sentenced to two years of supervised release and ordered to pay restitution to the IRS in the amount of $29,462,965.23.

Mr. Williams praised the IRS-CI for their outstanding investigative work on this case, and thanked the Large Business and International Division of the IRS for its assistance.

This case is being handled by the Office’s Complex Frauds and Cybercrime Unit. Assistant United States Attorneys Louis A. Pellegrino and Olga I. Zverovich are in charge of the prosecution.

Damian Williams, the United States Attorney for the Southern District of New York, announced that ROMANA LEYVA was sentenced to 100 months in prison for participating in a fraud conspiracy that exploited elderly victims by remotely accessing their computers and convincing victims to pay for computer support services that they did not need, and which were never actually provided.  In total, the conspiracy generated more than $10 million in proceeds from at least approximately 7,500 victims.  LEYVA previously pled guilty before U.S. District Judge Paul A. Crotty, who imposed today’s sentence.

U.S. Attorney Damian Williams said:  “Romana Leyva was a leader of a conspiracy that caused pop-up windows to appear on victims’ computers – pop-up windows that claimed, falsely, that a virus had infected the victims’ computers.  Through this and other misrepresentations, this fraud scheme deceived thousands of victims, many of whom are elderly, into paying a total of more than $10 million.  Today’s sentence sends a clear message: Those who exploit the vulnerable for financial gain will pay a heavy price.”

According to the allegations contained in the Superseding Information, court filings, and statements made in court, including at LEVYA’s plea proceeding and sentencing:

From approximately February 2015 through December 2018, LEYVA was a member of a criminal fraud ring (the “Fraud Ring”) based in the United States and India that committed a technical support fraud scheme that exploited elderly victims located across the United States and Canada, including in the Southern District of New York.  The Fraud Ring’s primary objective was to trick victims into believing that their computers were infected with malware, in order to deceive them into paying hundreds or thousands of dollars for phony computer repair services.  Over the course of the conspiracy, the Fraud Ring generated more than $10 million in proceeds from at least 7,500 victims.

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

LEYVA was a leader of the Fraud Ring.  Her roles in the scheme included: (1) creating several fraudulent corporate entities that were used to receive fraud proceeds from victims, (2) recruiting others (including through misrepresentations) to register fraudulent corporate entities that facilitated the activities of the Fraud Ring, and (3) assisting others in setting up fraudulent corporate entities and bank accounts, including coaching them to make misrepresentations to bank employees where necessary.

*                *                *

In addition to the prison sentence, LEYVA, 38, of Las Vegas, Nevada, was sentenced to three years of supervised release, forfeiture of $4,679,586.93, and restitution of $2,707,882.91.

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

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

Damian Williams, the United States Attorney for the Southern District of New York, announced that WILLIAM SADLEIR pled guilty to two counts of wire fraud in connection with his participation in two schemes relating to investments made by a New York-based investment fund (the “Fund”) in Aviron Pictures, LLC and its affiliated entities (collectively, “Aviron”). SADLEIR is scheduled for sentencing on May 10, 2022, at 10:30 a.m., by U.S. District Judge Paul A. Engelmayer, who presided over yesterday’s plea.

U.S. Attorney Damian Williams said:  “William Sadleir used his talent for selling stories to con a New York investment fund out of over $30 million using a fake company, fake documents, and even a fake identity.  In a brazen plot that could be ripped from one of the films he distributed, Sadleir even made up a character that he named ‘Amanda Stevens,’ and masqueraded as her in an effort to get away with his fraud. We called a wrap on Sadleir’s scheming, and he now faces significant time in federal prison.”

According to the Complaint, Indictment, and other court filings:

The Fund is a publicly traded, closed-end investment fund.  Shares in the Fund trade on the New York Stock Exchange.  As of in or about December 2019, the Fund had approximately $649.1 million in assets.

WILLIAM SADLEIR was the chairman and chief executive officer of Aviron, and oversaw its operations from in or about 2015 until in or about December 2019.  Aviron participated in the distribution of a number of films in the United States, including My All American (2015), Kidnap (2017), The Strangers: Prey at Night (2018), A Private War (2018), Destination Wedding (2018), Serenity (2019), and After (2019).

SADLEIR engaged in two fraudulent schemes relating to an approximately $75 million investment made by the Fund in Aviron.

In one of the schemes (the “Advertising Scheme”), SADLEIR misappropriated millions of dollars in funds from Aviron that had been invested in Aviron by the Fund.  SADLEIR represented to the Fund that this money had been invested by Aviron in pre-paid media credits with the advertising placement company MediaCom Worldwide (“MediaCom”), which is a subsidiary of the advertising and media agency GroupM Worldwide.  Instead, using the bank account for a sham entity he had created, SADLEIR illicitly transferred out of Aviron over $25 million of those funds.  Specifically, SADLEIR created a sham New York-based company called GroupM Media Services, LLC (the “Sham GroupM LLC”) designed to appear to be the legitimate entity, GroupM Worldwide, and a corresponding bank account in the name of that sham entity.  SADLEIR then used a significant portion of those illicitly transferred funds for his personal benefit, including to purchase a private residence in Beverly Hills for approximately $14 million.  SADLEIR then falsely represented to the Fund that Aviron had purchased an approximately $27 million balance in pre-paid media credits with MediaCom that were available to promote future Aviron films, and pledged a portion of those credits to the Fund as collateral for additional loans, when in fact the claimed credits did not exist.  As part of these false representations, SADLEIR also created a fake identity of a purported New York-based female employee of the Sham GroupM LLC named “Amanda Stevens” who corresponded with a representative of the Fund, assuring the Fund that Aviron had an approximately $27 million balance in pre-paid media credits with the Sham GroupM LLC.  But SADLEIR himself posed as Amanda Stevens when engaging in email exchanges with a representative from the Fund.

In the other scheme (the “UCC Scheme”), SADLEIR engineered the illicit and fraudulent sale and refinancing of assets worth over $3 million that secured the Fund’s loans to Aviron.  The Fund had secured its investment in Aviron by, among other means, obtaining UCC liens in 2017 and 2018 on certain intellectual property and other assets relating to Aviron’s films.  In 2019, SADLEIR used the forged signature of one of the Fund’s portfolio managers on releases to remove the Fund’s UCC liens on certain of these secured assets.  SADLEIR did so in order to sell or refinance the assets without the Fund’s consent, thus depriving the Fund of its collateral on outstanding loans.  Aviron ultimately defaulted on those loans.

*                *                *

SADLEIR, 67, of Beverly Hills, California, pled guilty to two counts of wire fraud, each of 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 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 work of the Federal Bureau of Investigation.  He also 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 Jared Lenow and Elizabeth Hanft are in charge of the prosecution.

Damian Williams, the United States Attorney for the Southern District of New York, and Michael J. Driscoll, Assistant Director-in-Charge of the New York Office of the Federal Bureau of Investigation (“FBI”), announced charges against RICHARD VIET NGUYEN for attempted enticement of one minor boy in Manhattan, New York.  NGUYEN was arrested this morning and presented in Manhattan federal court today before U.S. Magistrate Judge Sarah L. Cave.

U.S. Attorney Damian Williams said: “The conduct alleged against Richard Nguyen is as chilling and disturbing as one can imagine. The protection of our youth from predators has been and will remain of critical importance to this Office and our law enforcement partners.”

FBI Assistant Director Michael J. Driscoll said: "It's unfathomable to believe anyone would see a five-year-old boy as a sexual being. What's more despicable in this investigation, we allege the subject brought Benadryl to drug the child. The work these agents do is truly difficult, but so tremendously important to protecting children from predators. I want to commend what they do, and the fact that they show up every day despite how difficult their job can be."

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

On or about October 20, 2021, an individual identified to be NGUYEN initiated a series of conversations on an instant messaging platform with an undercover FBI agent (“UC-1”), posing as the father of an 8-year-old boy and a 5-year-old boy. Thereafter, UC-1 and NGUYEN had numerous communications, include one oral communication, via the instant messaging platform.

In these conversations, NGUYEN expressed his desire to engage in sexual activity with both children – including both oral and anal sex – and discussed potential arrangements for NGUYEN to engage in sexual activity with either child. 

UC-1 and NGUYEN arranged to meet at a coffee shop in Manhattan on the morning of January 20, 2022, with the understanding that they would return to UC-1’s apartment afterward and NGUYEN would then engage in sexual activity with the youngest boy.  On the morning in question, NGUYEN met UC-1 at the agreed-upon location.  After the two of them left the coffee shop and began walking toward UC-1’s purported apartment, law enforcement arrested NGUYEN. NGUYEN was in possession of, among other things, children’s Benadryl and a condom in his pocket.

*                 *                  *

NGUYEN, 29, of Manhattan, New York, is charged with one count of attempted enticement of a minor to engage in illegal sexual activity, in violation of Title 18, United States Code, Sections 2422(b) and 2, which carries a mandatory minimum sentence of 10 years in prison and a maximum sentence of life in prison.

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

The prosecution of this case is being handled by the Office’s General Crimes Unit.  Assistant United States Attorney Edward C. Robinson Jr. is in charge of the prosecution.

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

[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.

A federal grand jury in New York returned an indictment today charging four Belarusian state officials with conspiracy to commit aircraft piracy.

According to court documents, Leonid Mikalaevich Churo, Oleg Kazyuchits, Andrey Anatolievich Lnu and Fnu Lnu, all of Belarus, allegedly engineered the diversion of Ryanair Flight 4978 (the Flight) – which was carrying four U.S. nationals and more than 100 other passengers on board – while it was in flight on May 23, 2021, to arrest a dissident Belarusian journalist who was on board.

“Since the dawn of powered flight, countries around the world have cooperated to keep passenger airplanes safe,” said U.S. Attorney Damian Williams for the Southern District of New York. “The defendants shattered those standards by diverting an airplane to further the improper purpose of repressing dissent and free speech. Thanks to the extraordinary investigative work of a joint team of FBI counterterrorism and counterintelligence investigators, today’s indictment provides a prompt and public explanation of what actually happened to the Flight. We are committed to holding accountable these central participants in a shocking conspiracy to commit aircraft piracy that not only violated international norms and U.S. criminal law, but also potentially endangered the lives of four U.S. citizens and scores of other innocent passengers on board.”         

“We allege the defendants carried out an elaborate scheme to fake a bomb scare which forced an airplane to make an emergency landing in their country so they could arrest a dissident journalist,” said Assistant Director Michael J. Driscoll of the FBI’s New York Field Office. “During the course of our investigation, the FBI identified a detailed operation that subjected passengers from many countries, including the U.S., to the realities of terroristic threats. Not only is what took place a reckless violation of U.S. law, it’s extremely dangerous to the safety of everyone who flies in an airplane. The next pilot who gets a distress call from a tower may doubt the authenticity of the emergency – which puts lives at risk. The FBI and our foreign partners will continue to hold perpetrators responsible for actions which directly threaten the lives of our US citizens and jeopardize the stability of our national security.”

Overview of the Plot

While on its regularly scheduled passenger route between Athens, Greece, and Vilnius, Lithuania, on May 23, 2021, the Flight was diverted to Minsk, Belarus, by air traffic control authorities in response to a purported threat of a bomb on board the aircraft. There was, in fact, no bomb on board the aircraft. Belarusian government authorities fabricated the threat as a means to exercise control over the Flight and force it to divert from its course toward the original destination of Vilnius, and instead land in Minsk.

The purpose of the Belarusian government’s plot diverting the Flight to Minsk was so that Belarusian security services could arrest a Belarusian journalist and political activist (Individual-1) – who was critical of the Belarusian government, living in exile in Lithuania, and wanted by the Belarusian government on allegations of fomenting “mass unrest” – as well as Individual-1’s girlfriend (Individual-2). The Belarusian government conspiracy to divert the Flight was executed by, among others, officers of the Belarusian state security services working in coordination with senior officials of the Belarusian state air navigation authority.

The Defendants

The defendants, all Belarusian government officials and critical participants in this conspiracy, are identified as: Leonid Mikalaevich Churo, Oleg Kazyuchits, Andrey Anatolievich Lnu and Fnu Lnu. At all times relevant to the indictment, Churo was the Director General of Belaeronavigatsia, the Belarusian state air navigation authority. As alleged, Churo personally communicated the false bomb threat to staff at the Minsk air traffic control center before the Flight even took off from Athens, and directed the control center to instruct the Flight divert to Minsk in response to the purported threat.

Kazyuchits was the Deputy Director General of Belaeronavigatsia, and his role in the conspiracy included directing Belarusian air traffic authorities to falsify incident reports regarding the diversion of the Flight in order to conceal the fabrication of the bomb threat and to omit the role of Belarusian security services in directing the diversion.

Andrey Anatolievich Lnu and Fnu Lnu were officers of the Belarusian state security services. Fnu Lnu participated with Churo in conveying the false bomb threat to the Minsk air traffic control tower, personally directed the specific radio communications from the Minsk tower to coerce the Flight to divert to Minsk, and relayed contemporaneous updates on the diversion of the Flight and the progress of the plot to Andrey Anatolievich Lnu, who was Fnu Lnu’s superior in the Belarusian state security services.  

The Diversion of the Flight

On May 23, 2021, at approximately 6:45 UTC, Churo and Fnu Lnu arrived at the operations room of the Minsk area air traffic control center with responsibility for Belarusian airspace. Churo and Fnu Lnu conveyed the purported bomb threat to the controllers on duty, even though the Flight had not yet departed Athens. Churo and Fnu Lnu specifically crafted the threat to coerce the pilots of the Flight to avoid continuing to their final destination of Vilnius, by claiming that the purported bomb would explode if the Flight landed there.

In addition, Churo and Fnu Lnu took the telling steps of directing that the Flight be diverted specifically to Minsk, and even though the Flight was still in the adjacent airspace of Ukraine, prohibiting the Minsk air traffic control center from making any notification to Ukrainian authorities of the purported bomb threat. This helped to ensure that the Flight would enter Belarusian airspace, and the plot to obtain and exercise control over the Flight could be executed. Fnu Lnu remained in the operations room at the Minsk air traffic control center from the time that he and Churo conveyed the purported bomb threat and directed that the Flight divert to Minsk, until shortly before the Flight landed in Minsk after being diverted, in order to ensure that the diversion plot was successfully executed.

Once the Flight reached Belarusian airspace, Fnu Lnu instructed the senior air traffic controller who was responsible for communicating with the Flight to inform the pilots of the purported bomb threat, describe that the threat had been sent by email, and make specific statements to ensure the threat seemed credible and to coerce the Flight to divert to Minsk. For example, Fnu Lnu directed that the air traffic controller should falsely inform the pilots that the threat to the aircraft was a level “red” – the most specific and credible category of threat. Fnu Lnu provided updates on the execution of the plot in real time to his superior in the Belarusian security services, Andry Antolievich Lnu, at one point expressing concern that the pilots might be stalling for time and the Flight might soon leave Belarusian airspace, which would jeopardize the success of their diversion scheme. In response to the false information conveyed as part of the defendants’ plot, the pilots of the Flight ultimately declared an emergency and diverted to Minsk National Airport, in accordance with the directives from Churo and Fnu Lnu.

Once the Flight landed in Minsk, Fnu Lnu left the air traffic control operations room and went to the airport tarmac. The Flight was met by Belarusian security services personnel, including individuals dressed in camouflage military-style uniforms, some of whom were wearing ski masks and carrying visible firearms. Fnu Lnu remained on the tarmac supervising the security forces and monitoring the screening of the passengers as they disembarked. Belarusian security services personnel then instructed the passengers to board one of several airport passenger buses.

Belarusian authorities boarded one of the buses and asked Individual-1 to come forward and identify himself, demonstrating that Belarusian authorities were aware that Individual-1 was on board the Flight. Individual-1 was escorted off the bus, where uniformed Belarusian officers separately searched him again on the airport tarmac. Belarusian officers then escorted Individual-1 back onto the bus and traveled with Individual-1 and the rest of the passengers to the airport terminal. Once the bus arrived at the terminal, the Flight’s passengers were detained in an area of the terminal secured by Belarusian security services. Additional Belarusian security officers met Individual-1 and the officers accompanying him, escorted Individual-1 away from the remaining passengers and detained Individual-1. One group of passengers from the Flight, including multiple U.S. nationals and Individual-2, was detained in a narrow hallway for approximately three hours at the airport. During that time, Belarusian authorities also escorted Individual-2 away from the other passengers and detained Individual-2. The Flight was ultimately allowed to depart from Minsk and continue to its original destination of Vilnius later that evening. No bomb was ever on the Flight.

The Cover-Up

Soon after the diversion of the Flight, Belarusian government officials began to cover up what had happened. On or about May 24, 2021, the day after the Flight was diverted, Churo appeared at a press conference in Belarus with other Belarusian officials to address the Flight’s diversion. During the press conference, Churo stated falsely the Belarusian authorities had “done everything according to their technology and their job responsibilities” in handling the Flight. In reality, Churo knew that he and his co-conspirators had contrived the false bomb threat and had directed the Flight to divert to Minsk so that Belarusian security services could arrest Individual-1 and Individual-2. To further conceal the defendants’ plot, Kazyuchits directed Belarusian air traffic authorities to create false incident reports, including by doctoring the reports to misrepresent that the bomb threat was received at approximately the same time that the Flight entered Belarusian airspace and omit the fact that Fnu Lnu of the Belarusian security services was present in the operations room and directed activity during the Flight’s diversion.

Churo, Kazyuchits, Andrey Anatolievich Lnu and Fnu Lnu, all of Belarus, are charged with conspiring to commit aircraft piracy, which carries a minimum sentence of 20 years and maximum statutory penalty of life. A federal district court judge will determine any sentence after considering the U.S. Sentencing Guidelines and other statutory factors.

The defendants remain at large. The United States looks forward to working with our foreign partners to bring them to justice.

This case was jointly investigated by the FBI’s New York Field Office, Counterintelligence Division Foreign Influence Task Force and the New York Joint Terrorism Task Force, which principally consists of special agents from the FBI and detectives from the NYPD; as well as the FBI Legal Attaché Offices in Riga, Latvia; Warsaw, Poland; Athens, Greece; Kiev, Ukraine; and London; the National Transportation Safety Board; the Justice Department’s National Security Division Counterterrorism Section and Criminal Division’s Human Rights and Special Prosecutions Section, and the Office of International Affairs. Poland’s Internal Security Agency and the Mazowieckie Regional Prosecutor’s Office; and Lithuanian authorities provided valuable assistance with this investigation.

Assistant U.S. Attorneys David W. Denton Jr. and Elinor L. Tarlow for the Southern District of New York are prosecuting the case, with assistance from Trial Attorneys Jennifer Burke of the National Security Division’s Counterterrorism Section, and Jamie Perry and Christian Levesque of the Criminal Division’s Human Rights and Special Prosecutions Section.

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, Assistant Attorney General for National Security Matthew G. Olsen, Assistant Attorney General Kenneth A. Polite Jr. of the Justice Department’s Criminal Division, Assistant Director-in-Charge Michael J. Driscoll of the Federal Bureau of Investigation (“FBI”) New York Office, and Commissioner Keechant Sewell of the New York City Police Department (“NYPD”), announced the filing of a one-count indictment charging LEONID MIKALAEVICH CHURO, the Director General of Belaeronavigatsia Republican Unitary Air Navigation Services Enterprise (“Belaeronavigatsia”), the Belarusian state air navigation authority; OLEG KAZYUCHITS, the Deputy Director General of Belaeronavigatsia; and two officers of the Belarusian state security services, ANDREY ANATOLIEVICH LNU and FNU LNU, with conspiracy to commit aircraft piracy for engineering the diversion of Ryanair Flight 4978 (the “Flight”)—which was carrying four U.S. nationals and more than 100 other passengers on board—while it was in flight over Belarus on May 23, 2021, for the purpose of arresting a dissident Belarusian journalist who was on board the Flight.  The case is assigned to U.S. District Judge Paul A. Engelmayer.  The defendants are based in Belarus and remain at large. 

U.S. Attorney Damian Williams said: “Since the dawn of powered flight, countries around the world have cooperated to keep passenger airplanes safe.  The defendants shattered those standards by diverting an airplane to further the improper purpose of repressing dissent and free speech.  Thanks to the extraordinary investigative work of a joint team of FBI counterterrorism and counterintelligence investigators, today’s indictment provides a prompt and public explanation of what actually happened to the Flight.  We are committed to holding accountable these central participants in a shocking conspiracy to commit aircraft piracy that not only violated international norms and U.S. criminal law, but also potentially endangered the lives of four U.S. citizens and scores of other innocent passengers on board.”          

FBI Assistant Director Michael J. Driscoll said:  “We allege the defendants carried out an elaborate scheme to fake a bomb scare which forced an airplane to make an emergency landing in their country so they could arrest a dissident journalist. During the course of our investigation, the FBI identified a detailed operation that subjected passengers from many countries, including the U.S., to the realities of terroristic threats. Not only is what took place a reckless violation of U.S. law, it’s extremely dangerous to the safety of everyone who flies in an airplane. The next pilot who gets a distress call from a tower may doubt the authenticity of the emergency -- which puts lives at risk. The FBI and our foreign partners will continue to hold perpetrators responsible for actions which directly threaten the lives of our US citizens and jeopardize the stability of our national security.”

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

Overview of the Plot

While on its regularly-scheduled passenger route between Athens, Greece, and Vilnius, Lithuania, on May 23, 2021, the Flight was diverted to Minsk, Belarus by air traffic control authorities in Belarus in response to a purported threat of a bomb on board the aircraft.  There was, in fact, no bomb on board the aircraft.  Belarusian government authorities fabricated the threat as a means to exercise control over the Flight and force it to divert from its course toward the original destination of Vilnius, and instead land in Minsk.  The purpose of the Belarusian government’s plot diverting the Flight to Minsk was so that Belarusian security services could arrest a Belarusian journalist and political activist (“Individual-1”)—who was critical of the Belarusian government, living in exile in Lithuania, and wanted by the Belarusian government on allegations of fomenting “mass unrest”—as well as Individual-1’s girlfriend (“Individual-2”).  The Belarusian government conspiracy to divert the Flight was executed by, among others, officers of the Belarusian state security services working in coordination with senior officials of the Belarusian state air navigation authority.

The Defendants

LEONID MIKALAEVICH CHURO, OLEG KAZYUCHITS, ANDREY ANATOLIEVICH LNU, and FNU LNU, the defendants, are Belarusian government officials who were critical participants in this conspiracy.  At all times relevant to the indictment, CHURO was the Director General of Belaeronavigatsia, the Belarusian state air navigation authority.  CHURO personally communicated the false bomb threat to staff at the Minsk air traffic control center before the Flight even took off from Athens, and directed the Minsk air traffic control center to instruct the Flight to divert to Minsk in response to the purported threat.  KAZYUCHITS was the Deputy Director General of Belaeronavigatsia, and his role in the conspiracy included directing Belarusian air traffic authorities to falsify incident reports regarding the diversion of the Flight in order to conceal the fabrication of the bomb threat and to omit the role of Belarusian security services in directing the diversion.  ANDREY ANATOLIEVICH LNU and FNU LNU were officers of the Belarusian state security services.  FNU LNU participated with CHURO in conveying the false bomb threat to the Minsk air traffic control tower, personally directed the specific radio communications from the Minsk tower to coerce the Flight to divert to Minsk, and relayed contemporaneous updates on the diversion of the Flight and the progress of the plot to ANDREY ANATOLIEVICH LNU, who was FNU LNU’s superior in the Belarusian state security services.     

The Diversion of the Flight

On the day the flight was diverted, May 23, 2021, at approximately 6:45 UTC, CHURO and FNU LNU arrived at an operations room of the Minsk area air traffic control center with responsibility for Belarusian airspace.  CHURO and FNU LNU conveyed the purported bomb threat to the controllers on duty, even though the Flight had not yet departed Athens.  CHURO and FNU LNU specifically crafted the threat to coerce the pilots of the Flight to avoid continuing to their final destination of Vilnius, by claiming that the purported bomb would explode if the Flight landed there.  In addition, CHURO and FNU LNU took the telling steps of directing that the Flight be diverted specifically to Minsk, and even though the Flight was still in the adjacent airspace of Ukraine, prohibiting the Minsk air traffic control center from making any notification to Ukrainian authorities of the purported bomb threat.  This helped to ensure that the Flight would enter Belarusian airspace, and the plot to obtain and exercise control over the Flight could be executed.  FNU LNU remained in the operations room at the Minsk air traffic control center from the time that he and CHURO conveyed the purported bomb threat and directed that the Flight divert to Minsk, until shortly before the Flight landed in Minsk after being diverted, in order to ensure that the diversion plot was successfully executed.

Once the Flight reached Belarusian airspace, FNU LNU instructed the senior air traffic controller who was responsible for communicating with the Flight to inform the pilots of the purported bomb threat, describe that the threat had been sent by email, and make specific statements to ensure the threat seemed credible and to coerce the Flight to divert to Minsk.  For example, FNU LNU directed that the air traffic controller should falsely inform the pilots that the threat to the aircraft was a level “red”—the most specific and credible category of threat.  FNU LNU provided updates on the execution of the plot in real time to his superior in the Belarusian security services, ANDREY ANTOLIEVICH LNU, at one point expressing concern that the pilots might be stalling for time and the Flight might soon leave Belarusian airspace, which would jeopardize the success of their diversion scheme.  In response to the false information conveyed as part of the defendants’ plot, the pilots of the Flight ultimately declared an emergency and diverted to Minsk National Airport, in accordance with the directives from CHURO and FNU LNU. 

Once the Flight landed in Minsk, FNU LNU left the air traffic control operations room and went to the airport tarmac.  The Flight was met by Belarusian security services personnel, including individuals dressed in camouflage military-style uniforms, some of whom were wearing ski masks and carrying visible firearms.  FNU LNU remained on the tarmac supervising the security forces and monitoring the screening of the passengers as they disembarked.  Belarusian security services personnel then instructed the passengers to board one of several airport passenger buses. 

Belarusian authorities boarded one of the buses and asked Individual-1 to come forward and identify himself, demonstrating that Belarusian authorities were aware that Individual-1 was on board the Flight.  Individual-1 was escorted off the bus, where uniformed Belarusian officers separately searched him again on the airport tarmac.  Belarusian officers then escorted Individual-1 back onto the bus and traveled with Individual-1 and the rest of the passengers to the airport terminal.  Once the bus arrived at the terminal, the Flight’s passengers were detained in an area of the terminal secured by Belarusian security services.  Additional Belarusian security officers met Individual-1 and the officers accompanying him, escorted Individual-1 away from the remaining passengers, and detained Individual-1.  One group of passengers from the Flight, including multiple U.S. nationals and Individual-2, was detained in a narrow hallway for approximately three hours at the airport.  During that time, Belarusian authorities also escorted Individual-2 away from the other passengers and detained Individual-2.  The Flight was ultimately allowed to depart from Minsk and continue to its original destination of Vilnius later that evening.  No bomb was ever on the Flight.

The Cover-Up

Soon after the diversion of the Flight, Belarusian government officials began to cover up what had happened.  On or about May 24, 2021, the day after the Flight was diverted, CHURO appeared at a press conference in Belarus with other Belarusian officials to address the Flight’s diversion.  During the press conference, CHURO stated falsely that the Belarusian authorities had “done everything according to their technology and their job responsibilities” in handling the Flight.  In reality, CHURO knew that he and his co-conspirators had contrived the false bomb threat and had directed the Flight to divert to Minsk so that Belarusian security services could arrest Individual-1 and Individual-2.  To further conceal the defendants’ plot, KAZYUCHITS directed Belarusian air traffic authorities to create false incident reports, including by doctoring the reports to misrepresent that the bomb threat was received at approximately the same time that the Flight entered Belarusian airspace and omit the fact that FNU LNU of the Belarusian security services was present in the operations room and directed activity during the Flight’s diversion. 

*                      *                      *

CHURO, KAZYUCHITS, ANDREY ANATOLIEVICH LNU, and FNU LNU, all of Belarus, are charged with conspiring to commit aircraft piracy, which carries a maximum penalty of life in prison, and a mandatory minimum sentence of 20 years in prison.  The maximum potential sentences in this case are prescribed by Congress and are provided here for informational purposes only, as any sentencing of the defendants will be determined by a judge.

The defendants remain at large.  The United States looks forward to working with our foreign partners to bring them to justice.

Mr. Williams, Mr. Olsen, and Mr. Polite praised the outstanding efforts of a joint investigative team from the FBI’s New York Field Office, Counterintelligence Division and the New York Joint Terrorism Task Force, which principally consists of special agents from the FBI and detectives from the NYPD.  They also thanked the FBI Legal Attaché Offices in Riga, Latvia; Warsaw, Poland; Athens, Greece; Kiev, Ukraine; and London, England; the National Transportation Safety Board; the Counterterrorism Section of the Department of Justice’s National Security Division; the Office of International Affairs and the Human Rights and Special Prosecutions Section of the Department of Justice’s Criminal Division; Poland’s Internal Security Agency and the Mazowieckie Regional Prosecutor’s Office; and Lithuanian authorities for their assistance with this investigation.

This prosecution is being handled by the Office’s National Security and International Narcotics Unit.  Assistant U.S. Attorneys David W. Denton, Jr. and Elinor L. Tarlow are in charge of the prosecution, with assistance from Trial Attorneys Jennifer Burke of the Counterterrorism Section and Jamie Perry and Christian Levesque of the Human Rights and Special Prosecutions Section.

The charges contained in the indictment are merely accusations, and the defendants are presumed innocent unless and until proven guilty beyond a reasonable doubt in a court of law.   

[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, announced that VICTOR RIVERA pled guilty to participating in a conspiracy to commit Hobbs Act robbery between October 2019 and November 2020. RIVERA is scheduled to be sentenced on April 28, 2022, by U.S. District Judge Alvin Hellerstein.

U.S. Attorney Damian Williams said: “As he has now admitted, Victor Rivera committed a year-long spree of armed robberies and attempted robberies of jewelers and other owners of luxury watches, threatening his victims with guns and, during the course of one robbery, shooting a victim. Now Rivera awaits sentencing for this terrifying conduct.”

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

From at least in or about October 2019 up to and including November 2020, VICTOR RIVERA, and others known and unknown, agreed to rob victims of luxury watches worth up to hundreds of thousands of dollars each.  The watches owned by victims targeted in the robberies included Richard Mille, Rolex, Audemars Piguet, and Patek Philippe watches owned by jewelers as part of the jewelers’ businesses based in Manhattan’s Diamond District.  RIVERA used guns to commit several of the robberies, and in one robbery, shot a victim, who survived. 

The eleven robberies and attempted robberies included the following: 

1. On October 3, 2019, RIVERA and a co-conspirator robbed a jeweler in Long Island City, New York, of, among other things, a Richard Mille watch worth over $250,000.

1. On October 25, 2019, RIVERA and a co-conspirator robbed a jeweler in Jamaica, New York, of, among other things, a Rolex watch worth over $150,000.

1. On December 10, 2019, RIVERA and two co-conspirators robbed a jeweler in Brooklyn, New York, of, among other things, a Patek Philippe watch worth over $160,000 and a diamond necklace worth over $77,000.  During the robbery, a firearm was shown to the victim.

1. On January 14, 2020, RIVERA and a co-conspirator robbed a jeweler in Rego Park, New York, of, among other things, a Richard Mille watch worth over $500,000.

1. On February 16, 2020, RIVERA and a co-conspirator robbed a jeweler in Jamaica Estates, New York, of, among other things, an Audemars Piguet watch worth over $28,000.

1. On February 20, 2020, RIVERA and a co-conspirator robbed an individual in Long Island City, New York, of, among other things, an Audemars Piguet watch worth over $125,000.

1. On June 11, 2020, RIVERA and a co-conspirator robbed a jeweler in Brooklyn, New York, of, among other things, a Richard Mille watch worth over $148,000.  During the robbery, a firearm was shown to the victim and a victim was shot.

1. On July 6, 2020, RIVERA and a co-conspirator robbed a jeweler in Hoboken, New Jersey, of, among other things, a Richard Mille watch worth over $81,000.  Following the robbery, RIVERA and others transported the stolen watch from New Jersey to New York.

1. On July 20, 2020, RIVERA and a co-conspirator participated in an attempted robbery of a jeweler in Queens, New York, attempting to steal a Richard Mille watch worth over $180,000.

1. On August 2, 2020, RIVERA and a co-conspirator robbed an individual in the vicinity of Englewood Cliffs, New Jersey, of, among other things, a Richard Mille watch worth over $250,000.  During the robbery, a firearm was shown to a victim.  Following the robbery, RIVERA and others transported the stolen watch from New Jersey to New York.

1. On October 27, 2020, RIVERA and a co-conspirator robbed a jeweler in the vicinity of Woodbury, New York, of, among other things, an Audemars Piguet watch worth over $26,000 and assorted jewels and gold links worth over $60,000.  During the robbery, a firearm was shown to a victim.     

*          *          *

RIVERA, 30, of Brooklyn, New York, pled guilty to one count of conspiracy to commit Hobbs Act robbery, which carries a maximum prison term of twenty 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.

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

This case is being handled by the Office’s Violent and Organized Crime Unit.  Assistant United States Attorneys Mathew Andrews, Andrew K. Chan, and Celia Cohen are in charge of the prosecution.

Damian Williams, the United States Attorney for the Southern District of New York, Jonathan Mellone, Special Agent in Charge of the New York Regional Office of the U.S. Department of Labor Office of Inspector General (“DOL-OIG”), Daniel B. Brubaker, Inspector in Charge, New York Division of the United States Postal Inspection Service  (“USPIS”), and Sharon MacDermott, Special Agent in Charge of the New York Regional Office of the U.S. Social Security Administration Office of Inspector General (“SSA-OIG”), announced today the unsealing of a complaint charging YOHAURIS RODRIGUEZ HERNANDEZ with conspiracy to commit wire fraud, conspiracy to commit theft of government benefits, and aggravated identity theft in connection with a COVID-19 unemployment benefit scheme that attempted to steal more than $1.9 million from the New York State Department of Labor (“NYS DOL”) and various other states’ agencies tasked with the administration of unemployment benefits.  YOHAURIS RODRIGUEZ HERNANDEZ was arrested this morning in Goshen, New York, and will be presented later today before United States Magistrate Judge Paul E. Davison.

U.S. Attorney Damian Williams said: “As alleged, the defendant participated in a scheme to fraudulently obtain COVID-19 unemployment benefits under the names and social security numbers of at least 100 other people, which attempted to steal more than $1.9 million and resulted in the fraudulent disbursement of more than $500,000.  The defendant is now in custody and facing serious federal charges.”

DOL-OIG Special Agent in Charge Jonathan Mellone said: “The Unemployment Insurance Program exists to provide needed assistance to qualified individuals who are unemployed due to no fault of their own.  Fraud against the Unemployment Insurance Program distracts state workforce agencies from ensuring benefits go to individuals who are eligible to receive them. The Office of Inspector General will continue to work closely with our law enforcement partners to investigate those who exploit the Unemployment Insurance Program.”

USPIS Inspector in Charge Daniel B. Brubaker said: “This defendant allegedly took advantage of the urgent need to assist those struggling financially during the coronavirus pandemic; allegedly stealing identities and using those identities to file for unemployment benefits in a scheme to enrich their own lifestyle while others suffered. Postal Inspectors and their law enforcement partners are committed to bring those to justice who break the law, and in this case justice has been served.”

SSA-OIG Special Agent in Charge Sharon MacDermott said: “Today’s arrest demonstrates that pursuing and prosecuting those who allegedly abuse the identities of innocent people and damage the integrity of the Social Security number for their own selfish gain remains a priority for us. We are committed to working with our law enforcement partners, and I thank New York Department of Labor, Department of Labor, Office of the Inspector General, United States Postal Inspectors, Homeland Security Investigations, the New York Police Department, and the Yonkers Police Department for their efforts in this major investigation. I also thank the U.S. Attorney’s Office for pursuing justice in this case.”

As alleged in the Complaint:[1]

From February 2020 through December 2020, YOHAURIS RODRIGUEZ HERNANDEZ and a co-conspirator (“CC-1”) engaged in a scheme to obtain COVID-19 unemployment benefits through the fraudulent filing and verification of applications using the names and social security numbers of at least 100 other people.  Law enforcement agencies were first alerted to the scheme after YOHAURIS RODIRGUEZ HERNANDEZ and CC-1 fled a Yonkers hotel in December 2020 leaving behind in their previously occupied room over 500 pieces of NYS DOL mail containing information and NYS DOL-issued debit cards for approximately 76 individuals.  Over the course of the relevant time period, YOHAURIS RODRIGUEZ HERNANDEZ and CC-1 exchanged text messages, images, and other communications that included, among other things, personal identifying information—such as names, social security numbers, and dates of birth—that were used in connection with the filing and verification of fraudulent applications for unemployment benefits.  The scheme resulted in fraudulent claims for approximately $1.9 million and the fraudulent disbursement of over $500,000 in COVID-19 unemployment benefits.

*                *                *

YOHAURIS RODRIGUEZ HERNANDEZ, 40, is charged with (1) conspiracy to commit wire fraud, which carries a maximum sentence of 20 years in prison, (2) conspiracy to commit theft of government benefits, which carries a maximum sentence of 10 years in prison, and (3) aggravated identity theft, which carries a mandatory two-year consecutive 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 defendant will be determined by a judge.

Mr. Williams praised the outstanding work of the DOL-OIG, the USPIS, the SSA-OIG, the NYS DOL, the City of Yonkers Police Department, Homeland Security Investigations, and the New York City Police Department.  Mr. Williams noted that the investigation is ongoing.

The case is being prosecuted by the Office’s White Plains Division.  Assistant U.S. Attorney Kevin Sullivan is in charge of the prosecution.

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

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

Damian Williams, the United States Attorney for the Southern District of New York,  announced that SETH ANDREW pled guilty today to wire fraud, before United States District Judge John P. Cronan, in Manhattan federal court.

U.S. Attorney Damian Williams said: “Seth Andrew, a former White House advisor, admitted today to devising a scheme to steal from the very same schools he helped create.  Andrew now faces time in federal prison for abusing his position and robbing those he promised to help.”      

According to previous filings in this case:

In 2005, SETH ANDREW helped create “School Network-1,” a series of public charter schools then based in New York City.  In the Spring of 2013, ANDREW left School Network-1 and accepted a job in the United States Department of Education and, thereafter, as a senior advisor in the Office of Educational Technology at the White House.  In November 2016, ANDREW left his role in the White House and, shortly thereafter, in January 2017, ANDREW officially severed his relationship with School Network-1.

School Network-1’s New York based charter schools must maintain an “escrow account” that may be accessed only if the school dissolves.  Three such escrow accounts, for three New York City based-School Network-1 schools, were opened by ANDREW and other School Network-1 employees, at  “Bank-1” in 2009, 2011 and 2013.  As to each of those three accounts ‑- Escrow Account-1, Escrow Account-2 and Escrow Account-3 -- ANDREW was a signatory and had access to the funds in them.  However, pursuant to the charter agreement, the funds in the Escrow Accounts were reserved in case the school dissolved, and the funds could not be moved by ANDREW, or anyone, without proper authorization.

After he severed his relationship with School Network-1, on March 28, 2019, ANDREW entered a Bank-1 branch in New York City and closed both Escrow Account-1 and Escrow Account-2.  Bank-1 provided ANDREW a bank check in the amount of $71,881.23 made payable to “[School Network-1] Charter School” (“Check-1”) and a second bank check in the amount of $70,642.98 to “[School Network-1] Harlem Charter” (“Check-2”). 

The same day that ANDREW closed Escrow Account-1 and Escrow Account-2, ANDREW entered a Manhattan branch of a different FDIC insured bank (“Bank-2”) and opened a business bank account in the name of “[School Network-1] Charter School” (“Fraud Account‑1”).  To open that account, ANDREW misrepresented to a Bank-2 employee that he was a “Key Executive with Control of” School Network-1 Charter School and supported that misrepresentation with emails sent to the Bank-2 employee.  ANDREW then deposited Check-1 into the account. Five days later, on April 2, 2019, ANDREW used an ATM machine in Baltimore, Maryland to deposit Check-2 into Fraud Account‑1. 

On October 17, 2019, ANDREW closed out Escrow Account-3 and received a check (“Check-3”) made payable to “[School Network-1] Endurance” in the amount of $75,481.10.  On October 21, 2019, ANDREW deposited Check-3 into an account that he opened at a third bank (“Fraud Account-2”). 

Approximately one month later, ANDREW obtained a check from Bank-2 for $144,473.29, which constituted the funds stolen from Escrow Account-1 and Escrow Account-2, and ANDREW ultimately deposited those funds into Fraud Account-2.  Five days later, ANDREW rolled the funds in Fraud Account-2 into a certificate of deposit.  That certificate of deposit matured on May 20, 2020, which earned ANDREW $2,083.52 in interest.  ANDREW then transferred the funds from the certificate of deposit -- including the funds stolen from the Escrow Accounts -- into a bank account held in the name of a particular civic organization that ANDREW then-controlled thereby concealing the money’s association with School Network-1, and depositing the stolen money into an account under Andrew’s complete control.

*                      *                     *

ANDREW, 42, pled guilty to one count of wire fraud, which carries a maximum sentence of 20 years in prison.  ANDREW has agreed to pay restitution to the Charter School Network from which he stole.  ANDREW is scheduled to be sentenced before Judge Cronan on April 14, 2022.

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

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

Damian Williams, the United States Attorney for the Southern District of New York, Tim Foley, Acting Special Agent-in-Charge of the New York Division of the Drug Enforcement Administration (“DEA”), and Keechant Sewell, Commissioner of the New York City Police Department (“NYPD”), announced that SUCRE ALMANZAR-ALBA was charged in a criminal complaint today with possession of fentanyl with the intent to distribute it.  ALMANZAR-ALBA was arrested yesterday and presented today before the Hon. Barbara Moses, United States Magistrate Judge for the Southern District of New York.

U.S. Attorney Damian Williams said: “As alleged, the defendant trafficked huge quantities of fentanyl, the major driver of the opioid epidemic plaguing this country.  Thanks to our law enforcement partners, nearly 20 kilograms of this deadly drug – which amounts to millions of lethal doses – have been taken off the street.”

DEA Acting Special Agent-in-Charge Tim Foley said: “This seizure and arrest have already saved lives in New York. Allegedly, hidden in Almanzar-Alba’s apartment was the equivalent of nearly 10 million doses of the most dangerous illegal drug to ever hit the streets – FENTANYL.  I applaud the New York Strike Force, U.S. Attorney’s Office Southern District of New York, and our law enforcement partners for their collaborative and swift efforts in this investigation.”

NYPD Commissioner Keechant Sewell said: “Illicit fentanyl distribution destroys lives and devastates communities. Today’s federal complaint reflects the unrelenting focus by the NYPD and its law enforcement partners, working together, to rid our city of these and other deadly drugs and to build strong cases against those who would deal in them. I want to thank all the investigators and prosecutors who worked on this important investigation.”

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

On or about January 13, 2022, ALMANZAR-ALBA met with a confidential source to give that confidential source approximately one kilogram of fentanyl.  Law enforcement later searched ALMANZAR-ALBA’s house and recovered approximately 19 additional kilograms of fentanyl.

ALMANZAR-ALBA, 43, of the Bronx, New York, is charged with possession with intent to distribute a controlled substance, which carries a maximum sentence of life imprisonment.  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 Organized Crime Drug Enforcement Task Force (“OCDETF”) New York Strike Force.  The OCDETF New York Strike Force is a crime-fighting unit comprising federal, state, and local law enforcement agencies supported by the Organized Crime Drug Enforcement Task Force and the New York/New Jersey High Intensity Drug Trafficking Area.  The Strike Force is affiliated with the DEA’s New York Division and includes agents and officers of the DEA, New York City Police Department, New York State Police, Homeland Security Investigations, U.S. Internal Revenue Service Criminal Investigation Division, Bureau of Alcohol, Tobacco, Firearms and Explosives, U.S. Customs and Border Protection, U.S. Secret Service, U.S. Marshals Service, New York National Guard, Clarkstown Police Department, U.S. Coast Guard, Port Washington Police Department, and New York State Department of Corrections and Community Supervision. 

The case is being handled by the Office’s Narcotics Unit.  Assistant United States Attorney Kevin Mead is in charge of the prosecution.

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

[1] As the introductory phrase signifies, the entirety of the text of the Complaint and the description of the Complaint 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, and Lisa Garcia, Regional Administrator of the U.S. Environmental Protection Agency (“EPA”), announced today that the United States has filed a civil lawsuit against CISNE NY Construction, Inc., CISNE JE Construction, Inc., CISNE Contracting, Inc., and their principals Jose Pancha and Edison Ruilova (together, the “CISNE Defendants”), alleging that the CISNE Defendants repeatedly violated the federal Toxic Substances Control Act (“TSCA”) and EPA’s Renovation, Repair, and Painting Rule (“RRP Rule”).  TSCA and the RRP Rule impose safety requirements to minimize the risk that young children, tenants, and renovation workers are exposed to toxic lead paint dust during renovations of residential buildings.

Exposure to lead paint dust is the most common cause of lead poisoning.  Lead poisoning—particularly in children—can lead to severe, irreversible health problems.  Lead exposure can affect children’s brains and developing nervous systems, causing reduced IQ, learning disabilities, and behavioral problems. 

U.S. Attorney Damian Williams said: “As alleged, the CISNE Defendants repeatedly violated rules designed to protect children and others from lead poisoning during renovations of residential buildings.  Their actions threatened the most vulnerable with severe lifelong injury.  This Office will vigorously enforce the laws designed to protect the health of children against violators who disregard the public health and put children at risk.”

EPA Regional Administrator Garcia stated: “EPA recognizes that all people deserve protection from the hazards of lead-based paint, especially our most vulnerable communities. This case involves allegations of multiple violations in hundreds of NYC apartments. Reducing childhood lead exposure and addressing associated health impacts are one of EPA’s top priorities and we are committed to the robust enforcement of standards that are intended to protect individuals and families.”

The Complaint filed today in Manhattan federal court alleges that the CISNE Defendants repeatedly failed to use legally required safety precautions when renovating apartments that are presumed by law to contain lead paint because they were built prior to 1978.  EPA and New York City Department of Health and Mental Hygiene inspectors observed that the CISNE Defendants failed to contain debris and dust during their work, creating exposure hazards.  Construction dust was found not just in the units being worked on, but also in the public hallways accessible to other building residents.  Testing demonstrated that dust exceeded both local and federal safety standards.  The CISNE Defendants also failed to post warning signs at these jobs or take other steps required by law to protect tenants and workers.  In all of this, the CISNE Defendants risked exposing tenants and workers to lead paint dust and violated TSCA and the RRP Rule.

The Complaint also alleges that for years, in violation of TSCA and the RRP Rule, the CISNE Defendants performed renovations in New York City apartment buildings without the training and certifications required to perform such work, and that they failed to provide EPA with legally mandated records that would allow EPA to audit their work.   

*          *          *

The Complaint filed by the United States seeks an injunction barring the CISNE Defendants from performing further work governed by the TSCA and the RRP Rule without complying with mandated safety requirements. The Complaint also seeks an order requiring the CISNE Defendants to mitigate the harms caused by their prior illegal renovation work.

This case is being handled by the Environmental Protection Unit of the Office’s Civil Division.  Assistant United States Attorney Zack Bannon is in charge of the case.

Damian Williams, United States Attorney for the Southern District of New York, announced that YUDITH REYNOSO-HICIANO, a/k/a “La Classica,” was convicted today in Manhattan federal court of kidnapping conspiracy and kidnapping.  REYNOSO-HICIANO was convicted after a four-day jury trial before U.S. District Judge Denise L. Cote.

U.S. Attorney Damian Williams said:  “Yudith Reynoso-Hiciano and others tied up a victim and assaulted him following a drug deal gone bad.  Thanks to the U.S. Department of Homeland Security, Homeland Security Investigations, and the New York City Police Department, Reynoso-Hiciano was apprehended, prosecuted, and now stands convicted of these violent crimes.”

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

In May 2019, REYNOSO-HICIANO and others kidnapped an individual (“Victim-1”), in connection with a dispute between REYNOSO-HICIANO’s brother and Victim-1 relating to the sale of a kilogram of cocaine.  REYNOSO-HICIANO and others kept Victim-1 at her apartment, where they tied his wrists together, assaulted him, and threatened to beat him with a crowbar and to press a hot clothing iron against his chest.    

*                      *                      *

REYNOSO-HICIANO, 43, of the Bronx, New York, was convicted by a jury of one count of kidnapping conspiracy and one count of kidnapping.  Each count carries a maximum term of  life in prison.  The maximum potential sentence is prescribed by Congress and is provided here for informational purposes only, as the sentencing of the defendant will be determined by the judge.

REYNOSO-HICIANO is scheduled to be sentenced on April 15, 2022.

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

The prosecution of this case is being handled by the Office’s Narcotics Unit.  Assistant United States Attorneys Daniel H. Wolf and Alexander Li are in charge of the prosecution, with the assistance of paralegal specialist Sarah Rosenberg.

Damian Williams, the United States Attorney for the Southern District of New York,  Michael J. Driscoll, Assistant Director-in-Charge of the New York Office of the Federal Bureau of Investigation (“FBI”), Miriam E. Rocah, the Westchester County District Attorney, Kevin P. Bruen, Superintendent of the New York State Police (“NYSP”), and Keechant Sewell, Commissioner of the New York City Police Department (“NYPD”), announced the unsealing of two indictments charging 13 individuals – including an NYPD police officer, licensed physicians, an attorney, and others – in connection with a $100 million automobile insurance fraud scheme. 

Of the 13 defendants, eight are charged in an indictment detailing conspiracies to commit healthcare fraud, money laundering, bribery, and obstruction, making false statements to federal authorities, and aggravated identity theft.  The charges are set forth in United States v. Alexander Gulkarov, et al., 22 Cr. 20 (the “Gulkarov Indictment”), which has been assigned to U.S. District Judge Failla.  Five additional defendants are separately charged in United States v. Bradley Pierre, et al., 22 Cr. 19 (the “Pierre Indictment”), which has been assigned to U.S. District Judge Torres.

Of those defendants, ten were arrested this morning in New York and New Jersey and are scheduled to appear before U.S. Magistrate Barbara Moses in Manhattan federal court later today.  An eleventh defendant, Alexander Gulkarov, was arrested in Miami, Florida, and is scheduled to appear before a U.S. Magistrate Judge in the Southern District of Florida later today.

U.S. Attorney Damian Williams said:  “The thirteen defendants charged in today’s indictments are alleged to have collectively perpetrated one of the largest no-fault insurance frauds in history.  In carrying out their massive scheme, among other methods, they allegedly bribed 911 operators, hospital employees, and others for confidential motor vehicle accident victim information. With this information, they then endangered victims by subjecting them to unnecessary and often painful medical procedures, in order to fraudulently overbill insurance companies. Schemes exploiting no-fault insurance laws – which ironically exist to make insurance more affordable – also result in higher costs, and unfairly burden all consumers in the auto insurance market.” 

FBI Assistant Director Michael J. Driscoll said: “No-fault accident schemes, like the one alleged today, can cost insurance companies millions of dollars in payouts to doctors and clinics who provide phony or unnecessary services to unwitting accident victims. This cost is almost always passed to consumers of private insurance or subsidized programs established to help those in need. This is a dangerous game in which the penalties include federal criminal charges.”

Westchester County District Attorney Miriam E. Rocah said:  “This case is a perfect example of federal, state and local law enforcement working in partnership to investigate and take down two criminal organizations that allegedly defrauded insurance companies and exploited vulnerable individuals by subjecting them to unnecessary, harmful, and sometimes painful, medical treatments for the sake of greed and profit. We will continue to work with our law enforcement partners to hold accountable those who manipulate the insurance system on which so many people depend, especially when the alleged perpetrators are professionals who allegedly violated the oaths they took to serve and protect.” 

State Police Superintendent Kevin P. Bruen said: “These indictments are the result of years of investigative work and could not have succeeded without the collaboration between federal, state and local law enforcement.  Our investigation uncovered a large-scale, complex scheme that resulted in millions of dollars of fraudulent insurance claims. This type of fraud impacts the entire system and results in higher costs for companies and policyholders. I commend our members and our law enforcement partners for their work on this case, and we are sending a clear message that we will not tolerate fraud on any level.”

NYPD Commissioner Keechant Sewell said: “Today’s indictments reflect schemes to profit by exploiting victims’ through fraud. I commend the NYPD detectives, FBI agents and prosecutors of the United States Attorney’s Office in the Southern District of New York for their long-term efforts and cooperation in this investigation into alleged healthcare fraud, money laundering and bribery. Together, we will continue to be relentless in fighting crime that impacts the people we serve wherever, and however, it occurs."

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

Background of the Investigation

Since 2017, the U.S. Attorney’s Office for the Southern District of New York, the FBI, and the Westchester County District Attorney’s Office have been investigating several criminal organizations involved in a widespread healthcare fraud and bribery scheme that utilized the New York and New Jersey no-fault automobile insurance regime to earn millions of dollars in illegal profits.

New York and New Jersey no-fault insurance laws require a driver’s automobile insurance company to pay automobile insurance claims automatically for certain types of motor vehicle accidents, provided that the claim is legitimate, and is below a particular monetary threshold (the “No-Fault Laws”).  Pursuant to these requirements, insurance companies will often pay medical service providers directly for the treatment they provide to automobile accident victims, without the need to bill the victims themselves.  This process resolves automobile claims without apportioning blame or fault for the accident, thereby avoiding protracted disputes, and the costs associated with an extended investigation of the accident. 

The Gulkarov Indictment

The Gulkarov Indictment charges eight individuals (the “Gulkarov Conspirators”) with participating in a scheme to exploit the No-Fault Laws.  As part of the scheme, the Gulkarov Conspirators fraudulently owned and controlled more than a dozen medical professional corporations – including medical, acupuncture, and chiropractic practices – by paying licensed medical professionals to use their licenses to incorporate the professional corporations (collectively, the “Gulkarov Clinics”).  The Gulkarov Conspirators further defrauded automobile insurance companies by billing insurance companies for unnecessary, harmful, and excessive medical treatments and lying under oath to insurance company representatives.

The Gulkarov Conspirators promoted the scheme through bribery.  The Gulkarov Conspirators paid hundreds of thousands of dollars to co-conspirators (the “Runners”), who used this money to bribe 911 operators, hospital employees, and others for confidential motor vehicle accident victim information.  The Runners then used this information to contact automobile accident victims, lie to them, and induce them to seek medical treatment at, among other places, the Gulkarov Clinics.

The Gulkarov Conspirators laundered the proceeds of the fraud scheme through law firms, check-cashing entities, and shell companies, and used the money to pay for luxury cars, watches, and vacations.  Then, when certain members of the conspiracy learned that they were under federal criminal investigation, they obstructed justice by fabricating documents, lying to law enforcement, and committing perjury before a federal grand jury.

As alleged, the leaders of the Gulkarov Conspirators are non-physicians, including ALEXANDER GULKAROV, a/k/a “Little Alex,” ROMAN ISRAILOV, a/k/a “Roman Matatov,” PETER KHAIMOV, a/k/a “Peter Khaim,” and ANTHONY DIPIETRO.  ROLANDO CHUMACEIRO, a/k/a “Chuma,” and MARCELO QUIROGA are licensed medical practitioners who incorporated medical practices as part of the scheme, prescribed unnecessary and excessive medical treatments, and overbilled insurance companies under the No-Fault Laws.

The Gulkarov Indictment also includes charges against an attorney, ROBERT WISNICKI, Esq., who is the founding partner of two New York-based law firms.  As alleged, WISNICKI laundered hundreds of thousands of dollars of illicit proceeds for the leaders of the Gulkarov Conspiracy and concealed these transfers by fabricating retainer agreements, lying to law enforcement, and committing perjury before a federal grand jury. 

Finally, the Gulkarov Indictment includes a charge against an NYPD police officer, ALBERT ARONOV.  As alleged, as part of the scheme, ARONOV logged into NYPD computers during off-hours and searched for confidential motor vehicle accident reports on the NYPD’s servers.  ARONOV then took photos of the reports using a pre-paid “burner” phone and transmitted the photos to the leaders of the Gulkarov Conspiracy using an encrypted messaging application.  The leaders then used the confidential information contained in these reports to contact the motor vehicle accident victims, lie to them, and steer them to the Gulkarov Clinics for medical treatment.  When later questioned by federal agents, ARONOV lied about his involvement in accessing and disseminating the confidential motor vehicle accident reports.

All told, the Gulkarov Conspirators billed insurance companies for more than $30 million in fraudulent medical treatments.

The Pierre Indictment

The Pierre Indictment separately charges five additional individuals (the “Pierre Conspirators”) with participating in a second criminal scheme to exploit the No-Fault Laws.  The Pierre Conspirators fraudulently owned and controlled five medical services corporations – including medical clinics and a magnetic resonance imaging (“MRI”) center – by paying licensed medical professionals to use their licenses to incorporate the professional corporations (collectively, the “Pierre Clinics”).  The Pierre Conspirators further defrauded automobile insurance companies by billing insurance companies for unnecessary, harmful, and excessive medical treatments, falsifying clinical injuries in reports, and lying under oath to insurance company representatives.

The Pierre Conspirators promoted the scheme through bribery.  Like the Gulkarov Conspirators, the Pierre Conspirators also paid hundreds of thousands of dollars to the Runners, who used this money to pay bribes for confidential motor vehicle accident victim information.  The Runners then used this information to induce victims to seek medical treatment at, among other places, the Pierre Clinics.

The Pierre Conspirators laundered the proceeds of the fraud scheme through phony loan arrangements and shell companies.

As alleged, the leader of the Pierre Conspiracy is BRADLEY PIERRE, who is not a physician.  PIERRE conducted much of the No-Fault Scheme from his physical office located in a law firm owned by a family member (“Law Firm-2”), where, among other things, he monitored the Pierre Clinics using closed circuit TV cameras, communicated with co-conspirators using Law Firm-2’s email domain, and met with doctors in Law Firm-2’s offices.   PIERRE further openly communicated with Law Firm-2 about the scheme, for instance telling his family member, “I'm going to make sure you ALWAYS make your quota.”  Law Firm-2 paid PIERRE over $4 million in connection with the No-Fault Scheme – typically from Law Firm-2’s Interest on Lawyers Trust Accounts (“IOLA Accounts”) – while maintaining no documentation or ledgers identifying the purpose of these payments.

The Pierre Indictment further charges two licensed medical practitioners with participating in the scheme.  MARVIN MOY is a medical doctor who incorporated a medical practice as part of the scheme and agreed with PIERRE to conduct unnecessary and painful electrodiagnostic testing on patients.  WILLIAM WEINER is a doctor of osteopathic medicine who incorporated a medical imaging facility as part of the scheme and agreed with PIERRE to falsify findings of clinical injuries in MRIs in order to boost patient referrals.

Finally, the Pierre Indictment charges two individuals for conspiring with PIERRE to pay bribes in order to facilitate the scheme.  ARTHUR BOGORAZ is a paralegal and manager at a New York-based personal injury law firm (“Law Firm-1”).  Among other things, BOGORAZ and PIERRE agreed to jointly pay bribes for patient and client referrals to the Pierre Clinics and Law Firm-1.  ANDREW PRIME is a Runner who bribed 911 operators and operated an additional call center as part of the scheme.

All told, the Pierre Conspirators billed insurance companies for more than $70 million in fraudulent medical treatments.

*                *                *

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

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

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

22-007                                                                                                                                                           ###

Gulkarov Indictment

Defendant

Age

Hometown

Charges (Potential Maximum Term of Imprisonment)

ALEXANDER GULKAROV, a/k/a “Little Alex”

Healthcare fraud conspiracy, money laundering conspiracy, Travel Act conspiracy, obstruction conspiracy, aggravated identity theft

(42 years)

ROMAN ISRAILOV

Healthcare fraud conspiracy, money laundering conspiracy, Travel Act conspiracy, aggravated identity theft

(37 years)

PETER KHAIMOV, a/k/a “Peter Khaim”

Healthcare fraud conspiracy, money laundering conspiracy, Travel Act conspiracy, aggravated identity theft

(37 years)

ANTHONY DIPIETRO

Healthcare fraud conspiracy, money laundering conspiracy, Travel Act conspiracy; obstruction conspiracy

(40 years)

ROLANDO CHUMACEIRO, a/k/a “Chuma”

Healthcare fraud conspiracy

(10 years)

MARCELO QUIROGA

Healthcare fraud conspiracy

(10 years)

ROBERT WISNICKI

Money laundering conspiracy, obstruction conspiracy

(25 years)

ALBERT ARONOV

False statements

(5 years)

Pierre Indictment

BRADLEY PIERRE

Healthcare fraud conspiracy, money laundering conspiracy, Travel Act conspiracy, aggravated identity theft

(37 years)

MARVIN MOY

Healthcare fraud conspiracy, money laundering conspiracy

(30 years)

WILLIAM WEINER

Healthcare fraud conspiracy, money laundering conspiracy

(30 years)

ARTHUR BOGORAZ

Travel Act Conspiracy

(5 years)

ANDREW PRIME

Travel Act Conspiracy

(5 years)

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

Damian Williams, the United States Attorney for the Southern District of New York, and Keechant Sewell, Commissioner of the New York City Police Department (“NYPD”), announced today that RASHIEM COUNCIL, PARIS FULTON, and TERRENCE MCKEE, were charged by Complaint for their participation in a drug trafficking conspiracy and their use of firearms in connection with that conspiracy.  A fourth defendant, MICHAEL GARCIA, was charged in the same Complaint with possessing with the intent to distribute cocaine.  The defendants were arrested yesterday, GARCIA was presented today in Manhattan federal court before United States Magistrate Judge Barbara Moses. COUNCIL will be presented later today, and FULTON and MCKEE will be presented tomorrow before Judge Moses.

U.S. Attorney Damian Williams said:  “As alleged, three of the defendants posed as law enforcement officers and brandished a firearm during a home invasion in which they took approximately three kilograms of cocaine and proceeds from narcotics dealing.  Such brazen and dangerous conduct will not be tolerated.  Thanks to the work of the NYPD and federal law enforcement, these defendants face significant federal charges for their alleged crimes.”

NYPD Commissioner Keechant Sewell said: “Today’s criminal complaint once again highlights the NYPD’s swift work to neutralize the most violent elements of an alleged narcotics enterprise. Our covenant with New Yorkers is to always answer their calls for help and to work with our partners to ensure justice and I commend the United States Attorney’s Office in the Southern District of New York for their work with our officers in this important case.”

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

On or about January 11, 2022, RASHIEM COUNCIL, PARIS FULTON, and TERRENCE MCKEE, dressed as and pretending to be law enforcement officers, forced their way into an apartment (the “Apartment”) in a building (the “Building”) in the Bronx, where MICHAEL GARCIA, his partner, and their two minor children lived.  COUNCIL, FULTON, and MCKEE were armed.  They handcuffed GARCIA and held him at gun point, while GARCIA’s partner and their two minor children were in the Apartment.  COUNCIL, FULTON, and MCKEE, demanded to know where GARCIA kept his drugs and drug money in the Apartment, and GARCIA showed them.  COUNCIL, FULTON, and MCKEE stole approximately one hundred and sixty thousand dollars in narcotics proceeds and approximately three kilograms of cocaine from GARCIA.

After stealing the drugs and the money, COUNCIL, FULTON, and MCKEE escorted GARCIA, in handcuffs, out of the Apartment and into the building’s elevator.  By then, in response to another individual’s (“Witness-1”) 911 call about the home invasion, officers (the “Officers”) from the New York City Police Department had arrived at the Building, and had just entered the lobby when the elevator door opened.  COUNCIL, FULTON, MCKEE, and GARCIA, walked out of the elevator.  They tried to avoid the Officers and continued walking towards the front door.  The Officers asked COUNCIL, FULTON, and MCKEE what law enforcement unit they were with, and COUNCIL, FULTON, and MCKEE claimed that their sergeant was waiting for them outside.  As soon as they exited the Building, however, they—and GARCIA—began to run.  The Officers pursued them.  After a short pursuit, the Officers caught up to and apprehended COUNCIL, MCKEE, and GARCIA.  During that pursuit, one Officer saw one of the defendants throw a firearm into the street.  Immediately after the Officers apprehended COUNCIL and MCKEE, the Officers found two more firearms near the Building.  Shortly thereafter, the Officers found and arrested FULTON near his car, which he had parked outside the Building.  With FULTON’s consent, the Officers conducted a brief search of the car, where they found a fourth firearm inside a backpack in the car.   

*                *                *

RASHIEM COUNCIL, 31, PARIS FULTON, 29, and TERRENCE MCKEE, 33, all from Connecticut, are charged with one count of narcotics conspiracy, in violation of Title 21, United States Code, Section 846, and one count of brandishing firearms in connection with that narcotics conspiracy, in violation of Title 18, United States Code, Section 924(c).  The narcotics conspiracy charge carries a mandatory minimum sentence of five years and a maximum sentence of 40 years in prison.  The firearms charge carries a maximum sentence of life and a mandatory minimum sentence of seven years in prison, which must run consecutively to any other sentence imposed. 

MICHAEL GARCIA, 36, of the Bronx, New York, is charged with one count of possession with the intent to distribute 500 grams and more of cocaine, in violation of Title 21,  United States Code, Section 841(a)(1) and (b)(1)(B), which carries a mandatory minimum sentence of five years and a maximum sentence of 40 years in prison.

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

Mr. Williams praised the outstanding investigative work of the Special Agents of the U.S. Attorney’s Office for the Southern District of New York, the NYPD’s Bronx Violent Crimes Squad, and the Internal Affairs Bureau, Police Impersonation Unit.  Mr. Williams also praised the patrol officers from the 48th precinct for their outstanding policework in executing the arrests. 

The prosecution of this case is being handled by the Office’s Narcotics Unit.  Assistant United States Attorney Sarah L. Kushner is in charge of the prosecution. 

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

[1] As the introductory phrase signifies, the entirety of the text of the Complaint and the description of the Complaint 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, 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 the first criminal charge under the Rodchenkov Anti-Doping Act, signed into law on December 4, 2020, which proscribes doping schemes at international sports competitions, including the Olympic Games. The Complaint unsealed today alleges that ERIC LIRA, a “naturopathic” therapist operating principally in the area of El Paso, Texas, obtained various performance enhancing drugs (“PEDs”) and distributed those PEDs to certain athletes in advance of, and for the purpose of cheating at, the 2020 Olympic Games held in Tokyo in the summer of 2021. LIRA was taken into federal custody today and is expected to be presented in the Western District of Texas today before U.S. Magistrate Judge Miguel A. Torres.  

U.S. Attorney Damian Williams said:  “At a moment that the Olympic Games offered a poignant reminder of international connections in the midst of a global pandemic that had separated communities and countries for over a year, and at a moment that the Games offered thousands of athletes validation after years of training, Eric Lira schemed to debase that moment by peddling illegal drugs. The promise of the Olympic Games is a global message of unification. Today, this Office sends a strong message to those who would taint the Games and seek to profit from that corruption.”

FBI Assistant Director Michael J. Driscoll said: “Performance enhancing substances deprive competitors of a level playing field.  We allege Mr. Lira knew he was breaking the rules when he communicated with Olympians through an encrypted messaging app to hide his illegal activity.  It's not winning if you take illegal substances - it's cheating, and Mr. Lira will now be forced to face the consequences of his alleged criminal actions.”

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

The charges in this Complaint arises from an investigation of a scheme to provide Olympic athletes with PEDs, including drugs widely banned throughout competitive sports such as  human growth hormone and the “blood building” drug erythropoietin, in advance of and for the purpose of corrupting the 2020 Olympic Games, which convened in Tokyo in the summer of 2021. LIRA, who claims to be a “kinesiologist and naturopathic” doctor operating principally in and around El Paso, Texas, obtained misbranded versions of these, and other, prescription drugs from sources in Central and South America, before bringing those drugs into the United States and distributing them to, among other, the two athletes referred to in the Complaint as “Athlete-1” and “Athlete-2.” Throughout the scheme, LIRA and Athlete-1 communicated via encrypted electronic communications discuss the sale, shipment, and use of LIRA’s illegal drugs, and specifically discussed the “testability” of those drugs by anti-doping authorities. For example, on or about June 13, 2021, Athlete-1 wrote to LIRA, “So I took 2000ui of the E [erythropoietin] yesterday, is it safe to take a test this morning?” LIRA replied, “Good day [Athlete-1] . . . . 2000 ui is a low dosage.” Athlete-1 replied further, “Remember I took it Wednesday and then yesterday again / I wasn’t sure so I didn’t take a test / I just let them go so it will be a missed test.”

LIRA and Athlete-1, in particular, explicitly acknowledged the effectiveness of the doping program achieved through the use of LIRA’s illegal drugs. On or about June 22, 2021, Athlete-1 wrote to LIRA, “Hola amigo / Eric my body feel so good / I just ran 10.63 in the 100m on Friday / with a 2.7 wind / I am sooooo happy / Ericccccccc / Whatever you did, is working so well.” Shortly thereafter, and in advance of Athlete-1’s arrival in Tokyo to compete in the 2020 Olympics, LIRA encouraged his client: “What you did . . . is going to help you for the upcoming events. You are doing your part and you will be ready to dominate” (ellipsis in original).

Notwithstanding the attempt to evade anti-doping tests, LIRA and Athlete-1 were discovered in their scheme. On or about July 19, 2021, Athlete-1underwent an out-of-competition blood collection for purposes of drug testing by the Athletics Integrity Unit, a body charged with ensuring fair competition and prevention of doping at the Tokyo Olympics, among other competitions. The results of that testing reflected Athlete-1’s use of human growth hormone. On or about July 30, 2021, Athlete-1 was provisionally suspended from Olympic competition, including in the women’s 100m semi-finals set to take place that same evening.

LIRA is the first defendant charged pursuant to the recently enacted Rodchenkov Act. On December 4, 2020, the Rodchenkov Act was signed into law, Pub. L. 116-206, and incorporated into Title 21 of the United States Code at sections 2401 through 2404. The Rodchenkov Act prohibits any person, other than an athlete, to knowingly carry into effect, attempt to carry into effect, or conspire with any other person to carry into effect a scheme in commerce to influence by use of a prohibited substance or prohibited method any major international sports competition. 21 U.S.C. § 2402.

ERIC LIRA, 41, of El Paso, Texas, is, in addition to the charge under the Rodchenkov Act, accused of conspiring with others to violate the drug misbranding and adulteration laws of the United States, in violation 18 U.S.C. § 371 and 21 U.S.C. §§ 331 & 333(a)(2). The maximum term of imprisonment under the Rodchenkov Act is 10 years, and the maximum term of imprisonment for conspiring to violate the misbranding laws is 5 years. These 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 assigned to each case.

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Mr. Williams praised the outstanding investigative work of the FBI and the FBI’s Integrity in Sports and Gaming Initiative.  Mr. Williams also thanked the United States Anti-Doping Agency for their support of this investigation.

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

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

[1] As the introductory phrase signifies, the entirety of the text of the Complaint and the descriptions 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 Ricky J. Patel, the Acting Special Agent-in-Charge of the New York Field Office of the Department of Homeland Security (“HSI”), announced today the filing of a civil complaint seeking forfeiture of 35 Cambodian and Southeast Asian antiquities from a private American collection for the purpose of returning the antiquities to their countries of origin.  Antiquities dealer Douglas Latchford sold the collection to its present owner (the “Collector”) with false statements and fake provenance documents intended to hide the fact that the antiquities were the products of looting, and then imported the antiquities through lies on customs paperwork. The Collector has voluntarily relinquished possession of the antiquities.

U.S. Attorney Damian Williams said: “This Office continues to trace and recover the many stolen cultural treasures that Douglas Latchford sold and scattered far from their home countries. Through this action, the United States reaffirms its commitment to redressing the wrongs committed by Latchford and other looters who would exploit and profit from the pain and disruption of war.”

Ricky J. Patel, HSI New York Acting Special Agent in Charge said: “For years, Douglas Latchford operated an illegitimate enterprise by smuggling looted antiquities into the United States with blatant disregard for U.S. Customs laws.  Latchford facilitated this by falsifying customs documentation and providing deceptive paperwork to collectors for sale on the international art market.  Today, we are pleased to see that 35 pieces of cultural property will be repatriated to their rightful setting.  HSI New York will not rest in its efforts to locate all the antiquities related to Latchford’s fraud and see that each piece of history is not just found, but sent home.”

According to the Complaint filed in Manhattan Federal Court on January 7, 2022:

The United States of America seeks the forfeiture of 34 antiquities which Latchford sold to the Collector between in or about 2003 and in or about 2007 (the “Defendants in Rem”).  The Defendants in Rem are bronze and sandstone sculptures and artifacts which originate from countries in Southeast Asia, primarily Cambodia, but also India, Myanmar, and Thailand.  They include a monumental sandstone sculpture of Ganesha from Koh Ker, an ancient capital of the Khmer empire; and bronze sculptures from the vicinity of Angkor Wat. Latchford sold the Defendants in Rem to the Collector as part of a scheme to sell looted antiquities on the international art market.  The Defendants in Rem were either removed illegally from their country of origin; imported into the United States based on false statements to United States Customs and Border Protection (“CBP”), or both.

Over the years, Latchford lied to and withheld information from the Collector in order to conceal that the Defendants in Rem were stolen, and supplied the Collector with false provenance documents and false information about the origin of certain of the Defendants in Rem. After Latchford sold the Defendants in Rem, many of them were then illegally imported into the United States based on false statements Latchford made to CBP and others. 

In 2019, Latchford was indicted in the Southern District of New York with wire fraud conspiracy and other crimes related to a many-year scheme to sell looted Cambodian antiquities on the international art market, primarily by creating false provenance documents and falsifying invoices and shipping documents, including misrepresenting the country of origin of artworks. See United States v. Latchford, 19 Cr. 748 (AT) (the “Indictment”). In September 2020, the Indictment was dismissed due to Latchford’s death.

In 2021, an agent of HSI contacted the Collector about the Defendants in Rem. The Collector promptly cooperated with the Government’s inquiries and allowed the Government to inspect the Defendants in Rem.  After the Collector learned more about the history of Latchford and the Defendants in Rem, including the evidence that the Defendants in Rem were illegally looted and/or illegally imported into the United States, the Collector voluntarily relinquished possession of the Defendants in Rem so that they can be repatriated to their countries of origin.

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Mr. Williams thanked HSI for its outstanding work on this investigation, which he noted is ongoing, and praised its ongoing efforts to find and repatriate stolen and looted cultural property. Mr. Williams also thanked the Kingdom of Cambodia’s Ministry of Culture and Fine Arts for its assistance with this investigation.

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

The allegations contained in the Complaint are merely accusations.

Damian Williams, the United States Attorney for the Southern District of New York, and Thomas Fattorusso, the Special Agent in Charge of the New York Field Office of the Internal Revenue Service, Criminal Investigation (“IRS-CI”), announced that MARIO G. NUNES pled guilty today to tax evasion and filing false federal income tax returns, before United States District Judge Nelson S. Román, in White Plains federal court. 

U.S. Attorney Damian Williams said: “As he admitted in court, the defendant engaged in a scheme to evade paying federal income taxes for years, including by concealing business income, making false statements to the IRS, and filing false federal income tax returns.  Nunes has now pled guilty to federal crimes and faces time in federal prison, another example that attempting to conceal income and filing false returns are ultimately far costlier than filing accurate returns and paying one’s taxes due.”   

IRS-CI Special Agent in Charge Thomas Fattorusso said:  “Mr. Nunes attempted the cheat the system but the system caught up with him.  Thanks to the efforts of our IRS-CI Special Agents, Mr. Nunes will now be held to account for the lies, evasion and false returns he used to shelter more than $1.5 million dollars from taxation.”

According to the Information to which NUNES pled guilty and statements made in court:

NUNES was an independent contractor who performed construction work, including as a subcontractor for commercial and residential masonry and concrete projects.  NUNES filed false federal income tax returns for tax years 2012 through 2017 and, from in or about March 2014 through in or about May 2019, orchestrated a scheme to evade payment of his unpaid assessed federal income taxes, including by falsely informing the IRS, in response to its collection efforts, that he was unemployed and relying on family and friends for living expenses.  At the same time, NUNES concealed more than $1.5 million in business income by, among other things, depositing business receipts into personal bank accounts, cashing checks received from customers rather than depositing the funds into a bank account, and instructing customers to pay his suppliers directly. 

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NUNES, 59, of Yonkers, New York, pled guilty to one count of tax evasion, which carries a maximum sentence of five years in prison, and six counts of subscribing to false tax returns, each of which carries a maximum sentence of three years in prison.  NUNES has agreed to pay restitution to the IRS, representing the additional tax due and owing as a result of his conduct, in the amount of at least $330,833.  Sentencing before Judge Román is scheduled for April 14, 2022, at 10:00 a.m.

The statutory maximum sentences are prescribed by Congress and are provided here for information purposes only, as any sentence imposed on the defendant will be determined by the judge.

Mr. Williams praised the outstanding investigative work of IRS-CI in this case.

The case is being prosecuted by the Office’s White Plains Division.  Assistant U.S. Attorney Jeffrey C. Coffman is in charge of the prosecution.

A Rhode Island man was charged in a criminal complaint unsealed today with conspiring to traffic firearms and with making false statements. According to court documents, Robert Alcantara, 34, of Providence, was arrested today and presented in the District of Rhode Island.

“Untraceable ‘ghost guns’ pose a serious threat to public safety,” said U.S. Attorney Damian Williams. “As alleged, the defendant agreed with others to buy the parts for these firearms, put them together at his home, and then unlawfully sold or attempted to sell over 100 of them. Thanks to our law enforcement partners, the defendant has been arrested, and his deadly ghost gun business has been shut down.”

“As alleged, Robert Alcantara engaged in trafficking untraceable, Privately Made Firearms (PMF’s), commonly called 'ghost guns,'” said Special Agent in Charge John B. DeVito of ATF New York. “Stopping the flow of these firearms is a top priority of ATF, and we will rigorously pursue those who illegally sell these firearms. I applaud the NYSP who initiated this investigation through superb investigative actions, as well as our partners at the U.S. Department of Commerce, Office of Export Enforcement and the NYPD for their vital and continued contributions to the investigations.”    

“As is alleged to have happened here, the trafficking of PMFs poses a danger to our communities,” said Special Agent in Charge Jonathan Carson of the U.S. Department of Commerce, Bureau of Industry and Security, Office of Export Enforcement New York Field Office. “The Office of Export Enforcement will continue to partner with other law enforcement agencies to combat the illegal smuggling of firearms, including ‘ghost guns’ that are difficult to trace.”

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

From September 2019 up to November 2021, Alcantara and others entered an agreement in which Alcantara purchased the parts for more than 100 ghost guns, machined the ghost guns at his house in Providence, Rhode Island, and then illegally sold the working and completed ghost guns. On Nov. 20, 2021, law enforcement recovered parts for 45 ghost guns from Alcantara’s car. When interviewed by law enforcement, Alcantara falsely told them that he had never sold or transferred ownership of a firearm to any other individual, and that he had never transported a firearm to the Dominican Republic.

Below are photographs of the 45 ghost guns seized from Alcantara’s house, as well as photographs of firearms Alcantara intended to sell to buyers:

Alcantara is charged with: (1) conspiracy to traffic firearms, which carries a maximum sentence of five years in prison, and (2) making false statements, which carries a maximum sentence of five years in prison. A federal district court judge will determine any sentence after considering the U.S. Sentencing Guidelines and other statutory factors.

U.S. Attorney Damian Williams for the Southern District of New York; Special Agent in Charge John B. DeVito of the New York Field Division of the Bureau of Alcohol, Tobacco, Firearms, and Explosives (ATF) and Special Agent in Charge Johnathan Carson of the U.S. Department of Commerce, Office of Export Enforcement’s New York Field Office made the announcement.

U.S. Attorney Williams praised the outstanding investigative work of the ATF and the Department of Commerce. U.S. Attorney Williams also thanked the New York City Police Department, the New York State Police Department, the Providence Police Department and the U.S. Attorney’s Office for the District of Rhode Island for their assistance in the case.

The case is being handled by the office’s Narcotics Unit. Assistant U.S. Attorney Kevin Mead is in charge of the prosecution.

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