Southern District of New York

Damian Williams, the United States Attorney for the Southern District of New York, announced that a jury returned a guilty verdict last Friday against DELOWAR MOHAMMED HOSSAIN on both counts of the Superseding Indictment, for attempting to provide material support for terrorism and attempting to make a contribution of funds, goods, and services to the Taliban.  United States District Judge Sidney H. Stein presided over the one-week trial. 

U.S. Attorney Damian Williams said: “As the jury found, Delowar Hossain made elaborate preparations to travel to Afghanistan to join the Taliban and kill American troops, and he was intercepted at JFK Airport attempting to board a flight while carrying mountain survival gear and thousands in cash for weapons to achieve his murderous plan.  I commend the excellent work of the Joint Terrorism Task Force to uncover the plot and stop Hossain, who now awaits sentencing for his crimes.”

According to court documents and the evidence at trial:

Beginning in the fall of 2018, HOSSAIN expressed his desire to travel to Afghanistan, join the Taliban, and kill American servicemembers.  Over the next approximately 10 months, HOSSAIN attempted to recruit several other individuals into his plot; attempted to contact at least one individual in Pakistan who was associated with the Taliban; saved at least approximately $10,000, with which he planned to buy weapons to use after he joined the Taliban; and bought survival gear for the mountains of Afghanistan.  During recorded conversations with two confidential sources working with the Federal Bureau of Investigation (“FBI”), HOSSAIN consistently reiterated his desire to join the Taliban and kill Americans.  HOSSAIN also took steps to develop a cover story designed to disguise his extremism and evade detection by the FBI, which included traveling to Thailand on his way to Afghanistan.

On July 26, 2019, the FBI arrested HOSSAIN at John F. Kennedy International Airport as he was walking down the jet bridge to a flight that would have taken him to Thailand, the first leg of his planned journey to Afghanistan to join the Taliban.  A subsequent search of HOSSAIN’s person and luggage revealed approximately $10,000 in cash and survival gear, including a machete, an ax, a knife, a tent, sleeping bags rated for freezing temperatures, emergency thermal blankets, personal water filters, and solar power panels.

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HOSSAIN, 36, of the Bronx, New York, was convicted of one count of attempting to provide material support for terrorism, which carries a maximum sentence of 15 years in prison, and one count of attempting to make a contribution of funds, goods, and services to the Taliban, 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 Judge Stein.  Sentencing before Judge Stein is scheduled for January 12, 2022, at 2:30 p.m.

Mr. Williams praised the outstanding efforts of the FBI’s New York Joint Terrorism Task Force, which consists principally of agents from the FBI and detectives from the New York City Police Department.  Mr. Williams also thanked the Counterterrorism Section of the Department of Justice’s National Security Division, as well as the New York Office of U.S. Customs and Border Protection.

This case is being handled by the Office’s Terrorism and International Narcotics Unit.  Assistant United States Attorneys David W. Denton Jr., Jessica K. Fender, and Benjamin Woodside Schrier are in charge of the prosecution, assisted by Paralegal Specialist Daniel Sitko, and with assistance from Trial Attorney Jennifer Burke of the Counterterrorism Section.

Audrey Strauss, the United States Attorney for the Southern District of New York, and Michael J. Driscoll, the Assistant Director-in-Charge of the New York Field Office of the Federal Bureau of Investigation (“FBI”), announced today the extradition of NAPOLEON GRIER from the Netherlands on alleged wire fraud and wire fraud conspiracy charges.  GRIER was taken into custody by Dutch authorities in Amsterdam on August 13, 2019.  After contested extradition proceedings, GRIER arrived in the United States yesterday.  He will be presented today before United States Magistrate Katharine H. Parker.  The case is assigned to United States District Judge Richard M. Berman.

U.S. Attorney Audrey Strauss said: “As alleged, Napoleon Grier was part of a criminal conspiracy that bilked victims out of more than $2 million in advance fees for promised project financing that was never delivered.  Now, Grier is in U.S. custody and facing federal felony charges.”

FBI Assistant Director Michael J. Driscoll said: “Advance-fee schemes are based on false pretenses that criminals use to ensnare victims and trap them in their fraudulent plot. When victims pay these fees, they assume their alleged investor will put up the money promised to fund their venture, but that never happens. While Grier’s victims expected a loan they never received, he and his co-conspirators likely didn’t anticipate the FBI would deliver on its promise to hold con artists accountable.”

According to the allegations in the Complaint and the Indictment[1]:

From at least in or about April 2012, up to and including at least in or about August 2012, GRIER and others devised and participated in a scheme that defrauded victims of at least $2.275 million (the “Advance Fee Scheme”).  GRIER and his co-conspirators – operating out of offices near Wall Street in New York, New York – held themselves out to victims as experienced financiers and promised that they could obtain financing for victims’ intended projects.  GRIER and his co-conspirators promised victims that after the victims wired initial deposits into escrow accounts controlled by the co-conspirators, the victims would later receive the full amount of their promised financing, often in a few months’ time.  GRIER and his co-conspirators never provided any of the financing they promised to victims and they never returned any of the more than $2.275 million in advance fees they defrauded the victims into depositing into escrow accounts.

The Advance Fee Scheme included at least four sets of victims.  GRIER and his co-conspirators defrauded (1) a New Jersey-based woman, who was promised $2.5 million in financing to purchase, remodel, and reopen a concert hall in New Jersey, of a $225,000 advance fee; (2) two Pennsylvania-based men, who were promised $20 million in financing to start a fuel additive company in Ecuador, of a $150,000 to advance fee; (3) a Canadian filmmaker and a California-based filmmaker, who were promised $3 million of financing to make a movie, of a more than $900,000 advance fee; and (4) two Illinois-based men, who were promised up to $10 million in financing for the purchase of a Canadian wind turbine company, of a $1 million advance fee.

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GRIER, 56, is charged with one count of wire fraud and one count of wire fraud conspiracy, each of which carries a maximum penalty 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.

Ms. Strauss praised the outstanding investigative work of the FBI.  She also thanked the Justice Department’s Office of International Affairs of the Department’s Criminal Division and the Netherlands’ Ministry of Justice and Security for their assistance.

The prosecution is being handled by the Office’s General Crimes Unit.  Assistant U.S. Attorney Justin V. Rodriguez is in charge of the prosecution.

 

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

A federal grand jury in New York unsealed a superseding indictment today charging an Afghanistan national with federal terrorism-related offenses spanning approximately 2007 to 2009 and stemming from his role as a Taliban commander in Afghanistan.

According to court documents, Haji Najibullah, aka Najibullah Naim, Abu Tayeb, Atiqullah and Nesar Ahmad Mohammad, 45, of Afghanistan, was previously charged with crimes related to the 2008 kidnapping of an American journalist and two Afghan nationals. In addition to those charges, the superseding indictment charges Najibullah with attacks on U.S. troops conducted by Najibullah and the Taliban fighters under his command, including a June 26, 2008, attack on an American military convoy that killed three U.S. Army servicemembers – Sergeants First Class Matthew L. Hilton and Joseph A. McKay, and Sergeant Mark Palmateer – and their Afghan interpreter, as well as an Oct. 27, 2008, attack that resulted in the shooting down of a U.S. military helicopter. In October 2020, Najibullah was arrested and extradited from Ukraine to the United States where he remains in federal custody.

“Najibullah, who allegedly served as a Taliban commander in 2007 and 2008, is charged with numerous terrorism offenses relating to attacks against the U.S. military in Afghanistan, including an attack that killed three U.S. servicemembers, and others relating to taking an American journalist hostage in Afghanistan,” said Acting Assistant Attorney General Mark J. Lesko for the Justice Department’s National Security Division. “He will now be held accountable in an American courtroom. The National Security Division and our partners are committed to identifying and holding accountable those who target and harm Americans anywhere in the world. I want to thank the agents, analysts, and prosecutors who are responsible for this case.”

“As alleged, during one of the most dangerous periods of the conflict in Afghanistan, Haji Najibullah led a vicious band of Taliban insurgents who terrorized part of Afghanistan and attacked U.S. troops,” said U.S. Attorney Audrey Strauss for the Southern District of New York. “One of these lethal attacks resulted in the deaths of three brave American servicemembers and their Afghan interpreter, and another attack brought down a U.S. helicopter. Najibullah also arranged to kidnap at gunpoint an American journalist and two other men and held them hostage for more than seven months. Neither time nor distance can weaken our resolve to hold terrorists accountable for their crimes and to see justice done for their victims. Thanks to the outstanding work of our law enforcement partners, Najibullah will answer for his heinous acts in an American courtroom.”         

According to court documents, as of in or about 2007, Najibullah was the Taliban commander responsible for the Jaghato district in Afghanistan’s Wardak Province, which borders Kabul. In this role, Najibullah commanded more than a thousand fighters, at times acted as a spokesperson for the Taliban, and reported to senior leadership in the Taliban. During that time, Najibullah and the Taliban fighters under his command conducted attacks intended to kill and which did kill American and NATO troops and their Afghan allies, using automatic weapons, improvised explosive devices (IEDs), rocket-propelled grenades (RPGs), and other anti-tank weapons, including an attack that destroyed an Afghan Border Patrol outpost in or about September 2008.

On or about June 26, 2008, Taliban fighters under Najibullah’s command attacked a U.S. military convoy in the vicinity of Sayed Abad, Wardak Province, Afghanistan, with IEDs, RPGs, and automatic weapons, killing three U.S. Army servicemembers, Sergeants First Class Matthew L. Hilton and Joseph A. McKay, and Sergeant Mark Palmateer, and their Afghan interpreter.

On or about Oct. 27, 2008, Taliban fighters under Najibullah’s command shot down a U.S. military helicopter using RPGs in the vicinity of Sayed Abad, Wardak Province, Afghanistan. The Taliban subsequently claimed responsibility for downing the helicopter, asserting that it was “shot down [by] the mujahideen of the Islamic Emirate.” The Taliban also falsely claimed that “[a]ll those onboard were killed,” when, in fact, no troops died as a result of the attack.

On or about Nov. 10, 2008, Najibullah and his co-conspirators, armed with machineguns, kidnapped an American journalist (Victim-1) and two Afghan nationals who were assisting Victim-1 (Victim-2 and Victim-3) at gunpoint in Afghanistan. Approximately five days later, on or about Nov. 15, 2008, Najibullah and his co-conspirators forced the three hostages to hike across the border from Afghanistan to Pakistan, where Najibullah and his co-conspirators detained the hostages. For the next seven months, Najibullah and his co-conspirators held the hostages captive in Pakistan.

During their captivity, Najibullah and his co-conspirators forced the victims to make numerous calls and videos seeking help. For example, on or about Nov. 19, 2008, while in Pakistan, Najibullah and a co-conspirator (CC-1) directed Victim-1 to call his wife in New York. In one of the videos, Victim-1 – the American journalist – was forced to beg for his life while a guard pointed a machinegun at Victim-1’s face.     

Najibullah is charged with conspiring to provide material support for acts of terrorism resulting in death; providing material support for acts of terrorism resulting in death; conspiring to murder U.S. nationals; murdering U.S. nationals Hilton, McKay, and Palmateer; murdering officers and employees of the United States, and a person assisting them in their duties, by killing Hilton, McKay, Palmateer, and their interpreter; attempting to murder officers and employees of the United States; conspiring to destroy U.S. military aircraft; destroying a U.S. military aircraft; conspiring to use weapons of mass destruction; conspiring to take hostages; hostage-taking; conspiring to commit kidnapping; and kidnapping. Counts one through five and nine through 13 each carry a maximum penalty of life in prison. Counts six through eight each carry a maximum sentence of 20 years’ imprisonment. Count five also carries a mandatory minimum sentence of life in prison. A federal district court judge will determine any sentence after considering the U.S. Sentencing Guidelines and other statutory factors.

The the FBI’s New York Joint Terrorism Task Force, which principally consists of agents from the FBI and detectives from the NYPD, is investigating the case. Valuable assistance was provided by the New York and New Jersey Port Authority Police and the Department of Defense, as well as the Ukrainian authorities and the Justice Department’s Office of International Affairs, which assisted in the arrest and extradition of the defendant. 

Assistant U.S. Attorneys Sam Adelsberg, David W. Denton Jr., and Jessica K. Fender of the Southern District of New York are prosecuting the case, with valuable assistance provided by Trial Attorney Jennifer Burke of the National Security Division’s Counterterrorism 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.

Audrey Strauss, the United States Attorney for the Southern District of New York, Mark J. Lesko, Acting Assistant Attorney General for National Security, Michael J. Driscoll, the Assistant Director-in-Charge of the New York Office of the Federal Bureau of Investigation (“FBI”), and Dermot Shea, Police Commissioner of the City of New York (“NYPD”), announced the filing of a 13-count superseding indictment charging HAJI NAJIBULLAH, a/k/a “Najibullah Naim,” a/k/a “Abu Tayeb,” a/k/a “Atiqullah,” a/k/a “Nesar Ahmad Mohammad,” with federal terrorism-related offenses spanning approximately 2007 to 2009 and stemming from NAJIBULLAH’s role as a Taliban commander in Afghanistan.  NAJIBULLAH had previously been charged with crimes related to the 2008 kidnapping of an American journalist and two Afghan nationals.  In addition to those charges, the superseding indictment charges NAJIBULLAH with attacks on U.S. troops conducted by NAJIBULLAH and the Taliban fighters under his command, including a June 26, 2008, attack on an American military convoy that killed three U.S. Army servicemembers – Sergeants First Class Matthew L. Hilton and Joseph A. McKay, and Sergeant Mark Palmateer – and their Afghan interpreter, as well as an October 27, 2008, attack that resulted in the shooting down of a U.S. military helicopter.  NAJIBULLAH is already in federal custody on the initial indictment.  The case is assigned to U.S. District Judge Katherine P. Failla.

U.S. Attorney Audrey Strauss said: “As alleged, during one of the most dangerous periods of the conflict in Afghanistan, Haji Najibullah led a vicious band of Taliban insurgents who terrorized part of Afghanistan and attacked U.S. troops.  One of these lethal attacks resulted in the deaths of three brave American servicemembers and their Afghan interpreter, and another attack brought down a U.S. helicopter.  Najibullah also arranged to kidnap at gunpoint an American journalist and two other men, and held them hostage for more than seven months.  Neither time nor distance can weaken our resolve to hold terrorists accountable for their crimes and to see justice done for their victims.  Thanks to the outstanding work of our law enforcement partners, Najibullah will answer for his heinous acts in an American courtroom.”          

Acting Assistant Attorney General Mark J. Lesko said: “Najibullah, who allegedly served as a Taliban commander in 2007 and 2008, is charged with numerous terrorism offenses relating to attacks against the U.S. military in Afghanistan, including an attack that killed three U.S. servicemembers, and others relating to taking an American journalist hostage in Afghanistan. He will now be held accountable in an American courtroom. The National Security Division and our partners are committed to identifying and holding accountable those who target and harm Americans anywhere in the world. I want to thank the agents, analysts, and prosecutors who are responsible for this case.”

FBI Assistant Director Michael J. Driscoll said: “We meant what we said when we told the public we wouldn’t stop aggressively pursuing charges against those who harm our citizens, servicemembers, and allies, whether at home or abroad. Najibullah’s alleged actions will not be forgiven or forgotten, and the FBI, along with our partners, will continue to pursue justice for all victims in this case.”

NYPD Commissioner Dermot Shea said: “Time and again, the FBI agents and our NYPD detectives of the Joint Terrorism Task Force have demonstrated that they will go to any corner of the globe to ensure terrorists are captured and brought to justice. Haji Najibullah was charged with kidnapping three men including a journalist from New York City. Even after those crimes were charged, the JTTF investigators continued to gather more evidence. These newest charges for the terrorist murders of U.S. servicemen in Afghanistan will hopefully bring some small measure of closure to the families of those soldiers who gave their lives for our country.”

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

As of in or about 2007, NAJIBULLAH was the Taliban commander responsible for the Jaghato district in Afghanistan’s Wardak Province, which borders Kabul.  In this role, NAJIBULLAH commanded more than a thousand fighters, at times acted as a spokesperson for the Taliban, and reported to senior leadership in the Taliban.  During that time, NAJIBULLAH and the Taliban fighters under his command conducted attacks intended to kill and which did kill American and NATO troops and their Afghan allies, using automatic weapons, improvised explosive devices (“IEDs”), rocket-propelled grenades (“RPGs”), and other anti-tank weapons, including an attack that destroyed an Afghan Border Patrol outpost in or about September 2008.

On or about June 26, 2008, Taliban fighters under NAJIBULLAH’s command attacked a U.S. military convoy in the vicinity of Sayed Abad, Wardak Province, Afghanistan, with IEDs, RPGs, and automatic weapons, killing three U.S. Army servicemembers – Sergeants First Class Matthew L. Hilton and Joseph A. McKay, and Sergeant Mark Palmateer – and their Afghan interpreter.

On or about October 27, 2008, Taliban fighters under NAJIBULLAH’s command shot down a U.S. military helicopter using RPGs in the vicinity of Sayed Abad, Wardak Province, Afghanistan.  The Taliban subsequently claimed responsibility for downing the helicopter, asserting that it was “shot down [by] the mujahideen of the Islamic Emirate.”  The Taliban also falsely claimed that “[a]ll those onboard were killed,” when, in fact, no troops died as a result of the attack.

On or about November 10, 2008, NAJIBULLAH and his co-conspirators, armed with machineguns, kidnapped an American journalist (“Victim-1”) and two Afghan nationals who were assisting Victim-1 (“Victim-2” and “Victim-3”) at gunpoint in Afghanistan.  Approximately five days later, on or about November 15, 2008, NAJIBULLAH and his co-conspirators forced the three hostages to hike across the border from Afghanistan to Pakistan, where NAJIBULLAH and his co-conspirators detained the hostages.  For the next seven months, NAJIBULLAH and his co-conspirators held the hostages captive in Pakistan.

During their captivity, the victims of NAJIBULLAH and his co-conspirators were forced to make numerous calls and videos seeking help.  For example, on or about November 19, 2008, while in Pakistan, NAJIBULLAH and a co-conspirator (“CC-1”) directed Victim-1 to call his wife in New York.  In one of the videos, Victim-1 – the American journalist – was forced to beg for his life while a guard pointed a machinegun at Victim-1’s face.      

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NAJIBULLAH, 45, of Afghanistan, is charged with (1) conspiring to provide material support for acts of terrorism resulting in death, (2) providing material support for acts of terrorism resulting in death, (3) conspiring to murder U.S. nationals, (4) murdering U.S. nationals Hilton, McKay, and Palmateer, (5) murdering officers and employees of the United States, and a person assisting them in their duties, by killing Hilton, McKay, Palmateer, and their interpreter, (6) attempting to murder officers and employees of the United States, (7) conspiring to destroy U.S. military aircraft, (8) destroying a U.S. military aircraft, (9) conspiring to use weapons of mass destruction, (10) conspiring to take hostages, (11) hostage-taking, (12) conspiring to commit kidnapping, and (13) kidnapping.  Counts One through Five and Nine through Thirteen each carry a maximum penalty of life in prison.  Counts Six through Eight each carry a maximum sentence of 20 years in prison.  Count Five also carries a mandatory minimum sentence of life in prison.  The maximum potential sentences in this case are prescribed by Congress and are provided here for informational purposes only, as any sentencing of the defendant will be determined by a judge.

Ms. Strauss and Mr. Lesko praised the outstanding efforts of the FBI’s New York Joint Terrorism Task Force, which principally consists of agents from the FBI and detectives from the NYPD.  They also thanked the New York and New Jersey Port Authority Police and the Department of Defense for their assistance with this investigation, as well as the Ukrainian authorities and the Office of International Affairs of the Justice Department’s Criminal Division for their assistance in the arrest and extradition of the defendant.

This prosecution is being handled by the Office’s Terrorism and International Narcotics Unit.  Assistant U.S. Attorneys Sam Adelsberg, David W. Denton, Jr., and Jessica K. Fender are in charge of the prosecution, with assistance from Trial Attorney Jennifer Burke of the Counterterrorism Section.

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

 

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

Audrey Strauss, the United States Attorney for the Southern District of New York, Michael J. Driscoll, Assistant Director-in-Charge of the New York Field Office of the Federal Bureau of Investigation (“FBI”), and Dermot Shea, Police Commissioner of the City of New York (“NYPD”), announced today the unsealing of an Indictment charging TERRENCE WILLIAMS, ALAN ANDERSON, ANTHONY ALLEN, DESIREE ALLEN, SHANNON BROWN, WILLIAM BYNUM, RONALD GLEN DAVIS, CHRISTOPHER DOUGLAS-ROBERTS, a/k/a “Supreme Bey,” MELVIN ELY, JAMARIO MOON, DARIUS MILES, MILTON PALACIO, RUBEN PATTERSON, EDDIE ROBINSON, GREGORY SMITH, SEBASTIAN TELFAIR, CHARLES WATSON JR., ANTOINE WRIGHT, and ANTHONY WROTEN with conspiracy to commit health care fraud and wire fraud, in connection with a scheme to defraud the National Basketball Associations (“NBA’s”) Health and Welfare Benefit Plan out of nearly $4,000,000.  TERRENCE WILLIAMS is also charged with aggravated identity theft in connection with the same scheme.  The case is assigned to U.S. District Judge Valerie E. Caproni.

Manhattan U.S. Attorney Audrey Strauss said: “The defendants’ playbook involved fraud and deception. Thanks to the hard work of our law enforcement partners, their alleged scheme has been disrupted and they will have to answer for their flagrant violations of law.”

FBI Assistant Director Michael J. Driscoll said: “Today we’ve charged 18 former NBA players and one spouse for their alleged participation in a health care fraud scheme that resulted in nearly $2 million in losses to the National Basketball Association’s Health and Welfare Benefit Plan. The health care industry loses tens of billions of dollars a year to fraud. Thanks to the work of our dedicated FBI agents and partners alike, cases like this demonstrate our continued focus in uncovering health care fraud scams that harm both the industry and the consumers of their services.”

NYPD Commissioner Dermot Shea said: “Today’s federal indictment represents the NYPD’s long-term commitment, working with its law enforcement partners, in making sure those accused of health care related fraud are held accountable. I commend those involved in the investigation, the FBI, and the office of the United States Attorney for the Southern District in New York for its work in ensuring there is justice in this case.”

TERRENCE WILLIAMS, ALAN ANDERSON, DESIREE ALLEN, SHANNON BROWN, WILLIAM BYNUM, RONALD GLEN DAVIS, MELVIN ELY, JAMARIO MOON, DARIUS MILES, MILTON PALACIO, RUBEN PATTERSON, SEBASTIAN TELFAIR, CHARLES WATSON JR., ANTOINE WRIGHT, GREGORY SMITH, and ANTHONY WROTEN were arrested today. 

WILLIAMS and WROTEN will be presented in the Western District of Washington.  DAVIS will be presented in the Central District of California.  SMITH will be presented in the Eastern District of California.  PATTERSON will presented in the Northern District of Ohio.  MOON will be presented in the Northern District of Alabama.  BYNUM and ELY will be presented in the Northern District of Illinois.  MILES will be presented in the Middle District of Florida.  ANDERSON, WATSON, and WRIGHT will be presented in the District of Nevada.  BROWN will be presented in the Northern District of Georgia.  DESIREE ALLEN will be presented in the Western District of Tennessee.  TELFAIR will be presented in the Southern District of New York before U.S. Magistrate Judge Katharine H.  Parker.

ANTHONY ALLEN, DOUGLAS-ROBERTS, and ROBINSON remain at large.

As alleged in the Indictment unsealed today[1]:

The National Basketball Association Players’ Health and Welfare Benefit Plan (the “Plan”) is a health care plan providing benefits to eligible active and former players of the NBA. From at least in or about 2017, up to and including at least in or about 2020, TERRENCE WILLIAMS, ALAN ANDERSON, ANTHONY ALLEN, DESIREE ALLEN, SHANNON BROWN, WILLIAM BYNUM, RONALD GLEN DAVIS, CHRISTOPHER DOUGLAS-ROBERTS, a/k/a “Supreme Bey,” MELVIN ELY, JAMARIO MOON, DARIUS MILES, MILTON PALACIO, RUBEN PATTERSON, EDDIE ROBINSON, GREGORY SMITH, SEBASTIAN TELFAIR, CHARLES WATSON JR., ANTOINE WRIGHT, and ANTHONY WROTEN engaged in a widespread scheme to defraud the Plan by submitting and causing to be submitted fraudulent claims for reimbursement of medical and dental services that were not actually rendered. Over the course of the scheme, the defendants submitted and caused to be submitted to the Plan false claims totaling nearly $4 million.

WILLIAMS orchestrated the scheme to defraud the Plan. WILLIAMS recruited other Plan participants to defraud the Plan by offering to provide them with false invoices to support their fraudulent claims.  WILLIAMS provided ANDERSON, ANTHONY ALLEN, DESIREE ALLEN, BROWN, BYNUM, DAVIS, DOUGLAS-ROBERTS, ELY, MOON, MILES, PALACIO, PATTERSON, ROBINSON, SMITH, TELFAIR, WATSON, WRIGHT, and WROTEN with false provider invoices, which those defendants then submitted and caused to be submitted to the Plan for reimbursement of fraudulent claims. 

WILLIAMS provided the other charged defendants fake invoices from a particular Chiropractic Office in California, which were created by individuals working with WILLIAMS.  In addition, WILLIAMS obtained fraudulent invoices from a dentist affiliated with dental offices in Beverly Hills, California, and from a doctor at a Wellness Office in Washington State.  The fraudulent invoices purported to document that ANDERSON, ANTHONY ALLEN, DESIREE ALLEN, BROWN, BYNUM, DAVIS, DOUGLAS-ROBERTS, ELY, MOON, MILES, PALACIO, PATTERSON, ROBINSON, SMITH, TELFAIR, WATSON, WRIGHT, and WROTEN, and, in some cases, members of their families, had been recipients of expensive medical and dental services.  But the defendants had not received the medical or dental services described in the invoices WILLIAMS provided them.  In many instances, the defendants were not even located in the vicinity of the service providers on the dates the invoices stated they received medical or dental services.  In particular, GPS location information and/or documents, such as flight records, show that the defendants were in locations other than the vicinity of the medical or dental offices falsely claimed as the providers of services.

In return for his provision of false supporting documentation for their fraudulent claims, many of the defendants paid WILLIAMS kickbacks, totaling at least approximately $230,000.  WILLIAMS also used the personal identifying information of an employee of the Administrative Manager, which managed the Plan, in the course of the fraud scheme.

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TERRENCE WILLIAMS, ALAN ANDERSON, ANTHONY ALLEN, DESIREE ALLEN, SHANNON BROWN, WILLIAM BYNUM, RONALD GLEN DAVIS, CHRISTOPHER DOUGLAS-ROBERTS, a/k/a “Supreme Bey,” MELVIN ELY, JAMARIO MOON, DARIUS MILES, MILTON PALACIO, RUBEN PATTERSON, EDDIE ROBINSON, GREGORY SMITH, SEBASTIAN TELFAIR, CHARLES WATSON JR., ANTOINE WRIGHT, and ANTHONY WROTEN are each charged with one count of conspiracy to commit health care fraud and wire fraud, which carries a maximum sentence of 20 years in prison.  TERRENCE WILLIAMS is also charged with one count of aggravated identity theft, which carries a mandatory minimum sentence of two years in prison.  The maximum potential sentences in this case are prescribed by Congress and are provided here for informational purposes only, as any sentencing of the defendants will be determined by the judge.

Ms. Strauss praised the outstanding investigative work of the FBI/NYPD Health Care Fraud Task Force, which is composed of agents, detectives, and investigators from the FBI, the NYPD, and other law enforcement entities.  Ms. Strauss additionally praised the work of the FBI’s Seattle, Los Angeles, Cleveland, Birmingham, Chicago, Sacramento, Memphis, Tampa, Las Vegas, Atlanta, Portland, and Detroit Field Offices.

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

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

 

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

Audrey Strauss, the United States Attorney for the Southern District of New York, and Michael J. Driscoll, the Assistant Director-in-Charge of the New York Office of the Federal Bureau of Investigation (“FBI”), announced the arrests of VITALY FARGESEN and IGOR PALATNIK, and unsealing of an Indictment charging FARGESEN and PALATNIK with securities fraud, wire fraud and related offenses in connection with their fraudulent scheme to defraud investors in CanaFarma Corp. and later CanaFarma Hemp Products Corp. (together “CanaFarma”) by soliciting funds based upon false and misleading representations, failing to invest investor’s funds as promised, manipulating the public stock price of CanaFarma, and secretly misappropriating millions of dollars of CanaFarma funds.  The case is assigned to U.S. District Judge Loretta A. Preska. 

Manhattan U.S. Attorney Audrey Strauss said: “Vitaly Fargesen and Igor Palatnik presented themselves as entrepreneurs developing a new business for an emerging industry. But, as alleged, Fargesen and Palatnik were just using the trappings of a start-up to run an old-time scam: lying to investors to take money for themselves.”

F.B.I. Assistant Director-in-Charge Michael J. Driscoll said: “The defendants, as alleged, lured investors to CanaFarma by falsely representing the company’s financials, manipulating their stock price, and misappropriating millions for their personal benefit. Just as a reminder to anyone who thinks they can manipulate people’s investments in this way—that’s simply not the case.”

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

From in or about March 2019 to in or about March 2020, CanaFarma was a privately-held Delaware corporation with offices in Manhattan, New York.  Beginning on or about March 19, 2020, CanaFarma was listed on the Canadian Stock Exchange and beginning on or about March 23, 2020, CanaFarma was listed on the Frankfurt Stock Exchange. CanaFarma marketed itself to the investors as a “fully integrated cannabis company addressing the entire cannabis spectrum from seed to delivery of consumer products.” FARGESEN and PALATNIK, who held themselves out as Senior Vice Presidents at CanaFarma, in fact exercised full control of CanaFarma,  The men hid their control from the investing public by, among things, convincing an experienced businessman to falsely present himself to the market as the CEO of the company.

Using their control of CanaFarma, FARGESEN and PALATNIK devised and carried out a scheme to defraud CanaFarma’s investors by soliciting more than $14 million in funds, including investments in private shares of CanaFarma, with false and misleading representations concerning the company’s management, products, and financials, failing to invest investor’s funds as promised, causing the manipulation of the public stock price of CanaFarma for the purposes of advancing the scheme to defraud investors and enriching themselves, and secretly misappropriating at least $4 million of CanaFarma funds for their own benefit. 

FARGESEN and PALATNIK effectuated the scheme by: (a) purchasing a Canadian shell company through a straw purchaser; (b) directing the reverse merger of the shell company and CanaFarma to exercise secret control of the resulting publicly traded company; (c) controlling CanaFarma through a nominal Chief Executive Officer who reported to FARGESEN and PALATNIK; (d) supporting CanaFarma’s stock price through manipulative trading; (e) attempting to artificially inflate CanaFarma’s reported revenue; and (f) making false statements to CanaFarma’s auditors. 

*                      *                      *

FARGESEN, 52, and PALATNIK, 47, both of New Jersey, are each charged with one count of conspiracy to commit securities fraud, which carries a maximum sentence of five years in prison, one count of securities fraud, which carries a maximum sentence of 20 years in prison, one count of conspiracy to commit wire fraud, which carries a maximum sentence of 20 years in prison, and one count of wire fraud, which carries a maximum sentence of 20 years in prison. The maximum potential sentence in this case is prescribed by Congress and is provided here for informational purposes only, as any sentencing of the defendant will be determined by the judge.

Ms. Strauss praised the investigative work of the FBI and also thanked the Securities and Exchange Commission, which has filed a civil enforcement action against the defendants, for its assistance in the investigation.

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

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

 

 

 

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

Audrey Strauss, the United States Attorney for the Southern District of New York, announced today that BRENT BORLAND, the owner and principal of a New York-based investment fund known as Belize Infrastructure Fund I LLC (“Belize Fund”), was sentenced today in Manhattan federal court to 84 months in prison for orchestrating a $26 million investment fraud scheme against dozens of investors.   BORLAND pled guilty in February 2019 to conspiring to commit, and the commission of, securities fraud and wire fraud before U.S. District Judge Katherine Polk Failla, who imposed today’s sentence.

Manhattan U.S. Attorney Strauss said: “Brent Borland led a years-long, multifaceted scheme to bilk victims out of more than $26 million.  Using lies and deceit, Borland tricked more than 40 investors into entrusting him with their hard-earned money. In truth, Borland’s promises to investors were lies, and he spent much of their money on himself.  For the financial and emotional devastation his fraud has inflicted, Borland will spend the next seven years in prison.”    

According to the Complaint, Indictment, and statements made in connection with sentencing:

From 2014 through March 2018, BORLAND and others solicited and received approximately $26.1 million from approximately 40 investors based upon representations that he would use the investors’ money to construct an airport in Belize.  BORLAND promised investors high rates of return on their investments, which he represented were temporary “bridge financing.”  BORLAND also represented to investors that their investments would be fully secured by real property in Belize that was unencumbered by any liens or obligations.

In fact, however, BORLAND misappropriated millions of dollars of investors’ funds and used those funds for his own personal benefit.  BORLAND diverted a substantial portion of the funds invested by victims to himself to pay for a variety of personal expenses, including his mortgage payments, credit card bills, luxury automobiles, a beach club membership, and private school tuition for his children.  In contrast to BORLAND’s representations that investors would receive high rates of return within a specified time frame, all known investors in the scheme lost money.  And while BORLAND represented that the investments would be secured by real property, the property purportedly serving as collateral was improperly pledged to multiple investors and, in some cases, did not even exist in the manner identified and described by Borland in documents he provided to the investors. 

*                *                *

In addition to his prison term, BORLAND, 51, of West Palm Beach, Florida, was sentenced to three years of supervised release and ordered to pay forfeiture of $26,584,970 and restitution of $26,184,970.          

Ms. Strauss praised the investigative work of the U.S. Postal Inspection Service and thanked the Securities and Exchange Commission, which brought a separate civil action. 

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

Audrey Strauss, the United States Attorney for the Southern District of New York, Margaret Garnett, the Commissioner of the New York City Department of Investigation (“DOI”), and 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”), announced charges against CHANETTE LEWIS, TATIANA BENJAMIN, TATIANA DANIEL, and HEAVEN WEST for participating in a scheme that defrauded New York City’s COVID-19 Hotel Room Isolation Program of more than $400,000.  LEWIS was also charged with a second COVID‑19 scheme involving unemployment benefits fraud.  LEWIS and DANIEL were arrested today in New York and will be presented before Magistrate Judge Katharine H. Parker in Manhattan federal court.  WEST was arrested in Atlanta, Georgia, and will be presented before Magistrate Judge Catherine M. Salinas in the Northern District of Georgia.  BENJAMIN remains at large.

Manhattan U.S. Attorney Audrey Strauss said: “At the height of the COVID-19 pandemic in 2020, New York City designed a program to provide hotel rooms, free of cost, for qualifying individuals who could not safely self-isolate in their own homes, such as healthcare workers and individuals infected with COVID-19.  As alleged, the defendants abused this program by falsely claiming to be healthcare workers and by selling hotel rooms to non-qualifying individuals.  When, as alleged here, people illicitly exploit a public health crisis for private gain, they will find themselves facing criminal charges.”

DOI Commissioner Margaret Garnett said: “During the heart of the COVID-19 pandemic, while this City grappled with soaring transmission and death rates, these defendants exploited the very City-run program meant to provide respite and isolation to healthcare workers and City residents desperately trying to find space to quarantine and stem the spread of the virus, according to the charges. These defendants shamelessly posted their illegal conduct on social media and sold personal identification information of medical professionals to further their scheme, which siphoned more than $400,000 in hotel rooms paid for by the City and federal governments, according to the criminal complaint. DOI issued recommendations to the City Emergency Management to strengthen controls over this program, which has since ended, and thanks the agency for reporting this matter to DOI. I want to also thank our federal law enforcement partners at the Office of the U.S. Attorney for the Southern District of New York and the Office of Inspector General for the U.S. Department of Labor for working in partnership with us to uncover these charged COVID-19-related crimes and holding those involved accountable.”

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 many law enforcement partners, to investigate those who exploit the Unemployment Insurance Program.”

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

In response to the COVID-19 pandemic, New York City created the COVID-19 Hotel Room Isolation Program (the “Program”).  Funded by New York City and the Federal Emergency Management Agency, the Program provided free hotel rooms for qualifying individuals throughout New York City.  The Program was open to: (1) healthcare workers who needed to isolate because of exposure to COVID-19; (2) patients who had tested positive for COVID-19; (3) individuals who believed, based on their symptoms, that they were infected with COVID-19; and (4) individuals who lived with someone who had COVID-19.  As stated on the City’s website describing the Program, such individuals “may qualify to self-isolate in a hotel, free of charge, for up to 14 days if you do not have a safe place to self-isolate.”  Those who wished to book a hotel room through the Program could either call a phone number or use an online hotel booking platform. 

The four defendants defrauded the Program in at least two respects.  First, they secured free Program hotel rooms for themselves by falsely claiming to be healthcare workers.  Second, they sold fraudulently obtained hotel rooms – including rooms located in Manhattan and the Bronx – to customers who were ineligible for the Program.  In total, the defendants collectively diverted more than 2,700 nights’ worth of hotel rooms through this scheme.  The defendants charged varying amounts depending on the duration of the customers’ hotel stay (e.g., $150 for one week, or $300 for two weeks).  Customers paid the defendants in cash and using electronic payment services.  The federal government and New York City paid more than approximately $400,000 for the hotel rooms that were fraudulently diverted as a result of the defendants’ scheme.

LEWIS worked at a call center (“Call Center-1”) that handled phone calls and certain reservations for the Program for several months in 2020.  LEWIS was hired specifically for the Program, and as a result of her employment, she had access to legitimate healthcare workers’ identifying information.  LEWIS abused her position, including by misappropriating healthcare workers’ identifying information, revealing the Program’s inner workings to co-conspirators, and making unauthorized sales of Program hotel rooms to ineligible individuals.  For instance, LEWIS sold BENJAMIN, for $800, personal identifying information of at least five healthcare professionals, as well as certain “codes” to use when booking hotel reservations through the Program, such as the employee ID number and license number.  LEWIS admitted, in Facebook messages, that she had stolen doctors’ identifying information in furtherance of the scheme, writing: “I work for 311 oem that how I got doctors licenses and stuff . . . I work in the part that I collect they information and I do and approval the booking . . . I take doctors and stuff certificate numbers and stuff.”  LEWIS also advertised to potential customers that, when hotels asked for a healthcare worker’s identification, LEWIS would supply a purported paystub and a letter asserting that the individual was (purportedly) a healthcare worker. 

All four defendants used Facebook to advertise the sale of fraudulently obtained Program hotel rooms; communicate with co-conspirators; and communicate directly with customers.  LEWIS worked directly with BENJAMIN and DANIEL, while WEST worked with, among others, DANIEL.  The defendants made various incriminating statements via Facebook, including the following statements: (1) LEWIS told one hotel customer, “I’m booking it as u a health care worker”; (2) BENJAMIN told a Facebook user, “Friend at 311 gave me the juice for the hotel so I been booking ppl rooms”; (3) DANIEL told LEWIS, “We gotta relocate that bitch they keep asking for employee ID”; and (4) when asked whether she had “rooms” available, WEST replied, “Nah I dead don’t bro / All essential hotels are clipped” and added: “They finding out we was scamming the system lol.”  All four defendants were paid by, among other means, Cash App, and their Cash App accounts revealed payments where the memo line said, for instance, “1 month telly”, “Hotel Manhattan 2 week extension for Kenny []”, “for the 2 week room”, “ayo telly”, “2 week stay in Manhattan”, “the room”, and “hotel for july 4-6”.

LEWIS is also charged with a second COVID-19 scheme involving unemployment benefits fraud.  LEWIS fraudulently obtained more than $45,000 in unemployment benefits by claiming falsely that she had not been employed since February 2020 due to a lack of work because of the COVID-19 pandemic.  In fact, LEWIS was employed for at least some of that period at Call Center-1, and LEWIS’s employment there ceased not because of the COVID-19 pandemic, but because LEWIS stopped showing up to work.

*                *                *

The Complaint contains five counts.  A chart containing the names, ages, residences, charges for each defendant, and maximum penalties, is set forth below.  The statutory maximum sentences are prescribed by Congress and are provided here for informational purposes only, as any sentencing of the defendants will be determined by the judge.

Ms. Strauss praised the outstanding efforts of agents, investigators, and analysts from DOI, DOL-OIG, and the U.S. Attorney’s Office for the Southern District of New York.  Ms. Strauss also thanked the New York/New Jersey High Intensity Drug Trafficking Area (HIDTA) Intelligence Analysts for their support and assistance in this investigation.  She also expressed gratitude to the New York City Police Department, the New York State Department of Labor, and the DOL-OIG Atlanta Regional Office for their assistance.  She added that the investigation is continuing. 

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.

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

 

Defendant, Age, Hometown

Charges, Maximum Penalties

CHANETTE LEWIS, 30

Brooklyn, New York

Wire fraud: 20 years’ imprisonment

Wire fraud conspiracy: 20 years’ imprisonment

Honest services fraud: 20 years’ imprisonment

Aggravated identity theft: mandatory minimum term of 2 years’ imprisonment, consecutive to any other term of imprisonment

Theft of Government funds: 10 years’ imprisonment

TATIANA BENJAMIN, 26

Queens, New York

Wire fraud: 20 years’ imprisonment

Wire fraud conspiracy: 20 years’ imprisonment

Aggravated identity theft: mandatory minimum term of 2 years’ imprisonment, consecutive to any other term of imprisonment 

TATIANA DANIEL, 27

Brooklyn, New York    

Wire fraud: 20 years’ imprisonment

Wire fraud conspiracy: 20 years’ imprisonment

HEAVEN WEST, 21

Brooklyn, New York   

Wire fraud: 20 years’ imprisonment

Wire fraud conspiracy: 20 years’ imprisonment

 

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

Audrey Strauss, the United States Attorney for the Southern District of New York, John B. DeVito, Special Agent-in-Charge of the New York Field Division of the Bureau of Alcohol, Tobacco, Firearms, and Explosives (“ATF”), and Dermot Shea, Commissioner of the New York City Police Department (“NYPD”), announced the arrest of DOMINGO VALLE for being a felon in possession of a firearm and ammunition.  VALLE was arrested yesterday and was presented in Manhattan federal court before U.S. Magistrate Katharine H. Parker today.

Manhattan U.S. Attorney Audrey Strauss said: “Domingo Valle, despite being a felon, allegedly possessed six firearms, including two privately made AR-style rifles and three privately made pistols, and ammunition.  As alleged, for years, Valle purchased firearm tools, parts, and accessories online in order to create privately manufactured firearms, also known as ‘ghost guns,’ which are difficult to detect and trace.  Thanks to the ATF and NYPD, these dangerous weapons are out of the hands of a felon and will no longer pose a threat to the community.”

ATF Special Agent-in-Charge John B. DeVito said: “Privately manufactured firearms (PMFs) are an increasing source of weapons for criminals and pose an emerging threat to public safety.  ATF will continue to partner with NYPD and other agencies to identify, rigorously investigate, and apprehend those involved in the illegal manufacture and possession of firearms that endanger our communities.”

According to the allegations in the Complaint[1]:

For at least the past seven years, at least over 50 times, VALLE purchased online firearm parts, tools, and accessories that allow an individual to assemble a working firearm from component parts.  For example, in 2020, VALLE purchased online a replacement part for an Easy Jig, which an individual can use to create an assembled firearm from component parts, such as an 80% AR-15 lower receiver.  That same year, VALLE purchased online an 80% AR-15 lower receiver.

On October 4, 2021, agents from the ATF and NYPD recovered a pistol and five rounds of ammunition from VALLE’s residence in the Bronx, New York.  Inside the residence, agents also found two privately made AR-style rifles, three privately made pistols, body armor, which was loaded with rifle and pistol magazines, and numerous bullets.  In an effort to conceal the firearms, VALLE stored three of the privately made firearms in a concealed wall-mounted shelf in the residence. 

*                      *                      *

VALLE, 51, of Bronx, New York, is charged with being a felon in possession of a firearm and ammunition, which carries a maximum sentence of 10 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.  

Ms. Strauss praised the outstanding investigative work of the ATF and the NYPD.  Ms. Strauss also thanked the Metropolitan Transportation Authority Office of the Inspector General for its assistance in the investigation.

This case is being handled by the Office’s General Crimes Unit.  Assistant United States Attorney Rebecca T. Dell is in charge of the prosecution. 

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

 

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

Audrey Strauss, the United States Attorney for the Southern District of New York, announced that defendant HENRY PEREZ pled guilty today to leading a multi-year cellphone account takeover fraud conspiracy.  PEREZ impersonated legitimate cellphone accountholders in order to fraudulently obtain smartphones and electronic devices that he charged to compromised accounts.  The fraud scheme also caused more than 300 victims across the United States to lose cellphone service for a period of time.  PEREZ pled guilty before U.S. District Judge Richard M. Berman, to whom the case is assigned.

Manhattan U.S. Attorney Audrey Strauss said: “As he admitted today, Henry Perez led a sophisticated fraud scheme that impersonated victims, changed victims’ account information so victims would not receive fraud alerts, charged purchases to victims’ accounts, and deprived victims of cellphone service.  Thanks to the dedicated work of our partners at Homeland Security, Perez stands convicted of this cellphone fraud scheme and now awaits sentencing for his crime.”

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

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

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

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

Once they had successfully exploited a particular victim’s account, members of the conspiracy typically relinquished control of that account, and moved on to exploiting other victim accounts.  During the period in which the conspiracy compromised, and retained control of, a particular victim’s cellphone account, that victim typically lost cellphone service.  In total, the scheme caused more than 300 victims across the United States to lose cellphone service for a period of time.

PEREZ was integrally involved in all aspects of the scheme, including using victims’ personal identifying information to dupe Provider-1; gaining unauthorized access to victim accounts; making unauthorized changes to victim accounts; receiving fraudulently obtained devices; and recruiting, directing, and paying a subordinate, including supplying that subordinate with victim information.

PEREZ, 33, of Fort Lee, New Jersey, pled guilty to one count of conspiracy to commit wire fraud, which carries a maximum sentence of 20 years in prison.  The maximum potential sentence in this case is prescribed by Congress and is provided here for informational purposes only, as any sentencing of the defendant will be determined by the judge. 

PEREZ is scheduled to be sentenced by Judge Berman on January 18, 2022, at 10:00 a.m.  Under the terms of his plea agreement, PEREZ also agreed to pay restitution of $539,654.96 and forfeiture of $532,374.96.

*                *                *

Ms. Strauss praised the New York Office of Homeland Security Investigations (“HSI”) and its El Dorado Task Force for its outstanding work on this case.

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

Audrey Strauss, the United States Attorney for the Southern District of New York, Michael J. Driscoll, Assistant Director-in-Charge of the New York Office of the Federal Bureau of Investigation (“FBI”), and Dermot Shea, the Commissioner of the New York City Police Department (“NYPD”), announced the unsealing of a five-count Superseding Indictment charging JONATHAN GARCIA, a/k/a “Jayo,” with racketeering, murder in aid of racketeering, firearms, and narcotics offenses, in connection with GARCIA’s involvement in the 2017 murder of Joshua Flores, a/k/a “Monster,” and offenses committed by GARCIA as a member of the Latin Kings, including the Black Mob tribe of the Latin Kings.  GARCIA was arrested today and will be presented before U.S. Magistrate Judge Gabriel W. Gorenstein in Manhattan federal court.  The case has been assigned to U.S. District Judge Valerie E. Caproni. 

U.S. Attorney Audrey Strauss said: “Latin Kings, like other gangs, solve disputes with intimidation and violence, as Jonathan Garcia allegedly did when he shot and killed Joshua Flores in 2017.  Acts such as this endanger the public and wreak havoc on the neighborhoods where gangs have entrenched themselves. We will continue our partnership with the NYPD and FBI to stop the proliferation of deadly gang violence on the streets of our City.”

FBI Assistant Director Michael J. Driscoll said: “Violent street gang like the Latin Kings use brutal tactics in their pursuit of illegal drugs and firearms, terrorizing all those who stand in their way. Basing status within the gang on a member’s violent acts is a stark illustration of their utter lack of respect for human life. For his alleged acts of violence, Mr. Garcia now faces a possible lifetime in federal prison.”

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

GARCIA is a member of a racketeering enterprise known as the Latin Kings, and specifically, the set or “tribe” of the Latin Kings known as the Black Mob, which operates in the Bronx, Manhattan, Queens, Brooklyn, and Long Island.  In order to enrich the enterprise, protect and expand its criminal operations, enforce discipline among its members, and retaliate against members of rival gangs, members and associates of the Black Mob committed, conspired, attempted, and threatened to commit acts of violence; distributed and possessed with intent to distribute narcotics, including heroin, fentanyl, and crack; committed robberies; and obtained, possessed, and used firearms.  In December 2019 and April 2021, several members and associates of the Black Mob, including its senior-most leaders, were charged with racketeering offenses, narcotics conspiracy, and firearms offenses.

Since at least in or around 2012, GARCIA has been a member of the Latin Kings.  On or about May 18, 2017, GARCIA shot and killed Joshua Flores, a/k/a “Monster.”  The murder elevated GARCIA’s status within the Latin Kings, including the Black Mob. 

GARCIA, 27, of Queens, New York, is charged with: (1) conspiracy to commit racketeering, in violation of Title 18, United States Code, Sections 1962(d) and 1963, which carries a maximum term of life in prison; (2) murder in aid of racketeering, in violation of Title 18, United States Code, Sections 1959(a)(1) and 2, which carries a mandatory term of life in prison or death; (3) murder through the use of a firearm, in violation of Title 18, United States Code, Sections 924(j)(1) and 2, which carries a maximum term of life in prison or death; (4) narcotics conspiracy, in violation of Title 21, United States Code, Sections 846 and 841 (b)(1)(A), which carries a maximum term of life in prison and a mandatory minimum term of 10 years in prison; and (5) use of a firearm in furtherance of a drug trafficking offense, in violation of Title 18 United States Code, Sections 924(c)(1)(A) and 2, which carries a maximum term of life in prison, and a mandatory minimum term of 10 years in prison, which must be served consecutively to any other term of in prison.  The maximum potential sentences and the mandatory minimum sentences are prescribed by Congress and are provided here for informational purposes only, as any sentencing of the defendant would be determined by the judge. 

Ms. Strauss praised the outstanding investigative work of the FBI and NYPD. 

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

This case is being handled by the Office’s Narcotics Unit.  Assistant United States Attorneys Adam Hobson, Elinor Tarlow, 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.

 

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

Audrey Strauss, the United States Attorney for the Southern District of New York, announced today that ALAN KAUFMAN, who at the time of the offense was the chief executive officer of Melrose Credit Union (“Melrose CU”), was sentenced today to 46 months in prison.  KAUFMAN was previously convicted, following a three-week jury trial, of participating in a scheme in which he accepted from Tony Georgiton free housing and hundreds of thousands of dollars in financing for the purchase of his personal residence, after approving millions of dollars in loans to Georgiton’s companies at favorable terms.  KAUFMAN was also convicted for accepting lavish vacations, including to Paris and Hawaii, from CBS Radio after increasing Melrose CU’s advertising purchases at CBS Radio.  KAUFMAN’s sentence was imposed by United States District Judge Lewis A. Kaplan. 

U.S. Attorney Audrey Strauss said: “Alan Kaufman accepted lavish gifts from Tony Georgiton as a reward for favorable loan rates for Georgiton’s companies.  In addition, Kaufman accepted luxury travel and hotel accommodations in return for approval of advertising spending by Melrose Credit Union at CBS Radio and elsewhere.  Kaufman shirked his duty to act in the best interests of the credit union and its account holders, exploiting his position for personal gain.  Now, thanks to the work of the FBI, Kaufman will spend time in federal prison for his crimes.”

According to the Indictment, documents previously filed in the case, and evidence presented at trial:

In 2010, Georgiton purchased a home in Jericho, New York (the “Jericho Residence”), and permitted KAUFMAN to live in that home rent-free for over two years.  While KAUFMAN was living rent-free at the Jericho Residence, KAUFMAN personally approved the refinancing of over $100 million worth of loans at Melrose CU held by a company owned by Georgiton with favorable terms.  The head of Melrose CU’s loan department did not sign off on the loans made to Georgiton because, among other things, he believed that the terms were too favorable and did not comply with Melrose CU’s loan policy.

In 2011, KAUFMAN sought approval from Melrose CU’s board of directors (the “Melrose Board”) for Melrose CU to purchase the naming rights to a ballroom under construction in Astoria, Queens (the “Melrose Ballroom”).  That ballroom was owned by a company that was in turn owned by Georgiton.  KAUFMAN did not disclose to the Melrose Board that he was living rent-free in a house owned by Georgiton at the time he sought Melrose Board approval for the naming rights acquisition.  Over the next five years, Melrose CU paid $2 million to Georgiton’s company for the naming rights to the Melrose Ballroom.  KAUFMAN also directed that payment for the naming rights be paid a year in advance of the Melrose Ballroom’s actual opening for operations.   

In 2013, KAUFMAN purchased the Jericho Residence from Georgiton, with financing that largely came from Georgiton.  To purchase the Jericho Residence, KAUFMAN took out a $200,000 loan from Melrose CU, co-signed by Georgiton and secured by Georgiton’s shares in Melrose CU.  Georgiton also gave KAUFMAN a $240,000 unsecured personal “loan.”  Georgiton has never made a demand for payment on that purported loan and KAUFMAN has never made a payment on that purported loan.  Rather than repay the loan, the following year, KAUFMAN purchased a used Maserati sports car valued at over $100,000 for his wife. 

In addition, from in or about 2010 through in or about 2015, KAUFMAN solicited and accepted lavish vacations and other gifts worth tens of thousands of dollars from CBS Radio and other media vendors, after KAUFMAN approved advertising spending by Melrose CU.  For example, in 2010, CBS Radio paid for KAUFMAN and his wife, who also worked at Melrose CU, to fly to Paris, France, and stay at the Four Seasons George V Paris.  In 2012, CBS Radio paid for KAUFMAN and his wife to fly to Maui, Hawaii, and stay at the Four Seasons in Wailea.  In 2013, CBS Radio paid for KAUFMAN and his wife to attend the Super Bowl in New Orleans.

KAUFMAN did not seek approval for these vendor-paid trips from the Melrose Board, nor did he disclose these vendor-paid trips to the Melrose Board, in violation of Melrose CU’s anti-bribery policy.

*                *                *

In addition to the prison term, KAUFMAN, 62, of Jericho, New York, was sentenced to two years of supervised release and ordered to forfeit specified property, pay restitution to the National Credit Union Administration in the amount of $2 million, and pay a fine of $30,000.

On January 11, 2021, Georgiton was sentenced to three years’ probation, a fine of $95,000, forfeiture of $286,663.65, and a special condition of nine months’ home confinement.

Ms. Strauss praised the outstanding work of the Federal Bureau of Investigation.  She also thanked the National Credit Union Administration for their efforts and ongoing support and assistance with the case.

The prosecution of this case is being handled by the Office’s Complex Frauds and Cybercrime Unit.  Assistant United States Attorneys Dina McLeod, Michael McGinnis, and Nicholas Chiuchiolo are in charge of the prosecution.

Audrey Strauss, the United States Attorney for the Southern District of New York, Stuart M. Goldberg, Acting Deputy Assistant Attorney General of the Justice Department’s Tax Division, and James C. Lee, Chief of the Internal Revenue Service, Criminal Investigation (“IRS-CI”), announced today the unsealing of an Indictment charging six foreign individuals and a Swiss financial services company with conspiring to defraud the IRS by helping three high-value U.S. taxpayer-clients conceal more than $60 million in income and assets held in undeclared, offshore bank accounts and to evade U.S. income taxes.  The case has been assigned to U.S. District Judge Gregory H. Woods.  One of the charged defendants was recently arrested in Spain.

Ms. Strauss, Mr. Goldberg, and Mr. Lee also announced today the unsealing of the guilty plea of Wayne Franklyn Chinn, one of the U.S. taxpayer-clients who participated in the tax fraud scheme.  The case against CHINN is assigned to U.S. District Judge Victor Marrero.  Through a related civil forfeiture action, the Government forfeited approximately $2.2 million in CHINN’s untaxed funds and repatriated these funds from Singapore to the United States.

Manhattan U.S. Attorney Audrey Strauss said: “As alleged, the individual defendants and the Swiss firm Allied Finance conspired to defraud the IRS by assisting U.S. taxpayers in avoiding their tax obligations.  They allegedly did this through an elaborate scheme that involved concealing customer assets at a Swiss private bank through nominee bank accounts in Hong Kong and elsewhere, with funds returning to the private bank in the name of a Singapore firm.  One such U.S. customer, Wayne Chinn, pled guilty to his participation in the so-called ‘Singapore Solution,’ forfeited more than $2 million to the United States, and awaits sentencing for his admitted crime.”

Acting Deputy Assistant Attorney General Stuart M. Goldberg said: “Prosecuting offshore tax evasion remains one of the Tax Division’s highest priorities.  Taxpayers contemplating hiding money abroad – and the foreign bankers, attorneys and finance professionals who design and execute strategies to assist their evasion – should know that the Tax Division and IRS have the investigative resources and expertise to unravel even the most elaborate schemes.”

IRS-CI Chief James C. Lee said: “The defendants allegedly helped their clients conceal more than $60 million in income and assets in an attempt to evade their U.S. tax responsibilities. Through the hard work of IRS-CI and the cooperation of our law enforcement partners, we were able to uncover the massive fraud allegedly being perpetrated by these individuals and hold them accountable for their actions. We are also proud to recognize the guilty plea of Mr. Wayne Chinn. His actions demonstrate complete disregard for the United States tax laws, but thanks to the commitment of our agents, we were able to unravel his scheme and bring him to justice.”

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

From in or about 2009 to in or about 2014, Ivo Bechtiger, Bernhard Lampert, Peter Rüegg, Roderic Sage, Rolf Schnellmann, Daniel Wälchli, and Allied Finance Trust AG of Zurich, Switzerland (“ALLIED FINANCE”), the defendants, defrauded the IRS by concealing income and assets of certain U.S. taxpayer-clients with undeclared bank accounts located at Privatbank IHAG Zurich AG (“IHAG”), a Swiss private bank in Zurich, Switzerland,[2] and elsewhere.  In order to assist the U.S. taxpayer-clients, the defendants and others devised and implemented a scheme dubbed the “Singapore Solution” to fraudulently conceal the bank accounts of the U.S. taxpayer-clients, their assets, and their income from U.S. authorities.  In furtherance of the fraudulent scheme, the defendants and others conspired to transfer more than $60 million from undeclared IHAG bank accounts of three U.S. taxpayer-clients through a series of nominee bank accounts in Hong Kong and other locations before returning the funds to newly opened accounts at IHAG in the name of a Singapore-based asset-management firm.  The U.S. taxpayer-clients paid large fees to IHAG and others to help them conceal their funds and assets and evade taxes. 

On or about August 16, 2021, defendant PETER RÜEGG, 61, of Switzerland was arrested in Spain.  As alleged in the Indictment, RÜEGG was a member of IHAG’s management and a relationship manager for one of the U.S. taxpayer-clients who participated in the Singapore Solution scheme.  RÜEGG is alleged to have helped the U.S. taxpayer-client conceal approximately $50 million in undeclared assets at IHAG through the Singapore Solution. 

If convicted, the individual defendants face a maximum penalty of five years in prison, and ALLIED FINANCE faces monetary penalties.

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

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Also unsealed today was the guilty plea of Wayne Franklyn Chinn, one of the U.S. taxpayer-clients who participated in the Singapore Solution scheme.  According to statements made during CHINN’s plea proceeding, and related court filings:

From at least in or about 2001 through at least in or about January 2019, CHINN concealed approximately $5 million in undisclosed and untaxed income for tax years 2001 through 2018.  During this period, CHINN held offshore accounts at IHAG in nominee names.  Beginning in 2010, CHINN and others transferred funds from these offshore accounts at IHAG through nominee accounts outside of Switzerland, including in Hong Kong, before returning them to newly opened accounts at IHAG held in the name of a Singapore-based trust company purportedly on behalf of two foundations created by a co-conspirator.  They did so to continue to conceal CHINN’s income and assets from U.S. authorities.  CHINN subsequently transferred the funds out of Switzerland to undeclared accounts in Singapore.  CHINN did not file any tax returns or disclose his offshore bank accounts during the years at issue.  

CHINN, 79, of Ho Chi Minh City, Vietnam, and San Francisco, California, pled guilty on December 19, 2019, before U.S. Magistrate Judge Kevin Nathaniel Fox to one count of tax evasion for the calendar years 2001 through 2018, in violation of 26 U.S.C. § 7201, which carries a maximum penalty of five years in prison.  CHINN also consented to the civil forfeiture of 83% of the funds held in five accounts at two Singapore banks, which resulted in the successful forfeiture and repatriation to the United States of approximately $2.2 million.  The civil forfeiture proceeding is United States of America v. Certain Funds on Deposit in Various Accounts, 20 Civ. 3397 (LJL). 

CHINN is scheduled to be sentenced by Judge Marrero on November 19, 2021.

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

Ms. Strauss and Mr. Goldberg praised the outstanding work of IRS-CI.  Ms. Strauss thanked the Department of Justice’s Tax Division for their partnership on this case.  Ms. Strauss, Mr. Goldberg, and Mr. Lee also thanked the Department of Justice’s Office of International Affairs, the Singapore Attorney-General’s Chambers, and the Commercial Affairs Department of the Singapore Police Force for their assistance in this matter.

This prosecution is being handled by the Complex Frauds and Cybercrime Unit of the United States Attorney’s Office for the Southern District of New York and the Department of Justice’s Tax Division.  Assistant U.S. Attorney Olga I. Zverovich of the United States Attorney’s Office for the Southern District of New York and Senior Litigation Counsel Nanette Davis and Trial Attorney Sean Green of the Tax Division are in charge of the prosecution.

 

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

[2]  In November 2015, IHAG entered into a non-prosecution agreement with the Department of Justice, paid a penalty of approximately $7.4 million, and agreed to cooperate with U.S. authorities.

Audrey Strauss, the United States Attorney for the Southern District of New York, announced today that RALPH BERRY was found guilty by a unanimous Manhattan jury for the murder of Caprice Jones in the vicinity of 751 East 161 Street, Bronx, New York.  BERRY will be sentenced before the Honorable U.S. District Judge Alison J. Nathan, who presided over the jury trial.  

U.S. Attorney Audrey Strauss said:  “In June of 2000, Caprice Jones was senselessly gunned down, the unintended victim of drug-dealer Ralph Berry and a co-defendant, who tragically missed their mark when trying to murder a rival dealer. Instead, their bullet struck Jones, who died after suffering a years-long spinal injury.  This case typifies the inherent danger of the drug trade, which oftentimes leaves innocent victims in its wake. I commend the career prosecutors and agents of this Office in their partnership with the outstanding detectives of the NYPD for their determination in bringing closure in the cold case.”

According to the Indictment and other evidence presented at trial in federal court:

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

*              *             *

BERRY, 54, was convicted of murder through use of a firearm, which carries a maximum penalty of life in prison and a mandatory minimum sentence of five years in prison, murder in connection with a drug trafficking crime, which carries a maximum penalty of life in prison and a mandatory minimum sentence of 20 years in prison, and murder in aid of a racketeering enterprise, which carries a mandatory minimum sentence of life in prison.  

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

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

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

An indictment was unsealed today in New York, New York, that charges  offshore financial service executives and a Swiss financial services company with conspiracy to defraud the IRS by helping three large-value U.S. taxpayer-clients conceal more than $60 million in income and assets held in undeclared, offshore bank accounts and to evade U.S. income taxes.

According to the indictment, from 2009 to 2014, Ivo Bechtiger, Bernhard Lampert, Peter Rüegg, Roderic Sage, Rolf Schnellmann, Daniel Wälchli and Zurich, Switzerland-based Allied Finance Trust AG allegedly defrauded the IRS by concealing income and assets of certain U.S. taxpayer clients with undeclared bank accounts located at Privatbank IHAG (IHAG), a Swiss private bank in Zurich, Switzerland, and elsewhere. In order to assist those clients, the defendants and others allegedly devised and used a scheme called the “Singapore Solution” to conceal the bank accounts of the U.S.-based clients, their assets, and their income from U.S. authorities. In furtherance of the scheme, the defendants and others allegedly conspired to transfer more than $60 million from undeclared IHAG bank accounts of the three U.S. clients through a series of nominee bank accounts in Hong Kong and other locations before returning the funds to newly opened accounts at IHAG, ostensibly held in the name of a Singapore-based asset manager. The U.S. clients allegedly paid large fees to IHAG and others to help them conceal their funds and assets. 

“Prosecuting offshore tax evasion remains one of the Tax Division’s highest priorities,” said Acting Deputy Assistant Attorney General Stuart M. Goldberg of the Justice Department’s Tax Division. “Taxpayers contemplating hiding money abroad – and the foreign bankers, attorneys and finance professionals who design and execute strategies to assist their evasion – should know that the Tax Division and IRS have the investigative resources and expertise to unravel even the most elaborate schemes.”

“As alleged, the individual defendants and the Swiss firm Allied Finance conspired to defraud the IRS by assisting U.S. taxpayers in avoiding their tax obligations,” said U.S. Attorney Audrey Strauss for the Southern District of New York. “They allegedly did this through an elaborate scheme that involved concealing customer assets at a Swiss private bank through nominee bank accounts in Hong Kong and elsewhere, with funds returning to the private bank in the name of a Singapore firm. One such U.S. customer, Wayne Chinn, pleaded guilty to his participation in the so-called ‘Singapore Solution,’ forfeited more than $2 million to the United States, and awaits sentencing for his admitted crime.”

If convicted, the defendants face a maximum penalty of five years in prison, supervised release, and monetary penalties, and the corporate defendant faces monetary penalties. An indictment is merely an allegation and all defendants are presumed innocent until proven guilty beyond a reasonable doubt in a court of law.

Also unsealed today was the guilty plea of Wayne Franklyn Chinn, of Vietnam and San Francisco, California, one of the U.S. taxpayer-clients, who participated in the Singapore Solution scheme. 

According to court documents filed in relation to his guilty plea, from 2001 through 2018, Chinn concealed approximately $5 million in undisclosed and untaxed income. During this period, Chinn held accounts in nominee names at Privatbank IHAG. Beginning in 2010, Chinn wired funds from these offshore accounts through nominee accounts in Hong Kong before returning them to newly opened accounts at IHAG held in the name of a Singapore based trust company acting on behalf of two foundations created to conceal Chinn’s ownership of the accounts. Chinn subsequently transferred the funds out of Switzerland to undeclared accounts in Singapore. Chinn did not file any tax returns or disclose his foreign bank accounts during the years at issue.

Chinn pleaded guilty to one count of tax evasion which carries a maximum penalty of five years in prison. Chinn also consented to the civil forfeiture of 83% of the funds held in five accounts at two Singapore banks, which resulted in the successful forfeiture and repatriation to the United States of approximately $2.2 million. The civil forfeiture proceeding is United States of America v. Certain Funds on Deposit in Various Accounts, 20 Civ. 3397 (LJL). 

Chinn is scheduled to be sentenced on Nov. 19, and faces a maximum penalty of five years in prison. He also faces a period of supervised release, restitution and monetary penalties. A federal district court judge will determine any sentence after considering the U.S. Sentencing Guidelines and other statutory factors.

Acting Deputy Assistant Attorney General Stuart M. Goldberg of the Justice Department’s Tax Division; U.S. Attorney Audrey Strauss for the Southern District of New York; and Chief James Lee of IRS-Criminal Investigation made the announcement. The Department of Justice Office of International Affairs, the Singapore Attorney-General’s Chambers and the Commercial Affairs Department of the Singapore Police Force provided significant assistance in this matter.

The IRS-Criminal Investigation Division is investigating the case.

Senior Litigation Counsel Nanette Davis and Trial Attorney Sean Green of the Justice Department’s Tax Division and Assistant U.S. Attorney Olga Zverovich of the U.S. Attorney’s Office for the Southern District of New York are prosecuting the case.

Audrey Strauss, the United States Attorney for the Southern District of New York, and Philip R. Bartlett, the Inspector-in-Charge of the New York Division of the U.S. Postal Inspection Service (“USPIS”), announced that JAESON BIRNBAUM, an attorney and the founder of Cash4Cases, Inc., a bankrupt litigation funding firm that was headquartered in New York, New York, pled guilty to securities fraud today before U.S. District Judge Paul A. Crotty.  BIRNBAUM admitted as part of his plea that he used investor funds for his own purposes and double-pledged the same case recoveries as collateral to multiple parties.

U.S. Attorney Audrey Strauss said: “Jaeson Birnbaum conned investors through a series of lies about his litigation finance business, Cash4Cases.  He used Cash4Cases to steal cash for himself and then tried to cover up his scheme by directing a subordinate to falsify books and records.  Now Birnbaum awaits sentencing for his fraudulent conduct.”

USPIS Inspector-in-Charge Philip R. Bartlett said: “Everything Mr. Birnbaum told his investors was a lie framed around the idea of a good investment.  Postal Inspectors see these cases all the time and remind investors to thoroughly check the fine print on any investment offer, and if the return seems too lucrative or unreal, pass it by to make sure your money goes to fund your lifestyle and not the criminal’s.”

According to the Information and statements made in Court:

From at least in or about 2017 through in or about 2019, BIRNBUAM obtained more than $3 million in investments for Cash4Cases based on fraudulent misrepresentations.  These investments were in the form of promissory notes, titled “Investor Security Agreements” (“ISAs”), which purported to provide the relevant investors with a security interest in the recoveries associated with certain specified lawsuits that were ostensibly purchased by Cash4Cases.  In fact, in some instances, the lawsuits that were either never funded by Cash4Cases or BIRNBAUM had previously pledged their recoveries to other parties.

To help carry out his fraud, BIRNBAUM directed an employee to falsify his company’s books and records to make it appear that the recoveries from lawsuits that had already been paid out were still available to be pledged as collateral to new investors.

BIRNBAUM also misappropriated a substantial portion of investors’ funds for his personal use and to make promised payments to earlier investors.  As one example, BIRNBAUM obtained a $1 million investment for Cash4Cases in September 2019.  Prior to this investment, BIRNBAUM told the investor that Cash4Cases would use the money exclusively for advances to litigants.  However, contrary to this representation, on the same date that Cash4Cases received the $1 million investment, BIRNBAUM used the money to send a $530,000 wire toward the purchase of a house in New Jersey.

*                *                *

BIRNBAUM, 47, of Boca Raton, Florida, faces 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.  BIRNBAUM is scheduled to be sentenced before Judge Crotty on January 6, 2022, at 12:00 p.m.

Ms. Strauss praised the investigative work of the USPIS.  Ms. Strauss also thanked the Securities & Exchange Commission, which brought a civil action today against BIRNBAUM in Manhattan federal court.

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

Audrey Strauss, the United States Attorney for the Southern District of New York, and Scott Lampert, Special Agent in Charge of the New York Office of the U.S. Department of Health and Human Services, Office of Inspector General (“HHS-OIG”), announced the unsealing today of an indictment charging acupuncturists JUNYI LIU, a/k/a “Jenny,” and HONGXING WANG, as well as physical therapists GLEEN ANCIRO, NOEMI ALGODON, MOHAMED ELMANDOUH, GERARD ESTRELLA, RAMON GARCIA III, and HENLER DATU TAHIL, and cashier ZIHAO CHEN with operating an over $20 million health care fraud scheme at fraudulent medical offices in Manhattan, Brooklyn, and Queens.  As part of the fraud scheme, CHEN and other of the defendants’ co-conspirators paid cash kickbacks to patients (the “Paid Patients”) who were insured by Medicare and/or other insurance providers (collectively, the “Insurance Providers”), and the defendants and their co-conspirators then billed Medicare and the insurance providers for physical therapy and acupuncture services related to the Paid Patients that were unnecessary or never performed.  LIU was additionally charged with unlawfully enriching herself and a family member through a COVID-19 unemployment benefit scheme.

The defendants were arrested earlier today and will be presented this afternoon before U.S. Magistrate Judge Gabriel W. Gorenstein.  The case is assigned to Chief U.S. District Judge Laura Taylor Swain.

U.S. Attorney Audrey Strauss said: “As alleged, the defendants perpetrated a multimillion-dollar health care fraud scheme in which they billed Medicare and other insurers for physical therapy and acupuncture services that were either not rendered in the manner purported or not rendered at all.  Large-scale insurance frauds of the type alleged here impose hidden but very real costs on the public as well as insurers.  Thanks to our partners in this case, the defendants are in custody and facing serious federal charges.”

HHS Special Agent in Charge Scott Lampert said: “These allegations describe a greed-fueled scheme that undermined our health care system and the people it serves.  Health care providers participating in the Medicare program are trusted to furnish medically necessary services and to make beneficiaries collaborators in their care, not conspirators in fraud.  HHS-OIG and our law enforcement partners proudly work to protect federal health care funds by identifying and quelling fraudulent billing of providers.”

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

Between 2018 and 2021, LIU, a licensed acupuncturist, operated medical offices (the “Offices”) from which LIU and her partners fraudulently billed the Insurance Providers for physical therapy and acupuncture services that were not rendered in the manner represented or not rendered at all.  During the scheme, LIU partnered with other licensed medical professionals, including ANCIRO, ALGODON, ELMANDOUH, ESTRELLA, GARCIA, and TAHIL, all of whom were licensed physical therapists, and WANG, who was a licensed acupuncturist (collectively, the “Partners”).  The Partners’ roles in the scheme typically included: (i) allowing the Offices to use their enrollments with the Insurance Providers to submit to the Insurance Providers materially false and fraudulent claims for reimbursement for physical therapy and acupuncture services that were not rendered in the manner represented or were not rendered at all; (ii) creating materially false medical documentation, which stated that certain physical therapy and acupuncture services had been rendered, when such services in fact were not rendered in the manner represented or were not rendered at all; and (iii) contributing financing for the Offices, including for the payment of cash kickbacks to the Paid Patients to induce those patients to provide their insurance information and receive medically unnecessary and/or non-existent services at the Offices.  LIU and certain of the Partners also agreed to give kickbacks, including cash and expensive wine, to employees of Insurance Providers to enable the scheme to continue.

In furtherance of the scheme, LIU employed receptionists, cashiers, marketers, financial and billing personnel, acupuncturists, massagists, and other personnel.  The cashiers included CHEN, who on numerous occasions distributed tens of thousands of dollars in cash kickbacks to the Paid Patients.  In some instances, these Paid Patients visited the Offices, signed in, and received unnecessary physical therapy and acupuncture services.  In other instances, the Paid Patients visited the Offices, signed a sign-in sheet and other documents, and then left without receiving any services at all.  In yet other instances, the Paid Patients did not visit the Offices at all and instead signed sign-in sheets and other documents brought to them elsewhere.  Regardless of whether the Paid Patients received any services or even visited the Offices at all, the Partners used the Paid Patients’ insurance information to fraudulently bill the Insurance Providers for unnecessary and/or never rendered services.

While LIU and her Partners were defrauding the Insurance Providers of millions of dollars, from April 2020 through September 2021, LIU also engaged in a scheme to obtain COVID-19 unemployment benefits for herself and a family member (the “Family Member”) by fraudulently submitting and causing to be submitted to the New York Department of Labor materially false online applications and certifications for COVID-19 benefits.  Among other things, the applications and/or certifications represented that LIU was unemployed when, in fact, she continued to operate the Offices for all or nearly all of this period, and that LIU’s Family Member was unable to work because of COVID-19 during a five-month period when the Family Member was in China. 

*                *                *

JUNYI LIU, 67, of Great Neck, New York, GLEEN ANCIRO, 50, of Floral Park, New York, NOEMI ALGODON, 49, of Mineola, New York, MOHAMED ELMANDOUH, 48, of Staten Island, New York, GERARD ESTRELLA, 39, of West Hempstead, New York, RAMON GARCIA III, 39, of Merrick, New York, HENLER DATU TAHIL, 38, of East Meadow, New York, HONGXING WANG, 61, of Brooklyn, and ZIHAO CHEN, 20, of Queens, are each charged with: (1) conspiring to commit health care fraud, which carries a maximum sentence of 20 years in prison; (2) conspiring to violate the Anti-Kickback Statute, which has a maximum penalty of five years in prison; and (3) conspiring to commit money laundering, which carries a maximum sentence of 20 years in prison.  LIU is also charged with wire fraud, which has a maximum penalty of 20 years in prison, and theft of Government funds, which has a maximum penalty of 10 years in prison.

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

Ms. Strauss praised the outstanding investigative work of HHS-OIG’s New York Office and the New York Field Office of the Internal Revenue Service, Criminal Investigation.  Ms. Strauss also thanked the New York State Attorney General’s Medicaid Fraud Control Unit and the U.S. Department of Labor, Office of Inspector General, for their assistance.

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

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

 

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

Audrey Strauss, the United States Attorney for the Southern District of New York, announced today that VIRGIL GRIFFITH, a U.S. citizen, pled guilty to conspiring to violate the International Emergency Economic Powers Act (“IEEPA”) by providing services to the Democratic People’s Republic of Korea (“DPRK” or “North Korea”) including technical advice on using cryptocurrency and blockchain technology to evade sanctions. GRIFFITH pled guilty today before U.S. District Judge P. Kevin Castel.

U.S. Attorney Audrey Strauss stated: “As he admitted in court today, Virgil Griffith agreed to help one of our nation’s most dangerous foreign adversaries, North Korea.  Griffith worked with others to provide cryptocurrency services to North Korea and assist North Korea in evading sanctions, and traveled to North Korea to do so.  In the process, Griffith jeopardized the national security of the United States by undermining the sanctions that both Congress and the President have enacted to place maximum pressure on the threat posed by North Korea’s treacherous regime.”

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

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

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

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

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

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

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VIRGIL GRIFFITH, 38, a resident of Singapore and citizen of the United States, pled guilty to one count of conspiring to violate IEEPA, which carries a maximum term of 20 years in prison.  GRIFFITH is scheduled to be sentenced by Judge Castel on January 18, 2022, at 11:00 a.m.

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

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

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

Audrey Strauss, the United States Attorney for the Southern District of New York, and  Michael J. Driscoll, the Assistant Director-in-Charge of the New York Field Office of the Federal Bureau of Investigation (“FBI”), announced today that the United States has simultaneously filed and settled a civil fraud lawsuit against Wells Fargo Bank, N.A. (“Wells Fargo” or the “Bank”) alleging that it violated the Financial Institutions Reform Recovery and Enforcement Act (“FIRREA”) by fraudulently overcharging hundreds of commercial customers, many of them small and medium-sized businesses and federally-insured financial institutions, who used the Bank’s foreign exchange (“FX”) service.  Specifically, the United States alleged that, from 2010 through 2017, Wells Fargo FX sales specialists defrauded 771 customers by systematically charging them higher markups on FX transactions than they represented the Bank would charge, and concealing these overcharges through various misrepresentations and deceptive practices.

As part of the settlement, approved today by U.S. District Judge John G. Koeltl, Wells Fargo will pay a total of approximately $72.6 million, with approximately $35.3 million having been paid directly to the 771 customers collectively as restitution and approximately $37.3 million to be paid to the United States as civil penalties under FIRREA and as asset forfeiture.  Wells Fargo also made extensive admissions of certain conduct alleged in the Government’s complaint, including that many FX sales specialists overcharged hundreds of commercial customers by applying larger sales margins or spreads than they represented they would, and that, in certain instances, when customers contacted the Bank to inquire about higher-than-agreed-upon pricing, FX sales specialists would give customers false explanations for the inflated prices.

U.S. Attorney Audrey Strauss said:  “We all put trust in our banking institutions to deal with us honestly, fairly, and transparently when we are their customers.  For the better part of a decade, Wells Fargo abused this trust, using tricks, false information, and other deceptive practices to fraudulently overcharge customers who used the Bank’s foreign exchange service.  This settlement, which requires Wells Fargo to make its customers whole for their losses and pay a substantial penalty, sends a strong message to the banking industry that financial institutions who take advantage of their customers will be held to account.”

As alleged in the Government’s complaint:

During 2010 through 2017 (the “Covered Period”), Wells Fargo offered FX services to commercial customers located throughout the United States, such as converting the customers’ US dollars into foreign currency for outgoing wire transfers and converting incoming wire transfers of foreign currency into U.S. dollars.  Wells Fargo profited from these transactions by marking up the prices on currency it was selling to and marking down the prices on currency it was buying from its customers.  Wells Fargo employees referred internally to this currency mark-up as a “spread” or “sales margin.”  Wells Fargo FX sales specialists frequently entered into agreements with the Bank’s customers pursuant to which they represented that the Bank would charge specific spreads or sales margins on their FX transactions.  These agreements, referred to internally as “fixed-pricing agreements,” were both written and oral in nature. 

During the Covered Period, Wells Fargo defrauded 771 of its commercial customers with fixed-pricing agreements, many of them small or medium-sized companies and federally-insured financial institutions, by falsely representing to the customers that the Bank would charge specific fixed FX spreads on FX transactions, when, in fact, Wells Fargo was surreptitiously and systematically charging significantly higher spreads and pocketing tens of millions of dollars in ill-gotten FX revenue.  By financially incentivizing its FX sales specialists to overcharge FX customers while failing to take steps to ensure that FX sales specialists honored pricing representations, Wells Fargo created an atmosphere in which employees openly joked about and celebrated taking advantage of the Bank’s customers. 

Wells Fargo FX sales specialists used a variety of misrepresentations and deceptive practices to defraud customers.  For example, instead of applying agreed-upon fixed spreads to customers’ outgoing wires, FX sales specialists would charge inflated spreads that were as large as the FX sales specialists thought they could get away with.  Furthermore, rather than charging the agreed-upon fixed spread to the FX market rate at the time the outgoing wire was converted, FX sales specialists would select the best rate for the Bank and worst rate for the customer from the FX price fluctuations from the beginning of the trading day until the time of the transaction.  This practice was referred to internally as “Range of Day” Pricing.

In addition, FX sales specialists sometimes would give customers fictitious underlying FX market rates and spread calculations to create the false impression that Wells Fargo was complying with pricing representations when that was not the case. Other times, FX sales specialists would make intentional “errors” to the exchange rate given to a customer to make the Bank’s spread much larger.  If caught, the FX sales specialist would falsely claim that digits in the price had been mistakenly transposed.  This practice was known as the “Big Figure Trick.”

FX sales specialists also at times would charge a customer different spreads depending on which customer representative initiated the transaction.  Because Wells Fargo’s online FX service tracked user identities, FX sales specialists would impose larger spreads on transactions initiated by those representatives thought to be less sophisticated or experienced in FX trading.  This practice was known internally as “User-Based Pricing.”

FX sales specialists frequently would apply an even more egregious form of Range of Day pricing to customers’ incoming wire transfers, called “BSwift” wires.  Because Wells Fargo generally did not notify customers when they received incoming wires of foreign currency or when those wires were converted, FX sales specialist could wait until the end of the day and select the best rate for the Bank and worst rate for the customer from price fluctuations throughout the entire trading day.  One FX specialist called this practice the “BSwift Pinata.”

As part of the settlement, Wells Fargo admitted and accepted responsibility for the following conduct:

• • During the Covered Period, many FX sales specialists overcharged hundreds of commercial customers by applying larger sales margins or spreads to customer FX transactions than they represented they would.
  • Wells Fargo received millions of dollars from customers to which the Bank was not entitled.
  • FX sales specialists internally discussed and even celebrated transactions resulting in larger FX spreads than agreed to with customers or transactions generating large FX revenue.  For example, FX sales specialists on Wells Fargo’s San Francisco FX desk would celebrate transactions with large spreads or sales margins by ringing a bell located on the trading floor.  Other FX sales specialists would use expressions such as, “back the truck up,” and “when in doubt, spread them out,” to jokingly describe how Wells Fargo and its FX sales specialists were making money on transactions by charging large FX spreads, including larger FX spreads than agreed to with customers.
  • Wells Fargo’s own internal CMR database indicated that FX sales specialists were charging customers FX spreads that were higher than those the Bank had represented.  Certain CMR notes reflected that while a customer thought it would receive the rate that the Bank had represented to the customer, the Bank in fact charged the customer undisclosed higher spreads.  For example, an FX sales specialist stated in one CMR note concerning Customer A that there was an “agreement w/the customer” to charge “25 pips [points in percentage]on spot trades” but that the Bank would “take 30-35 . . . if possible.”   

False Information

• • In certain instances, when customers contacted the Bank to inquire about higher-than-agreed-upon pricing, FX sales specialists would give false explanations for the prices such as “time fluctuations” or other supposed events in the market.
  • In a few cases, FX sales specialists provided customers false transaction data.  In one instance, an FX sales specialist represented to Customer E that it would charge a spread of 5 basis points on certain BSwift wire transactions.  Contrary to this agreement, the Bank actually charged higher spreads on a series of FX transactions.  Then, in email correspondence with representatives of Customer E, the FX sales specialist provided inaccurate market rate information to the customer to make the FX spread falsely appear consistent with the agreement terms.

The Big Figure Trick

• • For some customers, FX sales specialists also used what they internally called the “big figure trick” or the “transposition error game” to increase the FX sales margin by switching digits in the price of the transactions in a way that would cost customers more money.  For example, if the correct hypothetical price to purchase a Euro was 1.0123 dollars, an FX sales specialist would use the big figure trick to switch the price to 1.0213 dollars, thus taking more spread (in this example, an additional 89 basis points) from the customer.
  • If caught by the customer, the FX sales specialist would claim that it was simply a mistake of adjusting the wrong digit in the price.  One FX sales specialist explained, “You can play the transposition error game if you get called out.”  Another FX sales specialist noted to a colleague about a previous transaction that a customer “didn’t flinch at the big fig the other day.  Want to take a bit more?”

User-Based Pricing

• • At times, Wells Fargo’s FX sales specialists charged the same customers different spreads depending on which representative of the customer happened to be involved in executing the trade.  Specifically, Wells Fargo’s FX sales specialists would charge larger spreads on transactions requested by certain customer representatives thought to be less sophisticated or experienced in FX trading.

BSwift Piñata

• • As noted above, because Wells Fargo generally did not provide immediate notice to customers when they received incoming wires, known as BSwifts, Wells Fargo’s FX sales specialists took advantage of this time delay to charge higher spreads than the Bank had represented it would. 
  • An FX sales specialist in a written instant message to another sales specialist referred to the Bank’s pricing of BSwift wire transfers as the “BSWIFT pinata.” An additional FX sales specialist noted in a recorded call that she preferred to book her own BSwifts to stretch the spread and could take more spread because she was doing the pricing herself.  She observed that she could “dance around it” if the customer called with questions.  
  • Another FX sales specialist observed in an internal email communication that customers would not notice higher spreads on BSwift wires.  He wrote, after noting that he “bumped spreads up a pinch,” that “these clients who are in the mode of just processing wires will most likely not notice this slight change in pricing” and that it “could have a very quick positive impact on revenue without a lot of risk.”

Financial Incentives and Lack of Meaningful or Effective Oversight

• • Wells Fargo incentivized its FX sales specialists to generate FX sales revenue by tying their bonuses exclusively to the amount of sales revenue they generated for the Bank from FX transactions.  Specifically, before 2017, Wells Fargo paid bonuses to FX sales specialists based upon the percentage of the FX sales revenue that each FX sales specialist and FX desk generated.  Each year during the Covered Period, Wells Fargo paid hundreds of thousands of dollars in bonuses to various FX sales specialists based on FX revenue.  Some FX sales specialists received bonus compensation exceeding $1 million in a single year.
  • Prior to 2017, Wells Fargo failed to put meaningful or effective safeguards in place to ensure that FX sales specialists priced customer FX transactions in accordance with the terms represented in fixed-pricing agreements.  For example, during the Covered Period, Wells Fargo:  (i) had no meaningful or effective policies or procedures governing how fixed-pricing agreements should be negotiated, memorialized, recorded, or implemented; (ii) provided no training to FX sales specialists concerning fixed-pricing agreements; (iii) had no meaningful or effective process to systematically track the existence or terms of fixed-pricing agreements; (iv) had no systemic process in place to monitor whether FX sales specialists were pricing FX transactions in a manner that was consistent with fixed-pricing agreements; (v) did not implement any electronic safeguards that would have prevented FX sales specialists from pricing transactions in a manner that deviated from fixed-pricing agreements; and (vi) did not conduct any audits or reviews of FX transactions to determine whether FX pricing matched fixed-pricing agreements until 2017.

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In the settlement, Wells Fargo acknowledged that it took adverse employment actions against more than 20 Wells Fargo employees who were involved in the FX business, including various disciplinary actions and separation of employment, and affirmed that it has taken various steps in an effort to comply with industry FX best practices.This matter was initially brought to the Government’s attention by a whistleblower who filed a confidential declaration with the U.S. Department of Justice pursuant to the Financial Institutions Anti-Fraud Enforcement Act.

Ms. Strauss praised the investigative work of the FBI.

The case is being handled by the Office’s Civil Frauds Unit. Assistant U.S. Attorneys Lawrence H. Fogelman and Pierre G. Armand are in charge of the case, and Assistant U.S. Attorney Alex Wilson of the Money Laundering and Transnational Criminal Enterprises Unit is responsible for the forfeiture aspects of the case.

Audrey Strauss, United States Attorney for the Southern District of New York, and Philip R. Bartlett, Inspector in Charge of the New York Office of the U.S. Postal Inspection Service (“USPIS”), announced that JOAO DJALMA PRESTES JUNIOR, a/k/a “Joao Pereira,” a Brazilian national, was sentenced today to 48 months in prison after pleading guilty to defrauding Brazilian businesses of approximately $15 million through an international advance fee scheme.  PRESTES JUNIOR was arrested in June 2020 and pled guilty in April 2021 before U.S. District Judge Jed S. Rakoff, who imposed today’s sentence.

In addition, Superseding Indictments were unsealed today charging co-conspirators HERMINIO RIBEIRO DIAS CRUZ, JUAN CARLOS VILLALBA, ROSE MARTINS DE OLIVEIRA, and ALEX PEREIRA DE SOUTO with wire fraud and conspiracy to commit wire fraud in connection with the same international advance fee scheme.  CRUZ, VILLALBA, DE OLIVEIRA, and DE SOUTO remain at large.

Manhattan U.S. Attorney Audrey Strauss said: “Partly through face-to-face meetings with victims in a Manhattan skyscraper, Joao Djalma Prestes Junior stole millions of dollars from companies seeking loans.  Prestes Junior will now spend four years in U.S. prison for those crimes.  As alleged, Prestes Junior did not work alone.  His four fugitive alleged co-conspirators in this multimillion-dollar international advance fee scheme have now been charged.”

USPIS Inspector-in-Charge Philip R. Bartlett said: “Postal Inspectors usually see advance fee scams tied to lottery fraud.  However, in this case the victims were allegedly duped into paying fees in advance to secure business loans.  The defendants allegedly used victim money to fund their opulent lifestyles.  Postal Inspectors remind those seeking loans to exercise due diligence when you have to pay money to get money.”

According to public filings and court proceedings in the case against PRESTES JUNIOR, CRUZ, VILLALBA, DE OLIVEIRA, and DE SOUTO, including the allegations in the Superseding Indictments[1]:

Since at least July 2018 up to and including February 2020, PRESTES JUNIOR participated in a scheme to defraud Brazilian-based businesses of millions of dollars through an advance fee scheme.

As part of the scheme PRESTES JUNIOR and his co-conspirators falsely represented that the victims would receive a large loan after making advance payment of various fees to entities that, unbeknownst to the victims, were controlled by the conspirators.  To effect the scheme, PRESTES JUNIOR and his co-conspirators created several shell companies (and accompanying websites) in the United States: a purported financial entity, a purported escrow company, and a purported insurance entity.  The defendant and his co-conspirators directed victims to pay advance fees to the escrow company and the insurance entity.  After the initial payments were made, the defendant and his co-conspirators falsely represented that there was some obstacle to transferring the loan money to the victim – such as a tax payment – and that the obstacle could be overcome if the victim made yet another advance payment.  Ultimately, despite paying one or more such fees up front, the victims never received the promised loans, and the money paid in advance was never returned. 

PRESTES JUNIOR also had executives of the victim companies travel to New York, New York, for in-person meetings in a suite in a skyscraper in downtown Manhattan that was purportedly the financial entity’s New York office.  When interacting with victim companies, however, PRESTES JUNIOR used an alias, “Joao Pereira,” due to the defendant’s notoriety in Brazil, where the defendant was previously the subject of widely publicized criminal proceedings. 

Money stolen from victims was used in part to fund PRESTES JUNIOR’s lavish lifestyle.  For example, although PRESTES JUNIOR did not even live in the United States full time, he owned a Maserati in this country.

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In addition to the prison term, JOAO DJALMA PRESTES JUNIOR, a/k/a “Joao Pereira,” 48, a Brazilian national, was ordered to forfeit $15,266,679.10 and to make restitution in the amount of $15,266,679.10.

HERMINIO RIBEIRO DIAS CRUZ, 76, a Portuguese national, JUAN CARLOS VILLALBA, 56, a Paraguayan national, ROSE MARTINS DE OLIVEIRA, 61, a Brazilian national, and ALEX PEREIRA DE SOUTO, 40, a Brazilian national, are each charged with one count of wire fraud, in violation of 18 U.S.C. § 1343, and one count of conspiracy to commit wire fraud, in violation of 18 U.S.C. § 1349, each of which carries a maximum sentence of 20 years in prison.  The maximum potential sentences are prescribed by Congress and are provided here for informational purposes only, as any sentencing of these defendants would be determined by a judge.

Ms. Strauss praised the outstanding investigative work of the USPIS.  

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

 

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

Audrey Strauss, the United States Attorney for the Southern District of New York, Peter C. Fitzhugh, the Special Agent in Charge of the New York Office of the U.S. Department of Homeland Security, Homeland Security Investigations (“HSI”), and Marty Raybon, Acting Director, Field Operations, New York, U.S. Customs and Border Protection (“CBP”), announced the filing of criminal and civil charges against GEORGE ILOULIAN, a/k/a “George Illulian,” the CEO of an apparel company located in New York, New York.  ILOULIAN was charged, in an indictment unsealed yesterday, with participating in a years-long scheme to defraud CBP by submitting invoices to CBP that falsely understated the true value of the goods his company imported into the United States, thereby evading the obligation to pay hundreds of thousands of dollars in customs duties. 

ILOULIAN was arrested yesterday and presented before U.S. Magistrate Judge James L. Cott in Manhattan federal court.  The criminal case has been assigned to U.S. District Judge Paul G. Gardephe.  In addition, a civil fraud lawsuit against ILOULIAN and his company, DELTA UNIFORMS, INC. (“DELTA”), which is also assigned to Judge Gardephe, was unsealed in Manhattan federal court earlier today.  The civil complaint asserts that ILOULIAN and DELTA violated the False Claims Act by misrepresenting the true value and nature of the goods they imported into the United States on entry documents submitted to CBP.  The conduct in this matter was first brought to the attention of federal law enforcement by a whistleblower who filed a lawsuit under the False Claims Act.

Manhattan U.S. Attorney Audrey Strauss said: “As alleged, George Iloulian cheated the United States out of hundreds of thousands of dollars by causing false documents that misrepresented the value of imported goods to be submitted to CBP to avoid paying lawfully owed customs duties.  Iloulian now faces criminal charges for his alleged fraud, and the government’s civil suit seeks treble damages and penalties against Iloulian and his company.”

HSI Special Agent in Charge Peter C. Fitzhugh said: “Iloulian allegedly evaded the obligation to pay hundreds of thousands of dollars in customs duties using a double-invoicing scheme, essentially creating two invoices, one for payment and one for customs.  HSI New York and U.S. Customs and Border Protection will continue to partner in protecting U.S. trade from perpetrators who intentionally defraud the U.S. government for a profit.”

CBP Acting Director of New York Field Operations Marty Raybon said: “U.S. Customs and Border Protection is proud to have played an important role to this ongoing investigation that resulted in the takedown of an elaborate conspiracy to defraud the United States of hundreds of thousands of dollars in revenue.  This case serves as a great example of collaborative law enforcement efforts to uncover and dismantle nefarious enterprises that seek to defraud the United States government for personal gain while causing economic harm to their competitors.” 

According to the allegations in the Government’s indictment and civil complaint[1]:

From at least in or about 2010 through at least in or about 2020, ILOULIAN, and others known and unknown, including individuals associated with overseas manufacturers, conspired to submit fraudulent invoices to CBP that understated the value of apparel imported into the United States, thereby depriving the United States of hundreds of thousands of dollars in customs duty revenue.  ILOULIAN and his co-conspirators achieved lower customs duties on imported goods in two ways: (i) a “double-invoicing scheme,” and (ii) a “fabric-type scheme.”

To effect the double-invoicing scheme, which was perpetrated by ILOULIAN and his co-conspirators from at least in or about 2010 through at least in or about 2020, ILOULIAN utilized two invoices: One invoice, at times referred to by ILOULIAN and his co-conspirators as the “Actual Invoice” or the “For Payment” invoice, contained higher prices and reflected what DELTA actually paid overseas manufacturers for apparel.  The second invoice, which they at times referred to as the “Customs Invoice” or “For Customs Declaration” invoice, contained false lower prices.  The information in the Customs Invoice was submitted by DELTA, through a customs broker (the “Customs Broker”), to CBP.  CBP relied on the information from the Customs Invoice in assessing and collecting customs duties from DELTA.  Accordingly, by presenting the false Customs Invoices to CBP, DELTA was able to pay fraudulently lower customs duties than DELTA actually owed.  In one version of the double-invoicing scheme, DELTA directed an overseas manufacturer to send to DELTA two sets of invoices for the same shipment of merchandise, the Actual Invoice and the Customs Invoice.  In a second version of the double-invoicing scheme, the overseas manufacturer provided DELTA with only the Actual Invoice; a Customs Invoice was created by other means and provided by DELTA to the Customs Broker.

From at least in or about 2011 through at least in or about 2016, ILOULIAN and his co-conspirators also engaged in a fabric-type scheme.  To effect the fabric-type scheme, DELTA directed an overseas manufacturer to misstate the composition of the fabric in the apparel in order to obtain a lower duty rate.  Specifically, the invoice would indicate that the imported goods were predominantly made of cotton rather than from man-made fibers, even though the reverse was true.  The falsified invoices were then presented to CBP, which allowed DELTA to pay lower customs duties than DELTA actually owed, because materials containing more cotton than man-made materials are subject to lower duty rates.

These multi-year fraud schemes resulted in the loss of hundreds of thousands of dollars in duty revenue to the United States.

*                      *                      *

ILOULIAN is charged with one count of conspiracy to commit wire fraud, which carries a maximum sentence of 20 years in prison, one count of wire fraud, which carries a maximum sentence of 20 years in prison, and one count of falsely effecting the entry of goods into the United States, which carries a maximum sentence of two years.  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.  ILOULIAN and DELTA are also charged with civil claims under the False Claims Act, through which the Government may recover treble damages and civil penalties arising from his conduct.

Ms. Strauss thanked HSI, CBP, and the Special Agents of the United States Attorney’s Office for the Southern District of New York for their efforts and ongoing support and assistance with the case.

The criminal case is being handled by the Office’s General Crimes Unit, and Assistant U.S. Attorney Kaylan E. Lasky is in charge of the prosecution.

The civil case is being handled by the Office’s Civil Frauds Unit, and Assistant U.S. Attorney Dominika Tarczynska is in charge of the matter.

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

 

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

Audrey Strauss, the United States Attorney for the Southern District of New York, announced today that JAVIER ENRIQUE DA SILVA ROJAS (the “defendant” or “DA SILVA”) was sentenced today to 360 months in prison for kidnapping Valerie Reyes (the “Victim”) in New Rochelle, New York and unlawfully transporting her to Connecticut, where her body was found approximately a week later.  DA SILVA, who was arrested in Flushing, Queens in February 2019, pled guilty before U.S. District Judge Vincent Briccetti on February 4, 2020.

U.S. Attorney Audrey Strauss stated: “Javier Da Silva committed a horrific kidnapping that resulted in the death of a young woman.  In the days after, he used her ATM card to empty her bank account and then attempted to cover up the evidence of his conduct. Valerie Reyes, the victim of this crime, was in the prime of her life when it was senselessly ended by Da Silva’s abhorrent act. Those who commit violence, especially those who kill, will not escape justice.”

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

DA SILVA and the Victim, who was 24 years old at the time of her death, were previously in a romantic relationship, which ended in approximately April 2018.  In the late evening of January 28, 2019, DA SILVA rented a car from a garage in Flushing, New York and drove to the Victim’s residence in New Rochelle, New York, arriving in the early morning hours of January 29, 2019.  Before he entered the Victim’s home, DA SILVA switched his phone to “airplane mode.”  Sometime after DA SILVA entered the Victim’s apartment, DA SILVA and the Victim had a violent altercation, during which the Victim suffered head trauma, bruising around the face, and a large hematoma to her forehead.  DA SILVA then kidnapped the Victim—covering her mouth with several layers of packing tape and binding her feet and hands with packing tape and twine and putting her in a suitcase—before disposing of her body, still inside the suitcase, in Connecticut.  Over the ensuing days, DA SILVA used the Victim’s debit card on various occasions to withdraw approximately $5,350 in cash from her bank account.  DA SILVA also sold an iPad belonging to the Victim in the days following her death.

On January 30, 2019, the Victim was reported missing to the New Rochelle Police Department.  A few days later, on February 5, 2019, her body was recovered in a red suitcase alongside a public road in the Town of Greenwich, Connecticut.  The Connecticut Medical Examiner’s Office later concluded that the Victim died of homicidal asphyxiation.

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DA SILVA, 25, pled guilty to one count of kidnapping.  In addition to the prison term, DA SILVA was sentenced to two years of supervised release.

Ms. Strauss praised the outstanding work of the FBI 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, as well as the FBI New Haven Division, the New Rochelle Police Department, the Greenwich Police Department, the Westchester County District Attorney’s Office, the Westchester County Department of Public Safety, and the Westchester County Real Time Crime Center.

This case is being handled by the Office’s White Plains Division.  Assistant United States Attorneys Sam Adelsberg, Mathew Andrews, and Andrew Dember are in charge of the prosecution.

Audrey Strauss, 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 a Complaint charging SERGEI POLEVIKOV with securities fraud, wire fraud, and investment company fraud in connection with his fraudulent scheme to misappropriate confidential information about pending trades by his employer, an investment adviser, on behalf of its investment company clients.  POLEVIKOV was arrested last night and will be presented this afternoon before Magistrate Judge James L. Cott. 

Manhattan U.S. Attorney Audrey Strauss said: “As alleged, Sergei Polevikov violated not just the terms of his employment but also the law when he exploited material, nonpublic information to make personal trades ahead of large institutional trades, reaping more than $8 million in illicit profits.  Despite his alleged efforts to conceal it, Polevikov’s scheme was uncovered, and he is facing serious federal charges.”

FBI Assistant Director Michael J. Driscoll said: “Using material, nonpublic information to exploit small price movements in his employer’s stock, Polevikov, as we allege, realized significant financial gains for himself through his trades. While these schemes are unfortunately all too common, so is the response of the FBI – if you misappropriate proprietary information for your own personal gain, you should expect to hear from us.”  

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

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

To conceal his front-running scheme, and notwithstanding policies of the Employer Firm to prevent insider trading, POLEVIKOV lied to the Employer Firm about his personal trading accounts and securities trades conducted therein in violation of the Investment Company Act.   

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POLEVIKOV, 48, of Port Washington, New York, is charged with one count of securities fraud, one count of wire fraud, and one count of investment company fraud.  POLEVIKOV faces a maximum sentence of 20 years in prison on the securities fraud and wire fraud charges, and five years in prison on the investment company fraud charge.

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.

Ms. Strauss praised the investigative work of FBI.  Ms. Strauss also thanked the Securities & Exchange Commission, which brought a related civil action against POLEVIKOV that was filed today.

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

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

 

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

Audrey Strauss, the United States Attorney for the Southern District of New York, announced today that EDUARDO TALENTINO was sentenced to 10 years in prison by United States District Judge Vincent Briccetti for possessing, and accessing with intent to view, images of child pornography, possessing a firearm after having been convicted of a felony, and failing to register as a sex offender.  The sentencing today followed TALENTINO’s guilty plea on May 27, 2021.

U.S. Attorney Audrey Strauss said: “This case underscores the urgent need for law enforcement to continue to use every available tool to prosecute and punish those who sexually exploit children.”

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

On May 27, 2021, TALENTINO pled guilty to a three-count Information.  Count One charged him with possessing, and accessing with intent to view, images of child pornography, including images of prepubescent children and minors who had not attained the age of 12, on a phone in Orange County, New York, in violation of Title 18, United States Code, Section 2252A(a)(5)(b) and (b)(2).  Count Two charged that TALENTINO, after having been convicted of a felony, possessed a Colt Pocket Positive .32 caliber revolver.  Count Three charged that TALENTINO, while required to register as a sex offender pursuant to the Sex Offender Registration and Notification Act (“SORNA”), failed to register as a sex offender.  

In August 1997, in the Commonwealth of Massachusetts, Suffolk Superior Court, TALENTINO was convicted of two counts of Rape of a Child, one count of Assault with Intent to Commit Rape, two counts of Indecent Assault and Battery on a Child Under 14, one count on Indecent Assault and Battery on a Person 14 and Over, and two counts of Disseminate Matter Harmful to Minors.  For these offenses, TALENTINO was sentenced to a term of four years and a day in prison.

On November 7, 2019, TALENTINO pled guilty in Orange County Court to Unauthorized Practice of Profession, and on February 13, 2020, he was sentenced to one to three years in prison.

In or about December 2017, TALENTINO became the guardian of a 16-year-old minor (“Victim-1”).  While acting as Victim-1’s guardian, TALENTINO sexually abused Victim-1.

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In addition to the prison term, TALENTINO, 56, of Monroe, New York, was sentenced to lifetime supervised release.

Ms. Strauss praised the efforts of the Federal Bureau of Investigation, the Orange County District Attorney’s Office, the New York State Police, the Orange County Child Sexual Abuse Task Force, Orange County Child Protective Services, and the Orange County Sherriff’s Office  in connection with this investigation.                                   

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

Audrey Strauss, the United States Attorney for the Southern District of New York, announced that ROVIER CARRINGTON was charged in a criminal complaint unsealed yesterday with perjury.  CARRINGTON was arrested yesterday and presented in the Central District of California.

Manhattan U.S. Attorney Audrey Strauss said:  “As alleged, Rovier Carrington faked evidence to support a $50 million lawsuit in the Southern District of New York making extremely serious allegations, and then lied about faking that evidence under penalty of perjury.  Now he will return to the Southern District of New York—this time to face criminal charges.”

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

Between at least June 2018 and July 2018, CARRINGTON committed perjury in connection with a civil lawsuit (the “Civil Case”) filed in the Southern District of New York.  In the Civil Case, CARRINGTON sued Hollywood executives alleging that the executives had sexually assaulted him, and that they had defrauded him in connection with a decision to refuse to produce CARRINGTON’s reality television program.  CARRINGTON sought damages of $50 million in the Civil Case.

In support of his allegations in the Civil Case, CARRINGTON included as exhibits to an amended complaint ten email chains that included the following purported exchanges:

• CARRINGTON: I need your help. I’m not built for this. [third party] has threaten me and [Executive-1] thinks I’m supposed to constantly sleep with him for my projects. I was promised my series and reality show would make the studio a lot of money. [Third party] is a piece of shit and a pimp. I’m not a whore. After this Harvey [Weinstein] bullshit. I’m done.

Counterparty Account-1: Trend my man. You have to obey [third party] if you plan on continuing. [Executive-1] has ruined your chances after that Harvey [Weinstein] shit. I understand screwing these Hollywood fucks is tough but it’s that Hollywood shit man.

• CARRINGTON: Thank you for reviewing my reality concept. I have so many ideas like a bisexual love interest and I could seek a third whose fully gay, but pick only one during the finale. Major right ? Hopefully that doesn’t take away from the public’s interest in my dramatic series, which I’ll send you. I’ll discuss with [third party] and [third party] for the press. Omg, we could totally pitch to [Executive-2’s company] due to you convincing [third party] to release me I just request you protect me from him and [Executive-1] who ruined my [third party company] deal. I must mention, I pondered if you had me eradicate my business relationship with [third party] just so you could own me and not really produce my shows... You totally request sex before business so just thoughts.

Executive-2: Babe, all I can think about is pounding you like I did when you were a boy. Daddy owns you. My boy... :)

But those email chains were faked.  In response to an investigation by the District Court overseeing the Civil Case, CARRINGTON was unable to produce the original versions of any of the email chains.  The versions of the email chains attached to the amended complaint could also not be located in the email accounts belonging to others that had allegedly sent and received the emails chains.  Moreover, law enforcement determined that versions of two of the email chains attached to the amended complaint did in fact exist in the email accounts belonging to others, although the versions attached to the amended complaint had been substantially altered by CARRINGTON in order to support his allegations in the Civil Case.

CARRINGTON deleted the contents of one of his email accounts that allegedly contained some of the email chains the day after he filed the amended complaint.  He deleted the contents of another of his email accounts that allegedly contained some of the email chains two months later, in violation of a preservation order that the District Court had issued in the Civil Case.

CARRINGTON submitted a statement swearing under penalty of perjury that the email chains in the amended complaint had not been faked or altered.  

CARRINGTON, 32, Los Angeles, California, is charged with one count of perjury, which carries a maximum sentence of five years in prison.  The maximum potential sentences in this case are prescribed by Congress and are provided here for informational purposes only, as any sentencing of the defendant will be determined by the judge.

Ms. Strauss praised the outstanding investigative work of the Special Agents of the Southern District of New York.  Ms. Strauss also thanked the United States Attorney’s Office for the Central District of California for their assistance in the case, and thanked the United States Marshals Service for its assistance in the apprehension of CARRINGTON. 

The case is being handled by the Office’s General Crimes 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 herein constitute only allegations, and every fact described should be treated as an allegation.

Audrey Strauss, the United States Attorney for the Southern District of New York, announced today that COREY SMITH and ELAINE CARBERRY pled guilty to conspiring to burn a marked New York City Police Department (“NYPD”) Homeless Outreach Unit van in the Greenwich Village neighborhood of New York, New York, in July 2020.  SMITH and CARBERRY pled guilty today before U.S. District Judge Lewis J. Liman, to whom the case is assigned. 

U.S. Attorney Audrey Strauss stated: “As they admitted in court today, Corey Smith and Elaine Carberry committed arson, deliberately setting fire to an NYPD van, then minutes later returning to the vehicle and – once again using an accelerant – ensuring its complete destruction.  Now Smith and Carberry await sentencing for their willful and wanton destruction of a law enforcement vehicle that had been used for outreach to homeless New Yorkers.”

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

On July 15, 2020, shortly after 4:30 a.m., SMITH and CARBERRY set a marked NYPD Homeless Outreach Unit van (“NYPD Van”) on the northwest corner of 12th Street and University Place on fire using ignitable liquid.  More specifically, as surveillance footage shows, as SMITH walked by the NYPD Van, CARBERRY handed SMITH a bottle filled with ignitable liquid and SMITH attempted to set fire to the NYPD Van.  After seeing that the NYPD Van was not fully engulfed in flames, CARBERRY again handed SMITH the bottle of ignitable liquid and SMITH circled back to the NYPD Van with more accelerant, and set it ablaze once more, thereby assuring the complete destruction of the NYPD Van. 

An analysis of the materials found in the NYPD Van confirmed the presence of an accelerant.  The Fire Department of the City of New York (“FDNY”) ultimately confirmed that the fire was deliberately set as an act of arson, resulting in the complete destruction of the NYPD Van. 

*                *                *

CARBERRY, 37, and SMITH, 25, both of Brooklyn, New York, each pled guilty to one count of conspiring to commit arson, in violation of 18 U.S.C. § 371, which carries a maximum penalty of five years in prison.  In connection with their guilty pleas, both defendants admitted their roles in the arson.  CARBERRY is scheduled to be sentenced by Judge Liman on January 5, 2022, at 2:00 p.m.  SMITH is scheduled to be sentenced by Judge Liman on January 11, 2022, at 2:00 p.m.

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

Ms. Strauss praised the outstanding investigative work of the New York City Arson and Explosion Task Force of the Bureau of Alcohol, Tobacco, Firearms and Explosives, the NYPD, and the FDNY. 

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

Audrey Strauss, the United States Attorney for the Southern District of New York, announced that a jury returned a guilty verdict today against NICHOLAS JOSEPH, a/k/a “Gotti,” a/k/a “Finesse,” on five counts in a Superseding Indictment, including charges of racketeering conspiracy, violent crimes in aid of racketeering, and firearms offenses.  JOSEPH is scheduled to be sentenced on January 5, 2022, by U.S. District Judge P. Kevin Castel, who presided over the seven-day trial. 

U.S. Attorney Audrey Strauss said: “Nicholas Joseph participated in a violent gang for years and carried out a shooting in a playground next to an elementary school, seriously injuring a 12-year-old child.  Now convicted of his crimes, Joseph will no longer be able to inflict harm on the people of this city.  We continue our daily work with our law enforcement partners to keep our communities safe by vigorously investigating and prosecuting acts of gang violence.”

According to the Superseding Indictment and the evidence at trial:

Between in or about 2014 and in or about December 2020, JOSEPH was a member and associate of the Castle Hill Crew, a racketeering enterprise that operated principally in the Castle Hill Houses in the Soundview neighborhood of the Bronx.  In order to enrich the enterprise, preserve and protect the power of the enterprise, and enhance its criminal operations, Castle Hill Crew members and associates committed, conspired, attempted, and threatened to commit acts of violence, including murder; distributed and possessed with intent to distribute narcotics; engaged in fraud; and obtained, possessed, and used firearms.

On or about November 19, 2015, JOSEPH and others stabbed a rival gang member in the head and back.

On or about April 28, 2017, JOSEPH shot at rival gang members in the vicinity of the Story Playground in the Bronx, New York, during which a 12-year-old child playing basketball in the park was injured.

In addition, on or about July 10, 2020, and in or around November 2020 and December 2020, JOSEPH illegally possessed firearms and ammunition. 

 *                      *                      *

JOSEPH, 23, was convicted on five counts: (1) racketeering conspiracy, which carries a maximum prison term of 20 years; (2) attempted murder and assault with a deadly weapon in aid of racketeering, which carries a maximum prison term of 20 years; (3) using and carrying a firearm during, and possessing a firearm in furtherance of, a crime of violence, which carries a mandatory consecutive prison term of 10 years and a maximum prison term of life; and (4) two counts of being a felon in possession of a firearm and ammunition, each of which carries a maximum prison term of 10 years.

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

Ms. Strauss praised the outstanding investigative work of the New York City Police Department, Homeland Security Investigations, and the New York City Department of Investigation.

The case is being handled by the Office’s Violent and Organized Crime Unit.  Assistant United States Attorneys Andrew K. Chan, Celia V. Cohen, Emily A. Johnson, and Justin V. Rodriguez, and paralegal specialist Victoria Bosah, are in charge of the prosecution.

Audrey Strauss, the United States Attorney for the Southern District of New York, announced today that DAVID HARDY, a/k/a “Mooka,” was sentenced to 372 months in prison for the 2016 murder of Shamoya McKenzie and his participation in a 2012 shooting.  In July 2021, codefendant MARQUIS COLLIER was sentenced to 324 months in prison for his participation in the McKenzie murder and the affairs of the Goonies gang.  COLLIER and HARDY previously pled guilty before U.S. District Judge Nelson S. Román, who imposed COLLIER’s and HARDY’s sentences.

U.S. Attorney Audrey Strauss said: “Nothing can undo the senseless killing of Shamoya McKenzie, an innocent young woman, or the trauma experienced by her mother, who witnessed it.  Justice requires that those responsible be held accountable, as Marquis Collier and now David Hardy have been.  Rightly, both will spend decades in federal prison for their crimes.”

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

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

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

*                *                *

HARDY, 26, pled guilty to one count of using a firearm in connection with the murder of Shamoya McKenzie in aid of racketeering and one count of using a firearm in connection with an assault with a dangerous weapon in aid of racketeering for committing a separate shooting in 2012 in furtherance of the Goonies.  In addition to the prison term, Hardy was also sentenced to five years of supervised release.

COLLIER, 29, pled guilty to one count of racketeering conspiracy and one count of discharging a firearm in connection with the murder of Shamoya McKenzie in aid of racketeering.  In addition to the prison term, Collier was also sentenced to five years of supervised release.

HUGHLEY and SAVOY are awaiting sentencing. 

HUGHLEY, 28, pled guilty to one count of racketeering conspiracy and one count of discharging a firearm in connection with the murder of Shamoya McKenzie in aid of racketeering.  Together, the crimes carry a maximum penalty of life in prison, and a mandatory minimum sentence of ten years in prison.

SAVOY, 24, pled guilty to one count of using a firearm in connection with the murder of Shamoya McKenzie in aid of racketeering, which carries a maximum penalty of life in prison, and a mandatory minimum sentence of five years in prison.

Ms. Strauss thanked the Westchester County District Attorney’s Office for their extraordinary cooperation and assistance with this case, and praised the outstanding investigative work of the Mount Vernon Police Department and the FBI’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 Attorneys Sarah Krissoff and Anden Chow are in charge of the prosecution.

Audrey Strauss, the United States Attorney for the Southern District of New York, announced that CARMELO VELEZ, a/k/a “Jugg,” was sentenced today to 19 years in prison in connection with his participation in the Black Mob set of the Latin Kings and their distribution of narcotics, including heroin, fentanyl, and cocaine.  VELEZ pled guilty on May 25, 2021, before U.S. District Judge Valerie E. Caproni, who imposed today’s sentence.   

U.S. Attorney Audrey Strauss said: “Carmelo Velez was the leader of a violent gang who himself participated in acts of extreme violence.  His wanton disregard for his victims has now earned him a lengthy prison term.”

According to public filings and statements made in court:

The Black Mob is a New York-based set, or “tribe,” of the nationwide Latin Kings gang.  In order to enrich the enterprise, protect and expand its criminal operations, enforce discipline among its members, and retaliate against members of rival gangs, members and associates of the Black Mob committed, conspired, attempted, and threatened to commit acts of violence; distributed and possessed with intent to distribute narcotics, including heroin, fentanyl, and crack; committed robberies; and obtained, possessed, and used firearms.

The Black Mob’s leadership structure resembles the traditional leadership structure of other Latin King tribes.  Leaders in the Black Mob are referred to as “Crowns,” with the respective Crowns ranked as “First Crown,” “Second Crown,” etc.  VELEZ served as the First Crown of the Black Mob since in or around 2012 and, in that capacity, oversaw the Black Mob’s day-to-day operations and also ordered and participated in acts of violence and narcotics trafficking.

In December 2019 and April 2021, VELEZ was charged along with several other members and associates of the Black Mob, including Angel Lopez, a/k/a “SB,” and Christopher Rodriguez, a/k/a “Taz,” with racketeering offenses, narcotics conspiracy, and firearms offenses.  Lopez and Rodriguez, both of whom also held leadership roles within the Black Mob, previously pled guilty and were sentenced to 240 months in prison and 210 months in prison, respectively.

VELEZ pled guilty to one count of conspiracy to distribute and possess with intent to distribute narcotics.  In connection with his guilty plea, VELEZ further stipulated to his involvement in multiple acts of violence: a June 2017 slashing of a rival gang member, an October 2018 home invasion that resulted in the slashing and assault of two rival gang members, and a gunpoint robbery of a drug dealer in or around September 2019. 

*                *                *

In addition to the prison term, VELEZ, 32, of Newburgh, New York, was sentenced to five years of supervised release.

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

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

This case is being handled by the Office’s Narcotics Unit.  Assistant United States Attorneys Adam Hobson, Elinor Tarlow, and David Robles are in charge of the prosecution.

Audrey Strauss, the United States Attorney for the Southern District of New York, announced that RUVIM KRUPKIN, a former New York state-licensed doctor, was sentenced yesterday to 120 months in prison for conspiring to distribute medically unnecessary oxycodone unlawfully.  KRUPKIN pled guilty on September 24, 2020, before U.S. District Judge Analisa Torres, who also imposed yesterday’s sentence.

U.S. Attorney Audrey Strauss said:  “Dr. Ruvim Krupkin wrote medically unnecessary prescriptions for millions of oxycodone pills.  He ignored his patients’ serious medical needs and his medical training, instead turning his medical clinic in Brooklyn into a pill mill, where he doled out oxycodone prescriptions in exchange for cash.  Krupkin put his own greed before his duties as a medical professional, and for that he will now spend a lengthy term in federal prison.”

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

KRUPKIN, a former licensed internal medicine doctor with specialties in oncology and hematology, practiced at a medical office in Brooklyn.  From 2006 to July 2017, KRUPKIN prescribed over four million oxycodone pills to individuals he knew had no legitimate medical need for the pills.  KRUPKIN charged each patient $200 in cash for each visit, payable directly to him.  

As a hematologist, KRUPKIN treated patients who had, or claimed to have, sickle cell anemia – a medical condition that can cause pain for which oxycodone, in conjunction with other treatments, may be legitimately prescribed.  However, KRUPKIN wrote thousands of prescriptions for large quantities of oxycodone to patients, knowing that they in fact had no legitimate medical need for the prescriptions.  KRUPKIN generally performed little to no physical examination on these patients; indeed, the medical notes for each patient were largely the same from one visit to the next.

KRUPKIN typically issued patients prescriptions for large doses of oxycodone.  KRUPKIN’s patients filled their prescriptions at pharmacies throughout New York, and in certain cases, sold the oxycodone pills they received to drug dealers, who in turn re-sold the pills at high value on the street.  KRUPKIN knew that certain of his patients were diverting the oxycodone pills he was prescribing, but he nonetheless continued writing prescriptions of oxycodone for such individuals.

*                *                *

KRUPKIN, 70, of Summit, New Jersey, pled guilty to one count of conspiring to unlawfully distribute and possess with intent to distribute oxycodone.

In addition to the prison term, KRUPKIN was sentenced to one year of supervised release, and ordered to pay a $500,000 fine and forfeit $124,000.

In imposing yesterday’s sentence, Judge Torres said: “Krupkin had a moral and ethical obligation to do no harm.  Instead, he prescribed staggering amounts of medically unnecessary pills of oxycodone.  He capitalized on the pain and desperation of poor New Yorkers.”

Ms. Strauss praised the outstanding investigative work of the FBI-NYPD Health Care Fraud Task Force.  Ms. Strauss also thanked the New York City Human Resources Administration for its work on the investigation.

This case is being handled by the Office’s Narcotics Unit.  Assistant United States Attorneys Tara M. La Morte and Alexandra N. Rothman are in charge of the prosecution.

Audrey Strauss, the United States Attorney for the Southern District of New York, Michael Speckhardt, the Special Agent in Charge of the U.S. Department of State, Office of Inspector General (“State Department OIG”), and Thomas Fattorusso, Acting Special Agent in Charge of the Internal Revenue Service, Criminal Investigation, New York Field Office (“IRS-CI”), announced that MAY SALEHI, a former State Department employee, pled guilty today to conspiracy to commit honest services fraud.  SALEHI was a longtime State Department employee who was involved in evaluating bids for critical overseas government construction projects such as U.S. embassies and consulates.  SALEHI gave confidential inside bidding information to a bidder, and received $60,000 in kickback payments in return.  SALEHI surrendered today and pled guilty before United States Magistrate Judge James L. Cott.  SALEHI’s case is assigned to United States District Judge P. Kevin Castel.

Manhattan U.S. Attorney Audrey Strauss said: “As a State Department employee, May Salehi was entrusted to serve the public.  Instead, she abused her position of trust to line her own pockets, as she admitted today.  Salehi revealed, and traded on, confidential information – corrupting the bidding process and receiving lucrative kickbacks in return.  Together with our law enforcement partners, this Office is committed to rooting out corruption.”

State Department OIG Special Agent in Charge Michael Speckhardt said: “The State Department OIG is dedicated to preserving the integrity of the Department’s programs and processes.  As government employees, we are entrusted to carry out our responsibilities with integrity and support an equitable process.  May Salehi did just the opposite.  She used her position of public trust to selfishly obtain a personal financial advantage by selling proprietary contracting information for profit.  Today’s plea, the culmination of extensive investigative and prosecutorial efforts, demonstrates that those who violate the public’s trust will be held accountable for their actions.”

IRS-CI Acting Special Agent in Charge Thomas Fattorusso said: “May Salehi violated the trust of the American taxpayer by putting her personal financial gain over her responsibilities to safeguard confidential information and government resources. Today’s guilty plea shows IRS-Criminal Investigation will continually work with our law enforcement partners to protect the American taxpayer from this type of abuse.”

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

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

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

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

In September 2016, the State Department’s employees who evaluate the cost of bids gave the remaining five bidders (including Montage) the opportunity to re-bid, if they wished to do so.  Montage had two days to decide whether to submit a re-bid.  During that two-day window, Montage’s principal, Sina Moayedi, spoke with SALEHI by phone and sought confidential inside bidding information about the relationship between Montage’s bid and those of its competitors, which SALEHI supplied.  SALEHI knew that this information was confidential, and that it was unlawful to provide it to a prospective bidder.  After Moayedi received this inside information from SALEHI, Montage immediately increased its bid by $917,820.  In its revised submission to the State Department, Moayedi and Montage lied as to the reason it had increased its bid by nearly $1 million, falsely claiming that it had discovered “an arithmetic error” in its estimates.  Montage was ultimately awarded the Bermuda Project with a revised bid of $6.3 million.  

In the months that followed, Moayedi paid SALEHI a total of $60,000 in kickbacks, which he paid in three installments.  In making these kickback payments, Moayedi used intermediaries to obscure the link between him and SALEHI.  To conceal the true purpose of the kickback payments, SALEHI also gave one of the intermediaries a Persian rug.  SALEHI did not report the $60,000 kickback payments on her State Department financial disclosure form.

*                *                *

SALEHI, 66, of Washington, D.C., pled guilty to one count of conspiracy to commit honest services fraud, which carries a maximum sentence of five years in prison.  The maximum potential sentence in this case is prescribed by Congress and is provided here for informational purposes only, as SALEHI’s sentence will be determined by Judge Castel.

Sina Moayedi was arrested on May 28, 2021, on three charges contained in a criminal Complaint: wire fraud, conspiracy to commit wire fraud, and bribery of a public official.  The charges against Moayedi are pending.

Ms. Strauss praised the outstanding investigative work of the State Department OIG, Special Agents from the United States Attorney’s Office for the Southern District of New York, and IRS‑CI.  She also thanked Special Agents from the United States Attorney’s Office for the District of Columbia and the Montgomery County, Maryland, Police Department.

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

Audrey Strauss, the United States Attorney for the Southern District of New York, announced today that KEVIN TAYLOR, GARY ROBLES, and MICHAEL MAZUR pled guilty to participating in the October 31, 2011, murder of Joshua Rubin.  After shooting and killing Rubin in Brooklyn, New York, the defendants drove Rubin’s body to rural Pennsylvania, where they doused his body in lighter fluid and set it on fire.  TAYLOR and ROBLES pled guilty today.  MAZUR pled guilty on July 1, 2021.  All three defendants will be sentenced by U.S. District Judge Jed S. Rakoff, to whom the case is assigned. 

U.S. Attorney Audrey Strauss said: “On October 31, 2011, Kevin Taylor, Gary Robles, and Michael Mazur participated in the murder of Joshua Rubin after they tried to rob Rubin of a quantity of marijuana.  Not only did the defendants kill Rubin, they then drove his body to rural Pennsylvania where they set it on fire in an attempt to conceal the murder.  Thanks to the relentless, nearly decade-long efforts of our law enforcement partners to find the individuals who cut short Joshua Rubin’s life, the defendants now face significant prison time for their crimes.”

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, TAYLOR, ROBLES, and MAZUR agreed to rob Joshua Rubin of a pound of marijuana.  TAYLOR arranged by phone to purchase the marijuana from Rubin.  ROBLES agreed to bring a firearm to the robbery.  That night, TAYLOR and ROBLES waited inside an apartment while MAZUR served as the lookout.  Rubin entered the apartment, and TAYLOR and ROBLES demanded that Rubin give them the marijuana.  When Rubin refused, ROBLES shot and killed Rubin.

After the murder, TAYLOR, ROBLES, and MAZUR put Rubin’s body into the trunk of a car and drove to rural Pennsylvania.  There, TAYLOR, ROBLES, and MAZUR put Rubin’s body in a garbage can, poured lighter fluid over the body, and set the body on fire.  TAYLOR, ROBLES, and MAZUR then drove back to New York in the early morning hours.

In 2019 and 2020, prior to federal charges being filed in this case, TAYLOR paid cash bribes to a potential witness in an attempt to prevent the witness from speaking with law enforcement.

*              *             *

TAYLOR, 28, ROBLES, 38, and MAZUR, 27, each pled guilty to one count of Hobbs Act robbery, in violation of 18 U.S.C. § 1951, which carries a maximum penalty of 20 years in prison.  In connection with his guilty plea, each defendant admitted his role in the murder.

TAYLOR also pled guilty to one count of conspiracy to commit Hobbs Act 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, each of which carries a maximum penalty of five years in prison.

ROBLES also pled guilty to one count of conspiracy to commit Hobbs Act robbery, in violation of 18 U.S.C. § 371, and one count of conspiracy to distribute marijuana, in violation of 18 U.S.C. § 371, each of which carries a maximum penalty of five years in prison.

MAZUR is scheduled to be sentenced on October 6, 2021.  TAYLOR and ROBLES are each scheduled to be sentenced on January 3, 2022.

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

Ms. Strauss 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.  She 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.

Audrey Strauss, the United States Attorney for the Southern District of New York, Dermot Shea, the Commissioner of the New York City Police Department (“NYPD”), and Ray Donovan, Special Agent in Charge of the New York Division of the Drug Enforcement Administration (“DEA”), announced that JOSE LUIS TEJADA AYBAR (“TEJADA”) and ALLEN ALEXIS ABISADA GUZMAN (“ABISADA”) were charged in criminal complaints unsealed today in Manhattan federal court with narcotics conspiracy resulting in the deaths of Marsha Clarke of the Bronx, New York, and Martin Banks and Edward Lynch of Yonkers, New York.  TEJADA was arrested this morning and will be presented later today before United States Magistrate Judge Ona T. Wang in Manhattan.  ABISADA was arrested today and will be presented tomorrow before United States Magistrate Judge Jonathan Goodman in Miami. 

Manhattan U.S. Attorney Audrey Strauss said: “As alleged, the defendants operated an on-demand delivery service for the distribution of highly addictive and dangerous drugs.  The cocaine distributed by the defendants’ service was laced with the deadly synthetic opioid fentanyl, and as alleged, caused the deaths of three victims.  Thanks to the tireless efforts of law enforcement, the defendants’ delivery service is no longer in business.”

Police Commissioner Dermot Shea said: “Every overdose in New York City is traced back to its source by the NYPD and its enforcement partners, to prevent the senseless kinds of deaths the victims in this case suffered. I commend our investigators and the prosecutors in the United States Attorney’s Office for the Southern District in New York for tirelessly fighting this scourge with every tool at our disposal.”

DEA Special Agent in Charge Ray Donovan said: “Today’s arrests illuminate the dangers associated with fentanyl-tainted street drugs.  Tejada’s alleged drug delivery service put lethal doses of drugs into three New Yorker’s hand, causing their overdose.  Too many lives have been lost to fentanyl-related overdoses and I applaud the NYPD, the U.S. Attorney’s Office, the DEA Homestead Resident Office, and members of the New York Strike Force for their diligent efforts in this investigation.”

As alleged in the Complaints[1]:

From at least January 2018 to at least in or about February 2020, TEJADA and ABISADA operated a narcotics delivery service (the “Cab Louie Delivery Service”) in the New York City area.  On or about September 19, 2019, ABISADA, working for the Cab Louie Delivery Service, delivered cocaine to Clarke, Banks, and Lynch.  Within two days, the cocaine delivered by the Cab Louie Delivery Service, which was tainted with fentanyl, caused the overdose deaths of Clarke, Banks, and Lynch, as well as the hospitalization of Clarke’s husband. 

Soon thereafter, TEJADA saved on his phone a news article reporting the overdose deaths of Banks and Lynch.  TEJADA nevertheless continued to operate the Cab Louie Delivery Service.  From in or about October 2019 to in or about February 2020, TEJADA and ABISADA, operating through the Cab Louie Delivery Service, repeatedly sold cocaine to an NYPD undercover officer. 

*                      *                      *

 JOSE LUIS TEJADA AYBAR, 39, of Yonkers, New York, and ALLEN ALEXIS ABISADA GUZMAN, 40, of the Bronx, New York, are each charged with narcotics conspiracy resulting in death, which carries a mandatory minimum sentence of 20 years in prison and a maximum sentence of life in prison.   

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

Ms. Strauss praised the outstanding investigative work of the NYPD Detective Borough Bronx Violent Crimes Squad and 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.  Ms. Strauss also thanked the Yonkers Police Department and the Westchester County District Attorney’s Office for their assistance in the case, and thanked the DEA’s Miami Field Division for its assistance in the apprehension of ABISADA. 

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

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

 

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

Attorney General Merrick Garland, Audrey Strauss, the United States Attorney for the Southern District of New York, and Kenneth A. Polite Jr., the Acting Assistant Attorney General of the Justice Department’s Criminal Division, announced today that the Madoff Victim Fund established by the Department of Justice began its seventh distribution to victims of funds forfeited to the United States Government in connection with the Bernard L. Madoff Investment Securities LLC (“BLMIS”) fraud scheme.  The distribution will include approximately $568 million in additional funds, bringing the total distributed to date to over $3.7 billion.  The additional funds will be sent to nearly 31,000 victims worldwide, the seventh payment to victims that will bring their total recovery from all sources of compensation to 81.35 percent of their losses.  Additionally, more than 2,600 victims will receive their first payment in this distribution.  The Madoff Victim Fund will ultimately return to victims more than $4 billion in assets that have been recovered as compensation for losses suffered by the collapse of BLMIS, following the largest fraud in history.  Another $5 billion in assets recovered by the U.S. Attorney’s Office are being separately paid to Madoff victims through the BLMIS Customer Fund administered by the Securities Investor Protection Act Trustee.

Manhattan U.S. Attorney Audrey Strauss said: “This Office continues to seek justice for victims of history’s largest Ponzi scheme.  The additional payment of more than $568 million by our Office and the U.S. Department of Justice Criminal Division’s Money Laundering and Asset Recovery Section represents the seventh in a series of distributions that will leave victims with compensation for more than 81 percent of their losses.  But our work is not yet finished, and the Office’s tireless commitment to compensating the victims who suffered as a result of Madoff’s heinous crimes continues.”

Acting Assistant Attorney General Kenneth A. Polite Jr. said: “This distribution provides nearly 31,000 victims additional financial recovery from the egregious crimes committed by Bernard Madoff.  The Department’s continued efforts to ensure justice for victims of crime is demonstrated through the ongoing Madoff remission process and the billions given back to innocent victims worldwide.” 

Since the early 1970s, BERNARD L. MADOFF (“MADOFF”) used his position as Chairman of BLMIS, the investment advisory business he founded, to steal billions from his clients.  On March 12, 2009, MADOFF pled guilty to 11 federal felonies, admitting that he had turned his wealth management business into the world’s largest Ponzi scheme, benefitting himself, his family, and select members of his inner circle.  On June 29, 2009, United States District Judge Denny Chin sentenced MADOFF to 150 years in prison for running the largest fraudulent scheme in history.  Judge Chin ordered MADOFF to forfeit $170,799,000,000 as part of MADOFF’s sentence.   

The Madoff Victim Fund is funded through recoveries by the U.S. Attorney’s Office in various criminal and civil forfeiture actions, and is overseen by Richard Breeden, the former chairman of the United States Securities and Exchange Commission, in his capacity as special master appointed by the Department of Justice to assist in connection with the victim remission proceedings.

Of the approximately $4.05 billion that will be made available to victims through the Madoff Victim Fund, approximately $2.2 billion was collected as part of the civil forfeiture recovery from the estate of deceased MADOFF investor Jeffry Picower.  An additional $1.7 billion was collected as part of a Deferred Prosecution Agreement with JPMorgan Chase Bank N.A. for MADOFF-related Bank Secrecy Act violations.  Additional funds were collected through criminal and civil forfeiture actions against MADOFF and his co-conspirators, and certain MADOFF investors.

Ms. Strauss praised the work of the Federal Bureau of Investigation and the Madoff Victim Fund, and thanked the Money Laundering and Asset Recovery Section of the Department of Justice’s Criminal Division for their assistance.

For more information about the Madoff Victim Fund, compensation to victims of BLMIS, eligibility criteria, and payment information, please visit www.madoffvictimfund.com, or phone 866-624-3670.

The case is being handled by the Office’s Money Laundering and Transnational Criminal Enterprises Unit.  Assistant United States Attorney Louis A. Pellegrino is in charge of the case.  The remission of these forfeited funds is being handled by the Office and the U.S. Department of Justice Criminal Division’s Money Laundering and Asset Recovery Section.

The Department of Justice announced today that the Madoff Victim Fund (MVF) began its seventh distribution of approximately $568 million in funds forfeited to the U.S. government in connection with the Bernard L. Madoff Investment Securities LLC (BLMIS) fraud scheme, bringing the total distributed to over $3.7 billion to nearly 40,000 victims worldwide. 

In this distribution, payments will be sent to nearly 31,000 victims across the globe, bringing their total recovery to 81.35%. This distribution represents the seventh in a series of payments that will eventually return over $4 billion to victims as compensation for losses they suffered from the collapse of the BLMIS. More than 2,600 victims will receive their first payment from MVF in this distribution.

“This distribution provides nearly 31,000 victims additional financial recovery from the egregious crimes committed by Bernard Madoff,” said Assistant Attorney General Kenneth A. Polite Jr. of the Justice Department’s Criminal Division. “The Department’s continued efforts to ensure justice for victims of crime is demonstrated through the ongoing Madoff remission process and the billions given back to innocent victims worldwide.”  

“This office continues to seek justice for victims of history’s largest Ponzi scheme,” said U.S. Attorney Audrey Strauss for the Southern District of New York. “The additional payment of more than $568 million by our Office and the U.S. Department of Justice Criminal Division’s Money Laundering and Asset Recovery Section represents the seventh in a series of distributions that will leave victims with compensation for more than 81 percent of their losses. But our work is not yet finished, and the Office’s tireless commitment to compensating the victims who suffered as a result of Madoff’s heinous crimes continues.”

According to court documents and information presented in related proceedings, for decades, Bernard L. Madoff used his position as chairman of BLMIS, the investment advisory business he founded in 1960, to steal billions from his clients. On March 12, 2009, Madoff pleaded guilty to 11 federal felonies, admitting that he had turned his wealth management business into the world’s largest Ponzi scheme, benefitting himself, his family and select members of his inner circle. 

On June 29, 2009, then-U.S. District Judge (now U.S. Circuit Judge), Denny Chin sentenced Madoff to serve 150 years in prison for running the largest fraudulent scheme in history. Of the approximately $4.05 billion that will be made available to victims, approximately $2.2 billion was collected as part of the historic civil forfeiture recovery from the estate of deceased Madoff investor Jeffry Picower. An additional $1.7 billion was collected as part of a deferred prosecution agreement with JPMorgan Chase Bank N.A. and civilly forfeited in a parallel action. The remaining funds were collected through a civil forfeiture action against investor Carl Shapiro and his family and from civil and criminal forfeiture actions against Bernard L. Madoff, Peter B. Madoff and their co-conspirators.

The MVF’s payouts would not have been possible without the extraordinary efforts of the Criminal Division’s Money Laundering and Asset Recovery Section, the U.S. Attorney’s Office for the Southern District of New York and the FBI in the prosecution of Madoff’s crimes and the recovery of assets supporting the forfeiture in this case. 

The MVF is overseen by Richard Breeden, former Chairman of the U.S. Securities and Exchange Commission, in his capacity as Special Master appointed by the Department of Justice to assist in connection with the victim remission proceedings. The Department of Justice also acknowledges the sacrifice of numerous individuals due to the COVID-19 pandemic, who worked in challenging conditions to ensure that this distribution occurred and remained on schedule.  

More information about MVF and its compensation to victims of BLMIS is available on the MVF website at www.madoffvictimfund.com, such as eligibility criteria, process updates, and frequently asked questions. Further questions may be directed to the MVF at 866-624-3670 or info@madoffvictimfund.com.

Audrey Strauss, United States Attorney for the Southern District of New York, announced that STEFAN HE QIN, the founder of the Virgil Sigma Fund LP (“Virgil Sigma”) and the VQR Multistrategy Fund LP (“VQR”), a pair of cryptocurrency hedge funds in New York which claimed to have over $100 million dollars in investments, was sentenced today to 90 months in prison.  On February 4, 2021, QIN pled guilty to one count of securities fraud before U.S. District Judge Valerie E. Caproni, who imposed today’s sentence.

U.S. Attorney Audrey Strauss said:  “According to Stefan He Qin, founder of Virgil Sigma and VQR, a pair of cryptocurrency hedge funds in New York, Virgil had a stated market strategy of ‘market neutral,’ safe investments.  Qin’s investors soon discovered that his strategies weren’t much more than a disguised means for him to embezzle and make unauthorized investments with client funds.  When faced with redemption requests he couldn’t fulfill, Qin doubled down on his scheme by attempting to plunder funds from VQR to satisfy his victim investors’ demands.  Qin’s brazen and wide-ranging scheme left his beleaguered investors in the lurch for over $54 million, and he has now been handed the appropriately lengthy sentence of over seven years in federal prison.”  

According to the Information and statements made in open court:

Background

STEFAN HE QIN is a 24-year old Australian national.  Between 2017 through 2020, QIN owned and controlled two cryptocurrency investment funds, Virgil Sigma and VQR, both of which were located in New York, New York.   Since its creation, Virgil Sigma purported to employ a strategy to earn profits from arbitrage opportunities in the cryptocurrency market.   This strategy was touted by QIN to the investing public as “market-neutral,” meaning the fund was not exposed to any risk from the price of cryptocurrency moving up or down and therefore provided a relatively safe and liquid investment. Until recently, Virgil Sigma purported to have over $90 million under management from dozens of investors, including many in the United States.  According to its public marketing materials, Virgil Sigma has been profitable in every month from August 2016 to the present, with the sole exception of March 2017.  QIN also regularly participated in calls with Virgil Sigma investors and other forms of public communication where he touted the growth and success of Virgil Sigma.  For example, in February 2018, QIN and his fund were profiled in the Wall Street Journal.

In or about February 2020, QIN founded VQR. VQR employed a variety of trading strategies and was poised to make or lose money based on the fluctuations in the value of cryptocurrency and was not market neutral.  QIN was the sole owner of VQR’s general partner, but was not involved in VQR’s day-to-day operations.  Instead, VQR had its own trading staff, including a head trader (the “Head Trader”) and other investment professionals.  Until recently, VQR had at least approximately $24 million under management from investors. 

Qin’s Scheme to Steal Assets from Virgil Sigma

Since 2017, QIN engaged in a scheme to steal assets from Virgil Sigma and defraud its investors.  Rather than investing the fund’s assets in a cryptocurrency arbitrage trading strategy as advertised, QIN embezzled investor capital from Virgil Sigma and used the funds for purposes other than the purported arbitrage trading strategy, including: (a) using a substantial portion of investor capital stolen from Virgil Sigma to pay for personal expenses such as food, services, and rent for a penthouse apartment in New York City; (b) using a substantial portion of investor capital from Virgil Sigma to make personal, often illiquid investments in other entities that had nothing to do with cryptocurrencies.  For example, in or about October 2018, QIN invested hundreds of thousands of dollars stolen from Virgil Sigma into a real estate investment; and (c) using a substantial portion of investor capital from Virgil Sigma to invest in crypto-assets that had nothing to do with the fund’s stated arbitrage strategy.  For example, in or about 2018, QIN invested funds from Virgil Sigma into certain initial coin offerings, a speculative form of investing in new issues of cryptocurrency.  As a result of these and other fraudulent activities, QIN dissipated nearly all of the investor capital in Virgil Sigma.  QIN also regularly lied to the fund’s investors about the value, location, and status of their investment capital, including through false account statements that QIN prepared and bogus tax documents that he circulated to his investors. 

Qin Attempts to Steal Assets From VQR to pay Virgil Sigma Investors

In or about December 2020, faced with redemption requests from the Virgil Sigma fund that he could not meet, QIN demanded that the Head Trader at VQR wind down all trading positions at VQR and transfer a portion of the funds to QIN so that QIN could use that money to pay off these redemptions to Virgil Sigma investors.  QIN issued the demand even though the Head Trader advised QIN that closing out VQR’s then-current trading positions, rather than holding those positions in accordance with VQR’s directional trading strategy, would result in losses to VQR’s investors.  At QIN’s direction, the Head Trader accordingly closed out VQR’s positions and turned over access to VQR’s trading accounts to QIN.  QIN subsequently attempted to take control of VQR’s assets in order to enable QIN to meet certain Virgil Sigma investor redemption requests.

The Virgil Sigma fund and VQR have ceased operations and the liquidation and distribution of assets is being handled by a court-appointed receiver in the matter of S.E.C. v. Qin, 20 Civ. 10849. 

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QIN, 24, was also sentenced to three years of supervised release, and ordered to forfeit $54,793,532. 

Ms. Strauss praised the work of the Department of Homeland Security, Homeland Security Investigations.  She further thanked the Securities and Exchange Commission for its cooperation and assistance in this investigation.   

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

Audrey Strauss, the United States Attorney for the Southern District of New York, announced that AMEET GOYAL, an ophthalmologist in Rye, New York, pled guilty yesterday to perpetrating a seven-year healthcare fraud scheme by falsely billing for millions of dollars of procedures he did not perform, and also to fraudulently obtaining two Government-guaranteed loans intended to help small businesses during the COVID-19 pandemic while facing charges on pretrial release for the healthcare fraud scheme.  GOYAL pled guilty before U.S. District Judge Cathy Seibel to all charges in a six-count superseding Indictment.

U.S. Attorney Audrey Strauss said:  “Dr. Ameet Goyal was an experienced eye doctor who became blinded by greed and routinely defrauded patients who trusted him to heal their eyes.  He grossly overbilled minor ophthalmological procedures, billed for tests and procedures that were never performed, falsified medical records, attempted to corrupt others in his practice to abet the scheme, and sent patients who refused to pay his fraudulent charges to collections.  Already facing charges for defrauding patients and insurers of millions of dollars, Goyal committed a new fraud in applying for Paycheck Protection Program loans on behalf of two separate businesses and lying on the applications.  Goyal looted over $630,000 in federal funds earmarked for legitimate small businesses affected by the COVID-19 pandemic.  Goyal has now admitted to both fraudulent schemes, agreed to forfeit $3.6 million, and faces the possibility of a significant term of incarceration.”

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

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

For example, GOYAL and others at the Practice routinely treated patients for an excision of a chalazion, a small bump on an eyelid, typically removed in less than 15 minutes.  An excision of chalazion, when billed truthfully under its associated code, paid the Practice approximately $200 on average from patients and insurance programs.  However, GOYAL systematically billed an excision of chalazion and other similar superficial eyelid procedures as if he had performed an orbitotomy together with a conjunctivoplasty, which are complex surgeries into the orbit of the eye, often to remove an orbital tumor together with grafting to close the resulting wound, that typically take an hour or more to perform.  These substantial surgeries, as billed, paid the Practice approximately $1,400 on average from a combination of insurance and patient out-of-pocket payments.  GOYAL also upcoded certain superficial procedures as an excision and repair of eyelid, a type of higher-paying eyelid surgery involving reconstruction or removal of certain lesions other than chalazions.  During the relevant time period, GOYAL billed less than 40 chalazions under the billing code designated for excision of chalazion, while billing over 1,400 orbitotomies, over 700 bundled conjunctivoplasties, and over 1,600 excision and repair of eyelid surgeries, all of which he claimed to have personally performed.  The scheme involved numerous other CPT codes for procedures and examinations not performed or upcoded, resulting in at least $3.6 million of ill-gotten gains for GOYAL.

On November 21, 2019, an indictment (the “Indictment”) was returned in the action United States of America v. Ameet Goyal, 19 Cr. 844 (CS) (S.D.N.Y.), charging GOYAL with healthcare fraud, wire fraud, and making false statements relating to healthcare matters.  On November 22, 2019, GOYAL was arraigned on the Indictment and placed on pretrial release pursuant to an order that notified GOYAL of the potential effect of committing a criminal offense while on pretrial release.

The Coronavirus Aid, Relief, and Economic Security (“CARES”) Act is a federal law enacted on March 29, 2020, designed to provide emergency financial assistance to the millions of Americans who are suffering the economic effects caused by the COVID-19 pandemic.  One source of relief provided by the CARES Act was the authorization of hundreds of billions of dollars in forgivable loans to small businesses for job retention and certain other expenses through the Small Business Administration’s (“SBA”) Paycheck Protection Program (“PPP”).  Applicants with pending criminal charges are ineligible for PPP loans.  The PPP also limits each eligible borrower to one loan, and a maximum loan amount calculated based on a business’s average monthly payroll expenses. 

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

On both applications, GOYAL falsely answered that he was not facing any pending criminal charges, and electronically placed his initials “AG” directly under his “No” response.  GOYAL also falsely certified, among other things, that his business would not receive another PPP loan until the end of the year.  After obtaining approval from Bank-1 and the SBA through his fraudulent misrepresentations, GOYAL executed loan notes for two loans.  On May 4, 2020, GOYAL received the first loan of $358,700, and on May 11, 2021, GOYAL received the second loan of $278,500.  GOYAL used the business checking account into which these funds were deposited to pay business and personal expenses, including by making a $1,800 payment to a country club in Westchester, New York, within days of receiving the first loan.                    

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GOYAL, 58, of Rye, New York, pled guilty to all six counts in the Superseding Indictment.  The first count charged healthcare fraud, which carries a maximum sentence of 10 years in prison; the second count charged wire fraud, which carries a maximum sentence of 20 years in prison; and the third count charged making false statements relating to health care matters, which carries a maximum sentence of five years in prison.  Counts four, five, and six charged that while on pretrial release, the defendant committed the following offenses, respectively: bank fraud, which carries a maximum sentence of 30 years in prison; making false statements on a loan application, which carries a maximum sentence of 30 years in prison; and making false statements in a matter within the jurisdiction of the executive branch of the Government of the United States, which carries a maximum sentence of five years in prison.  Additionally, a conviction under counts four, five, and six, if committed while on pretrial release, provides for an additional maximum sentence of 10 years in prison consecutive to any other sentence of imprisonment.

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

GOYAL is scheduled to be sentenced by Judge Seibel on January 6, 2022, at 2:30 p.m.              

Ms. Strauss praised the work of the Federal Bureau of Investigation, the U.S. Department of Health and Human Services, Office of Inspector General, and the Office of the Inspector General of the SBA, whose expertise and diligence were integral to the development of this investigation and the guilty plea.

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

Audrey Strauss, the United States Attorney for the Southern District of New York, announced that defendant SCOTT MANGINI was sentenced today to 18 months in prison in connection with his years-long sale and distribution of adulterated and misbranded drugs, including performance-enhancing drugs (“PEDs”) marketed to racehorse trainers and others in the racehorse industry.  MANGINI pled guilty to a one-count Information on April 23, 2021, before U.S. District Judge J. Paul Oetken, who presided over today’s sentencing.

U.S. Attorney Audrey Strauss said: “Scott Mangini used his skills as a pharmacist to create and supply a market for adulterated and unregulated performance-enhancing drugs that endangered racehorses.  Mangini designed and peddled dozens of products intended for use by those engaged in fraud and animal abuse.  Mangini’s products were manufactured in unsanitary facilities that he hid behind shell companies, straw owners, and fake prescription records.  His conduct persisted despite efforts by state and federal regulators to shutter Mangini’s operation and strip his license.  Today’s sentence underscores this Office’s commitment to the prosecution of those who, in their race for riches, would corruptly produce, peddle, or deploy illegal substances that endanger the animals under their care.”

According to the prior Indictments, the Superseding Information to which MANGINI pled guilty, and other court documents, as well as statements made in public court proceedings:

From at least in or about 2011 through at least in or about March 2020, MANGINI and his conspirators manufactured, sold, and shipped millions of dollars’ worth of adulterated and misbranded equine drugs, including performance-enhancing drugs intended to be administered to racehorses for the purpose of improving those horses’ race performance in order to win races and obtain prize money.  MANGINI, a former pharmacist whose license was suspended in 2016, sold these drugs through several direct-to-consumer websites designed to appeal to racehorse trainers and owners, including, among others, “horseprerace.com” and “racehorsemeds.com.”  

MANGINI contributed to the conspiracy by, among other things, using his training to design and create custom PEDs that were advertised and sold online, using misleading labels, packaging, and return address information, including sales to customers in the Southern District of New York.  Among the drugs advertised and sold during the course of the conspiracy were “blood builders,” which are used by racehorse trainers and others to increase red blood cell counts and/or the oxygenation of muscle tissue of a racehorse in order to stimulate the horse’s endurance, which enhances that horse’s performance in, and recovery from, a race, and customized analgesics, which are used by racehorse trainers and others to deaden a horse’s nerves and block pain in order to improve a horse’s race performance.  MANGINI and his co-conspirators repeatedly touted illegal drugs sold on these websites as substances that “WILL NOT TEST” in the event of drug screens by racing officials.  For example, MANGINI’s pain-numbing product “Numb It Injection” was advertised as a “proprietary formula and without question the most powerful pain shot in the market today AND WILL NOT TEST,” and customers were expressly directed to administer the drug by “injection as close to the event or extreme exercise as possible.”

The drugs distributed through the defendant’s websites were manufactured in facilities not registered with the Food and Drug Administration (“FDA”), and carried significant risks to the animals affected through the administration of those illicit PEDs.  For example, in 2016, MANGINI and his co-conspirator, Scott Robinson, who was previously convicted and sentenced in this case, received a complaint regarding the effect of his unregulated drugs on a customer’s horse: “starting bout 8 hours after I give the injection and for about 36 hours afterwards both my horses act like they are heavily sedated, can barely walk.  Could I have a bad bottle of medicine, I’m afraid to give it anymore since this has happened three times.”  Commenting on this complaint to MANGINI, Robinson wrote simply, “here is another one.”

MANGINI is among 29 individuals charged to date in a series of Indictments arising from an investigation of a widespread scheme 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, horse racing officials, and the FDA, among others, participants in these schemes sought to improve race performance and obtain prize money from racetracks, all to the detriment and risk of the health and well-being of the racehorses. 

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In addition to his prison sentence, MANGINI, 55, of Boca Raton, Florida, was sentenced to three years of supervised release and ordered to pay a forfeiture penalty of $8,108,141.65.

Ms. Strauss 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.  Ms. Strauss also thanked the New Jersey Attorney General’s Office, the New York State Police, and the New York City Police Department for their support of this investigation, and the FDA and the Drug Enforcement Administration for their assistance and expertise.

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

Audrey Strauss, the United States Attorney for the Southern District of New York, and Wendy Woolcock, the Special Agent in Charge of the Special Operations Division of the U.S. Drug Enforcement Administration (“DEA”), today announced that former Venezuelan official Hugo Armando Carvajal Barrios, a/k/a “El Pollo,” was arrested yesterday in Madrid, Spain, based on an Indictment filed in the Southern District of New York.  The Indictment charges Carvajal Barrios with participating in a narco-terrorism conspiracy and a conspiracy to import cocaine into the United States, including a 5.6-ton shipment of cocaine transported from Venezuela to Mexico in April 2006, along with related firearms offenses.[1]  CARVAJAL BARRIOS was originally arrested in connection with these charges in April 2019, and later that year the Spanish National Court approved CARVAJAL BARRIOS’s extradition to the United States. CARVAJAL BARRIOS has since remained a fugitive pending extradition until his arrest yesterday.

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Carvajal Barrios, 61, a Venezuelan national residing in Spain, among other places, is charged with: (1) participating in a narco-terrorism conspiracy, which carries a 20-year mandatory minimum sentence and a maximum of life; (2) conspiring to import cocaine into the United States, which carries a 10-year mandatory minimum sentence and a maximum of life; (3) using and carrying machine guns and destructive devices during and in relation to, and possessing machine guns and destructive devices in furtherance of, the narco-terrorism and cocaine importation conspiracies, which carries a 30-year mandatory minimum sentence and a maximum of life; and (4) conspiring to use and carry machine guns and destructive devices during and in relation to, and to possess machine guns and destructive devices in furtherance of, the narco-terrorism and cocaine importation conspiracies, which carries a maximum sentence of life.  The potential mandatory minimum and maximum sentences in this case are prescribed by Congress and provided here for informational purposes only, as any sentencing of the defendants will be determined by the judge.

Ms. Strauss praised the outstanding efforts of the DEA’s Special Operations Division Bilateral Investigations Unit and Miami Field Division, Homeland Security Investigations, the U.S. Treasury Department Office of Foreign Assets Control, the U.S. Department of Justice’s Office of International Affairs, the U.S. Attorney’s Office for the Southern District of Florida, and the Spanish National Police’s Fugitive Unit.

This prosecution is being handled by the Office’s Terrorism and International Narcotics Unit.  Assistant U.S. Attorneys Jason A. Richman, Benjamin Woodside Schrier, and Kyle A. Wirshba are in charge of the prosecution.

 

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

Audrey Strauss, the United States Attorney for the Southern District of New York, announced that DWAYNE ANTHONY CONLEY, a/k/a “Taquan Rashad,” a/k/a “Q,” a/k/a “Pops,” was sentenced to 11 years in prison for coercion and enticement and the promotion of prostitution of five victims.  CONLEY previously pled guilty to those offenses on March 11, 2021, before United States District Judge Paul A. Engelmayer.

Manhattan U.S. Attorney Audrey Strauss said: “Dwayne Conley exploited and victimized women for his financial gain.  He coerced his victims into prostitution, including by physical abuse and exploiting a victim’s heroin addiction.  For his wanton indifference to the suffering of his victims – indeed, for inflicting that suffering – Conley has been sentenced to a lengthy prison term.”

According to the Superseding Information, publicly filed documents, and evidence presented at the trial of CONLEY’s codefendant Justin Rivera, in or about 2015, CONLEY persuaded, induced, enticed, and coerced a victim, described in the Superseding Information as “Victim‑3,” to travel from New York to Virginia to engage in prostitution.  CONLEY used violence against Victim‑3 on many occasions.  CONLEY also exploited Victim‑3’s severe heroin addiction, verbally abused Victim‑3, used Victim-3 to further his narcotics trafficking, and promoted Victim-3’s prostitution.

In or about 2015, CONLEY also attempted to persuade, induce, entice, and coerce two other victims to travel from New York to Virginia to engage in prostitution.  CONLEY further promoted the prostitution of two additional victims, including by posting advertisements on the Internet for commercial sex with the victims, and providing heroin to one of the victims.  In total, at his sentencing hearing, CONLEY was held accountable for his victimization and exploitation of five different women. 

*                      *                      *

In addition to today’s prison sentence, CONLEY, 52, of Central Islip, New York, was sentenced to five years of supervised release.

Ms. Strauss thanked Special Agents and Task Force Officers from the FBI-NYPD New York Child Exploitation and Human Trafficking Task Force, detectives from the Suffolk County Police Department’s Human Trafficking Investigations Unit, and Special Agents from the United States Attorney’s Office for the Southern District of New York for their outstanding work on this case.

The case is being handled by the Office’s General Crimes Unit.  Assistant United States Attorneys Rushmi Bhaskaran, Benjamin Woodside Schrier, and Daniel H. Wolf are in charge of the prosecution.

Audrey Strauss, the United States Attorney for the Southern District of New York, announced today that JOSEPH IORHEMBA ASAN JR. was sentenced to 46 months in connection with a scheme to commit romance fraud scams and business email compromises against dozens of victims across the United States, defraud banks, and launder millions of dollars in fraud proceeds to co-conspirators based in Nigeria.  ASAN was arrested on October 31, 2019, and pled guilty on December 23, 2020, to conspiracy to commit bank fraud and wire fraud.  Today’s sentence was imposed by U.S. District Judge Kimba Wood.

Manhattan U.S. Attorney Audrey Strauss said:  “Among the many victims of the internet scams facilitated by Joseph Asan Jr. were elderly women and men who were callously fooled into believing they were engaging online with potential romantic interests. This former serviceman and his co-defendant even laundered money stolen from a U.S. Marine Corps veteran’s organization in one of the conspiracy’s email spoofing schemes. Asan’s crimes have indeed led to his own reversal of his fortune, as this former defender of this country now becomes a federal prisoner.”

According to allegations in documents filed in Manhattan federal court:

From at least in or about February 2018 through at least in or about October 2019, ASAN and his co-defendant CHARLES IFEANYI OGOZY were members of the U.S. Army Reserves who participated in a scheme to commit fraud against dozens of victims across the United States, defraud banks, and launder millions of dollars in fraud proceeds in bank accounts that they controlled.  The funds laundered by ASAN and OGOZY were obtained primarily through: (a) romance scams, in which members of the scheme deluded unsuspecting older women and men into believing they were in a romantic relationship with a fake identity assumed by members of the scheme, and used false pretenses to cause the victims to transfer money to bank accounts under the control of members of the scheme, including ASAN and OGOZY; and (b) business email compromises, in which members of the scheme gained unauthorized access to or spoofed email accounts and impersonated employees of a company or third parties engaged in business with the company in order to fraudulently induce the victims to transfer money to bank accounts under the control of members of the scheme, including ASAN and OGOZY.  Notably, one of the victims of the defendants’ business email compromise scheme included a U.S. Marine Corps veteran’s organization.

In order to launder proceeds from those fraud schemes, ASAN and OGOZY opened several bank accounts in the names of fake businesses called Uxbridge Capital LLC, Renegade Logistics LLC, and Eldadoc Consulting LLC.  In total, ASAN opened at least 10 business bank accounts at eight different banks in the names of these fake businesses, and he used those accounts to receive and transfer to co-conspirators overseas over $1.8 million in fraud proceeds from at least 69 identified victims.  In connection with the opening of the business bank accounts, ASAN made multiple false statements to banks about the purported business of his companies, including misrepresentations that the companies were involved in shipping, real estate, and public relations.  In addition, a significant portion of the laundered funds was deposited and withdrawn in cash that was not able to be traced by law enforcement.   

                                                                                                                                             *                      *                      *

ASAN, 24, of Daytona Beach, Florida, was also sentenced to three years of supervised release.  In addition, ASAN was ordered to forfeit $184,723, and to pay restitution of $1,792,015 to victims.

Ms. Strauss praised the outstanding investigative work of the Federal Bureau of Investigation and the U.S. Army Criminal Investigation Command’s Major Procurement Fraud Unit.  Ms. Strauss also thanked the U.S. Customs and Border Protection for their assistance in the investigation.  

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

Audrey Strauss, the United States Attorney for the Southern District of New York, announced that MICHAEL ACKERMAN, who orchestrated a multimillion-dollar cryptocurrency investment scheme, pled guilty to wire fraud today before United States Chief District Judge Laura Taylor Swain.  ACKERMAN admitted to causing victim losses of more than $30 million.

U.S. Attorney Audrey Strauss said: “As he admitted today, Michael Ackerman raised millions of dollars in investments for his fake cryptocurrency scheme by falsely touting monthly returns of over 15 percent, falsifying documents to con investors into thinking his fund had a balance of over $315 million, and spending millions in investor funds on himself.  Now Ackerman awaits sentencing for his crime.”

According to the Indictment and the underlying complaint filed in this case, as well as prior court filings and recent court proceedings:

In or about 2017, MICHAEL ACKERMAN and others started a purported cryptocurrency “investment” fund (the “Fund”) and recruited hundreds of individual investors into the Fund.  The Fund was an investment club that allowed its members to contribute U.S. dollars, which the investors were told would then be used to invest and trade in Bitcoin and other cryptocurrencies.  ACKERMAN was held out as the Fund’s chief trading officer and personally controlled the Fund’s primary trading account on an online cryptocurrency exchange.  Based on figures provided by ACKERMAN, the Fund claimed that its proprietary trading algorithm was earning approximately 15 percent in profit for investors each month.

By December 2019, ACKERMAN claimed that the Fund investment pool – which consisted of approximately $37 million in original investor contributions – had grown in value to approximately $315 million.  ACKERMAN’s claims about the performance of the Fund were communicated to existing Fund investors as well as prospective investors, some of whom were induced to invest in the Fund in the hopes of enjoying high rates of return.

The rates of return that ACKERMAN reported on the Fund investments, and its overall Fund balance, were false.  In reality, the primary trading account used by ACKERMAN had an account balance that never exceeded approximately $5 million.  To support his false claim that the Fund’s investments were earning 15 percent in monthly profits and had grown to approximately $315 million, ACKERMAN doctored numerous account screenshots that he knew were being used to communicate with Fund investors.

Instead of investing and trading on behalf of the Fund, ACKERMAN stole at least $9 million in investor contributions and used them to bankroll a lavish lifestyle that included his purchase of multiple pieces of real estate, hundreds of thousands of dollars of Tiffany jewelry, vehicles, travel, and personal security services.

*                *                *

ACKERMAN, 52, of Sheffield Lake, Ohio, pled guilty today to one count of wire fraud, which carries a maximum sentence of 20 years in prison.  The maximum potential sentence in this case is prescribed by Congress and is provided here for informational purposes only, as any sentencing of the defendant will be determined by the judge.

Under the terms of his plea, ACKERMAN agreed to make restitution of at least $30,667,738.79.  ACKERMAN also agreed to forfeiture of $36,268,515, including the millions of dollars in cash, real estate, and jewelry that were fraudulently obtained from victims or bought with victim funds.

ACKERMAN is scheduled to be sentenced by Judge Swain on January 5, 2022, at 2:00 p.m.       

Ms. Strauss praised the outstanding work of special agents from Homeland Security Investigations’ El Dorado Task Force and the Federal Bureau of Investigation in Tampa, and thanked the attorneys and investigators at the Commodity Futures Trading Commission and the Securities and Exchange Commission whose expertise and diligence were integral to the development of this investigation and today’s guilty plea.

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

Audrey Strauss, the United States Attorney for the Southern District of New York (“SDNY”), Kenneth A. Polite Jr., the Assistant Attorney General for the Criminal Division of the Department of Justice (“DOJ”), and Darrell J. Waldon, the Acting Special Agent in Charge of the Washington DC Field Office of the Internal Revenue Service, Criminal Investigation (“IRS-CI”), announced today the unsealing of an indictment charging AFEWORK BEREKET, a/k/a “Affe Bereket,” with conspiring to violate the Foreign Corrupt Practices Act (“FCPA”) and to commit money laundering, in connection with his role in a criminal scheme to bribe foreign government officials perpetrated by Telefonaktiebolaget LM Ericsson (“LM Ericsson”), a multinational telecommunications company headquartered in Sweden, and its subsidiary Ericsson Egypt Ltd. (“Ericsson Egypt” and, collectively with LM Ericsson, “Ericsson”).  BEREKET remains at large.

U.S. Attorney Audrey Strauss said: “As alleged, Afework Bereket conspired in a corrupt scheme to pay millions of dollars in bribes to two Djibouti government officials and an official of a state-owned telecom company to win a contract for Ericsson valued at more than €20 million.  To disguise the scheme, Bereket allegedly engaged in financial sleight-of-hand involving a sham consulting contract, a false due-diligence report, and fake invoices.  The alleged criminal scheme has been exposed, and Affe Bereket is now charged in our District with serious federal crimes.”

Assistant Attorney General Kenneth A. Polite Jr. said: “Bereket allegedly used the U.S. financial system to pay bribes to high-level government officials in Djibouti to ensure that Swedish telecom giant Ericsson won a multimillion-dollar government contract.  Today’s unsealed charges demonstrate the department’s commitment to hold individuals accountable for violations of the FCPA and to ensure that business is won or lost on merit, not the amount of bribes a company’s employees and agents are willing to pay.”

IRS-CI Acting SAC Darrell J. Waldon said: “Our global economy should be one free from corrupt practices.  The indictment unsealed today, reflects the veracity in which IRS-CI will investigate those who engage in bribery to receive their business.  Together with our partners at the Department of Justice, we will continue our efforts to ensure fair competition for companies around the world.

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

BEREKET, while working for Ericsson, bribed foreign officials in Djibouti in exchange for business with a state-owned telecommunications company there (“Telecom Company-1”). BEREKET was an Ericsson account manager responsible for the Horn of Africa, a region that included Djibouti, from approximately November 2010 until approximately July 2013.  According to the indictment, BEREKET and co-conspirators engaged in a scheme to pay approximately $2.1 million in bribes to three foreign officials – two high-ranking foreign officials in the executive branch of Djibouti’s government, and a high-level executive at Telecom Company-1 – in order to help Ericsson obtain and retain a €20,300,000 contract with Telecom Company-1.  BEREKET and co-conspirators disguised the bribes as payments to a consulting company linked to one of the foreign officials being bribed.  To do so, BEREKET and co-conspirators entered into a sham contract with the consulting company, prepared a false due-diligence report, and caused an Ericsson entity to approve fake invoices.  BEREKET discussed the bribery scheme in multiple communications with co-conspirators.  In one email, he urged  others to pay an invoice from the consulting company “ASAP,” explaining that “[e]verybody in the management of [Telecom Company-1] & in the ministry are waiting their part of the cake.”

*                *                *

AFEWORK BEREKET, 53, a dual citizen of Ethiopia and Sweden, has been charged in the indictment with one count of conspiring to violate the anti-bribery provision of the FCPA, which carries a maximum potential sentence of five years in prison, and one count of conspiring to commit money laundering, which carries a maximum potential sentence of 20 years in prison.

The prosecution of this case is being handled by the Office’s Complex Frauds and Cybercrime Unit and the FCPA Unit of the Fraud Section of DOJ’s Criminal Division. Assistant U.S. Attorneys David Abramowicz and Juliana N. Murray, together with Acting Assistant Chief Andrew Gentin and Trial Attorneys Michael Culhane Harper and James Mandolfo of the Criminal Division’s Fraud Section, are in charge of the prosecution.

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

 

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

Audrey Strauss, the United States Attorney for the Southern District of New York, announced today that HERODE CHANCY, who at the time of the offense was employed as a manager at a Manhattan branch of a national bank (“Bank-1”), was sentenced today to 30 months in prison for his role in a commercial loan fraud scheme for loans totaling over $1 million.  CHANCY’s sentence was imposed by United States District Judge Lewis J. Liman. 

U.S. Attorney Audrey Strauss said: “Bank employee Herode Chancy used fake businesses, doctored bank statements, and stolen identities in an effort to obtain over $1 million in commercial loans.  Now Chancy has rightly been sentenced to prison for his crime.  Prosecutions like this one should serve as notice to individuals in positions of trust at financial institutions that engaging in corrupt criminal conduct will lead to prosecution and prison.”

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

From at least in or about March 2019 up to and including at least in or about March 2020, CHANCY and codefendant Adedayo Ilori conspired to fraudulently obtain business loans from a third-party commercial lender with the intent not to repay the loans – i.e., with the intent to “bust out” the loans.  CHANCY and Ilori together submitted eight fraudulent business loan applications for a total of $1,025,000 in business loans.  The business loan applications submitted by CHANCY and Ilori included doctored bank statements and listed the identities of other persons as the loan applicants, including stolen identities.  CHANCY and Ilori also opened bank accounts using the identities of those other persons in order to receive the loan payments from the third-party commercial lender.  CHANCY and Ilori subsequently conspired with codefendant Michael Albarella, another bank manager at Bank-1, to open a bank account using a stolen identity to launder approximately $200,000 of the expected proceeds of the loan scheme.  Albarella opened the bank account at Bank-1 using the stolen identity provided by CHANCY and Ilori, and Albarella accepted a $10,000 bribe to open the bank account.        

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

*                *                *

In addition to the prison term, CHANCY, 41, of Bellerose, New York, was sentenced to two years of supervised release and ordered to forfeit $10,000 in fraudulent proceeds.

On August 5, 2021, Albarella was sentenced to six months in prison and three years of supervised release by Judge Liman.  Ilori is scheduled to be sentenced on October 13, 2021.

Ms. Strauss praised the outstanding investigative work of the New York FBI’s Eurasian Organized Crime Task Force and Homeland Security Investigation’s El Dorado Task Force. 

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

Audrey Strauss, the United States Attorney for the Southern District of New York, Michael J. Driscoll, the Assistant Director-in-Charge of the New York Field Office of the Federal Bureau of Investigation (“FBI”), Dermot Shea, Police Commissioner for the City of New York (“NYPD”), and Stuart K. Cameron, Acting Commissioner of the Suffolk County Police Department (“SCPD”), announced that WILLIAM JONES, a/k/a “Principe,” was charged with the murder of a federal confidential informant.  JONES was arrested yesterday and will be presented today in Manhattan federal court.  The case has been assigned to United States District Judge Edgardo Ramos.

U.S. Attorney Audrey Strauss said: “William Jones allegedly participated in the premeditated murder of Frederick Delacruz solely because Delacruz had the courage to cooperate with law enforcement.  The indictment and arrest demonstrate that this office and its partners will be relentless in our pursuit of anyone who seeks to harm a witness to a crime.”

FBI Assistant Director Michael J. Driscoll said: “Those who witness crimes and cooperate with the government to keep our communities safe are vital to our work in arresting criminals and holding them accountable for their criminal acts.  Mr. Jones may have allegedly thought murdering an informant would make his problems go away.  But violence is never the answer.  Instead, he’s now facing up to a lifetime in federal prison for allegedly murdering a man who would have testified against him.”

NYPD Commissioner Dermot Shea said: “Nearly two years ago in eastern Long Island, William Jones allegedly fatally shot a confidential informant who was a fellow Trinitarios gang member.  But our NYPD investigators and law enforcement partners worked together from the beginning, never giving up, and we welcome these federal charges by the United States Attorney’s Office in the Southern District of New York to achieve some measure of justice in this case.”

Suffolk County Police Commissioner Stuart K. Cameron said: “The ability for individuals to come forward and work with law enforcement is a critical pillar in police work.  Those who have the courage to come forward should be confident their safety is of the utmost importance when pursuing alleged perpetrators of violent crimes, like William Jones.  We hope this arrest will reinforce the partnership between members of law enforcement and those who put themselves at risk to provide valuable information in criminal investigations.”

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

In or around December 2019, JONES, who is a member of the Trinitarios street gang, and others agreed to kill Frederick Delacruz, who was a member of the Trinitarios and also a confidential informant for law enforcement.  On December 28, 2019, JONES and others drove Delacruz from the Bronx to Suffolk County, where they caused Delacruz to be shot and killed.

*                *                *

JONES, 43, of the Bronx, New York, is charged  with two counts of conspiracy to murder a federal informant, each of which carries a maximum penalty of death or life in prison and a mandatory minimum sentence of life in prison; two counts of murder of a federal informant, each of which carries a maximum penalty of death or life in prison and a mandatory minimum sentence of life in prison; and murder through the use of a firearm, which carries a maximum penalty of death or life in prison and a mandatory minimum sentence of five years in prison.

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

Ms. Strauss praised the outstanding investigative work of the FBI, the NYPD, and the Suffolk County Police Department.  She also thanked the Suffolk County District Attorney’s Office for its assistance.

The prosecution is being handled by the Office’s Violent & Organized Crime Unit.  Assistant United States Attorneys Justin V. Rodriguez and Emily A. Johnson are in charge of the prosecution. 

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

 

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

Audrey Strauss, the United States Attorney for the Southern District of New York, announced today that CARLOS DE LA TORRE pled guilty before United States District Judge Naomi Reice Buchwald to one count of mail fraud and two counts of filing false income tax returns in connection with a years-long scheme to steal from the clients of his tax preparation business and defraud the Internal Revenue Service (“IRS”) and New York State Department of Taxation and Finance (“NYSDTF”). 

U.S. Attorney Audrey Strauss said: “As he admitted today, Carlos De La Torre defrauded his tax preparation clients by converting to his own use money the clients had been told they owed the IRS and New York State.  As he further admitted, De La Torre defrauded the IRS and the State by seeking refunds for overpayments of his taxes that were actually the funds he stole from his clients, and by failing to report those stolen funds as income.  Now Carlos De La Torre awaits sentencing for his crimes.”  

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

DE LA TORRE is a tax preparer and the sole proprietor of a bookkeeping and tax preparation business in New York, New York.  From at least in or about 2014, through at least in or about 2020, DE LA TORRE represented certain small businesses based in New York City and their owners (the “Victims”) in connection with the preparation and filing of their personal and business federal and state tax returns.  During that time period, DE LA TORRE told the Victims how much they allegedly owed in state and federal personal and business taxes, and the Victims gave DE LA TORRE checks in those amounts.

Instead of submitting the Victims’ checks as payments to be applied toward the Victims’ federal and state tax liabilities, DE LA TORRE fraudulently altered the checks and mailed them to the IRS and the NYSDTF as estimated tax payments to be credited against his own personal tax liabilities.  Those payments greatly exceeded DE LA TORRE’s own tax liabilities each year.  At the end of each tax period, DE LA TORRE fraudulently sought and received refunds from the IRS and the NYSDTF for the total amount of the altered checks he submitted to each agency, less any amount DE LA TORRE actually owed in taxes.  Refunds from the IRS and the NYSDTF were wired by the U.S. Treasury and New York State, respectively, directly into DE LA TORRE’s personal bank account.  In total, DE LA TORRE stole more than $466,000 from the Victims through this scheme. 

DE LA TORRE also filed false tax returns with the IRS and NYSDTF in connection with this scheme, by failing to report on his tax returns the money he stole from the Victims.  Had DE LA TORRE reported that income, as he was required to do, his total tax liability each year would have been much greater than it was, and he would not have been entitled to the refunds that he claimed.  As a result, DE LA TORRE defrauded the IRS and NYSDTF of a total of at least $91,663 (including interest). 

*                *                *

DE LA TORRE, 79, of Little Neck, New York, pled guilty to one count of mail fraud, in violation of Title 18, United States Code, Section 1341, which carries a maximum sentence of 20 years in prison, and to two counts of subscribing to false individual tax returns, in violation of Title 26, United States Code, Section 7206(1), each of which carries a maximum sentence of three 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 would be determined by the judge.  DE LA TORRE is scheduled to be sentenced by Judge Buchwald on December 21, 2021.

Ms. Strauss praised the outstanding investigative work of IRS Criminal Investigation and NYSDTF. 

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

Audrey Strauss, the United States Attorney for the Southern District of New York, announced that GEORGE BRIDI, a citizen of the United Kingdom, was extradited to the United States from Cyprus on August 31, 2021.  BRIDI was extradited on charges of conspiracy to commit copyright infringement, wire fraud conspiracy, and conspiracy to commit interstate transportation of stolen property, for his involvement in the Sparks Group, an international piracy group that illegally distributed movies and television shows on the Internet. 

BRIDI was arrested on August 23, 2020, in Paphos, Cyprus.  BRIDI will be presented and arraigned today before U.S. Magistrate Judge Ona T. Wang.  Codefendant Jonatan Correa, a/k/a “Raid,” previously pled guilty to conspiracy to commit copyright infringement and was sentenced on May 19, 2021, to three years and three months of supervised release, with the first three months to be served in community confinement.  Codefendant Umar Ahmad, a citizen of Norway, remains at large.  The case is assigned to U.S. District Judge Richard M. Berman. 

U.S. Attorney Audrey Strauss said: “As alleged, George Bridi was a member of an international video piracy ring that circumvented copyright protections on nearly every movie released by major production studios, as well as television shows, and distributed them worldwide on the Internet.  Thanks to the assistance of our law enforcement partners, the piracy ring has been busted and Bridi is now in U.S. custody.”

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

Between 2011 and the present, Umar Ahmad, a/k/a “Artist,” GEORGE BRIDI, Jonatan Correa, a/k/a “Raid,” and others known and unknown were members of the Sparks Group, a criminal organization that disseminated on the Internet movies and television shows prior to their retail release date, including nearly every movie released by major production studios, after compromising the content’s copyright protections.

In furtherance of its scheme, the Sparks Group fraudulently obtained copyrighted DVDs and Blu-Ray discs from wholesale distributors in advance of their retail release date by, among other things, making various misrepresentations to the wholesale distributors concerning the reasons that they were obtaining the discs prior to the retail release date.   

Sparks Group members then used computers with specialized software to compromise the copyright protections on the discs, a process referred to as “cracking” or “ripping,” and to reproduce and encode the content in a format that could be easily copied and disseminated over the Internet.  They thereafter uploaded copies of the copyrighted content onto servers controlled by the Sparks Group, where other members further reproduced and disseminated the content on streaming websites, peer-to-peer networks, torrent networks, and other servers accessible to public.  The Sparks Group identified its reproductions by encoding the filenames of reproduced copyrighted content with distinctive tags, and also uploaded photographs of the discs in their original packaging to demonstrate that the reproduced content originated from authentic DVDs and Blu-Ray discs.

Ahmad and BRIDI arranged for discs to be picked up, mailed, or delivered from distributors located in Manhattan, Brooklyn, and New Jersey to other members of the Sparks Group, including Correa, prior to their official release date.  Ahmad, BRIDI, and Correa then reproduced, and aided and abetted the reproduction of, these discs by using computer software that circumvented copyright protections on the discs and reproducing the copyrighted content for further distribution on the Internet. 

The Sparks Group has caused tens of millions of dollars in losses to film production studios.

On August 26, 2020, in coordination with law enforcement authorities in 17 countries and supported by Eurojust and Europol, dozens of servers controlled by the Sparks Group were taken offline around the world, including in North America, Europe, and Asia.  The Sparks Group utilized these servers to store and disseminate copyrighted content illegally to members around the globe. 

*              *             *

BRIDI, 50, is charged with copyright infringement conspiracy, which carries a maximum penalty of five years in prison; wire fraud conspiracy, which carries a maximum penalty of 20 years in prison; and conspiracy to transport stolen property interstate, which carries a maximum penalty of five years in prison.    

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

 Ms. Strauss praised the outstanding work of Homeland Security Investigations and the U.S. Postal Inspection Service.  She also thanked Europol and Eurojust as well as law enforcement authorities in the following countries for their assistance in the investigation: Canada, Cyprus, Czech Republic, Denmark, France, Germany, Italy, Republic of Korea, Latvia, Netherlands, Norway, Poland, Portugal, Romania, Spain, Sweden, Switzerland, and the United Kingdom. 

The case is being prosecuted by the Office’s Violent and Organized Crime Unit.  Assistant United States Attorneys Andrew K. Chan, Mollie Bracewell, and Christy Slavik are in charge of the prosecution.  The Justice Department’s Office of International Affairs (OIA) of the Department’s Criminal Division provided significant and ongoing assistance with facilitating the execution of dozens of mutual legal assistance requests in 18 different countries necessary for taking down servers and gathering evidence.  OIA also provided critical support in working with Eurojust and Europol in planning the coordinated operation in August 2020 and provided critical assistance in securing the defendant’s extradition from Cyprus.

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

 

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

Audrey Strauss, the United States Attorney for the Southern District of New York, announced that JASON RHODES, the co-founder, chief investment officer, and chief compliance officer for Sentinel Growth Fund Management, LLC (“Sentinel”), was sentenced today by U.S. District Judge Sidney H. Stein to 48 months in prison for securities fraud, wire fraud, investment adviser fraud and conspiracy charges.  Those charges relate to RHODES’s participation in a scheme to defraud over 25 investors in Sentinel out of more than $25 million by lying to the investors and using investor funds for his own personal use and to make repayments to earlier investors in a Ponzi-like manner.   

U.S. Attorney Audrey Strauss said:  “Jason Rhodes defrauded investors in the fund he co-founded of more than $25 million through years of lies and deceit.  This conduct is made even worse by the fact that Rhodes served as the chief investment officer and Chief Risk Officer of Sentinel, roles in which it was his direct responsibility to safeguard investor funds.  Rhodes will now serve four years in prison for his crimes.”

According to the Indictment and other Court filings:

Beginning in at least 2013 and through in or about December 2016, RHODES, together with his co-conspirators, solicited investments in Sentinel by falsely representing to investors that their funds would be used for legitimate, specified, investment purposes, namely purchasing securities.  In fact, RHODES failed to invest the investor monies as promised, but rather diverted investor funds to his own personal use and the personal use of his co-conspirators and, in a Ponzi-like manner, used them to make repayments to other investors who were demanding their money.  Among other things, RHODES diverted investor funds to a trucking business operated by RHODES and his wife; used them to pay more than $1 million to settle an unrelated civil lawsuit filed against RHODES and one of his co-conspirators; and expended them on other, personal expenses including a resort stay in Dubai and a luxury time-share vacation club.  Through this scheme, RHODES and his co-conspirators defrauded over 25 investors out of more than $25 million.

Among other fraudulent acts, RHODES and a co-conspirator falsified an account statement for an investor (“Investor-1”) to conceal the fact that RHODES and his co-conspirators had misappropriated most of the $4.2 million Investor-1 had invested in Sentinel.  After Investor-1 discovered the fraudulent nature of the account statement, RHODES, working with others, obtained funds from yet another investor (“Investor-2”) in order to make payments to Investor-1.  RHODES and his co-conspirators then, on multiple occasions, created fraudulent reports for Investor-2, falsely reflecting that Investor-2’s funds were invested with portfolio managers in Sentinel’s brokerage accounts and were earning returns.  In truth and in fact, and as RHODES well knew, Investor-2’s funds had been almost entirely misappropriated upon their receipt to repay Investor-1 and were not being managed by portfolio managers on Sentinel’s platform. 

*                      *                      *

RHODES, 48, of Rowayton, Connecticut, was also sentenced to three years of supervised release and ordered to pay restitution and forfeiture of $25,451,801.

Ms. Strauss praised the work of the FBI.  She also thanked the Securities and Exchange Commission for its assistance.  

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

 

Audrey Strauss, the United States Attorney for the Southern District of New York, announced that Dr. EMMANUEL LAMBRAKIS, a former state-licensed doctor, was sentenced this afternoon to 188 months in prison for conspiring to distribute medically unnecessary oxycodone unlawfully.  LAMBRAKIS pled guilty on November 26, 2019, before U.S. District Judge William H. Pauley III, and was sentenced today before U.S. District Judge Katherine Polk Failla. 

U.S. Attorney Audrey Strauss said: “Dr. Emmanuel Lambrakis wrote medically unnecessary prescriptions for thousands of oxycodone pills – an addictive and potentially fatal opiate.  Instead of abiding by his oath to ‘do no harm,’ Lambrakis pumped deadly drugs into the community.  Lambrakis put his own greed before his duties as a medical professional, and for that he will now spend a lengthy term in federal prison.”

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

Oxycodone is a highly addictive, narcotic opioid that is used to treat severe and chronic pain conditions.  Oxycodone prescriptions are in high demand and can be resold on the street for thousands of dollars.  A single prescription for 120 30-milligram tablets of oxycodone can net an illicit distributor $2,400 in cash or more.

From at least approximately January 2011 until December 2016, LAMBRAKIS operated two medical clinics in Queens, New York, where LAMBRAKIS wrote numerous medically unnecessary prescriptions for large quantities of oxycodone in exchange for cash payments.  LAMBRAKIS typically charged approximately $150 in cash for “patient visits,” and these visits often involved numerous “patients” being seen by LAMBRAKIS at the same time in the same examination room.  During these “patient visits,” LAMBRAKIS would perform simple, perfunctory body manipulations (such as rotating the patient’s arm or leg) and engage in little or no conversation with the purported “patient.”  Nonetheless, LAMBRAKIS would then issue to the patient a prescription for a large quantity of oxycodone, most often 120 30-milligram tablets or more.

Between January 2011 and December 2016, LAMBRAKIS wrote hundreds of oxycodone prescriptions, resulting in the illicit distribution of thousands of oxycodone tablets.  On numerous occasions, LAMBRAKIS wrote 100 or more prescriptions for 30-milligram oxycodone pills in a single day.  As a result of LAMBRAKIS’s actions, LAMBRAKIS collected approximately more than $3 million in fees from his “patients.”

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LAMBRAKIS, 74, of New York, New York, pled guilty to one count of conspiring to unlawfully distribute and possess with intent to distribute oxycodone. 

In addition to the prison term, LAMBRAKIS was sentenced to three years of supervised release, and ordered to forfeit $3,093,000, representing the amount he gained from issuing medically unnecessary oxycodone prescriptions.

Ms. Strauss praised the outstanding investigative work of the DEA’s Tactical Diversion Squad, which comprises agents and officers from the DEA, the NYPD, the New York State Police, Town of Orangetown Police Department, Rockland County Drug Task Force, Westchester County Police Department, and New York City Department of Investigation.  She also acknowledged the assistance of the Department of Health & Human Services, U.S. Immigration and Customs Enforcement’s Homeland Security Investigations, the New York City Human Resources Administration, and the National Insurance Crime Bureau.

The case is being prosecuted by the Office’s Narcotics Unit.  Assistant U.S. Attorneys Ryan Finkel, Sarah Mortazavi, Kimberly J. Ravener, and Jessica K. Fender are in charge of the prosecution. 

Audrey Strauss, the United States Attorney for the Southern District of New York, and Michael J. Driscoll, the Assistant Director-in-Charge of the New York Office of the Federal Bureau of Investigation (“FBI”), announced today the unsealing of an Indictment charging GEORGE CONSTANTINE, MARC ELEFANT, ANDREW DOWD, and SADY RIBEIRO with conspiracy to commit mail and wire fraud, mail fraud, and wire fraud in connection with a scheme to obtain fraudulent insurance reimbursements and other compensation for fraudulent trip-and-fall accidents.  ELEFANT, DOWD, and RIBEIRO were arrested earlier this morning and will be presented today before United States Magistrate Kevin Nathaniel Fox in Manhattan federal court.  CONSTANTINE is expected to surrender and be presented in Manhattan federal court tomorrow.  The case has been assigned to United States District Judge Loretta A. Preska.

Manhattan U.S. Attorney Audrey Strauss said: “As alleged, the defendants abused their professional licenses and positions of trust to steal millions of dollars from New York City businesses and their insurance companies through a massive trip-and-fall fraud scheme.  In carrying out the scheme, the defendants allegedly preyed upon the most vulnerable members of society.  Now, thanks to the FBI, the defendants are in custody and facing federal charges.”

FBI Assistant Director-in-Charge Michael J. Driscoll said: “The scheme allegedly carried about by the defendants charged today highlights the extent to which some are willing to go in the name of money.  Licensed attorneys are well aware of their obligation to uphold the law.  As we allege today, they did just the opposite, stealing from business owners and preying upon other vulnerable victims who were coerced into risking their own personal health and safety.  This alleged conduct is beyond reprehensible, and something we won’t let people get away with.”

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

From in or about January 2013, up to and including in or about April 2018, the defendants engaged in an extensive fraud scheme through which the defendants defrauded businesses and insurance companies by staging trip-and-fall accidents and filing fraudulent lawsuits arising from those staged trip-and-fall accidents.  In or about 2015, certain members of the fraud scheme split from the original conspiracy and formed a separate conspiracy that operated in substantially the same manner.  GEORGE CONSTANTINE was the primary attorney who filed fraudulent lawsuits in the original conspiracy starting in 2013.  MARC ELEFANT was the primary attorney who filed fraudulent lawsuits in the separate conspiracy, formed in or about 2015.

Fraud scheme participants recruited individuals (the “Patients”) to stage or falsely claim to have suffered trip-and-fall accidents at particular locations throughout the New York City area (the “Accident Sites”).  In the course of the fraud scheme, scheme participants recruited more than 400 Patients.  In the beginning, scheme participants would instruct Patients to claim they had tripped and fallen at a particular location, when in fact the Patients had suffered no such accidents.  Eventually, at the direction of the lawyers who filed fraudulent lawsuits on behalf of the Patients, scheme participants began to instruct Patients to stage trip-and-fall accidents, i.e., to go to a location and deliberately fall.  Common Accident Sites used during the fraud scheme included cellar doors, cracks in concrete sidewalks, and purported “potholes.”

After the staged trip-and-fall accidents, Patients were referred to specific attorneys, including GEORGE CONSTANTINE and MARC ELEFANT, who would file personal injury lawsuits (the “Fraudulent Lawsuits”) against the owners of the Accident Sites and/or insurance companies of the owners of the accident sites (the “Victims”).  The Fraudulent Lawsuits did not disclose that the Patients had deliberately fallen at the accident sites or, in some cases, had not fallen at all.  During the course of the fraud scheme, the defendants, together with others known and unknown, attempted to defraud the Victims of more than $31,000,000.

The Patients were also instructed to receive ongoing chiropractic and medical treatment from certain chiropractors and doctors, including ANDREW DOWD and SADY RIBEIRO.  The fraud scheme participants advised the Patients that if they intended to continue with their lawsuits, they were required to undergo surgery.  As an incentive to getting surgery, the recruited Patients were offered a payment of typically between $1,000 and $1,500 after they completed surgery (“Post-Surgery Payments”).  Patients generally were told to undergo two surgeries.

Doctors in the fraud scheme, including DOWD and RIBEIRO, were expected to, and in fact did, conduct these surgeries regardless of the legitimate medical needs of the Patients.  For example, in a March 2016 email, before DOWD examined the shoulder of a particular Patient who had staged a trip-and-fall accident (“Patient-2”), one of the scheme organizers asked DOWD to “write us an additional report today stating that [Patient-2’s] Lt. shoulder has worsened [so that I can] book this surgery for you.”  DOWD provided the requested report and recommended that Patient-2 undergo arthroscopic surgery. 

Likewise, in an August 2015 email from RIBEIRO to the owner of a litigation funding company, in which RIBEIRO described the services that he performed, RIBEIRO wrote, “I will play very honest ‘game’ with you . . . I see the patient and I generate a very good dictation that justifies the treatment-there is a cost for that and I hope a profit.”

Members of the fraud scheme often recruited individuals who were extremely poor as Patients – individuals desperate enough to submit to surgeries in exchange for the small Post-Surgery Payments.  For example, it was common for Patients to ask for food when they would appear for their intake meetings with the lawyers.  Many of the Patients did not have sufficient clothing to keep them warm during the wintertime and had poor-quality shoes.  Members of the fraud scheme also recruited Patients who were drug addicts.  It was also common for scheme participants to recruit Patients from homeless shelters in New York City.

The Patients’ legal and medical fees were usually paid for by litigation funding companies (the “Funding Companies”), even if the Patient maintained medical coverage through an insurance company or a government-subsidized program.  The Funding Companies also paid the fraud scheme organizers and participants referral fees, typically $1,000 to $2,500, for each Patient who signed a funding agreement.  In exchange for funding Patients’ medical and legal costs, the Funding Companies charged the Patients high interest rates, sometimes up to 50% on medical loans and up to 100% on personal loans.  The interest rates were so high that oftentimes the majority (if not all) of the proceeds that were awarded in the Fraudulent Lawsuits were paid to the Funding Companies, CONSTANTINE, ELEFANT, DOWD, RIBEIRO, and others, with the Patients receiving a much smaller percentage of the remaining recovery.

GEORGE CONSTANTINE, 58, and MARC ELEFANT, 49, are New York-licensed attorneys who represented hundreds of Patients and filed Fraudulent Lawsuits on their behalf as part of the fraud scheme.

ANDREW DOWD, 45, is a New York-licensed orthopedic surgeon who performed hundreds of knee and shoulder surgeries on Patients as part of the fraud scheme, earning approximately $9,500 per surgery.

SADY RIBEIRO, 51, is a New York-licensed pain management doctor and surgeon who performed back surgeries, among other medical procedures, on Patients.  RIBEIRO paid participants cash kickbacks in exchange for patient referrals and treated nearly 200 Patients during the fraud scheme.

GEORGE CONSTANTINE, MARC ELEFANT, ANDREW DOWD, and SADY RIBEIRO are each charged with conspiracy to commit mail and wire fraud, which carries a maximum sentence of 20 years in prison, mail fraud, which carries a maximum sentence of 20 years in prison, and wire fraud, which carries a maximum sentence of 20 years in prison.  DOWD and RIBEIRO are also charged with one additional count each of conspiracy to commit mail and wire fraud, mail fraud, and wire fraud.  The maximum potential sentences in this case are prescribed by Congress and are provided here for informational purposes only, as any sentencings of the defendants will be determined by the judge.

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Ms. Strauss praised the outstanding investigative work of the New York FBI.  Ms. Strauss also thanked the National Insurance Crime Bureau for their assistance in the investigation. 

This case is being handled by the Office’s Complex Frauds and Cybercrime Unit.  Assistant United States Attorneys Nicholas Chiuchiolo, Nicholas Folly, and Alexandra Rothman are in charge of the prosecution.

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

 

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