Southern District of New York

Audrey Strauss, the United States Attorney for the Southern District of New York, and William F. Sweeney Jr., Assistant Director-in-Charge of the New York Field Office of the Federal Bureau of Investigation (“FBI”), announced today the unsealing of a criminal complaint charging GANGADAI RAMPERSAUD AZIM, a/k/a “Julie Azim,” with wire fraud, bank fraud, bank theft, money laundering, and conspiracy, for her role in a scheme to defraud her employer, a Manhattan-based bank, of approximately $1.7 million.  AZIM was arrested today and presented before United States Magistrate Judge Stewart D. Aaron this afternoon.

U.S. Attorney Audrey Strauss said:  “As alleged, Gangadai Azim betrayed her position as a trusted bank employee to defraud the bank and misappropriate client funds for more than a dozen years.  She allegedly stole more than $1.7 million and concealed the scheme until an absence from work led to its discovery.  Now Azim faces the prospect of a much longer absence from work.”

FBI Assistant Director William F. Sweeney Jr. said:  “Azim’s alleged $1.7 million fraud scheme not only victimized her employer, but also risked the financial standing of the customers whose accounts she manipulated.  In the long run, defrauding a financial institution with the hope of making an easy profit only resulted in federal charges and the potential for time behind bars.”

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

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

In furtherance of her scheme to defraud Bank-1, AZIM repeatedly made false entries in Bank-1’s systems, misappropriating funds paid to Bank-1 by its clients to satisfy outstanding loan obligations and then extending the maturity dates of those loan obligations, making it appear as though the loan obligations had not yet been paid.  When even the fraudulently extended maturity dates came due, AZIM originated new, fraudulent loans.  AZIM utilized the proceeds of those fraudulent loans to satisfy the loans for which she had previously stolen the client payments.  In doing so, AZIM abused her position at Bank-1 and enriched herself at the expense of her employer.

AZIM’s fraud was discovered by Bank-1 when AZIM took a leave from her position at Bank-1 as a result of illness earlier this year.  In January 2021, Bank-1 debited the account of a client of Bank-1 (“Client-1”) in order to pay off an outstanding loan obligation Client-1 had coming due.  Client-1 then alerted Bank-1 that the debit was improper, as Client-1 had, in fact, paid off that obligation in 2019.  Upon further investigation, Bank-1 discovered that while the funds had been withdrawn from Client-1’s account in or about 2019, AZIM had misappropriated those funds, using them for purposes other than satisfying Client-1’s obligation.

As a result of identifying this discrepancy, Bank-1 officials discovered approximately 14 loan obligations (the “Fraudulent Loan Obligations”), worth more than approximately $1 million, for which no underlying documents existed.  AZIM appears to have entered each of the Fraudulent Loan Obligations in Bank-1’s systems so that the proceeds could be used, in significant part, to pay off outstanding loan obligations coming to maturity; those loan obligations had, in fact, already been satisfied by clients, but AZIM had misappropriated the payments.  In addition, Bank-1 officials discovered approximately five outstanding loan obligations, worth more than approximately $706,000, for which AZIM appears to have extended the maturity dates, despite the relevant clients having paid off the loan obligations.  

The approximately $1.7 million of loan proceeds resulting from the Fraudulent Loan Obligations and the improperly extended maturity dates appear to have been misappropriated by AZIM.  Over the course of approximately 12 years, between 2008 and 2020, AZIM caused approximately 200 wire transfers of Bank-1’s funds, each for an amount under $10,000, to be sent to third party accounts, including those of co-conspirators and related companies, which then returned portions of those funds to AZIM.

*                *                *

AZIM, 58, of Richmond Hill, New York, is charged in the Complaint with (1) conspiring to commit wire fraud and bank fraud, which carries a maximum sentence of 30 years in prison; (2) bank fraud, which carries a maximum sentence of 30 years in prison ; (3) wire fraud, which carries a maximum sentence of 20 years in prison; (4) bank theft, embezzlement, or misapplication, which carries a maximum sentence of 30 years in prison; (5) conspiring to commit money laundering, which carries a maximum sentence of 20 years in prison; and (6) money laundering, which carries a maximum sentence of 20 years in prison.  The maximum potential sentences in this case are prescribed by Congress and are provided here for informational purposes only, as any sentencing of the defendant will be determined by the judge.

Ms. Strauss praised the outstanding investigative work of the FBI in this case.

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

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

---

 

[1] As the introductory phase 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 ALADE KAZEEM SODIQ, a/k/a “Eluku,” was sentenced in Manhattan federal court to 50 months in prison for conspiracy to commit money laundering.  SODIQ, a money launderer who operated in Dubai, United Arab Emirates, was charged in 2019 along with Habeeb Audu, Abdulai Kennedy Saaka, Dominic Francis Labiran, and Yusuf Owolabi Abdul.  SODIQ pled guilty on November 19, 2020, to one count of conspiracy to commit money laundering, before U.S. District Judge Katherine Polk Failla, who also imposed today’s sentence.

 U.S. Attorney Audrey Strauss said:  “Using a widely available telephone ‘spoofing’ service and other deceitful means, Alade Sodiq, in concert with others, was able to steal and conceal millions of dollars in victim funds.  Sodiq has rightly received a significant sentence for his crimes.  This Office is committed to working with the FBI to uncover and uproot organizations like Sodiq’s that would exploit the U.S. financial system.”

According to the allegations in the Indictment, court filings, and statements made during court proceedings, including SODIQ’s plea and sentencing hearings:

From at least 2013 through in or about 2018, SODIQ and various other conspirators, located in countries including the United States, Canada, Italy, the United Kingdom, and the United Arab Emirates (collectively, the “Conspirators”), were involved in a scheme to fraudulently access millions of dollars held in individuals’ and corporations’ bank accounts, and to conduct financial transactions using those bank accounts without the knowledge or authority of the accounts’ legitimate owners (the “Bank Scheme”).  As part of the Bank Scheme, the Conspirators placed thousands of calls to various United States banks, holding themselves out as legitimate accountholders of particular targeted bank accounts and using the stolen personal identifying information belonging to those accountholders.  Using a particular telephone number “spoofing” service, and voice-altering technology, the Conspirators would deceive bank representatives into believing that the Conspirators were actual accountholders.  In so doing, they convinced multiple U.S. banks to, among other things:  Transfer funds into accounts from which the Conspirators could access the funds and conduct further unauthorized transactions; falsely list victim accountholders as “traveling abroad” to reduce the chances of the bank flagging suspicious international transactions made by the Conspirators; have “replacement” credit cards mailed to international addresses controlled by the Conspirators; and authorize foreign purchases made by the Conspirators.

SODIQ was also involved in separate schemes to defraud United States-based businesses and banks by means of business email compromise schemes (the “BEC Fraud Schemes”).  For example, SODIQ and his co-conspirators defrauded a North Carolina-based healthcare company (the “Healthcare Company Victim”) into wiring over $1 million to a bank account controlled by one of SODIQ’s co-conspirators (the “SODIQ Co-conspirator Account”).  They did so by tricking the Healthcare Company Victim into believing that one of its legitimate vendors had changed bank accounts to the SODIQ Co-conspirator Account, such that payment for the vendor’s services were made to the SODIQ Co-conspirator Account.  These funds were thereafter quickly withdrawn from the SODIQ Co-conspirator Account and dispersed to other accounts controlled by SODIQ and his co-conspirators.

Thereafter, in connection with an FBI undercover operation, SODIQ and others each agreed, for a substantial fee, to launder funds that they believed to be fraud proceeds through bank accounts controlled by SODIQ’s co-conspirators.  SODIQ and his co-conspirators agreed to conceal the nature of those purportedly fraudulent proceeds. 

In addition to the prison term, SODIQ, 5­­­0, of Dubai, United Arab Emirates, was also sentenced to one year of supervised release, and ordered to pay $298,581.11 in restitution and forfeiture in the amount of $23,385.00. 

Other defendants charged in this case include Abdulai Kennedy Saaka, a/k/a “Kenny,” of Atlanta, Georgia, who pled guilty to one count of money laundering conspiracy was sentenced to 32 months in prison; Habeeb Audu, a/k/a “Dickson,” a citizen of the United Kingdom and Yusuf Owolabi Abdul, a/k/a “Saheed Sador,”  a citizen of Canada, whose cases remain pending; and Dominic Francis Labiran, a citizen of the United Kingdom, who remains at large.

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

The prosecution of this case is being handled by the Office’s Money Laundering and Transnational Criminal Enterprises Unit.  Assistant United States Attorneys Kiersten A. Fletcher, Jonathan E. Rebold, and Andrew A. Rohrbach are in charge of the prosecution.

The charges against Habeeb Audu, Yusuf Owolabi Abdul, and Dominic Francis Labiran are merely accusations, and they are presumed innocent unless and until proven guilty.

Audrey Strauss, the U.S. Attorney for the Southern District of New York, and Raymond P. Donovan, Special Agent in Charge of the New York Division of the U.S. Drug Enforcement Administration (“DEA”), announced today the unsealing of a nine‑count superseding indictment charging FERNANDO RA, KENNY BATISTA, FERNANDO ROSARIO CRUZ, YONATHAN JUNIOR GARCIA VALDEZ, ANTTWAN CROSBIE, ELMER GILL, and MICHAEL ASHLEY with kidnapping, robbery, firearms, and narcotics offenses.

As alleged in the Superseding Indictment unsealed today and other publicly available documents, the charges arise, in part, from an October 3, 2020 kidnapping and robbery during which certain of the defendants brandished a firearm and assaulted two victims in connection with the defendants’ trafficking of cocaine.[1] 

RA was previously charged by indictment with firearms and narcotics offenses, based on his possession of an assault rifle, a loaded pistol, and approximately 700 fentanyl pills.

Manhattan U.S. Attorney Audrey Strauss said:  “As alleged in the Superseding Indictment, the defendants were responsible for a brutal kidnapping and robbery in furtherance of their narcotics trafficking.  Thanks to the extraordinary work of our partners at the DEA and the Special Agents and Investigative Analysts at the U.S. Attorney’s Office, the defendants now face federal charges for their crimes”

DEA Special Agent in Charge Raymond P. Donovan said:  “As alleged, this investigation took us to the dark side of drug trafficking that includes kidnapping, armed robbery, and assault.  These arrests make it poignantly clear that alleged traffickers disregard the rule of law and will stop at nothing to continue their illegal trade.  I applaud the investigators and prosecutors whose exceptional work resulted in today’s announcement.”

*                      *                      *

BATISTA, 25, ROSARIO, 27, GARCIA, 21, GILL, 36, and ASHLEY, 30, were arrested today, and CROSBIE, 26, was arrested yesterday.  BATISTA, ROSARIO, GARCIA, GILL, and CROSBIE will be presented before United States Magistrate Judge Stewart D. Aaron.  ASHLEY will be presented before United States Magistrate Judge Jeremiah J. McCarthy of the Western District of New York.  RA was already in federal custody.  The case is assigned to United States District Judge P. Kevin Castel.

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

Ms. Strauss praised the outstanding investigative work of Special Agents from the New York Division of the DEA and Special Agents from the U.S. Attorney’s Office for the Southern District of New York.  Ms. Strauss also thanked the DEA Buffalo Resident Office and the Paterson (New Jersey) Police Department for their assistance with the investigation, as well as the Organized Crime Drug Enforcement Task Force New York Strike Force, Financial Investigation Team, comprising agents and officers of the DEA, NYPD, Bergen County Prosecutors Office, Fort Lee Police Department, Teaneck Police Department, Hillsdale Police Department, Northvale Police Department, Palisades Interstate Parkway Police, and Closter Police Department.

The case is being handled by the Office’s Narcotics Unit.  Assistant U.S. Attorneys Rushmi Bhaskaran and Benjamin Woodside Schrier are in charge of the prosecution.

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

COUNT

DEFENDANT(S)

MAX. TERM OF IMPRISONMENT

Count One: Conspiracy to Distribute and Possess with the Intent to Distribute More than 40 Grams of Fentanyl (21 U.S.C. § 846)

Fernando Ra

Anttwan Crosbie

40 Years; Mandatory Minimum Sentence of Five Years

 

Count Two:  Using, Carrying, and Possessing a Firearm During, in Relation to, and in Furtherance of a Drug Trafficking Crime (18 U.S.C. §§ 924(c)(1)(A)(i) and 2)

 

Fernando Ra

Life; Mandatory Consecutive Sentence of Five Years

Count Three: Felon in Possession of a Firearm (18 U.S.C. § 922(g)(1))

 

Fernando Ra

10 Years

Count Four:  Conspiracy to Distribute and Possess with the Intent to Distribute More than Five Kilograms of Cocaine (21 U.S.C. § 846)

All Defendants

Life; Mandatory Minimum Sentence of 10 Years

Count Five: Conspiracy to Commit Kidnapping (18 U.S.C. § 1201(c))

 

Fernando Ra

Kenny Batista

Fernando Rosario Cruz

Yonathan Junior Garcia Valdez

Anttwan Crosbie

Life

Count Six: Conspiracy to Commit Hobbs Act Robbery (18 U.S.C. § 1951(a))

 

Fernando Ra

Kenny Batista

Fernando Rosario Cruz

Yonathan Junior Garcia Valdez

Anttwan Crosbie

20 Years

Count Seven: Attempted Hobbs Act Robbery (18 U.S.C. §§ 1951(a) and 2)

 

Fernando Ra

Kenny Batista

Fernando Rosario Cruz

Yonathan Junior Garcia Valdez

20 Years

 

Count Eight: Using, Carrying, and Brandishing a Firearm During, in Relation to, and in Furtherance of a Crime of Violence and a Drug Trafficking Crime (18 U.S.C. §§ 924(c)(1)(A)(i), 924(c)(1)(A)(ii), and 2)

 

Fernando Ra

Kenny Batista

Fernando Rosario Cruz

Yonathan Junior Garcia Valdez

Life; Mandatory Consecutive Sentence of Seven Years

Count Nine: Conspiracy to Use, Carry, and Possess a Firearm During, in Relation to, and in Furtherance of a Crime of Violence and a Drug Trafficking Crime (18 U.S.C. § 924(o))

 

Fernando Ra

Anttwan Crosbie

20 Years

 

 

 

---

 

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

Audrey Strauss, United States Attorney for the Southern District of New York, and Margaret Garnett, Commissioner of the New York City Department of Investigation (“DOI”), announced today the unsealing of a Complaint charging PAUL FISHBEIN, the defendant, with theft of government funds, wire fraud, and mail fraud for defrauding rental assistance programs administered by New York City’s Human Resources Administration (“HRA”), New York City’s Housing Preservation & Development (“HPD”), and the New York City Housing Authority (“NYCHA”), by falsely claiming to be the owner and landlord of 20 properties (the “Properties”) in New York City, renting out the Properties to families in need through the rental assistance programs, and collecting money – including federal funds – from HRA, HPD, and NYCHA as the purported owner and landlord of the Properties.  The defendant is also charged with Medicaid fraud.  The defendant was arrested today and will be presented later today in Manhattan federal court before United States Magistrate Judge Stewart D. Aaron.

U.S. Attorney Audrey Strauss said:  “As alleged, Paul Fishbein not only took advantage of New Yorkers in need, he also defrauded city and federal government programs designed to help those very people.  Fishbein allegedly lied about ownership of residential properties, fraudulently took rent subsidies and other benefits from those government housing programs, and often evicted tenants without cause from housing that was substandard in any event.  Now Paul Fishbein is in custody and facing serious federal charges for his alleged fraud and exploitation.”

DOI Commissioner Margaret Garnett said:  “This defendant’s alleged conduct wove a web of lies that allowed him to illegally profit from government programs meant to help those in desperate need of housing, and he further exploited them by providing squalid apartments in properties he did not rightly own, often evicting them shortly after they moved in, according to the charges.  Homeless New Yorkers, and others in critical need of housing, not only have a need but a right to homes that are clean, safe, and secure, especially when they are offered through public assistance programs.  DOI will continue to work in partnership with the U.S. Attorney’s Office for the Southern District of New York to root out and stop the corruption and fraud that undermines basic needs such as housing.”

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

The Rental Assistance Program Fraud 

The Rental Assistance Programs

HRA, HPD, and NYCHA (collectively, the “Agencies”) each offer a rental subsidy program that helps provide critical affordable housing to New Yorkers in need.  Landlords who participate in these programs receive guaranteed monthly rent payments, among other benefits.  Rental units must meet federal “Housing Quality Standards,” which are based on the minimum criteria for safe housing, and otherwise meet basic safety and living conditions.

Specifically, HRA administers a rental assistance program (the “Rental Assistance Program”) that helps homeless families move out of the shelter system and into stable housing.  Landlords who participate in the Rental Assistance Program rent housing to homeless families, and in turn, HRA pays participating landlords, among other things, (i) the first month’s rent; (ii) a landlord bonus at signing, which is currently $4,300; and (iii) a rent supplement for either the first three or 11 months’ rent, which is paid in a lump sum at the time of the lease.  In addition, if a landlord uses the services of a broker in renting out the property, HRA will pay the broker a broker’s fee equal to 15 percent of the annual rent.  These and other program-related payments from HRA to participating landlords and brokers include funds from the federal government.  

HPD offers a Housing Choice Voucher program, which is also known as Section 8 (“HPD’s Section 8 Housing Program”).  This program provides federal funding to local housing agencies to assist eligible low-income families with rental subsidies toward decent, safe, and affordable housing.  Participating families pay a certain percentage of their income toward rent and HPD pays the difference directly to the landlord.

NYCHA also operates a Section 8 program (“NYCHA’s Section 8 Housing Program”), which provides assistance to eligible low- and moderate-income families to rent housing in the private market.  NYCHA’s Section 8 Housing Program works as a rental subsidy that allows families to pay a reasonable amount of their income toward their rent.  In general, families pay no more than 40 percent of their adjusted monthly income toward their rent share.  NYCHA pays the remaining amount to the property owner on the family’s behalf.

The Housing Fraud

In this case, from at least in or about 2013 through at least in or about the present, the defendant defrauded the Agencies’ rental assistance programs by falsely claiming to be the owner and landlord of 20 different Properties in New York City based on forged deeds that purported to transfer the Properties from legitimate owners to the defendant.  The defendant rented out the Properties to homeless and low/moderate-income families through the Agencies’ programs, and collected payments from the Agencies as the purported owner and landlord of the Properties.  In addition, the defendant falsely represented to HRA that he used a broker to rent out the Properties, and collected and kept for himself certain broker’s fees that HRA issued for the Properties.  The defendant also took advantage of the homeless and in-need families who were placed in the Properties.  For example, most of the Properties that Fishbein rented out were dilapidated and uninhabitable.  Moreover, even though he was not the lawful owner of the Properties, the defendant often evicted families shortly after they were placed in the Properties.  Through this scheme, the defendant fraudulently obtained more than $1.5 million from HRA, HPD, and NYCHA, including more than $270,000 in federal funds.

The Medicaid Fraud

The defendant also committed Medicaid fraud.  Medicaid is a health insurance program for low-income adults, children, pregnant women, elderly adults, and people with disabilities, which is funded jointly by states and the federal government.   

From at least in or about 2014 through at least in or about the present, the defendant received Medicaid benefits based on his false representations to HRA that he was financially eligible for Medicaid.  During that time, the defendant represented to HRA that he worked at a company where his total income was approximately $150 a week – that is, approximately $600 a month or approximately $7,200 a year.  In reality, the defendant made hundreds of thousands of dollars each year, thus, far exceeding the income and asset limitations for Medicaid eligibility.  By lying about his income and assets, the defendant received at least approximately $47,621 in Medicaid benefits to which he was not entitled.

*                *                *

FISHBEIN, 47, of Far Rockaway, New York, is charged with two counts of theft of government funds, in violation of Title 18, United States Code, Section 641, each of which carries a maximum sentence of 10 years in prison, one count of mail fraud, in violation of Title 18, United States Code, Section 1341, and one count of wire fraud, in violation of Title 18, United States Code, Section 1343, each of 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 would be determined by the judge.

Ms. Strauss praised the outstanding investigative work of DOI. 

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.

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

 

---

[1] As the introductory phrase signifies, the entirety of the text of the Complaint and the description of the Complaint set forth 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, William F. Sweeney Jr., Assistant Director-in-Charge of the New York Office of the Federal Bureau of Investigation (“FBI”), and Jonathan Carson, Special Agent in Charge of the New York Field Office of the U.S. Department of Commerce, Office of Export Enforcement (“DOC-OEE”), announced today the unsealing of charges against MICHAEL ROSE for conspiring to violate the International Emergency Economic Powers Act (“IEEPA”), and participating in bank fraud and money laundering conspiracies.  ROSE was arrested by the FBI and OEE today, and he will be presented later today in Manhattan federal court before United States Magistrate Judge Stewart D. Aaron.

Manhattan U.S. Attorney Audrey Strauss said:  “As alleged, Michael Rose participated in a years-long scheme to violate our sanctions by surreptitiously exporting cosmetics to Iran via front company intermediaries in the Middle East.  Today’s charges underscore that those who violate our sanctions on Iran will be investigated and prosecuted.” 

FBI Assistant Director William F. Sweeney Jr. said:  “Whatever his motivation – greed or something more sinister – we allege Mr. Rose intentionally disguised his products’ ultimate destination and lied about those products’ prices to limit his customs liability.  It’s a federal crime to violate sanctions the United States put in place to protect our national interests from Iran and other designated nation states.  Mr. Rose may have thought the rules didn’t apply to him, but, if he did, today’s action demonstrates otherwise.”

DOC-OEE Special Agent in Charge Jonathan Carson said:  “The Office of Export Enforcement will vigorously enforce sanctions violations involving Iran, including actions by exporters to undermine the integrity of our export control system through the submission of false or misleading information.  The Office of Export Enforcement will continue applying the investigative resources and authorities necessary to protect and promote U.S. national security, foreign policy, and economic interests.”

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

MICHAEL ROSE is the president of a Long Island-based cosmetics manufacturer and supplier (“Company-1”).  In that role, ROSE manages, among other things, Company-1’s operations and its international sales business.  Between 2015 and 2018, ROSE participated in a conspiracy to evade U.S. sanctions on Iran by causing Company-1 to export from the United States more than $350,000 worth of cosmetics to an importer in Iran (“Importer-1”).  In or about June 2015, ROSE signed a contract with Importer-1 establishing that Importer-1’s Iran-based company would be the exclusive distributor for Company-1’s products in Iran.  Importer-1 then used front companies based outside Iran to make payments to Company-1 in New York and to arrange for the transshipment of Company-1’s goods to Iran via the United Arab Emirates.  In addition to shipping goods and accepting payments in violation of U.S. sanctions, ROSE also filed false and misleading information on United States Department of Commerce Shipper’s Export Declaration forms in connection with the illegal shipments.  The forms falsely represented that the “ultimate consignee” for the goods was in the United Arab Emirates, not Iran, and also falsely lowered the purchase price for the goods purchased by Importer-1 in order to evade customs payments.

*                *                *

ROSE, 50, of Ridgefield, Connecticut, is charged in the Indictment with (1) conspiring to violate IEEPA, in violation of 50 U.S.C. § 1705, which carries a maximum sentence of 20 years in prison; (2) conspiring to launder money, in violation of 18 U.S.C. § 1956(h), which carries a maximum sentence of 20 years in prison; and (3) conspiring to commit bank fraud, in violation of 18 U.S.C. § 1349, which carries a maximum sentence of 30 years in prison.  The statutory 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 efforts of the FBI and the Department of Commerce’s Bureau of Industry and Security (“BIS”) for their assistance.

This prosecution is being handled by the Office’s Terrorism and International Narcotics Unit.  Assistant U.S. Attorney Sam Adelsberg is in charge of the prosecution, with assistance from Trial Attorney Scott Claffee of the Counterintelligence and Export Control Section of the Department of Justice’s National Security Division.

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

 

---

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

Audrey Strauss, the United States Attorney for the Southern District of New York, announced today that CHARLES HUSTIS, a former town trustee and substitute teacher in Cold Spring, New York, was sentenced to five years in prison for attempted receipt of child pornography from a former student.  CHARLES HUSTIS previously pled guilty before U.S. District Judge Cathy Seibel, who imposed today’s sentence.

U.S. Attorney Audrey Strauss said:  “Charles Hustis used his social media account to persuade a minor victim and former student to meet with him and perform sexual acts.  In doing so, Charles Hustis repeatedly solicited pornographic pictures from the victim.  This predatory behavior was a betrayal of the trust that the Cold Spring community placed in Charles Hustis, both as a former teacher and as a public official.  Today, he has been sentenced to federal prison.  Our Office will continue to work with our law enforcement partners at all levels of government to keep our children safe.”

According to the Information, other court filings (including the complaint), and statements made during court proceedings:

Between at least on or about December 8, 2019, and December 16, 2019, HUSTIS, a former teacher and public official in Cold Spring, New York, communicated over Facebook Messenger with a 16-year-old victim (“Victim-1”).  During these communications, HUSTIS sent Victim-1 sexual images, including photographs of himself, and attempted to arrange a meeting with Victim-1 with the understanding that HUSTIS and Victim-1 would perform various sexual acts.  HUSTIS repeatedly solicited pornographic pictures from Victim-1 while arranging his planned meeting.  HUSTIS was arrested by law enforcement officers on December 16, 2019, after he arrived at a meeting location that he had arranged with Victim-1, expecting to bring Victim-1 back to his apartment for sexual activity.   

In addition to the prison term, CHARLES HUSTIS, 37, of Cold Spring, New York, was sentenced to seven years of supervised release.  On November 19, 2020, HUSTIS pled guilty to one count of attempted receipt of child pornography, in violation of Title 18, United States Code, Sections 2252A(a)(2)(A) and (b)(1).

Ms. Strauss praised the outstanding investigative work of the FBI, the Putnam County Sheriff’s Department, and the Cold Spring Police Department.

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

Audrey Strauss, the U.S. Attorney for the Southern District of New York, John C. Demers, the Assistant Attorney General for National Security, William F. Sweeney Jr., Assistant Director-in-Charge of the New York Office of the Federal Bureau of Investigation (“FBI”), and Dermot Shea, Commissioner of the New York City Police Department (“NYPD”), announced that JAMES BRADLEY, a/k/a “Abdullah,” and ARWA MUTHANA were arrested yesterday, March 31, 2021, at a seaport in Newark, New Jersey.  A criminal Complaint was subsequently filed in Manhattan federal court charging BRADLEY and MUTHANA with attempting and conspiring to provide material support to a designated foreign terrorist organization, the Islamic State of Iraq and al-Sham (“ISIS”).  As alleged in the Complaint, BRADLEY, who resides in the Bronx, New York, has expressed his support for ISIS and his desire to join the group overseas or commit a terrorist attack in the United States.  BRADLEY and his wife MUTHANA, of Alabama, who has also expressed her support for ISIS, were arrested while attempting to travel together by cargo ship to the Middle East to join and fight for ISIS.  BRADLEY and MUTHANA were presented before United States Magistrate Judge Debra Freeman in Manhattan federal court this afternoon.

Manhattan U.S. Attorney Audrey Strauss said:  “James Bradley allegedly pledged devout allegiance to ISIS, expressing his desire to ‘fight among the rank[s] for the Islamic State.’ Suspecting he may be unable to travel, Bradley instead allegedly discussed conducting terrorist attacks along with his wife, Arwa Muthana, also an ISIS supporter, against the US Military Academy at West Point or another area university where Bradley knew military recruits to be training. But in an alleged attempt to evade the watchful eye of law enforcement, the two ultimately planned to travel to Yemen by cargo ship to fulfil their wish to fight with the terrorist organization. As Bradley suspected, he and his wife were indeed on law enforcement’s radar – he was confiding in and planning their journey for terror with an undercover officer – and their plans to wage attacks against the United States have been thwarted.”

Assistant Attorney General John C. Demers said: “As alleged, the defendants planned to travel overseas to join and support ISIS.  The threat of terrorism at home and abroad remains, and the National Security Division is committed to holding accountable those who would provide material support to foreign terrorist organizations.  I want to thank the agents, analysts, and prosecutors who are responsible for this case.”

FBI Assistant Director-in-Charge William F. Sweeney Jr. said:  “Like others who followed a similar path before them, Mr. Bradley and his wife Mrs. Muthana have now learned their alleged attempts to fight on behalf of ISIS, inside the U.S. or overseas, instead begin with two pairs of FBI JTTF handcuffs and court appearances in lower Manhattan.  Our goal is to interdict violence before it occurs, and once again I commend the work of the FBI-NYPD Joint Terrorism Task Force personnel who work 24/7 to keep their fellow citizens safe."

NYPD Commissioner Dermot Shea said:  “James Bradley and his wife Arwa Muthana’s alleged determination to join ISIS and carry out terrorism against Americans overseas or here in New York is well documented in this multi-year investigation. It is yet another example of the effectiveness of the undercover operatives, detectives and analysts of the NYPD’s Intelligence Bureau working in seamless coordination with our partners at the FBI and the Joint Terrorism Task Force.”

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

BRADLEY and MUTHANA are ISIS supporters who attempted to travel to the Middle East to join and fight for ISIS.  Since at least 2019, BRADLEY has expressed violent extremist views, including his desire to support ISIS by traveling overseas to join the group or committing a terrorist attack in the United States.  In May 2020, BRADLEY stated to an undercover law enforcement officer (“UC-1”) that he believed that ISIS may be good for Muslims because ISIS was establishing a caliphate.[2]  BRADLEY further expressed his desire to conduct a terrorist attack in the United States and discussed potentially seeking to attack the United States Military Academy in West Point, New York.  BRADLEY explained that if he could not leave the United States because he might be on a terrorism watch list, he would do “something” in the United States instead, referring to carrying out an attack. 

In June 2020, BRADLEY stated to UC-1 that his plan to attack a military base was something he really wanted to do and that it would be his contribution to the cause of jihad.  In January 2021, BRADLEY mentioned to UC-1 another university in New York State where he frequently saw Reserve Officer Training Corps (“ROTC”) cadets training.  BRADLEY stated that he could use his truck in an attack, and that he along with MUTHANA could take all of the ROTC cadets “out.”

In late January 2021, BRADLEY married MUTHANA in an Islamic marriage ceremony.  Beginning before and continuing after their marriage, BRADLEY and MUTHANA discussed, planned, and ultimately attempted to travel to the Middle East together in order to join and fight with ISIS.  In or about early March 2021, BRADLEY traveled from New York to Alabama to visit MUTHANA.  BRADLEY and MUTHANA subsequently traveled together to New York in order to begin their journey to join ISIS.  Thereafter, BRADLEY raised the possibility of UC-1 helping BRADLEY and MUTHANA get on a cargo ship to travel to Asia or Africa for the purpose of ultimately joining and fighting for ISIS.  UC-1 subsequently put BRADLEY in contact with a purported associate who could assist BRADLEY in making arrangements for BRADLEY and MUTHANA to travel to the Middle East via cargo ship.  In reality, the purported facilitator was a law enforcement officer acting in an undercover capacity (“UC-2”). 

Later in March 2021, BRADLEY met with UC-2 and expressed his desire to travel via cargo ship and to “fight among the rank[s] of the Islamic State.”  In a subsequent meeting with UC-2, BRADLEY provided UC-2 $1,000 in cash as travel costs for BRADLEY and MUTHANA to take a cargo ship to Yemen. BRADLEY told UC-2 that he and MUTHANA both planned to be “fighting” after arriving in the Middle East.  BRADLEY also told UC-2 that he had a dream that he had given “bay’ah,” an Arabic term meaning the oath of allegiance, to Abu Ibrahim al-hashimi al-Qurashi, the current leader of ISIS.

On March 25, 2021, UC-2 told BRADLEY that the cargo ship would be leaving on Wednesday, March 31, from a seaport in Newark, New Jersey.  BRADLEY praised Allah and confirmed he and MUTHANA planned to travel on the ship.

On March 31, 2021, BRADLEY and MUTHANA met with UC-2 en route to the seaport.  During the course of this meeting, MUTHANA confirmed to UC-2 that she was traveling to the Middle East to fight for ISIS.  BRADLEY and MUTHANA were arrested as they walked on a gangplank to board the cargo ship.  After MUTHANA was arrested, she waived her Miranda rights and stated during an interview that she was willing to fight and kill Americans if it was for Allah.  Also on March 31, 2021, in connection with a court-authorized search, the FBI seized from a bedroom previously used by BRADLEY what appears to be a hand-drawn image of a jihadi flag commonly used by ISIS and a hand-drawn map of the Pakistan region. 

*                      *                      *

BRADLEY, 20, of the Bronx, New York, and MUTHANA, 29, of Hoover, Alabama, are charged with (1) one count of attempting to provide material support to a designated foreign terrorist organization, which carries a maximum sentence of 20 years in prison, and (2) one count of conspiring to provide material support to a designated foreign terrorist organization, which also carries a maximum sentence of 20 years in prison.  The maximum potential sentences in this case are prescribed by Congress and are provided here for informational purposes only, as any sentencing of the defendants will be determined by a judge.

Ms. Strauss praised the outstanding efforts of the FBI’s New York Joint Terrorism Task Force, which consists of investigators and analysts from the FBI, the NYPD, and over 50 other federal, state, and local agencies; the NYPD’s Intelligence Division; and U.S. Customs and Border Protection New York Field Office Director of Field Operations (DFO) Marty C. Raybon.  Ms. Strauss also thanked the Counterterrorism Section of the Department of Justice’s National Security Division, as well as the FBI’s Birmingham, Alabama Field Office, and the U.S. Attorney’s Office for the Northern District of Alabama.

This prosecution is being handled by the Office’s Terrorism and International Narcotics Unit. Assistant U.S. Attorneys Andrew J. DeFilippis and Jason A. Richman are in charge of the prosecution, with assistance from Trial Attorney Jennifer Burke of the National Security Division’s Counterterrorism Section.

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

 

---

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

[2] Communications, conversations, and statements discussed herein are described in substance and in part.

Audrey Strauss, the United States Attorney for the Southern District of New York, announced the conviction in Manhattan federal court of ALAN KAUFMAN for participating in a scheme in which KAUFMAN, who was then the Chief Executive Officer of Melrose Credit Union (“Melrose CU”), accepted rent-free housing and financing for the purchase of his personal residence from Tony Georgiton as a reward for the approval of 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 a media company and other vendors, as a reward  for Melrose CU purchasing increased advertising from those companies.  The jury convicted KAUFMAN today following a two-week trial before U.S. District Judge Lewis A. Kaplan.  Georgiton pleaded guilty before Judge Kaplan on September 9, 2020.

U.S. Attorney Audrey Strauss said:  “A unanimous Manhattan jury has found that Alan Kaufman, the former CEO of Melrose Credit Union, accepted luxurious gifts from Georgiton as a reward for favorable loan rates for his companies. In doing so, Kaufman shirked his fiduciary obligation to act in the best interests of Melrose to instead exploit his control of union funds for his own personal gain.  Melrose’s members certainly deserved better representation than Alan Kaufman, who placed his own selfish needs above theirs – and thanks to the work of the FBI, Kaufman and Georgiton both stand convicted of federal crimes.”

According to the Indictment, documents previously filed in the case, and evidence introduced 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 given 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 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 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 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 personal loan and KAUFMAN has never made a payment on that personal loan.  Rather than repay the loan, the following year, KAUFMAN purchased a used Maserati sports car for his wife, valued at over $100,000. 

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 a media company (“Media Company-1”) and other media vendors, as a reward  for KAUFMAN’s approval of advertising spending by Melrose CU.  For example, in 2010, Media Company-1 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, Media Company-1 paid for KAUFMAN and his wife to fly to Maui, Hawaii and stay at the Four Seasons in Wailea.  In 2013, Media Company-1 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 CU Board, nor did he disclose these vendor-paid trips to the Melrose CU Board, in violation of Melrose CU’s anti-bribery policy.          

*                      *                      *

KAUFMAN was found guilty of two counts of bribery of a financial institution officer, which each carry a maximum sentence of 30 years in prison.  KAUFMAN was found not guilty of one count of conspiracy to commit bribery of a financial institution officer.  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.  KAUFMAN is scheduled to appear for sentencing before Judge Kaplan on June 23, 2021.

Ms. Strauss praised the outstanding work of the FBI.  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, Peter C. Fitzhugh, the Special Agent-in-Charge of the New York Field Office of Homeland Security Investigations (“HSI”), and Dermot Shea, Commissioner of the New York City Police Department (“NYPD”), announced the unsealing of a Superseding Indictment charging JENNIFER SHAH and STUART SMITH with conspiracy to commit wire fraud in connection with telemarketing and conspiracy to commit money laundering.  The case has been assigned to United States District Judge Sidney H. Stein.

SHAH and SMITH were arrested earlier today and will be presented this afternoon in Salt Lake City federal court before United States Magistrate Judge Dustin Pead.

Manhattan U.S. Attorney Audrey Strauss said:  “Jennifer Shah, who portrays herself as a wealthy and successful businessperson on ‘reality’ television, and Stuart Smith, who is portrayed as Shah’s ‘first assistant,’ allegedly generated and sold ‘lead lists’ of innocent individuals for other members of their scheme to repeatedly scam.  In actual reality and as alleged, the so-called business opportunities pushed on the victims by Shah, Smith, and their co-conspirators were just fraudulent schemes, motivated by greed, to steal victims’ money.  Now, these defendants face time in prison for their alleged crimes.”

HSI Special Agent-in-Charge Peter C. Fitzhugh said:  “Shah and Smith flaunted their lavish lifestyle to the public as a symbol of their ‘success.’  In reality, they allegedly built their opulent lifestyle at the expense of vulnerable, often elderly, working-class people.  As alleged, disturbingly, Shah and Smith objectified their very real human victims as ‘leads’ to be bought and sold, offering their personal information for sale to other members of their fraud ring.  Working with our partners at the NYPD and the United States Attorney’s Office, SDNY, and with the assistance of HSI Salt Lake City, HSI New York worked to ensure that Shah and Smith will answer for their alleged crimes.  As a result, their new reality may very well turn out differently than they expected.”

NYPD Commissioner Dermot Shea said:  “These individuals allegedly targeted and defrauded hundreds of victims but thanks to the hard work of the NYPD and our law enforcement partners, this illegal scheme was brought to an end.  I congratulate the NYPD detectives, Homeland Security Investigations, and the U.S. Attorney for the Southern District of New York for their hard work in bringing these persons to justice.”

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

From 2012 until March 2021, JENNIFER SHAH and STUART SMITH, together with others (collectively, the “Participants”) carried out a wide-ranging telemarketing scheme that defrauded hundreds of victims (the “Victims”) throughout the United States, many of whom were over age 55, by selling those Victims so-called “business services” in connection with the Victims’ purported online businesses (the “Business Opportunity Scheme”). 

In order to perpetrate the Business Opportunity Scheme, Participants, including SHAH and SMITH, engaged in a widespread, coordinated effort to traffic in lists of potential victims, or “leads,” many of whom had previously made an initial investment to create an online business with other Participants in the Scheme.  Leads were initially generated by sales floors operating in, among other places, Arizona, Nevada, and Utah.  The owners and operators of those sales floors operated in coordination with several telemarketing sales floors in the New York and New Jersey area, including in Manhattan, and provided lead lists and assistance in fighting Victim refund requests to other Participants operating those floors.

SHAH and SMITH, among other things, generated and sold leads to other Participants for use by their telemarketing sales floors with the knowledge that the individuals they had identified as “leads” would be defrauded by the other Participants.  SHAH and SMITH received as profit a share of the fraudulent revenue per the terms of their agreement with those Participants.  SHAH and SMITH often controlled each aspect of the frauds perpetrated by other Participants on the individuals they had identified by, among other things, determining which “coaching” sales floor could buy leads from them, selecting the downstream sales floors to which the “coaching” sales floor was permitted to pass the leads, choosing the firms to provide “fulfillment” services, that is, documents and records purporting to demonstrate that the services the Participants claimed to provide to those Victims were actual and legitimate, setting how much the downstream sales floors could charge, and determining which “products” each of the downstream sales floors could sell. 

To perpetrate the Business Opportunity Scheme, certain of the Participants sold alleged services purporting to make the management of Victims’ businesses more efficient or profitable, including tax preparation or website design services, notwithstanding that many Victims were elderly and did not own a computer.  At the outset of the Business Opportunity Scheme, certain Participants employed by a purported fulfillment company sent a given Victim electronic or paper pamphlets or provided so-called “coaching sessions” regarding these purported online businesses, but at no point did the defendants intend that the Victims would actually earn any of the promised return on their intended investment, nor did the Victims actually earn any such returns. 

SHAH and SMITH undertook significant efforts to conceal their roles in the Business Opportunity Scheme.  For example, SHAH and SMITH, among other things, incorporated their business entities using third parties’ names and instructed other Participants to do the same, used and directed others to use encrypted messaging applications to communicate with other Participants, instructed other Participants to send SHAH’s and SMITH’s shares of certain fraud proceeds to offshore bank accounts, and made numerous cash withdrawals structured to avoid currency transaction reporting requirements.

*                      *                      *

SHAH, 47, of Park City, Utah, and SMITH, 43, of Lehi, Utah, are each charged with one count of conspiracy to commit wire fraud in connection with telemarketing through which they victimized 10 or more persons over the age of 55, which carries a maximum sentence of 30 years, and one count of conspiracy to commit money laundering, which carries a maximum sentence of 20 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 defendants will be determined by the judge.  

Ms. Strauss praised the outstanding investigative work of HSI’s El Dorado Task Force and the NYPD.  Ms. Strauss also thanked HSI Utah and the United States Attorney’s Office for the District of Utah for their support and assistance in this investigation.   

This case is being handled by the Office’s Money Laundering and Transnational Criminal Enterprises Unit.  Assistant United States Attorneys Kiersten A. Fletcher, Benet J. Kearney, and Robert B. Sobelman are in charge of the prosecution. 

If you believe you have been a victim of the scheme described above, including a victim entitled to restitution, and you wish to provide information to law enforcement and/or receive notice of future developments in the case or additional information, please contact Wendy Olsen-Clancy, the Victim Witness Coordinator at the United States Attorney’s Office for the Southern District of New York, at 866-874-8900 or wendy.olsen@usdoj.gov.  You may also report it to Detective Christopher Bastos at 917-480-7167 or christopher.bastos@nypd.org.

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

 

---

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

Audrey Strauss, the United States Attorney for the Southern District of New York, and Wendy C. Woolcock, the Special Agent in Charge of the Special Operations Division of the U.S. Drug Enforcement Administration (“DEA”), announced today that JUAN ANTONIO HERNÁNDEZ ALVARADO, a/k/a “Tony Hernández” (“HERNÁNDEZ”) was sentenced to life in prison for cocaine-importation, weapons, and false-statements offenses.  HERNÁNDEZ is a former Honduran congressman and the brother of Juan Orlando Hernández, the current president of Honduras.  HERNÁNDEZ was convicted on October 18, 2019, following a jury trial before U.S. District Judge P. Kevin Castel, who also imposed today’s sentence. 

Manhattan U.S. Attorney Audrey Strauss said:  “Former Honduran congressman Juan Antonio Hernández Alvarado was involved in all stages of the trafficking through Honduras of multi-ton loads of cocaine destined for the U.S.  Hernández bribed law enforcement officials to protect drug shipments, arranged for heavily armed security for cocaine shipments, and brokered large bribes from major drug traffickers to powerful political figures, including the former and current presidents of Honduras.  Hernández was complicit in at least two murders.  Today, Tony Hernández was rightly sentenced to life in prison.”

Special Agent in Charge Wendy C. Woolcock said:  “Exploiting a high-ranking position in government to wield the power of the state to support drug trafficking is as nefarious as it comes.  The conviction and sentencing of Tony Hernandez is a reminder there is no position powerful enough to shield you from facing justice when you violate U.S. drug laws by sending tons of cocaine to our country.  As important as this conviction is to the people of the United States, it is also important to the citizens of Honduras who Hernandez purposely put in harm’s way for his own personal gain.  Today’s sentencing is a victory for the rule of law and we are grateful to our federal and international partners who made this possible.”

As reflected in the Superseding Indictment, other filings in Manhattan federal court, evidence at trial, and statements made in court proceedings:

HERNÁNDEZ played a leadership role in a violent, state-sponsored drug trafficking conspiracy.  Over a 15-year period, HERNÁNDEZ manufactured and distributed at least 185,000 kilograms of cocaine that was imported into the United States.  HERNÁNDEZ commanded heavily armed members of the Honduran military and Honduran National Police; he sold machineguns and ammunition to drug traffickers, some of which he obtained from the Honduran military; he controlled cocaine laboratories in Colombia and Honduras; he secured millions of dollars of drug proceeds for Honduras’s National Party campaigns in connection with presidential elections in 2009, 2013, and 2017; and he helped cause at least two murders.  HERNÁNDEZ made at least $138.5 million through his drug trafficking activities, money he was ordered to forfeit in connection with today’s sentencing. 

Hernández’s Drug Trafficking Conduct

HERNÁNDEZ’s drug trafficking career started in about 2004 when he began providing sensitive law enforcement and military information to major Honduran drug traffickers Victor Hugo Diaz Morales, a/k/a “El Rojo,” and Hector Emilio Fernandez Rosa, a/k/a “Don H.”  HERNÁNDEZ provided Diaz Morales with information about, among other things, operations of the Honduran Navy; efforts by the United States to train Honduran Air Force pilots to fly at night to conduct anti-narcotics operations; military radar capabilities so that cocaine plane shipments could avoid detection; and interdiction efforts by certain Honduran National Police officials.  Over the course of their relationship, HERNÁNDEZ helped Fernandez Rosa and Diaz Morales distribute approximately 140,000 kilograms of cocaine. 

By 2008, HERNÁNDEZ’s narcotics trafficking had expanded, and he was also manufacturing his own cocaine in a laboratory he controlled near El Aceitico, Colombia.  HERNÁNDEZ told his co-conspirators that some of the cocaine manufactured at his laboratory was stamped with his initials “TH,” and a photograph of a kilogram of “TH” stamped cocaine was intercepted during the course of the investigation.  HERNÁNDEZ supplied his co-conspirators with tons of cocaine that was produced at his laboratory.    

Beginning in about 2008, HERNÁNDEZ partnered with Amilcar Alexander Ardon Soriano, a former Honduran drug trafficker and mayor, under the protection of members of the  National Party leadership.  Testimony at trial established that HERNÁNDEZ and Ardon Soriano secured protection from investigation, arrest, and extradition through massive bribes paid to high-ranking politicians, including, among others, Porfirio “Pepe” Lobo Sosa and Juan Orlando Hernández.  In connection with the 2009 national elections, drug proceed bribes paid in exchange for protection included:  (i) Ardon Soriano paying $2 million to support Lobo Sosa’s campaign for presidency and Juan Orlando Hernández’s reelection campaign for a position in the Honduran congress; (ii) Diaz Morales paying $100,000 to HERNÁNDEZ to support National Party campaigns; and (iii) Ardon Soriano bribing three congressmen at the direction of Juan Orlando Hernández so that the congressmen would support Juan Orlando Hernández’s efforts to become president of the congress.    

Juan Orlando Hernandez was named president of the congress in early 2010.  HERNÁNDEZ, Ardon Soriano, and their co-conspirators, including co-defendant Mario Jose Calix Hernández, a Honduran deputy mayor, and codefendant Mauricio Hernández Pineda, a then-member of the Honduran National Police and HERNÁNDEZ’s cousin, took advantage of National Party protection to continue transporting huge quantities of cocaine.  Once or twice a month in 2010, HERNÁNDEZ sent Ardon Soriano cocaine shipments consisting of approximately 300 kilograms; and once a month in 2011 and 2012, HERNÁNDEZ sent Ardon Soriano maritime cocaine shipments ranging in size from 700 to 1,600 kilograms.    

   In 2013, HERNÁNDEZ was campaigning to become a congressman and Juan Orlando Hernández was campaigning to become president.  Around this time, according to testimony at trial, Juan Orlando Hernández solicited $1.6 million in drug proceeds from Ardon Soriano to support himself and National Party campaigns.  Also during the 2013 campaign, HERNÁNDEZ accepted $1 million from former Sinaloa Cartel leader Joaquín Archivaldo Guzmán Loera, a/k/a “Chapo,” to support Juan Orlando Hernández’s presidential campaign.  During meetings with Chapo in Honduras, HERNÁNDEZ promised to provide protection for members of their conspiracy and their cocaine shipments through Honduran territory if Juan Orlando Hernández was elected president. 

In November 2013, HERNÁNDEZ was elected to the Honduran congress and Juan Orlando Hernández was elected president.  Between 2015 and 2017, per trial testimony, HERNÁNDEZ and Juan Orlando Hernández continued to secure large sums of drug proceeds for National Party campaigns in exchange for protecting drug traffickers.  For example, there was testimony at trial that approximately six months before the November 2017 national elections, HERNÁNDEZ and Juan Orlando Hernández met with Ardon Soriano in Copán, Honduras.  During that meeting, HERNÁNDEZ and Juan Orlando Hernández solicited $500,000 and 1.6 million Lempira in drug proceeds from Ardon Soriano to “finance” the National Party’s campaign in the Copán and Lempira Departments.    

In 2018, HERNÁNDEZ continued to engage in large cocaine shipments with Nery López Sanabria, another significant Honduran drug trafficker.  Honduran authorities arrested and detained López Sanabria in connection with a traffic incident and recovered, among other things, several drug ledgers in a secret compartment of his car.  One of the ledgers was labeled “Hard Work” 2018, and reflected a 650-kilogram cocaine shipment with HERNÁNDEZ.  At least one of the other ledgers seized by Honduran law enforcement in 2018 contained references to “JOH,” initials used by Juan Orlando Hernández.  López Sanabria was murdered in a Honduran prison, as described below, shortly after his drug ledgers were introduced at HERNÁNDEZ’s trial. 

Hernández’s Weapons Possession and Acts of Violence

HERNÁNDEZ used firearms throughout his drug trafficking.  HERNÁNDEZ’s personal weapons included a modified AR-15, an Uzi inscribed with the name of Juan Orlando Hernández, “Presidente de la República,” and an M60 belt-fed machinegun.  HERNÁNDEZ also sold machineguns and ammunition to drug traffickers.  In 2010, Diaz Morales obtained between 4,000 and 6,000 rounds of assault rifle ammunition from a member of the Honduran National Police who told Diaz Morales he obtained the ammunition from HERNÁNDEZ.  In 2012, HERNÁNDEZ supplied 40 M16s to another drug trafficker.   

HERNÁNDEZ also coordinated at least two drug-related murders.  In 2011, HERNÁNDEZ and Ardon Soriano caused the murder of a rival drug trafficker named Franklin Arita in the Copán Department.  HERNÁNDEZ directed Juan Carlos “Tigre” Bonilla Valladares, the regional Honduran National Police chief responsible for the Copán Department at the time, to arrange for Arita’s murder, which was executed by assassins using two 40-millimeter grenade launchers, M16s, and Israeli-made Galil assault rifles.  In 2013, HERNÁNDEZ worked with other drug traffickers, including Ardon Soriano, to murder a drug trafficker named Chino because HERNÁNDEZ was concerned that Chino might cooperate with law enforcement.    

   Hernández’s Obstruction and Other Efforts to Influence the Investigation

HERNÁNDEZ made false statements to law enforcement and the Court during the course of this investigation and prosecution, and he obstructed justice.  HERNÁNDEZ (i) traveled to the United States in 2016 and made false statements to law enforcement about his drug trafficking activities; (ii) made false statements about his assets during a January 2019 bail hearing; (iii) caused sensitive witness information to be disclosed in Honduras in violation of a protective order in October 2019; and (iv) made false statements about his assets during an application for appointed counsel in February 2020.

Eight days after the jury found HERNÁNDEZ guilty, on October 26, 2019, López Sanabria – the drug trafficker from whom were seized the ledgers bearing HERNÁNDEZ’s name and Juan Orlando Hernández’s initials – was murdered at a maximum security prison in Honduras.  López Sanabria’s attorneys confirmed to the media that: one of HERNÁNDEZ’s family members and an investigator hired by HERNÁNDEZ’s family had made unauthorized visits to López Sanabria prior to HERNÁNDEZ’s trial; López Sanabria had rejected their efforts to obtain information about whether he was cooperating with the DEA; and López Sanabria had planned to cooperate with the DEA against Juan Orlando Hernández and HERNÁNDEZ.  Leaked surveillance video of the murder shows López Sanabria talking to the warden of the facility, Pedro Ildefonso Armas, while a masked man walks past and unlocks a nearby door.  Several individuals who are believed to be prisoners then storm through the door and shoot and stab López Sanabria to death.  On December 9, 2019, a group of unknown assailants murdered Jose Luis Pinto, a lawyer who represented López Sanabria.  Three days later, on December 12, 2019, a group of unknown gunmen on motorcycles murdered Ildefenso Armas, the warden of the facility in which López Sanabria was murdered, in Tegucigalpa.    

Hernández’s Co-Conspirators

On August 8, 2019, Fernandez Rosa was sentenced in this District to life in prison for, among other things, his participation in HERNÁNDEZ’s cocaine importation conspiracy and for committing 18 murders.  Several of HERNÁNDEZ’s other co-conspirators, including, among others, Hernández Pineda, Calix Hernández, Bonilla Valladares, Arnaldo Urbina Soto, Carlos Fernando Urbina Soto, and Miguel Angel Urbina Soto, are also charged in this District with firearms and drug trafficking offenses based on, among other things, their participation in HERNÁNDEZ’s cocaine importation conspiracy.  On February 12, 2020, Hernández Pineda surrendered in this District and he is awaiting trial.  On March 22, 2021, HERNÁNDEZ’s co defendant and co-conspirator Geovanny Fuentes Ramirez was convicted at trial in this District of drug trafficking and weapons offenses.  Fuentes Ramirez’s sentencing is scheduled for June 22, 2021.     

*                *                *

In addition to the prison term, HERNÁNDEZ, 42, was sentenced to five years of supervised release.

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

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 Terrorism and International Narcotics Unit.  Assistant U.S. Attorneys Amanda L. Houle, Matthew Laroche, and Jason A. Richman are in charge of the prosecution.

Audrey Strauss, the United States Attorney for the Southern District of New York, and Wendy C. Woolcock, the Special Agent in Charge of the Special Operations Division of the U.S. Drug Enforcement Administration (“DEA”), announced today that JUAN MANUEL AVILA MEZA, a former member of the Honduran National Police, was sentenced today to 12 years in prison for conspiring to import cocaine into the United States.  AVILA MEZA previously pled guilty before U.S. District Judge Lorna G. Schofield, who imposed today’s sentence. 

Manhattan U.S. Attorney Audrey Strauss said:  “Juan Manuel Avila Meza conspired to transport large shipments of cocaine into, within, and out of Honduras, including shipments bound for the U.S.  He provided sensitive law enforcement information to members of the Cachiros to enable their trafficking operations, and he brokered meetings with other corrupt officials to facilitate money laundering and cocaine trafficking.  Juan Manuel Avila Meza tarnished the badge he wore by protecting drug traffickers rather than those he took an oath to protect and serve.”

Special Agent in Charge Wendy C. Woolcock said:  “Juan Manuel Avila Meza leveraged his position in law enforcement and as an attorney to attempt to rise above the law, profiting from the reprehensible criminal activities he helped facilitate.  Today’s sentencing reaffirms that corruption in law enforcement will never go unchecked by the United States.  The Drug Enforcement Administration, alongside our domestic and international partners, will continue working tirelessly to bring to justice all those who participate in drug trafficking.”

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

Between at least approximately 2004 and 2014, AVILA MEZA worked with members of a drug trafficking organization known as the Cachiros, which was a prolific and violent criminal syndicate that relied on connections to politicians, military personnel, and law enforcement to transport cocaine to, within, and from Honduras.  During that time, and while AVILA MEZA was purportedly enforcing the law as a police officer and, later, an attorney, AVILA MEZA participated in the Cachiros’ criminal enterprise by engaging in drug trafficking, money laundering, sanctions evasion, and debt collection. 

Beginning in about 2004, AVILA MEZA provided the Cachiros with sensitive law enforcement information to facilitate the transportation of cocaine.  AVILA MEZA also assisted the Cachiros with money laundering and evasion of U.S. sanctions.  In May 2013, the U.S. Department of the Treasury’s Office of Foreign Assets Control (“OFAC”) publicly identified the Cachiros as a significant foreign narcotics group pursuant to the Foreign Narcotics Kingpin Designation Act.  Nevertheless, beginning in August 2013, the defendant – as an active member of both the Honduran National Police and the Cachiros – assisted the Cachiros with an asset-based money laundering transaction related to a large piece of real estate in San Pedro Sula, Honduras. 

In February 2014, AVILA MEZA helped set up and attended a meeting between one of the leaders of the Cachiros and Juan Antonio Hernández Alvarado, a/k/a “Tony Hernández,” another convicted major drug trafficker who is the brother of current Honduran president Juan Orlando Hernández, to discuss money laundering transactions between a Cachiros front company and the Honduran government.  In June 2014, AVILA MEZA met with six other members of the Honduran National Police, Fabio Lobo Sosa, the now-convicted son of Porfirio Lobo Sosa, the Honduran president who preceded Juan Orlando Hernández, and two DEA confidential sources purporting to be members of the Sinaloa Cartel.  During the meeting, AVILA MEZA led a discussion of how best to rely on the Honduran National Police to secure safe passage for a large cocaine shipment. 

Six other former members of the Honduran National Police, including, among others, Victor Oswaldo Lopez Flores, Ludwig Criss Zelaya Romero, Carlos Jose Zavala Velasquez, and Carlos Alberto Valladares Garcia, were convicted in this case of firearms and/or drug trafficking offenses for conspiring to import cocaine into the United States.  Each of those individuals has pled guilty in federal court, along with co-conspirator Fabio Lobo.  On September 5, 2017, Lobo was sentenced to 24 years in prison; on February 6, 2018, Flores was sentenced to five years in prison; on June 27, 2018, Velasquez was sentenced to 12 years in prison; and on September 27, 2018, Garcia was sentenced to 14 years in prison.  Zelaya Romero is awaiting sentencing by Judge Schofield.  On October 18, 2019, Hernández Alvarado was convicted at a trial before the Honorable P. Kevin Castel of cocaine importation, weapons, and false statements offenses, and he is scheduled to be sentenced by Judge Castel tomorrow. 

*                *                *

In addition to the prison term, AVILA MEZA, 50, was sentenced to four years of supervised release.          

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

This case is being handled by the Office’s Terrorism and International Narcotics Unit.  Assistant U.S. Attorneys Jacob Gutwillig, Matthew Laroche, Jason A. Richman, and Elinor Tarlow are in charge of the prosecution.

Audrey Strauss, the United States Attorney for the Southern District of New York, announced the conviction today of HAMID “Ray” AKHAVAN and RUBEN WEIGAND, following a four-week trial before the Honorable Jed S. Rakoff.  AKHAVAN and WEIGAND devised a complex scheme involving fake companies, false websites, and fake “customer service centers,” to deceive U.S. issuing banks and credit unions into effectuating more than $150 million of credit and debit card purchases of marijuana by disguising those purchases as being for other kinds of goods, such as face creams and dog products.  The defendants were each convicted of one count of conspiracy to commit bank fraud, in violation of Title 18, United States Code, Section 1349. 

Manhattan U.S. Attorney Audrey Strauss said:  “As a jury has now found, Ray Akhavan and Ruben Weigand were in the business of selling lies.  Under the radar of U.S. banks and credit card companies screening for suspicious and illegal activity, these men offered their services: creating fake companies and fake websites, and ginning up fake web traffic to those fake websites, all in the service of fraudulently moving money through the United States financial system.  Today, a jury has seen through those lies and convicted Akhavan and Weigand of bank fraud.” 

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

From in or around 2016 through in or around 2019, AKHAVAN and WEIGAND, working with others, including principals from one of the leading on-demand marijuana delivery companies in the United States (the “Company”) planned and executed a scheme to deceive United States banks and other financial institutions into processing over $150 million in credit and debit card payments for the purchase and delivery of marijuana products (the “Scheme”).

The Scheme involved the deception of virtually all of the participants in the payment processing network, including issuing banks in the United States (the “Issuing Banks”) and Visa and MasterCard.  The primary method used by AKHAVAN, WEIGAND, and other coconspirators to deceive the Issuing Banks involved the purchase and use of shell companies that were used to disguise the marijuana transactions through the use of phony merchants (the “Phony Merchants”).  The shell companies were used to open offshore bank accounts with merchant acquiring banks and to initiate credit card charges for marijuana purchases made through the Company.  AKHAVAN and WEIGAND worked with other co-conspirators to create these phony merchant accounts – including phony online merchants purportedly selling dog products, diving gear, carbonated drinks, green tea, and face creams – and established Visa and MasterCard merchant processing accounts with one or more offshore acquiring banks.  They then arranged for more than a dozen Phony Merchants to be used by the Company to process debit and credit card purchases of marijuana products.  Many of the Phony Merchants purported to be based in the United Kingdom, but, despite being based outside the United States, claimed to maintain U.S.-based customer service numbers.

To facilitate the Scheme, webpages were created and deployed to lend legitimacy to the Phony Merchants.  The Phony Merchants typically had web pages suggesting that they were involved in selling legitimate goods, such as carbonated drinks, face cream, dog products, and diving gear.  Yet these companies were actually being used to facilitate the approval and processing of marijuana transactions.  The defendants’ scheme even involved fake visits to those websites to make it appear as though the websites had real customers and were operating legitimate online businesses.

The defendants’ scheme also involved the use of online tracking pixels.  Because the descriptors listed on Company customers’ credit card statements often were the URLs for the Phony Merchant websites, Company customers were sometimes confused and did not recognize the transactions on their credit card statements.  The defendants and their coconspirators were concerned that confused customers would call their Issuing Banks and inadvertently reveal the Scheme by indicating that they had purchased marijuana products and/or that they had made a purchase through the Company.  To lessen the risk that customers would be confused, the defendants used a number of techniques, including online tracking pixels to track which users had visited the Company’s website.  If a Company customer had visited the Company’s website and went to the URL listed on their credit card statement, they would automatically be re-routed to a webpage connected to the Company so that the customer would understand what the real purchase had been for (i.e., from the Company).  However, in order to hide the Scheme, the defendants ensured that if a third party such as a bank or credit card company investigator visited a URL of a Phony Merchant, they would not be re-routed, and would therefore be unable to discern any connection between the Phony Merchant website and the Company and/or the sale of marijuana products. 

Over $150 million in marijuana credit and debit card transactions were processed using the Phony Merchants.  Some of the merchant websites listed for those transactions included: diverkingdom.com, desirescent.com, outdoormaxx.com, and happypuppybox.com.  Moreover, none of the Phony Merchant website names listed for those transactions referred to the Company or to marijuana.  AKHAVAN, WEIGAND, and others also worked with and directed others to apply incorrect merchant category codes (“MCCs”) to the marijuana transactions in order to disguise the nature of those transactions and create the false appearance that the transactions were completely unrelated to marijuana.  Some of the MCCs/categories listed for the transactions included freight carrier, trucking; clock, jewelry, watch, and silverware; stenographic services; department stores; music stores/pianos; and cosmetic stores.            

AKHAVAN was the leader of the transaction laundering scheme and WEIGAND was responsible for overseeing the acquiring bank accounts used by the Phony Merchants and sending the proceeds from the marijuana transactions back to bank accounts in the United States.

*                *                *

AKHAVAN, 43, of, California, and WEIGAND, 38, of Germany, were each convicted of one count of conspiracy to commit bank fraud, which carries a maximum sentence of 30 years in prison.  The maximum potential sentence is prescribed by Congress and is provided here for informational purposes only, as the sentencing of the defendants will be determined by the judge.  Sentencing before Judge Rakoff is scheduled for June 25, 2021.

Ms. Strauss praised the work of the Federal Bureau of Investigation.

The prosecution of this case is being handled by the Office’s Complex Frauds and Cybercrime Unit and the Money Laundering and Transnational Criminal Enterprises Unit.  Assistant United States Attorneys Nicholas Folly, Tara La Morte, and Emily Deininger are in charge of the prosecution.

Audrey Strauss, the United States Attorney for the Southern District of New York, and Margaret Garnett, the Commissioner of the New York City Department of Investigation (“DOI”), announced today the arrest of VICTOR RIVERA on charges of honest services fraud and money laundering. As alleged in an Information filed today in Manhattan federal court, RIVERA, while leading a non-profit organization (“Organization-1”) that operated soup kitchens, homeless shelters, and affordable-housing facilities in New York City, schemed to enrich himself through bribes and kickbacks from Organization-1’s contractors. RIVERA will be presented and arraigned later today before United States District Judge Sidney H. Stein. 

Manhattan U.S. Attorney Audrey Strauss said:  “Many of the over 8.4 million residents of New York City rely on government-assisted non-profits to provide food, affordable housing, and other essential services for their well-being. As alleged in today’s charges, by accepting bribes and kickbacks, Victor Rivera sought to leverage his position as the CEO of a non-profit into a very much for-profit situation for himself.  The vast majority of organizations in New York City’s non-profit networks honorably provide assistance to those in need, but when any individual selfishly exploits one of those organizations for their own personal gain, they will find themselves facing criminal charges for corruption.”

DOI Commissioner Margaret Garnett said:  “As CEO of a City-funded nonprofit, this defendant should have been serving the underprivileged, including the homeless;  instead, according to the criminal information, he schemed to enrich himself and his relatives, taking bribes and kickbacks from those doing business with his organization. New York City provides billions of dollars to support nonprofits, many of which run organizations with integrity and provide valuable, essential services. But corruption at nonprofit social services contractors remains an investigative priority for DOI, and today's arrest should serve as notice to any individual who sees the City's coffers as a path to personal profit. DOI thanks the U.S. Attorney's Office for the Southern District of New York for its partnership and commitment to this important corruption investigation.”

As alleged in the Information:[1]

RIVERA was the President and Chief Executive Officer of Organization-1, which annually spent millions of dollars in public funds on real estate, security, cleaning, construction, and food expenses, among other costs related to the housing and social services Organization-1 provided. From at least in or about 2013 until in or about 2020, RIVERA engaged in a scheme to enrich himself and his relatives by soliciting and accepting bribes and kickbacks from contractors doing work related to or for Organization-1. The scheme yielded RIVERA at least hundreds of thousands of dollars in illicit gains. RIVERA laundered some of the corrupt payments through intermediary entities he controlled, including through a purported consulting company nominally owned by one of RIVERA’s relatives. 

*                *                *

RIVERA, 61, of Stony Point, New York, is charged with one count of honest services wire fraud conspiracy, one count of honest services wire fraud, and one count of money laundering. Each count carries a maximum potential prison sentence of 20 years. The maximum potential penalties are prescribed by Congress and are provided here for informational purposes only; any sentencing of the defendant will be determined by the judge.

Ms. Strauss praised the outstanding investigative work of Special Agents of the United States Attorney’s Office for the Southern District of New York and of DOI, and thanked the Internal Revenue Service for its participation in the investigation.

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

The allegations contained in the Information 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 Information and the description of the Information 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, William F. Sweeney Jr., Assistant Director-in-Charge, New York Division, Federal Bureau of Investigation (“FBI”) and Amaleka McCall-Brathwaite, Special Agent in Charge, U.S. Small Business Administration, Office of Inspector General (“SBA-OIG”), announced today the unsealing of a complaint charging ALICIA AYERS, ANDREA AYERS, and TRACI PROCTOR with conspiracy to commit wire fraud, wire fraud, false statements, and aggravated identity theft in connection with a scheme to defraud the U.S. Small Business Administration (“SBA”), resulting in a loss to the SBA of more than $1.6 million.  All three defendants were arrested this morning.  ALICIA AYERS and ANDREA AYERS will be presented this afternoon before United States Magistrate Judge Judith C. McCarthy.  TRACI PROCTOR will be presented in United States District Court for the Northern District of Georgia.

U.S. Attorney Audrey Strauss said:  “As alleged, the defendants schemed to defraud the SBA by submitting disaster loan and grant applications for non-existent businesses.  In so doing, they stole funds intended for the many small businesses that are struggling as a result of the COVID-19 pandemic.  We thank the FBI and SBA-OIG for their partnership in investigating the scheme alleged.”   

FBI Assistant Director William F. Sweeney Jr. said: “While small businesses throughout the country were clamoring for the economic support they so desperately needed after the first quarter of the pandemic, those charged today allegedly saw the SBA’s Economic Injury Disaster Loan Program as nothing more than an opportunity to turn a quick profit. As alleged, Ayers, Ayers, and Proctor filed more than 300 online applications on behalf of others that included false information to support their claims. This resulted in nearly $1.7 million worth of payments from the SBA, a portion of which the defendants received in the form of kickbacks. No matter how creative the scheme is, rest assured those who siphon money from taxpayer funded programs will be aggressively pursued. This investigation remains ongoing, and we ask anyone with information to call us at 1-800-CALL-FBI or reach us online at tips.fbi.gov.” 

SBA OIG’s Eastern Region Special Agent-in-Charge Amaleka McCall-Brathwaite said: “Law enforcement will aggressively unmask fraudsters who allegedly hid behind stolen identities to gain access to SBA’s EIDL funds. SBA OIG will aggressively pursue evidence of fraud with its law enforcement partners.  I want to thank the U.S. Attorney’s Office for its leadership and dedication to pursuing justice.”

As alleged in the Complaint:[1]

The SBA is a federal agency of the Executive Branch that administers assistance to American small businesses. This assistance includes making direct loans to applicants through the Economic Injury Disaster Loan (“EIDL”) Program.  In response to the COVID-19 pandemic, Congress expanded SBA’s EIDL Program to provide small businesses with low-interest loans of up to $2 million prior to in or about May 2020 and up to $150,000 beginning in or about May 2020, in order to provide vital economic support to help overcome the loss of revenue small businesses are experiencing due to COVID-19.  Applicants seeking a loan under the EIDL program were also now permitted to request and receive an advance of approximately $1,000 per employee, for an amount up to $10,000, which the SBA has generally provided while the loan application was pending.

In June and July 2020, ALICIA AYERS, ANDREA AYERS, and TRACI PROCTOR used the identities of approximately 300 other individuals (the “Applicants”) to submit approximately 315 online applications to the SBA, seeking over $3 million of funds through the SBA’s EIDL Program.  (the “EIDL Applications”).  In connection with the EIDL Applications, ALICIA AYERS, ANDREA AYERS, and PROCTOR falsely represented to the SBA, among other things, that the Applicants were the owners of businesses with ten or more employees.  In fact, however, the applications falsely reported the businesses’ numbers of employees, and the vast majority of the purported businesses appear not to have existed at all.  Based on the fraudulent EIDL Applications, the SBA made advance payments of approximately $1,690,000 to the Applicants, who often then kicked back a portion of the advance payments to ALICIA AYERS, ANDREA AYERS, and TRACI PROCTOR.

*                *                *

ALICIA AYERS, 34, and ANDREA AYERS, 54, of Mount Vernon, New York, and TRACI PROCTOR, 47, of Clarkston, Georgia, are charged with (1) conspiracy to commit wire fraud, which carries a maximum sentence of 20 years in prison, (2) wire fraud, which carries a maximum sentence of 2 years in prison, (3) false statements, which carries a maximum sentence of five years in prison, and (4) aggravated identity theft, which carries a mandatory two-year consecutive sentence.  

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

Ms. Strauss praised the outstanding work of the FBI and the SBA-OIG.

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

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

 

---

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

Audrey Strauss, the United States Attorney for the Southern District of New York announced that MICHAEL PIZARRO, a/k/a “Eric Miller,” was sentenced today to 40 months in prison in connection with PIZARRO’s scheme to defraud individuals (the “Victims” ) by representing to them that they had qualified for a government grant, which could only be accessed upon the payment of an up-front refundable application fee.  In actuality, the government grant did not exist and none of the Victims had been approved for such a grant.  PIZARRO pled guilty to a one-count information on August 20, 2019, before United States Magistrate Judge Gabriel W. Gorentstein.  Today, United States District Judge Paul A. Crotty accepted PIZARRO’s guilty plea and imposed the sentence.

U.S. Attorney Audrey Strauss said:  “Michael Pizarro promised government grants to his victims under the condition they pay an up-front application fee. Regretfully, Pizarro’s victims, many of whom were over 70 years old, eventually discovered that they had fallen prey to a serial fraudster – there were no government grants, and they would not be receiving any funds. Michael Pizarro has now been sentenced to time in federal prison for his brazen fraud.”

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

Beginning in at least February 2017 through July 25, 2019, PIZARRO called the Victims, many of whom were more than 70 years old, and told them that his name was “Eric Miller” and that he was calling on behalf of a company named “National Grants.”  PIZARRO informed the Victims that they had been approved for a government grant, which was being held in escrow at an account with the “World Bank” in Washington, D.C.  Before the funds could be released, however, the Victims would have to pay a registration fee.  In fact, none of the Victims had been approved for a grant, the grants did not exist, and no Victim ever received any funds.

In April 2018, PIZARRO was charged in New York Supreme Court in connection with his involvement with National Grants from October 2015 through January 2017.  PIZARRO pled guilty to those charges in December 2018 and was awaiting sentencing when he was arrested in connection with this scheme on May 2, 2019.  After he was released on bail in connection with the federal charges, PIZARRO continued to seek contact information for additional Victims in furtherance of the scheme.  In total, not including the conduct charged in New York Supreme Court, PIZARRO defrauded the Victims out of approximately $270,000.

In addition to his prison sentence, PIZARRO, 38, of Brooklyn, New York, was sentenced to three years of supervised release and ordered to pay forfeiture and restitution in the amount of $278,853.37.

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

The prosecution is being handled by the Office’s Money Laundering and Transnational Criminal Enterprises Unit.  Assistant United States Attorneys Kiersten A. Fletcher and Benet J. Kearney are in charge of the prosecution. 

Audrey Strauss, the United States Attorney for the Southern District of New York, announced that JAMAL BRISSETT, a/k/a “Trigger,” a/k/a “Trigg,” pled guilty today before U.S. Magistrate Judge Kevin N. Fox to one count of Hobbs Act robbery.  As part of his plea, BRISSETT admitted that on June 30, 2009, he shot and killed Leshaun Gordon, the victim of the robbery.  BRISSETT is scheduled to be sentenced by U.S. District Judge Kimba M. Wood on June 22, 2021.

U.S. Attorney Audrey Strauss said:  “In 2009, Jamal Brissett robbed and murdered Leshaun Gordon in cold blood.  Now Brissett awaits sentencing for his callous conduct that robbed another man of his life.”

According to statements in the Information, and other filings and statements at public court proceedings in the case, on June 30, 2009, BRISSETT robbed Gordon near the intersection of Mickle Avenue and Chester Street in the Bronx, New York.  BRISSETT planned to, and did, shoot and kill Gordon during the robbery.          

*                      *                     *

The sole count of the Information charges BRISSETT with one count of Hobbs Act robbery, in violation of 18 U.S.C. § 1951, carrying a maximum penalty of 20 years in prison.  The maximum potential sentence in this case is prescribed by Congress and is provided here for informational purposes only, as any sentencing of the defendant will be determined by the judge.

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

The case is being handled by the Office’s Violent and Organized Crime Unit.  Assistant United States Attorneys Hagan Scotten and Danielle R. Sassoon are in charge of the prosecution.

Audrey Strauss, the United States Attorney for the Southern District of New York, Dermot Shea, Commissioner of the New York City Police Department (“NYPD”), and Ray Donovan, Special Agent in Charge of the New York Field Division of the Drug Enforcement Administration (“DEA”), announced today the unsealing of a Superseding Indictment charging RONALD GOLAND, a/k/a “Bigg Base,” a/k/a “Base,” with murder in aid of racketeering and a firearms offense in connection with the murder of Odane Bentley on July 17, 2015, in the Bronx; attempted murder and assault with a dangerous weapon in aid of racketeering and a firearms offense in connection with the shooting of a rival gang member on November 9, 2018, in the Bronx; and, conspiracy to commit murder in aid of racketeering.  Isaiah Smith, who is also charged in the Superseding Indictment, was previously arrested on charges related to the November 9, 2018, shooting and is already in federal custody.

GOLAND was arrested this morning and will be presented later today before U.S. Magistrate Judge Kevin Nathaniel Fox.  The case is assigned to U.S. District Judge Kimba M. Wood.

Manhattan U.S. Attorney Audrey Strauss said:  “As alleged, Ronald Goland engaged in senseless gang violence, resulting in the tragic murder of Odane Bentley.  We commend the extraordinary efforts of our law enforcement partners, who have worked tirelessly to investigate Odane Bentley’s death.”           

NYPD Commissioner Dermot Shea said:  “This case reflects the NYPD’s continued effort to eradicate violent street crime by targeting those most responsible.  I want to commend our law enforcement partners and the U.S. Attorney’s Office for the Southern District for helping to bring these individuals to justice.”

DEA Special Agent in Charge Ray Donovan said:  “This arrest sends a message to New Yorkers that law enforcement is committed to bringing to justice those fueling gang violence in our city.   I commend the NYPD and the U.S. Attorney’s Office Southern District of New York for their diligent efforts throughout this investigation and thank them for their partnership.” 

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

GOLAND is a member or associate of the MacBallas, a subset of the larger Bloods street gang.  In order to preserve and protect the MacBallas’ power, enrich its members, keep victims in fear, and promote and enhance its reputation, members and associates of the MacBallas committed, conspired, attempted, and threatened to commit acts of violence, including acts involving murder and assault, against others, including, in particular, rival gang members; conspired to distribute and possess with intent to distribute narcotics; and, possessed, stored, and used firearms. 

On July 17, 2015, GOLAND shot at a rival gang member (the “Rival Gang Member”) and, in doing so, fired a bullet through the front door of 4431 DeReimer Avenue in the Bronx, New York, killing Odane Bentley.

On November 9, 2018, GOLAND and Isaiah Smith planned and carried out the shooting of the Rival Gang Member in the vicinity of Murdock Avenue in the Bronx, New York.                

*                *                *

GOLAND, 29, from the Bronx, New York, is charged with one count of murder in aid of racketeering, which carries a sentence of death or life in prison; one count of murder through the use of a firearm, which carries a maximum sentence of death or life in prison, and a mandatory minimum sentence of five years in prison; one count of conspiracy to commit murder in aid of racketeering, which carries a maximum sentence of 10 years in prison; one count of attempted murder and assault with a dangerous weapon in aid of racketeering, which carries a maximum sentence of 20 years in prison; and possession of a firearm in furtherance of a crime of violence, which firearm was brandished and discharged, which carries a maximum sentence of life in prison and a mandatory minimum of 10 years in prison.

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

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

This case is being handled by the Office’s Violent and Organized Crime Unit.  Assistant United States Attorneys Justin V. Rodriguez and Andrew K. Chan are in charge of the prosecution.

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

 

---

[1] As the introductory phrase signifies, the entirety of the text of the 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 a jury returned a guilty verdict against GEOVANNY FUENTES RAMIREZ (“FUENTES RAMIREZ”) on all three counts in the Indictment, which included cocaine-importation and weapons charges.  FUENTES RAMIREZ is scheduled to be sentenced by the Honorable P. Kevin Castel on June 22, 2021.

Manhattan U.S. Attorney Audrey Strauss said:  “Geovanny Fuentes Ramirez was, up until his arrest by the DEA just over a year ago, a ruthless, powerful, and murderous cocaine trafficker in Honduras.  He facilitated the shipment of large loads of cocaine by bribing Juan Orlando Hernández Alvarado, then president of the Honduran National Congress and now the Honduran president.  Hernández Alvarado instructed Fuentes Ramirez to report directly to convicted co-conspirator and former Honduran congressman Tony Hernandez, the president’s brother.  Now Geovanny Fuentes Ramirez, one of the criminal conduits between Honduran officials and drug traffickers, faces a possible life behind bars.”

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

Beginning in or about 2009, FUENTES RAMIREZ and others established and operated a cocaine laboratory in the Cortés Department of Honduras, where they produced hundreds of kilograms of cocaine each month.  FUENTES RAMIREZ worked with others to receive cocaine shipments sent to Honduras over air and maritime routes, and to transport cocaine that he produced at the laboratory.  FUENTES RAMIREZ provided security for the facility, and for the transportation of cocaine, using heavily armed workers and Honduran police and military personnel.

On several occasions between approximately 2010 and 2013, FUENTES RAMIREZ helped arrange or directly participated in drug-related violence.  In or about 2012, for example, after FUENTES RAMIREZ’s cocaine laboratory was raided by law enforcement, FUENTES RAMIREZ beat and tortured a law enforcement official who FUENTES RAMIREZ believed to have been involved in the investigation of the laboratory.  FUENTES RAMIREZ murdered the officer by shooting him in the head with what FUENTES RAMIREZ described as “mercy shots.”

In or about 2013, FUENTES RAMIREZ paid a bribe of at least approximately $25,000 to Honduran president Juan Orlando Hernández Alvarado (“JOH”), who was at the time the president of the Honduran National Congress, and allowed JOH to access millions of dollars’ worth of cocaine from FUENTES RAMIREZ’s laboratory.  In connection with negotiations relating to the laboratory, JOH told FUENTES RAMIREZ that he was interested in access to the laboratory because of its proximity to Puerto Cortés, a key shipping port on the northern coast of Honduras.  JOH also told FUENTES RAMIREZ that the Honduran armed forces would provide security, and that Óscar Fernando Chinchilla Banegas, the Attorney General of Honduras, would help protect FUENTES RAMIREZ’s drug trafficking activities.  JOH instructed FUENTES RAMIREZ to report directly to JOH’s brother, Juan Antonio Hernández Alvarado (“Tony Hernández”), for purposes of their drug trafficking partnership.  Finally, JOH told FUENTES RAMIREZ that he wanted to make the DEA think that Honduras was fighting drug trafficking, but that instead he was going to eliminate extradition and “stuff drugs up the gringos’ noses,” referring to flooding the United States with cocaine. 

In October 2019, Tony Hernández was convicted of the same offenses as FUENTES RAMIREZ, as well as an additional count of making false statements to the DEA.  FUENTES RAMIREZ met with JOH following two key filings in the prosecution of Tony Hernández, as demonstrated by, among other things, data from FUENTES RAMIREZ’s phone reflecting that he twice searched for directions to JOH’s Casa Presidencial in Tegucigalpa, Honduras, after the filings.  Tony Hernández is scheduled to be sentenced by Judge Castel on March 30, 2021.  

*                *                *

FUENTES RAMIREZ, 51, was convicted on three counts:  (1) conspiring to import cocaine into the United States, which carries a mandatory minimum prison term of 10 years and a maximum prison term of life; (2) using and carrying machine guns during, and possessing machine guns in furtherance of, the cocaine-importation conspiracy, which carries a mandatory consecutive prison term of 30 years; and (3) conspiring to use and carry machine guns during, and to possess machine guns in furtherance of, the cocaine-importation conspiracy, which carries a maximum prison term of life.

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

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

Audrey Strauss, the United States Attorney for the Southern District of New York, announced today that codefendants HERODE CHANCY and MICHAEL ALBARELLA, who at the time of offense were employed as a managers at a Manhattan branch of a national bank (“Bank-1”), have pled guilty before United States District Judge Lewis J. Liman in connection with their respective roles in a loan fraud and bank bribery scheme.  CHANCY pled guilty on March 12, 2021, to conspiracy to commit wire and mail fraud, and ALBARELLA pled guilty today to bank bribery.     

U.S. Attorney Audrey Strauss said: “Bank employee Herode Chancy engaged in a scheme to obtain over $1 million in commercial loans for fake businesses, and his co-worker Michael Albarella then accepted a bribe to open a bank account using a stolen identity for the purpose of laundering a portion of the stolen money.  Chancy and Albarella now await sentencing for their fraudulent and corrupt acts.”

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

From at least in or about March 2019 up to and including at least in or about March 2020, CHANCY and 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 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. 

*                *                *

CHANCY, 41, of Bellerose, New York, pled guilty to one count of conspiracy to commit wire and mail fraud, which carries a maximum penalty of 20 years in prison.  CHANCY also admitted that he conspired to commit money laundering, in violation of Title 18, United States Code, Section 1956(h).  CHANCY will be sentenced by Judge Liman on July 9, 2021, at 2:00 p.m.

ALBARELLA, 35, of Floral Park, New York, pled guilty to one count of bank bribery, which carries a maximum penalty of 30 years in prison.  ALBARELLA will be sentenced by Judge Liman on June 28, 2021, at 2:00 p.m. 

Ilori is charged with: (1) conspiracy to commit mail and wire fraud, (2) wire fraud, (3) mail fraud, and (4) conspiracy to commit money laundering, each of which carries a maximum penalty of 20 years in prison, and (5) aggravated identity theft, which carries a mandatory term of two years in prison, to be served consecutively to any other term of imprisonment.  

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

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.

The allegations against Ilori in the Complaint and Indictment are merely accusations, and Ilori is presumed innocent unless and until proven guilty.

Audrey Strauss, the United States Attorney for the Southern District of New York, and William F. Sweeney Jr., Assistant Director-in-Charge of the New York Field Office of the Federal Bureau of Investigation (“FBI”), announced the unsealing of an Indictment charging ABRAHAM ADENIYI with money laundering and bank fraud offenses in connection with his years-long involvement in a money laundering operation.  ADENIYI, who was arrested this morning in Georgia, will be presented later today before a federal magistrate judge in the Northern District of Georgia.

U.S. Attorney Audrey Strauss said:  “As alleged, Abraham Adeniyi used a web of bank accounts to hide millions of dollars stolen from fraud victims, some of which went to Adeniyi’s own pockets.  Thanks to the FBI, Adeniyi now faces federal charges.”

FBI Assistant Director William F. Sweeney Jr. said:  “Criminals will always believe there is a pot of gold at the end of the rainbow. As we allege in this investigation, Mr. Adeniyi and his cohorts stole money and attempted to conceal its origin through a series of bank accounts – all the while thinking no one would be able to track it. He discovered his luck ran out when all he found at the end of his rainbow was the FBI and the federal criminal justice system.”

According to the allegations in the indictment[1] filed against ADENIYI and other court proceedings:

From at least in or about 2017 through at least in or about 2020, ADENIYI opened and directed others to open multiple bank accounts, which received proceeds of various wire fraud schemes, and transferred and directed others to transfer those proceeds among the bank accounts he had opened, as well as to other bank accounts controlled by participants in the scheme, in order to conceal and disguise the source, location, ownership, and control of the funds.  As part of the scheme, ADENIYI and others used fraudulent identification information to open accounts at FDIC-insured banks and to obtain the funds in those accounts.

*                *                *

ADENIYI, 37, of Atlanta, Georgia, is charged with one count of conspiracy to commit money laundering, which carries a maximum sentence of 20 years in prison, and onecount of conspiracy to commit bank fraud, which carries a maximum sentence of 30 years in prison. 

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

This case is being handled by the Office’s Money Laundering and Transnational Criminal Enterprises Unit.  Assistant United States Attorney Anden Chow is in charge of the prosecution.

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

 

---

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

Audrey Strauss, the United States Attorney for the Southern District of New York, and Peter C. Fitzhugh, the Special Agent in Charge of the New York Field Office of Homeland Security Investigations (“HSI”), announced that VICTOR MONES CORO (“MONES CORO”) was sentenced today to 55 months in prison, in connection with a scheme to provide private charter flights to two prominent members of former Venezuelan President Nicolás Maduro’s inner circle:  former Venezuelan Vice President Tareck Zaidan El Aissami Maddah (“El Aissami”) and his frontman, Samark Jose Lopez Bello (“Lopez Bello”).  These flight services violated sanctions imposed by the U.S. Department of the Treasury’s Office of Foreign Assets Control (“OFAC”) pursuant to the Foreign Narcotics Kingpin Designation Act (“Kingpin Act”).  MONES CORO pled guilty to a five-count Indictment on January 4, 2021, and was sentenced today by U.S. District Judge Alvin K. Hellerstein. 

Manhattan U.S. Attorney Audrey Strauss said:  “Victor Mones Coro led a concerted, sustained, multi-year scheme to provide millions of dollars’ worth of illicit flight services to Venezuelan leaders in direct contravention of our country’s sanctions regime and foreign policy.  Today’s sentence serves as a reminder that, together with our law enforcement partners, we will aggressively prosecute sanctions violators to protect our national security.”

HSI Special Agent in Charge Peter C. Fitzhugh said:  “HSI is instrumental in protecting the interests of the United States by leveraging our unique and expansive authorities to root out the corrupt regimes operating around the globe.  For over 25 years, the HSI New York El Dorado Task Force has investigated and dismantled complex international money laundering schemes along with other serious financial crimes.  Working with our law enforcement partners around the country and around the world, we continue to safeguard our financial systems from international corruption that enriches the coffers of dictators and their cohorts.”

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

Between February 2017 and March 2019, MONES CORO provided travel services, including private jet charters, to El Aissami and Lopez Bello, as well as their associates, in violation of OFAC sanctions.  El Aissami became the vice president of Venezuela in approximately January 2017 and is currently Venezuela’s Minister of Industry and National Production.  In February 2017, OFAC designated El Aissami and Lopez Bello as Specially Designated Narcotics Traffickers pursuant to the Kingpin Act and related regulations.  As a result of OFAC’s designations, U.S. persons are generally prohibited from, among other things, engaging in transactions with or providing services to El Aissami and Lopez Bello absent authorization from OFAC.

To evade the OFAC designations, MONES CORO designed an elaborate criminal scheme to enrich himself and provide flight services to El Aissami and Lopez Bello, among other influential Venezuelans in Maduro’s inner circle, including the president of Venezuela’s Supreme Court, Maikel Moreno, who had also been previously sanctioned by OFAC.   In spearheading this criminal scheme, MONES CORO used his U.S.-based company, American Charter Services (“ACS”), its planes, and its employees to fly Lopez Bello, El Aissami, and others around the world, including to foreign countries of strategic importance to the Maduro regime such as Russia and Turkey. 

MONES CORO also provided flights in furtherance of Maduro’s May 2018 campaign for re-election, a corrupt campaign through which Maduro illegitimately maintained control of Venezuela.  In particular, between approximately February and May 2018, MONES CORO and ACS arranged between 20 to 25 domestic Venezuelan flights for the Maduro campaign.  These flights transported people, campaign materials, and food, among other things, and were coordinated with associates of El Aissami and Lopez Bello.

To avoid detection, MONES CORO and his co-conspirators, including Joselit Ramírez Camacho, Venezuela’s current Superintendent of Cryptocurrencies, engaged in various forms of subterfuge.  They used code names, falsified flight manifests and invoices, communicated over encrypted messaging applications, received cash flown into the United States from Venezuela, and accepted wire transfers from a front company tied to the sanctioned Venezuelan leaders.   MONES CORO also tried to cover his tracks by directing one of his pilots to lie to law enforcement.

MONES CORO perpetrated these crimes at a time when the United States and its allies were engaged in the crucial undertaking of depriving Venezuela and its leadership of resources for its malign, undemocratic, and deadly activities – including its systematic and oftentimes fatal repression of activists, its subversion of Venezuelan democratic institutions, and its corrupt plundering of Venezuela’s natural resources.  Maduro and others are charged with narco-terrorism and related crimes in a Superseding Indictment also pending before Judge Hellerstein.  In a separate Superseding Indictment, El Aissami, Lopez Bello, and Ramírez Camacho are charged with sanctions violations based on their roles in the scheme with MONES CORO.

*                      *                      *

In addition to his prison sentence, MONES CORO, 52, of Florida, was sentenced to two years of supervised release and ordered to pay a fine of $250,000.

Ms. Strauss praised the outstanding efforts of U.S. Customs and Border Protection, and the DEA’s Special Operations Division Bilateral Investigations Unit.  Ms. Strauss also thanked the Counterintelligence and Export Control Section of the Department of Justice’s National Security Division, and OFAC.

This prosecution is being handled by the Office’s Terrorism and International Narcotics Unit.  Assistant U.S. Attorneys Sam Adelsberg and Amanda Houle are in charge of the prosecution, with assistance from David Recker of the Counterintelligence and Export Control Section.

The charges against Maduro, El Aissami, Lopez Bello, and Ramírez Camacho are merely accusations, and those defendants are presumed innocent unless and until proven guilty.

Audrey Strauss, the United States Attorney for the Southern District of New York, Michael C. Mikulka, Special Agent in Charge of the New York Regional Office of the U.S. Department of Labor Office of Inspector General (“DOL-OIG”), and Patrick Freaney, Deputy Special Agent in Charge of the New York Field Office of the U.S. Secret Service (“USSS”), announced today the unsealing of a complaint charging ELVIN GERMAN with wire fraud and aggravated identity theft in connection with a COVID-19 unemployment benefit scheme that resulted in the loss of more than $1.4 million from the New York Department of Labor (“NY DOL”).  GERMAN was arrested on March 16, 2021 in the Bronx, New York, and will be presented this afternoon before United States Magistrate Judge Sarah L. Cave.    

Manhattan U.S. Attorney Audrey Strauss said: “As alleged, Elvin German used the identities of over 250 unknowing victims to file false claims in order to receive over $1.4 million in COVID-19 unemployment benefits. But investigators were able to detect a pattern to his alleged scam, partly because German typically used the same IP address and security question and answer – the name of family dog, Benji – to illegally submit applications on the DOL’s website. We thank our partners at DOL and Secret Service for alertly detecting German’s attempt to profiteer from funds earmarked to provide relief for families struggling with financial hardships resulting from the ongoing pandemic.”

DOL-OIG Special Agent in Charge Michael C. Mikulka said: “Investigating fraud involving the Unemployment Insurance Program is an important part of the mission of the U.S. Department of Labor Office of Inspector General, particularly now when our nation is providing billions of dollars in unemployment benefits to American workers in need due to the economic effects of the COVID-19 pandemic. We will continue to work with our law enforcement partners to vigorously investigate unemployment insurance fraud.”

USSS Deputy Special Agent in Charge Patrick Freaney said:  “It is a priority of the U.S. Secret Service to investigate and hold responsible those who manipulate financial programs for their own personal gain. In this case, the defendant allegedly used personally identifiable information of over 200 individuals to file fraudulent unemployment insurance claims resulting in over a million dollars of loss.  The Secret Service looks forward to our continued partnership with the U.S. Department of Labor as we collectively pursue those who seek to commit unemployment insurance fraud.” 

As alleged in the Complaint[1]:

From May 2020 through March 2021, ELVIN GERMAN engaged in a scheme to obtain COVID-19 unemployment benefits by fraudulently filing and verifying applications using the names and social security numbers of more than 250 other people.  The NY DOL was alerted to the suspicious activity based on metadata associated with the applications (the “Applications”), which indicated that the Applications were either submitted and/or verified on a weekly basis from the same internet protocol (“IP”) address.   Additionally, the Applications had the same security questions and responses, including that the applicant’s first pet was named “Benji.”  After identifying the residence assigned to the IP address, DOL-OIG and USSS conducted a joint search of the residence, locating, among other items linked to GERMAN, approximately $7,000 in cash, a computer loaded to the NY DOL unemployment benefits page with the personal identifying information of four individuals named in the Applications open in an adjacent computer file, and, consistent with the security question used in the fraudulent applications – a dog wearing a collar inscribed with the name “Benji.”  As a result of GERMAN’s scheme, the NY DOL authorized the release of more than $1.4 million of COVID-19 unemployment benefits. 

*                      *                      *

ELVIN GERMAN, 41, is charged with (1) wire fraud, which carries a maximum sentence of 20 years in prison, and (2) aggravated identity theft, which carries a mandatory two-year consecutive sentence. The maximum potential sentences in this case are prescribed by Congress and are provided here for informational purposes only, as any sentencing of the defendant will be determined by the assigned judge.

Ms. Strauss praised the outstanding investigative work of DOL-OIG, the USSS, and the NY DOL.

The case is being handled by the Office’s General Crimes Unit.  Assistant United States Attorney Danielle M. Kudla is in charge of the prosecution.

 

 

---

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

Audrey Strauss, United States Attorney for the Southern District of New York, and William F. Sweeney Jr., Assistant Director-in-Charge of the New York Office of the Federal Bureau of Investigation (“FBI”), Jonathan D. Larsen, Special Agent in Charge of the New York Field Office of the Internal Revenue Service, Criminal Investigation (“IRS-CI”), and Thomas Licetti, New York Regional Director, U.S. Department of Labor Employee Benefits Security Administration (“DOL-EBSA”), announced today the unsealing of a complaint charging MELISSA PANAYIOTA KANES with health care fraud, money laundering, and aggravated identity theft in connection with a scheme to submit more than $800,000 in fraudulent health care claims, including by using, over the course of multiple years, the identities of three per diem chiropractors when submitting claims in an effort to hide the defendant’s association with the claims.

KANES was arrested this morning on Long Island, New York, and was presented earlier today before U.S. Magistrate Judge Sarah L. Cave. 

Manhattan U.S. Attorney Audrey Strauss said:  “As alleged, Melissa Kanes filed numerous fraudulent health insurance claims for her chiropractic services.  Indeed, as further alleged, Kanes filed so many claims that an insurer flagged her for suspicious billing, at which point she tried to circumvent scrutiny by filing claims in the names of other chiropractors without their knowledge.  Now Melissa Kanes is in custody and facing federal charges.”

FBI Assistant Director William F. Sweeney Jr. said:  “As alleged, Kanes used the identities of three different chiropractors to reap more than $800,000 from fraudulent insurance claims.  The crimes with which she is charged today are serious ones, which carry the possibility of a lengthy prison sentence.  This case should serve as a warning to others unwilling to make adjustments to their illegal behavior – the federal criminal justice system could be just what the doctor ordered.”

IRS-CI Special Agent in Charge Jonathan D. Larsen said:  “The offenses charged in this case are particularly troubling because once the fraudulent activities were detected, the defendant allegedly continued the activities using additional concealment methods.  While the vast majority of health care providers are operating in good faith to take care of patient needs, it is the role of IRS CI and our law enforcement partners to bring to justice the small percentage of providers who are knowingly abusing the health care system for personal profit.”

DOL-EBSA New York Regional Director Thomas Licetti said:  “This type of activity is detrimental to workers, employers and the entire healthcare system. EBSA is proud to partner with our fellow federal agencies in protecting hard-earned employee benefits.”

According to the allegations in the Complaint:[1]

MELISSA PANAYIOTA KANES, the defendant, worked as a licensed chiropractor in New York, New York.

Between 2014 and 2016, KANES submitted a high volume of insurance claims to one of the largest private health insurance companies in the country (“Insurer-1”).  Insurer-1 served as the third-party claims administrator for various health plans, including a health plan covering the employees of a large consulting firm (“Victim Employer-1”).  At the outset, KANES submitted the bills using companies publicly associated with her and her own identification number.  But in 2016, Insurer-1 flagged KANES for improper billing and slowed or ceased payments to KANES.  Thereafter, KANES continued to submit claims to Insurer-1, but took steps to hide KANES’s association with the bills.  In particular, KANES submitted bills under the names and identification numbers of two newly incorporated companies (“New Company-1” and “New Company-2”), and three newly recruited per diem chiropractors (“Victim Chiropractor-1,” “Victim Chiropractor-2,” and “Victim Chiropractor-3”; together, the “Victim Chiropractors”), without the Victim Chiropractors’ knowledge or consent.

These claims to Insurer-1 – the vast majority of which related to services purportedly rendered to employees in the Manhattan office of Victim Employer-1, which was nearby KANES’s regular office in Manhattan – were false.  The claims variously misrepresented the provider of the services (as one of the Victim Chiropractors), the location of the services (as somewhere other than KANES’s regular office), and which chiropractic services were in fact rendered (including whether any were rendered at all).  More generally, the claims misleadingly omitted KANES’s involvement.  The fraudulent claims that KANES submitted to Insurer-1 alone totaled more than $800,000.

Along with Insurer-1, KANES submitted claims to other private health insurance companies during the relevant time period.  At least some set of those claims were also false.  In particular, on certain dates for which KANES claimed to have provided the services billed, KANES was, in fact, traveling outside the United States.

*                *                *

KANES, 50, of New Hyde Park, New York, is charged with one count of health care fraud, which carries a maximum sentence of 10 years in prison, one count of money laundering, which carries a maximum sentence of 20 years in prison, and one count of aggravated identity theft, which carries a mandatory consecutive term of two years in prison.  The maximum potential sentences are prescribed by Congress and are provided here for informational purposes only, as any sentencing of the defendant would be determined by a judge.

Ms. Strauss praised the outstanding investigative work of the FBI, IRS-CI, and DOL-EBSA.

If you believe you were a victim of this crime, including a victim entitled to restitution, and you wish to provide information to law enforcement and/or receive notice of future developments in the case or additional information, please contact Wendy Olsen-Clancy, the Victim Witness Coordinator at the United States Attorney’s Office for the Southern District of New York, at (866) 874-8900, or Wendy.Olsen@usdoj.gov.  For additional information, go to: http://www.usdoj.gov/usao/nys/victimwitness.html.

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.

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 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 that JOSE MORELY CHOCRON pled guilty today before U.S. District Judge Jed S. Rakoff to one count of money laundering.  CHOCRON laundered more than $500,000 in funds that had been represented to him to be the proceeds of a scheme to bribe Brazilian political officials, using a network and bank accounts to which he had access by virtue of his operation of an unlicensed money transmitting business.

U.S. Attorney Audrey Strauss said:  “Jose Chocron’s black-market banking was designed to facilitate tax evasion, and was used to facilitate what he thought was the bribery of a foreign official.  Unbeknownst to Chocron, the FBI had identified his network and worked quickly to dismantle it.  This Office will continue to ensure the integrity of the U.S. financial system by identifying and prosecuting shadow banking operations like Chocron’s.”  

According to the Complaint, the Indictment, and other filings in this case:

Between May 2019 and October 2019, CHOCRON, working with his co-conspirators, utilized his network of contacts and bank accounts to launder funds that had been provided to him by individuals who – unbeknownst to CHOCRON – were working for the Federal Bureau of Investigation (“FBI”).  Those individuals informed CHOCRON that the funds were the proceeds of bribes that had been paid to Brazilian public officials in order to obtain licenses and permits.  On four occasions, CHOCRON accepted cash from individuals who were working for the FBI or arranged to have the cash delivered to his associates.  He then arranged for the funds to be transferred to bank accounts specified by the FBI, minus a commission payment.

CHOCRON explained that he was able to receive large amounts of cash in the United States and arrange for those funds to be transferred to bank accounts because CHOCRON “ha[d] . . . people here that need cash.  They will transfer to you, because they don’t want to pay taxes . . .  What do I do? I give them the money and they make a transfer to me.”  He also requested a higher commission for his services than initially offered, stating “Let’s be clear, that’s laundering money.” 

*                *                *

CHOCRON, 61, of Spain and Venezuela, pled guilty to one count of money laundering, which carries a maximum sentence of 20 years in prison.  The maximum potential sentence in this case is prescribed by Congress and is provided here for informational purposes only, as any sentencing of the defendant will be determined by the judge.  In connection with his guilty plea, CHOCRON also admitted that he operated an unlicensed money transmitting business, in violation of Title 18, United States Code, Section 1960.

CHOCRON is scheduled to be sentenced by Judge Rakoff on July 16, 2021, at 4:00 p.m.

Ms. Strauss praised the outstanding work of FBI New York’s Eurasian Organized Crime Task Force.

The prosecution of this case is being overseen by the Office’s Money Laundering and Transitional Criminal Enterprises Unit.  Assistant U.S. Attorneys Andrew C. Adams, Benet J. Kearney, and Sarah Mortazavi are in charge of the case.

Audrey Strauss, the United States Attorney for the Southern District of New York, announced the entry today of a Consent Order of Preliminary Injunction (the “Injunction”) mandating that the Village of Airmont (“AIRMONT”) immediately cease enforcement of zoning code provisions enacted in 2018 that discriminate against Orthodox Jewish residents in violation of the Religious Land Use and Institutionalized Persons Act (“RLUIPA”), as alleged in a lawsuit brought by the United States (the “Government”).  Among other things, the zoning code provisions at issue limit the amount of space in private homes that can be used as a Residential Place of Worship (“RPW”), restrict whom residents are allowed to invite into their own homes to pray, and expand the use of an arbitrary, drawn-out application process designed to delay and effectively deny permits for even minor alterations to private houses.  After commencing its lawsuit in December 2020, the Government presented evidence that the provisions had been motivated by discriminatory animus and served no legitimate governmental purpose.  Following the Government’s submission, AIRMONT agreed to entry of the Injunction.

U.S. Attorney Audrey Strauss said:  “The right to Free Exercise of religion is central to the First Amendment, and our multicultural society is only as strong as our willingness to stand up for the rights of religious minorities.  We appreciate Airmont’s willingness to agree to cease enforcement of its discriminatory zoning code restrictions pending final resolution of this matter.”  

Under the terms of the Injunction entered today by U.S. District Judge Nelson S. Román, AIRMONT:

• Must restore RPWs as a recognized land use category permitted as of right in all residential districts and may not enforce contrary provisions of local law enacted in 2018 that removed RPWs as a recognized of-right use from AIRMONT’s zoning code;

• Must restore in full zoning provisions protecting the right to residential worship enacted by order of the District Court in 1996 after a jury found that AIRMONT had engaged in discrimination against Orthodox Jews, which AIRMONT removed from its zoning code in 2018 in violation of the Court-entered final judgment;    
   
• Must ensure that all applications for RPWs that are 1,400 square feet or less in total size are reviewed and approved on an expedited basis without public hearing; and
   
• May not adjudicate applications for RPWs that are larger than 1,400 square feet under the terms of site development regulations enacted in 2018, which expanded and made mandatory a disproportionately burdensome review process, and may instead only apply regulations that were in effect under an earlier version of AIRMONT’s zoning code enacted in 1997.

RLUIPA authorizes the Department of Justice to commence an action against any local government that implements a land use regulation that places a substantial burden on religious exercise or discriminates on the basis of religion.  By its terms, the Injunction will remain in effect until further order of the District Court.

The case is being handled by the Office’s Civil Rights Unit.  Assistant U.S. Attorney Stephen Cha-Kim is charge of the case.

Audrey Strauss, the United States Attorney for the Southern District of New York, and Raymond P. Donovan, Special Agent in Charge of the New York Division of the U.S. Drug Enforcement Administration (“DEA”), announced that ADRIANO RODRIGUEZ-DIAZ, IRONELLYS PAULINO-NOLASCO, and ROBERT NUNEZ were charged in a criminal complaint filed in Manhattan federal court with narcotics importation, narcotics trafficking, and firearms offenses.  RODRIGUEZ-DIAZ and PAULINO-NOLASCO were apprehended on March 12, 2021 and will be presented this afternoon before United States Magistrate Judge Sarah L. Cave.  NUNEZ remains at large. 

Manhattan U.S. Attorney Audrey Strauss said:  “This  investigation has yielded the seizure of over 120 kilograms of cocaine and over $1 million in suspected proceeds from illegal narcotics trafficking, disrupting the operation of this alleged drug trafficking organization. Thanks to our partners at the DEA, this massive shipment of potentially deadly narcotics has been kept off the streets.”

DEA Special Agent in Charge Raymond P. Donovan said:  “A stakeout turned into a three-day enforcement operation taking six million dollars’ worth of cocaine sales away from alleged drug traffickers while saving lives. Over one hundred kilograms of cocaine is significant in many ways since CDC warned of a 26.5% increase in overdose deaths involving cocaine in a 12- month period ending May 2020. Law enforcement will continue to rally our resources to seize illegal drugs responsible for record-breaking overdose rates.” 

 

As alleged in the Complaint[1]:

Since in or about late 2020, the DEA has been investigating the importation and distribution of narcotics through a produce warehouse in New Jersey called “Sweet Produce” (the “Warehouse”).  Cocaine was shipped from a company in the Dominican Republic to the Warehouse.  Between March 9, 2021 and March 12, 2021, DEA agents observed members of the conspiracy receive and move shipments from the Warehouse to other locations, including an apartment in the Bronx.

On March 10, 2021, agents seized approximately one kilogram of cocaine from a car driven by NUNEZ.  On March 11, 2021, agents seized approximately 20 kilograms of cocaine and $1.3 million in United States currency from the apartment in the Bronx.  On March 12, 2021, agents seized approximately 100 kilograms of cocaine from a produce van as it left the Warehouse, and also seized a firearm from the Warehouse.  The Produce Van was en route to a safe house in New Jersey that contained approximately one kilogram of cocaine, a cocaine press, and packaging materials.    

*                      *                      *

ADRIANO RODRIGUEZ-DIAZ, 41, IRONELLYS PAULINO-NOLASCO, 37, and ROBERT NUNEZ, 50, are charged with conspiring to import at least five kilograms of cocaine into the United States, which carries a mandatory minimum sentence of 10 years in prison and a maximum sentence of life in prison, and conspiring to distribute and possess with intent to distribute at least five kilograms of cocaine, which carries a mandatory minimum sentence of 10 years in prison and a maximum sentence of life in prison.  RODRIGUEZ-DIAZ is also charged with possession of a firearm during and in relation to the narcotics importation and trafficking conspiracies, which carries a mandatory consecutive sentence of five years in prison.

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

Ms. Strauss praised the outstanding investigative work of the New York Division the DEA.  Ms. Strauss also thanked the El Dorado Task Force of the United States Department of Homeland Security, Homeland Security Investigations, the New York City Police Department and the Organized Crime Drug Enforcement Task Force New York Strike Force, Financial Investigation Team comprising agents and officers of the DEA, NYPD, Bergen County Prosecutors Office, Fort Lee Police Department, Teaneck Police Department, Hillsdale Police Department, Northvale Police Department, Palisades Interstate Parkway Police, and Closter Police Department for its assistance in the investigation.  

The case is being handled by the Office’s Narcotics Unit.  Assistant United States Attorneys Danielle M. Kudla and Alexander Li are in charge of the prosecution.

 

---

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

Audrey Strauss, the United States Attorney for the Southern District of New York, announced that MARVIN GAMONEDA, a/k/a “June,” pled guilty today in Manhattan federal court in connection with a shooting in the Nelson Playground on June 7, 2018, in furtherance of the Woodycrime criminal enterprise.  U.S. District Judge John G. Koeltl accepted the defendant’s guilty plea.

U.S. Attorney Audrey Strauss said:  “Today, Marvin Gamoneda admitted his responsibility for a brazen shooting in the middle of the afternoon in a playground in the Bronx.  During the shooting, two individuals, including a child, were hit.  We continue our daily work with our law enforcement partners to keep our communities safe and to vigorously investigate acts of gang violence.”

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

Woodycrime was a criminal enterprise involved in committing numerous acts of violence, including attempted murders and assaults, as well as drug dealing in the Bronx.  Members and associates of Woodycrime engaged in violence to retaliate against rival gangs, to preserve and expand the gang’s territory, and to protect the gang’s narcotics business.  Members and associates of Woodycrime enriched themselves by selling drugs, such as crack cocaine, marijuana, oxycodone, and MDMA or “ecstasy.”  On June 7, 2018, GAMONEDA and others shot at a rival gang member in the vicinity of the Nelson Playground in the Bronx, during which two victims, including a 13-year-old child, were injured.  

*                *                *

GAMONEDA, 34, of the Bronx, New York, pled guilty to attempted murder and assault with a dangerous weapon in aid of racketeering, which carries a maximum sentence of 20 years in prison, and using and carrying a firearm in furtherance of a crime of violence, which carries a maximum sentence of life and a mandatory minimum sentence of five years in prison.  GAMONEDA will be sentenced before Judge Koeltl on July 30, 2021, at 10:00 a.m.

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

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

This case is being handled by the Office’s Violent and Organized Crime Unit.  Assistant United States Attorneys Andrew K. Chan, Jacob R. Fiddelman, and James Ligtenberg are in charge of the prosecution.

Audrey Strauss, the United States Attorney for the Southern District of New York, Peter C. Fitzhugh, Special Agent-in-Charge of the New York Field Office of Homeland Security Investigations (“HSI”), Philip R. Bartlett, Inspector-in-Charge of the New York Field Division of the United States Postal Inspection Service (“USPIS”), Dermot Shea, Commissioner of the New York City Police Department (“NYPD”), and Joseph Fucito, New York City Sheriff, announced today the unsealing of a criminal Complaint charging SHAMOON RAFIQ, a/k/a “Shamoon Omer Rafiq,” a/k/a “Omar Rafiq,” a/k/a “Omer Rafiq,” a resident of Singapore, with securities fraud, wire fraud, and aggravated identity theft for engaging in a scheme in which RAFIQ solicited millions of dollars through his use of false representations offering to sell purported investments in shares of stock in privately held companies that have not yet conducted an initial public offering (“pre-IPO stock”) that he did not actually own, his false impersonation of senior officials of a reputable family office investment firm, and other acts of deception.

U.S. Attorney Audrey Strauss said:  “As alleged, Shamoon Rafiq exploited investors’ fear of missing out on the potential gains to be earned from investing in companies before they go public, and solicited millions of dollars from investors through brazen lies and deception. Rafiq allegedly elicited millions under the false pretense that he would sell shares of pre-IPO stocks which – unbeknownst to his investors – he did not even own and therefore could not sell.  Furthermore, Rafiq allegedly sent faked emails impersonating senior officials of a reputable family office investment firm that supposedly backed his claims.  I sincerely thank our law enforcement partners for their assistance in charging Rafiq for alleged predatory acts of deceit on his victims.” 

HSI Special Agent-in-Charge Peter C. Fitzhugh said:  “A fraudster with a felony conviction for wire fraud, Rafiq allegedly attempted to fleece investors out of their hard-earned cash by creating the illusion of a once-in-a-lifetime opportunity to invest victims’ funds into pre-IPO stocks such as Airbnb shares. In reality, no such opportunity existed and Rafiq' was simply trying to walk off with millions of dollars from Singapore. HSI’s El Dorado Task Force and our partners will continue to work tirelessly to identify, investigate, arrest and prosecute individuals, like Rafiq, who allegedly peddled too good to be true financial opportunities within the U.S. financial markets. Investors should be reminded that unbelievable investment prospects are sometimes just that.”

USPIS Inspector-in-Charge Phillip R, Bartlett said:  “Mr. Rafiq’s alleged scheme is all based on the alleged perfect opportunity for ‘stock’ in a well-known company. The opportunity to own prominent holdings would be a boon to any investor, but in this case there was no stock, just a made up investment scheme to enrich an alleged serial fraudster. Through the collaboration of law enforcement, both domestically and globally, Mr. Rafiq will once again answer for his crimes to defraud investors. A reminder that no one eludes justice forever.”

NYPD Commissioner Dermot Shea said:  “As alleged in this complaint, Shamoon Rafiq preyed on the hopes of innocent victims in elaborate financial swindles. But the joint work of our NYPD investigators and law enforcement partners put an end to these alleged crimes and I commend the United States Attorney’s Office in the Southern District of New York for bringing this important case.”

If you believe you are a victim of a fraudulent pre-IPO stock scheme perpetrated by SHAMOON RAFIQ or have information about the crimes charged in the Complaint, please call the United States Attorney’s Office at 866-874-8900.

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

SHAMOON RAFIQ, a/k/a “Shamoon Omer Rafiq,” a/k/a “Omar Rafiq,” a/k/a “Omer Rafiq,” was born in the Netherlands in 1973 and presently resides in Singapore.  RAFIQ was convicted in 2004 in the United States District Court for the Eastern District of New York for carrying out a wire fraud scheme in which he purported to sell pre-IPO stock in a privately held company that had not yet conducted its initial public offering when, in fact, RAFIQ did not own or have access to such stock.  After serving a 41-month federal prison sentence for that crime, RAFIQ was deported from the United States and eventually relocated to Singapore.

Since at least July 2020, RAFIQ has been engaging in a new scheme from Singapore to defraud victims into paying him millions of dollars for alleged investment interests in various pre-IPO stocks that he does not actually own or control. 

In connection with his new fraud scheme, RAFIQ has fraudulently impersonated two senior officials (“Victim-1” and “Victim-2”) of a prominent family office investment firm (“FamCap”) that manages and invests assets of members of a prominent billionaire family (the “Family”).  In July 2020, RAFIQ caused the creation of a fake FamCap website (the “Fake FamCap Website”) that has automatically routed users to the official FamCap website, and the creation of fake FamCap email addresses for Victim-1 and Victim-2 that closely resemble, but are slightly different from, their official FamCap email addresses (the “Fake FamCap Email Addresses”).  The Fake FamCap Website and Fake FamCap Email Addresses for Victim-1 and Victim-2 were created without their or FamCap’s consent.  The Fake FamCap Email Addresses also included the names of Victim-1 and Victim-2 without their authorization.

In July 2020, RAFIQ began soliciting millions of dollars from investment firms in New York and elsewhere based on false claims that in exchange for their funds, he would sell them investment interests in a purported special purpose investment vehicle called “[Fam] Capital Technology Fund, LLC” that was supposedly managed by FamCap and allegedly owned pre-IPO stock in Airbnb, Inc., among other companies.  For example, as part of this fraudulent scheme, RAFIQ deceived an investment firm based in New York, New York (the “New York Firm”), and one of the firm’s foreign institutional clients (the “Client”) into making agreements under which the Client wired about $9 million in mid-August 2020 into an escrow account in New York for anticipated release to a bank account in Singapore to pay RAFIQ for his purported sale of investment interests in the LLC.

In soliciting this $9 million investment, RAFIQ made a variety of false representations, including the following:

• RAFIQ falsely claimed that the LLC was managed by FamCap.  In fact, the LLC never existed.

 

• RAFIQ falsely claimed that the LLC owned pre-IPO shares of Airbnb.  In fact, the LLC did not own and could not have owned such stock because the LLC never existed.

 

• RAFIQ falsely claimed that Victim-1 and Victim-2 had approved of his sale of his alleged interests in the LLC.  In fact, Victim-1 and Victim-2 do not know RAFIQ and have confirmed that FamCap was never involved in or approved of any such transaction.

During and to further the goals of this fraudulent scheme, RAFIQ also caused the creation and transmission of emails from the Fake FamCap Email Addresses and fake contracts and deal documents purporting to have been signed by Victim-1 or Victim-2 on behalf of FamCap that neither of them approved.  For example, in August 2020, during the course of email communications with the New York Firm and Client concerning RAFIQ’s alleged sale to them of his purported interests in an alleged FamCap-managed LLC that supposedly held Airbnb shares, RAFIQ copied into the email chain the Fake FamCap Email Addresses to create the false impression that FamCap was involved in and approved of the alleged transaction.

In a separate parallel enforcement action, the United States Securities and Exchange Commission (the “SEC”) has filed civil charges against RAFIQ.        

*                      *                      *

RAFIQ, 47, is a resident of Singapore and a citizen of the Netherlands.  RAFIQ has been charged in a three-count Complaint with one count of securities fraud, which carries a maximum potential sentence of 20 years in prison; one count of wire fraud, which carries a maximum potential sentence of 20 years in prison; and one count of aggravated identity theft, which carries a mandatory prison sentence of two years that must be imposed to run consecutively to any other terms of imprisonment.  In addition to potential prison sentences, each of these charges also carries potential financial penalties.  The maximum potential prison 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. 

RAFIQ remains at large.  The United States looks forward to working with our foreign partners to bring RAFIQ to justice.

Ms. Strauss praised the investigative work of HSI, USPIS, the NYPD and the New York City Sheriff’s Office, and she also thanked the SEC, which conducted a separate parallel investigation, for its assistance.

This case is being handled by this Office’s Securities and Commodities Fraud Task Force.  Assistant United States Attorney Samson Enzer is in charge of the prosecution.

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

 

---

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

Audrey Strauss, United States Attorney for the Southern District of New York, Stuart M. Goldberg, Acting Deputy Assistant Attorney General for the Department of Justice’s Tax Division, and James C. Lee, Chief of the Internal Revenue Service-Criminal Investigation (“IRS-CI”), announced the filing of a criminal Information against RAHN+BODMER CO. (“R+B”), a financial institution located in Zurich, Switzerland.  The Information charges R+B with one count of conspiring to help U.S. accountholders evade their U.S. tax obligations, file false federal tax returns, and otherwise defraud the Internal Revenue Service (“IRS”) by hiding hundreds of millions of dollars in offshore bank accounts at R+B.

Ms. Strauss, Mr. Goldberg, and Mr. Lee also announced a deferred prosecution agreement with R+B (the “Agreement”), under which R+B admits to its unlawful conduct in assisting U.S. accountholders in violating their legal duties.  R+B’s admissions are contained in a detailed Statement of Facts attached to the Agreement.  The Agreement requires R+B to provide ongoing assistance to the Department of Justice and to pay a total of $22 million in restitution, forfeiture, and penalties.  If R+B abides by all of the terms of the Agreement, the Government will defer prosecution on the Information for three years and then seek to dismiss the charge.

Manhattan U.S. Attorney Audrey Strauss said:  “As Rahn+Bodmer now admits, it aided U.S. taxpayers in evading their tax responsibilities to the tune of more than $16 million.  This venerated banking institution knowingly offered banking services that assisted its U.S. customers in evading their tax obligations, and affirmatively schemed to conceal from the IRS the assets and income of U.S. accountholders.  Now Rahn+Bodmer will pay $22 million and commit to helping the Justice Department uncover tax evasion by U.S. customers.”

Acting Deputy Assistant Attorney General Stuart M. Goldberg said:  “Under today’s resolution, Rahn+Bodmer is paying $22 million for helping U.S. accountholders evade their taxes, and  has agreed to fully cooperate with investigations into those taxpayers.  With the April 15 tax filing date fast approaching, there is a clear message for those intending not to pay their fair share – nothing remains hidden forever.”

IRS-CI Chief James C. Lee said:  “Through a years-long scheme, the R+B bank hid the assets of U.S. accountholders to shield them from their tax obligations.  Today’s admission and agreement provide a clear path to recovery of funds owed to the U.S. government, and sends a strong signal that offshore accounts are not beyond the reach of special agents with IRS CI.”

According to the Agreement, the accompanying Statement of Facts, and other documents filed today in Manhattan federal court:

From at least in or about 2004 and continuing until at least in or about 2012, R+B conspired with certain of its U.S. accountholders and others to defraud the United States with respect to taxes, file false federal tax returns, and commit tax evasion.  R+B’s bankers assisted U.S. accountholders in concealing their ownership and control of assets and funds held in undeclared R+B accounts, which enabled those U.S. accountholders to evade their U.S. tax obligations.  R+B admitted to holding undeclared accounts on behalf of approximately 340 U.S. taxpayers, who collectively evaded approximately $16.4 million in U.S. taxes between in or about 2004 and in or about 2012.  The assets under management that R+B held for undeclared U.S. accountholders increased from approximately $391 million in 2004 to approximately $550 million in 2007, its peak year for undeclared assets under management.

In furtherance of the scheme to help U.S. taxpayers hide assets from the IRS and evade taxes, R+B undertook the following actions, among others:

• R+B opened “numbered” or “pseudonym” accounts for U.S. accountholders in order to reduce the risk that U.S. tax authorities would learn their identities.
   
• R+B opened and maintained accounts for U.S. accountholders in the names of non-U.S. corporations, foundations, trusts, or other legal entities, thereby helping U.S. taxpayers conceal their beneficial ownership of the accounts.
   
• R+B agreed to hold bank statements and other account-related mail in Switzerland, rather than send them to the U.S. accountholders in the United States, which helped ensure that documents reflecting the existence of the accounts remained outside the United States and beyond the reach of U.S. tax authorities.
   
• After Liechtenstein and the United States signed a Tax Information Exchange Treaty in December 2008, R+B transferred the undeclared assets of certain U.S. taxpayers from accounts held in the names of sham foundations organized under the laws of Liechtenstein to new accounts held in the names of new sham foundations organized under the laws of Panama, in an effort to further conceal the accounts from U.S. tax authorities.
   
• R+B allowed U.S. accountholders and third-party asset managers to make withdrawals by check from undeclared accounts in amounts of less than $10,000, in an apparent attempt to conceal transactions from U.S. authorities.
   
• On occasion, R+B opened accounts for U.S. taxpayers who were exiting UBS AG and other Swiss banks, and allowed these U.S. taxpayers to continue to conceal their undeclared assets at R+B.  R+B additionally opened “escrow” accounts on behalf of a Swiss attorney to facilitate the transfer of undeclared assets of U.S. accountholders that had been converted to gold and other precious metals held in a vault at UBS.
   
• R+B helped U.S. accountholders to repatriate funds to the United States in a manner designed to ensure that U.S. tax authorities did not discover the undeclared accounts, including by transferring the funds of one U.S. accountholder in increments of approximately $100,000 to another Swiss bank before the U.S. accountholder routed the funds to a diamond dealer in Manhattan, where the U.S. accountholder ultimately received them.
   
• R+B, through its bankers, made regular visits to the United States to solicit, open, and service undeclared accounts of U.S taxpayers.

Under today’s resolution, R+B is required to cooperate fully with the Department of Justice and affirmatively disclose new information it may later uncover regarding U.S.-related accounts.  R+B is also required to disclose information consistent with the Department’s Swiss Bank Program relating to accounts closed between January 1, 2009, and December 31, 2019.   

As part of the resolution, R+B will pay a total of $22 million, which has three parts.  First, R+B has agreed to pay $4.9 million in restitution to the IRS, which represents the estimated unpaid taxes resulting from R+B’s participation in the conspiracy.  Second, R+B has agreed to forfeit $9.7 million to the United States, which represents the approximate gross fees that R+B earned on its undeclared U.S.-related accounts between 2004 and 2012.  Finally, R+B has agreed to pay a penalty of $7.4 million.  The penalty takes into consideration that R+B conducted a thorough internal investigation and provided a substantial volume of documents to the Department, as well as implemented remedial measures to protect against the use of its services for tax evasion in the future.

*                *                *

Ms. Strauss and Mr. Goldberg praised the outstanding work of IRS-CI.  Ms. Strauss also thanked the Department of Justice’s Tax Division for their partnership on this case.

This case 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 and Trial Attorney Ellen M. Quattrucci are in charge of the case.   

Audrey Strauss, the United States Attorney for the Southern District of New York, Peter C. Fitzhugh, Special Agent in Charge of Homeland Security Investigations (“HSI”) in New York, Matthew Modafferi, Special Agent in Charge of the Northeast Area Field Office of the U.S. Postal Service, Officer of Inspector General (“USPS-OIG”), and Philip R. Bartlett, Inspector-in-Charge of the New York Office of the U.S. Postal Inspection Service (“USPIS”), announced the unsealing of an indictment today charging LUIS GAMEZ, HUGO RICHARD VILLANUEVA TORRES, DANIEL ORTIZ, JOSE LUIS MARTINEZ ROSARIO and JAYSON COLON with participating in a conspiracy to distribute heroin and fentanyl in connection with a scheme to transport those narcotics through the U.S. mail.  GAMEZ was arrested on Sunday evening in California and was presented yesterday before a federal magistrate judge in the Central District of California.  VILLANUEVA, ORTIZ, MARTINEZ, and COLON were arrested yesterday in New Jersey and were presented before U.S. Magistrate Judge Barbara C. Moses that same day.   The case is assigned to United States District Judge Paul A. Engelmayer.

Manhattan U.S. Attorney Audrey Strauss said:  “As alleged, the defendants are charged with trafficking large quantities of fentanyl and heroin.  We thank our partners at HSI and USPS-OIG for their outstanding work in stopping the shipment of narcotics through the U.S. mail.”

HSI Special Agent in Charge Peter C. Fitzhugh said: “These defendants allegedly operated a cross-country drug distribution network which placed profits above all else, including the safety of our communities. During this week's operation, we arrested 5 members of this drug trafficking organization.  More importantly, we seized over 6 kilograms of fentanyl and heroin, which contain numerous fatal doses of these dangerous drugs.  Working with our law enforcement partners at the U.S. Postal Inspection Service, the U.S. Postal OIG and the United States Attorney’s Office, SDNY, HSI will continue to protect the public from those who would exploit our communities for their own financial and personal gain.”

USPS-OIG Special Agent in Charge Matthew Modafferi said: “The Special Agents of the U.S. Postal Service Office of Inspector General are dedicated to maintaining the integrity of the Postal Service and its personnel. When a Postal Service employee allegedly decides to break the public’s trust and participates in a scheme to transport illegal narcotics through the U.S. Mail, USPS OIG Special Agents will tirelessly work to bring those responsible to justice.  The USPS OIG is thankful for the great relationships we have developed with our law enforcement partners and with the U.S. Attorney’s Office to combat the shipment of illegal narcotics through the U.S. Mail.”

USPIS Inspector-in-Charge Philip R. Bartlett said:  “Using the U.S. Mail to facilitate the transportation of deadly fentanyl was one of many mistakes allegedly made by these subjects. Postal Inspectors and their law enforcement partners will arrest and bring to justice anyone who breaks the sanctity of the trust placed in the U.S. Mail, no matter where they are found.”

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

From at least in or about May 2020 up to and including in or about February 2021, LUIS GAMEZ, HUGO RICHARD VILLANUEVA TORRES, DANIEL ORTIZ, JOSE LUIS MARTINEZ ROSARIO, and JAYSON COLON participated in a conspiracy to distribute kilograms of fentanyl and heroin.  The conspirators transported kilogram-quantities of fentanyl and heroin, as well as narcotics proceeds, in packages shipped through the United States mail with the assistance of ORTIZ, an employee of the U.S. Postal Service.

*                *                *

GAMEZ, 30, of Riverside, California, VILLANUEVA, 29, of Belleville, New Jersey, ORTIZ, 41, of Harrison, New Jersey, MARTINEZ, 44, of Harrison, New Jersey, and COLON, 42, of Kearny, New Jersey, are each charged with one count of conspiracy to distribute 400 grams or more of fentanyl and one kilogram or more of heroin.  That charge carries a mandatory minimum sentence of ten years in prison and a maximum sentence of life in prison.

Ms. Strauss praised the outstanding investigative work of HSI-New York, USPS-OIG, and the United States Postal Inspection Service, and thanked HSI-Newark and HSI-Riverside for their assistance.

This case is being handled by the Office’s Narcotics Unit.  Assistant United States Attorneys Kedar Bhatia and Andrew A. Rohrbach are in charge of the prosecution.

 

---

[1] As the introductory phrase signifies, the entirety of the text of the Indictment, and the description 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 SCOTT ROBINSON was sentenced today to 18 months in prison in connection with ROBINSON’s years-long sale and distribution of adulterated and misbranded drugs, including performance-enhancing drugs marketed to racehorse trainers and others in the racehorse industry.  ROBINSON pled guilty to a one-count Information on September 16, 2020, before U.S. District Judge J. Paul Oetken, who also imposed today’s sentence.

U.S. Attorney Audrey Strauss said:  “Scott Robinson created and profited from a system designed to exploit racehorses in the pursuit of speed and prize money, risking their safety and wellbeing.  Robinson sold unsanitary, misbranded, and adulterated drugs, and misled and deceived regulators and law enforcement in the process.”  

According to the Indictment, the Superseding Information to which ROBINSON 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, ROBINSON conspired with others to manufacture, sell, and ship millions of dollars’ worth of adulterated and misbranded equine drugs, including performance-enhancing drugs (“PEDs”) intended to be administered to racehorses for the purpose of improving those horses’ race performances in order to win races and obtain prize money.  ROBINSON sold these drugs through several direct-to-consumer websites designed to appeal to racehorse trainers and owners, including, among others, “horseprerace.com.” 

ROBINSON contributed to the conspiracy by, among other things, sourcing chemicals used to create custom PEDs that were advertised and sold; falsely labeling, packaging, and shipping those PEDs to customers across the country, including in the Southern District of New York; and collecting, reporting, and responding to employee and customer complaints regarding the misbranded and adulterated products advertised and sold online.  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, as well as customized analgesics that 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.  The drugs distributed through the defendant’s websites were manufactured in non-FDA registered facilities and carried significant risks to the animals affected through the administration of those illicit PEDs.  For example, in 2016, ROBINSON 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, ROBINSON wrote simply, “here is another one.”

*                *                *

In addition to his prison sentence, ROBINSON, 46, of Tampa, Florida, was sentenced to three years of supervised release and forfeiture of $3,832,318.90.

Ms. Strauss praised the outstanding investigative work of the New York FBI Office’s Eurasian Organized Crime Task Force and its support of the FBI’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 Food and Drug Administration 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, Benet J. Kearney, and Andrew C. Adams are in charge of the prosecution.

Audrey Strauss, the United States Attorney for the Southern District of New York, Thomas E. Walsh II, Rockland County District Attorney, William F. Sweeney Jr., Assistant Director-in-Charge of the New York Field Office of the Federal Bureau of Investigation (“FBI”), and Raymond McCullagh, Chief of the Clarkstown Police Department, announced that DWAYNE HICKS and TNAIYA WILLIAMS were arrested on March 6, 2021, based on a criminal Complaint filed in White Plains federal court.  HICKS and WILLIAMS are charged with conspiracy to commit carjacking and carjacking, stemming from their participation in a brutal beating and robbery of a victim in New City, New York.  HICKS and WILLIAMS will be presented before United States Magistrate Judge Andrew E. Krause in White Plains federal court later today.

U.S. Attorney Audrey Strauss said:  “As alleged, Dwayne Hicks and Tnaiya Williams took part in a brazen and brutal carjacking, inflicting grievous bodily injuries to the victim and leaving him for dead.  Thanks to the FBI and the Clarkstown Police, Hicks and Williams are in custody and facing justice in federal court.”

Rockland County District Attorney Thomas E. Walsh II said:  “The arrests of these two individuals are another example of great cooperation by multiple law enforcement agencies working together to ensure that Rockland County remains a safe community. I commend the dedication and professionalism by all those involved. We will now push forward with an aggressive prosecution of the crimes alleged to bring closure to the victim of this violent attack.”

FBI Assistant Director William F. Sweeney Jr. said:  “As we allege, the subjects in this case committed unfathomable acts of violence when they brutally beat and stabbed a man, left him naked and bloody in a snowbank, and stole his car.  I want to commend the quick action of our law enforcement partners and the FBI Westchester County Safe Streets Task Force in getting these assailants off the street before they could do more harm.”

Clarkstown Police Chief Raymond McCullagh said:  “This heinous crime was not perpetrated on just one victim alone, it affected our entire community. Though these types of crimes are thankfully uncommon in Clarkstown, the men and women of the Clarkstown Police Department were able to swiftly find justice for the victim and allay the concerns of the community. We would like to thank District Attorney Thomas Walsh of the RCDA, FBI, and the U.S. Attorney’s Office of the Southern District for their partnership in this investigation.”

As alleged in the Complaint unsealed in White Plains federal court[1]:

On February 28, 2021, HICKS lured a victim to a certain residence in New City, New York.  Once the victim arrived there, HICKS and multiple other assailants, including WILLIAMS, viciously attacked the victim.  HICKS, WILLIAMS, and others forced the victim to strip naked, stole his personal belongings, including the keys to his car, and then beat the victim with a baseball bat, belts, and their hands, and repeatedly slashed and stabbed the victim with a large knife.  The victim ultimately fled, after being left, naked and covered in blood, in a pile of snow, and some of the assailants drove off in the victim’s car.    

*                       *                      *

HICKS, 27, of Spring Valley, New York and WILLIAMS, 26, of New City, New York are each charged with one count of conspiracy to commit carjacking, which carries a maximum sentence of five years in prison, and one count of carjacking, which carries a maximum sentence of 25 years in prison.  The statutory maximum penalties are prescribed by Congress and are provided here for informational purposes only, as any sentencing of the defendants would be determined by the judge.

Ms. Strauss praised the investigative work of the FBI and its Westchester County Safe Streets Task Force, the Clarkstown Police Department, and the Rockland County District Attorney’s Office.

The case is being handled by the Office’s White Plains Division.  Assistant United States Attorneys Derek Wikstrom and T. Josiah Pertz are in charge of the prosecution.

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

 

---

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

Audrey Strauss, United States Attorney for the Southern District of New York, and Larry Starfield, Acting Assistant Administrator for the Office of Enforcement and Compliance Assurance of the U.S. Environmental Protection Agency (“EPA”), announced today that the United States has filed a civil lawsuit against Cayman Islands-based EZ LYNK, SEZC (“EZ LYNK”), a related company, PRESTIGE WORLDWIDE, SEZC (“PRESTIGE”), and their U.S.-based founders and owners, BRADLEY GINTZ and THOMAS WOOD (collectively, “Defendants”).  The lawsuit alleges that Defendants manufacture and sell a defeat device designed to permit car and truck owners to remove computerized emissions controls in violation of the Clean Air Act.  The complaint also alleges that EZ LYNK, GINTZ, and WOOD violated the Clean Air Act by refusing to provide EPA with information about the manufacture, sale, and use of EZ LYNK’s defeat device.

U.S. Attorney Audrey Strauss said:  “Emissions controls on cars and trucks protect the public from harmful effects of air pollution.  EZ Lynk has put the public’s health at risk by manufacturing and selling devices intended to disable those emissions controls.  Through our lawsuit, we will prevent Defendants from continuing to sell this product and impose civil penalties to hold them to account.”

EPA Acting Assistant Administrator Larry Starfield stated:  “EZ Lynk refused to cooperate with EPA’s investigation, and all the while continued to sell aftermarket defeat devices that resulted in harmful air pollution.  This is not acceptable and EPA will work diligently with the Department of Justice to stop the illegal activities and ensure that EZ Lynk complies with the Clean Air Act.”

The complaint filed in Manhattan federal court today alleges that for more than four years, Defendants violated the Clean Air Act’s prohibition on defeat devices.  Among other things, the complaint alleges the following:

The Clean Air Act requires motor vehicle manufacturers to design vehicles to meet detailed standards for limiting the emission of harmful air pollutants, which are linked to premature death and cause heart and lung disease, heart attacks, and aggravated asthma, among other serious illnesses.  To achieve these limitations, vehicles contain both hardware components and software that work together to maintain vehicle emissions within legal limits.  The Clean Air Act makes it illegal to manufacture, sell, offer to sell, or cause to be sold any part or component that has a principal effect of defeating emissions controls, if the defendant knew or had reason to know the product is put to this use.

EZ LYNK manufactures and sells a product permitting drivers to “delete” computerized emissions controls in their vehicles, in violation of the Clean Air Act.  Referred to as the “EZ Lynk System,” this product consists of three components: the Auto Agent, which is a physical device that plugs into vehicle computer systems to install software designed to “delete” emissions controls; the EZ Lynk Cloud, which is a cloud computing platform that stores the deletion software; and the Auto Agent App, a smartphone application that connects the Auto Agent to the EZ Lynk Cloud, allowing customers to acquire and install deletion software through their smartphones.  EZ LYNK has sold its product to thousands of drivers across the United States.

EZ LYNK also knows and has reason to know that the principal effect and use of this product is to defeat emission controls.  Among other things, EZ LYNK maintains an online “EZ Lynk Forum” on social media to encourage and assist drivers looking to disable their vehicle emissions controls using the EZ Lynk System.  Hundreds of drivers have visited the EZ Lynk Forum to post their experiences “deleting” emissions controls using the EZ Lynk System.  EZ LYNK representatives have explicitly approved many of the posts, and in some instances have offered technical support to drivers disabling emissions controls.  For example:

• A driver posted, in part, “Finally made the jump and deleted my 14 Ram 2500: Holy hell [] this thing is awesome!  The EZ lynk worked flawlessly, albeit I was a nervous wreck during the tune flash,” adding that “the guys at EZ lynk are doing great work!”  The driver tagged an EZ Lynk representative, who later “loved” the post.
   
• Another driver posted to the EZ Lynk Forum, “Had a few small issues with my ez lynk install.  Got in touch with the tech support.  All issues resolved.  Couldn’t be happier with my ez lynk.  Truck has shown huge improvement with the deletes and new tunes.”  Again, an EZ Lynk representative “loved” the post.

• A driver posted to the EZ Lynk Forum, “Installed ez Lynk on my 14 ram 3500 fully deleted the other day [but] as soon as it loaded” experienced a malfunction.  The driver asked if anyone else had experienced the same problem.  An EZ LYNK representative responded, providing detailed instructions to fix the problem.  The driver then wrote “[p]roblems fixed with the help of EZ Lynk’s Technical Support Representative.”

In fact, some drivers have used the same EZ Lynk Forum maintained by EZ LYNK to urge others to keep quiet about their use of the EZ Lynk System to defeat emissions controls.  For instance, one driver wrote, “If everyone keeps their mouth shut about deleting sooner or later the EPA will calm down.”  Since the EZ Lynk System launched in mid-2016, EZ LYNK has manufactured and/or sold at least tens of thousands of EZ Lynk Systems.

Defendants GINTZ and WOOD own EZ LYNK and control, direct, and manage the marketing and sale of the EZ Lynk System as well as the technical support for the EZ Lynk System.  Defendant PRESTIGE, which is also owned by GINTZ and WOOD, facilitates EZ LYNK’s sale of the EZ Lynk System in the United States by purchasing the Auto Agent devices from EZ Lynk and selling them onward to distributors that sell the devices within the United States.

EZ LYNK’s illegal activity has been compounded by its refusal to provide EPA with basic information about the manufacture, sale, and use of the EZ Lynk System.  The Clean Air Act requires manufacturers like EZ LYNK to provide information that EPA may reasonably require to determine whether the manufacturer’s product complies with the Clean Air Act.  As alleged in the complaint, despite repeated requests, EZ LYNK has refused to provide EPA with much of the requested information about the manufacture, sale, and use of the EZ Lynk System.  EZ LYNK’s efforts to stymie EPA’s investigation also violate the Clean Air Act.

In its complaint, the United States seeks an injunction barring the sale of the EZ Lynk System, the assessment of civil penalties against all Defendants, and other relief.

*                *                *

Ms. Strauss thanked the attorneys in EPA’s Air Enforcement Division and program staff at EPA’s Office of Transportation and Air Quality for their critical work on this case.  Ms. Strauss also thanked Nicole Veilleux, Senior Counsel in the Environment and Natural Resources Division of the U.S. Department of Justice, for her assistance.

This case is being handled by the Environmental Protection Unit of the Office’s Civil Division.  Assistant U.S. Attorneys Mónica Folch and Jennifer Jude are in charge of the case.

Audrey Strauss, the United States Attorney for the Southern District of New York, and Scott Lampert, Special Agent in Charge of the U.S. Department of Health and Human Services, Office of Inspector General’s (“HHS-OIG”) New York Region, announced today that the civil and criminal healthcare fraud cases against FENG QIN, M.D. (“QIN”), a vascular surgeon, and his medical practice QIN MEDICAL P.C. (“QIN MEDICAL”) have been resolved.  QIN, who practiced in Lower Manhattan and Far Rockaway, Queens, was criminally charged in December 2018 with fraudulently billing Medicare for vascular surgery procedures performed on end-stage renal disease (“ESRD”) patients that were not medically reasonable and necessary or covered under Medicare rules; the United States also filed a civil healthcare fraud complaint against QIN and QIN MEDICAL in December 2018. 

Under the civil settlement approved today by U.S. District Judge Laura Taylor Swain, QIN and QIN MEDICAL agreed to a pay $783,200 to the United States.  The State of New York is expected soon to enter into an additional settlement with defendants in the amount of $16,800, for a total recovery of $800,000.  The amount is based on the Office’s assessment of the defendants’ ability to pay based on the financial information they provided.  As part of the settlement, QIN and QIN MEDICAL admitted and accepted responsibility for conduct alleged by the Government in its civil complaint as further described below.  QIN previously paid $150,000 to settle a prior civil fraud lawsuit filed against him and his previous employer for engaging in fraudulent billing practices during the time period 2010 through 2012.

QIN also entered into a Voluntary Exclusion Agreement with HHS-OIG, which prohibits him from participating in Medicare and other federal healthcare programs for four years.  This is in addition to the more than two years he has been so excluded since his arrest, as a condition of his bail.  The Government has agreed to defer QIN’s criminal prosecution for a period of one year, after which time it will seek to dismiss the charges if QIN abides by the terms of the deferred prosecution agreement.    

Manhattan U.S. Attorney Audrey Strauss said:  “For several years, Dr. Qin performed interventional vascular procedures on patients with end-stage renal disease without any documented clinical justification.  As a repeat offender, Dr. Qin now faces a lengthy suspension from participating in federal healthcare programs and must make a hefty monetary payment.  This Office will continue to hold unscrupulous medical providers accountable when they perform and bill the Government for medically unnecessary procedures.”

HHS-OIG Special Agent in Charge Scott Lampert said:  “By billing Medicare for medically unnecessary procedures, Dr. Qin needlessly compromised patient care and victimized taxpayers.  Our agency will continue to hold medical professionals accountable, while protecting the federal health care programs intended for those that depend on them for critical services.”

According to the indictment and the Government’s civil complaint:

Patients with ESRD who are receiving dialysis may require vascular access surgical procedures, such as fistulagrams, where dye is injected into the patient’s vein or artery to visualize blood flow, and percutaneous transluminal angioplasties, in which wires and balloons are inserted into blood vessels that have narrowed in order to restore blood flow.  However, as Medicare billing guidelines made clear, it is not reasonable and necessary for physicians to bill the program for fistulagrams and angioplasties unless the patient has specific and documented clinical problems, such as significant difficulty receiving dialysis properly. 

The patients at QIN’s medical practice primarily consisted of ESRD patients undergoing dialysis treatment.  During the relevant period, from 2015 to 2016, QIN routinely scheduled patients for fistulagrams and angioplasties three months in advance, and performed fistulagrams and angioplasties on these patients as a matter of routine, regardless of whether there was a justifiable clinical reason to do so.  Furthermore, on multiple occasions he misrepresented the medical conditions of patients in their medical records to make it seem as if they suffered from symptoms that would warrant the procedures when they did not.  QIN MEDICAL then unlawfully billed and received payment from Medicare for these procedures, which were excluded from Medicare coverage, as QIN knew.

As part of the civil settlement, QIN and QIN MEDICAL admit, acknowledge, and accept responsibility for the following conduct:

• QIN often routinely scheduled, and actually saw, ESRD patients approximately every three months, regardless of their medical need.
   
• QIN treated many of his ESRD patients with fistulagrams and angioplasties.  The symptoms documented in the medical records, including the records of the dialysis center and the treating nephrologist, were insufficient to justify these treatments for numerous ESRD patients.
   
• QIN knew that in the absence of a documented clinical justification, Medicare would not pay for fistulagrams or angioplasties.  Nevertheless on numerous occasions, QIN MEDICAL sought and received reimbursement from Medicare for these treatments without the required documented clinical justification. 

The allegations of fraud stated in the civil complaint were first brought to the attention of federal law enforcement by a whistleblower who filed a lawsuit under the False Claims Act.

The criminal case is being handled by the Office’s General Crimes Unit.  Assistant United States Attorneys Jean-David Barnea, Michael Krouse, and Alexander Li are in charge of the criminal prosecution.  The civil case is being handled by the Office’s Civil Frauds Unit, and Assistant United States Attorney Barnea is in charge of the matter.

Audrey Strauss, the United States Attorney for the Southern District of New York, announced the filing of a civil complaint against RAFAEL ALVAREZ and ATAX New York LLC (“ATAX New York”) to prohibit them from, among other things, preparing tax returns for others or engaging in activities that substantially interfere with the administration of federal tax laws. The complaint alleges that ALVAREZ and ATAX NEW YORK have prepared and filed fraudulent tax returns on behalf of their customers in order to reduce their customers’ tax liability and generate refunds to which those customers were not entitled. 

U.S. Attorney Audrey Strauss said:  “Tax return preparers who regularly cheat the tax system by preparing fraudulent federal income tax returns for their customers should not be permitted to continue in business.  This Office will work with the IRS to shut down return preparers who fleece the Treasury by claiming improper deductions or credits for their customers.”

 As alleged in the Government’s complaint filed in federal district court today:

ATAX NEW YORK is a limited liability company that prepares tax returns for customers in the Bronx.  ALVAREZ is a tax preparer and ATAX NEW YORK’s sole member.  Together, ATAX NEW YORK and ALVAREZ prepared and filed over 36,000 federal income tax returns from 2016 to 2019 for their customers.  In preparing those returns, ATAX NEW YORK and ALVAREZ knowingly prepared and filed false federal income tax returns for their customers by fabricating, among other things, unreimbursed business expenses, charitable contributions, capital loss carryovers, and tuition expenses.  Many tax returns prepared and filed by ATAX NEW YORK and ALVAREZ also falsely claimed “head of household” status for their customers as part of this scheme, even by using social security numbers belonging to deceased individuals in claiming dependents.

The Government is seeking an injunction against ATAX NEW YORK and ALVAREZ that would, among other things, permanently bar them from preparing or filing federal tax returns on behalf of others.  The complaint also asks the court to order the defendants to turn over the ill-gotten net profits they earned because of their fraudulent conduct.

 *                      *                     *

Ms. Strauss thanked the Internal Revenue Service for its assistance with this case.

The case is being handled by the Tax and Bankruptcy Unit in the Office’s Civil Division.  Assistant U.S. Attorneys Charles S. Jacob and Ilan Stein are in charge of the case.

Audrey Strauss, the United States Attorney for the Southern District of New York, and William F. Sweeney Jr., the Assistant Director-in-Charge of the New York Field Office of the Federal Bureau of Investigation (“FBI”), announced today the unsealing of an Indictment charging JOHN DAVID MCAFEE, the founder of the McAfee antivirus software company, and JIMMY GALE WATSON JR., who served as an executive adviser of MCAFEE’s so-called cryptocurrency team (the “McAfee Team”), with conspiracy to commit commodities and securities fraud, conspiracy to commit securities and touting fraud, wire fraud conspiracy and substantive wire fraud, and money laundering conspiracy offenses stemming from two schemes relating to the fraudulent promotion to investors of cryptocurrencies qualifying under federal law as commodities or securities.  WATSON, who was arrested last night in Texas, will be presented later today before a federal magistrate judge in the Northern District of Texas.  MCAFEE is currently detained in Spain on separate criminal charges filed by the United States Department of Justice’s Tax Division.

Manhattan U.S. Attorney Audrey Strauss said:  “As alleged, McAfee and Watson exploited a widely used social media platform and enthusiasm among investors in the emerging cryptocurrency market to make millions through lies and deception.  The defendants allegedly used McAfee’s Twitter account to publish messages to hundreds of thousands of his Twitter followers touting various cryptocurrencies through false and misleading statements to conceal their true, self-interested motives.  McAfee, Watson, and other members of McAfee’s cryptocurrency team allegedly raked in more than $13 million from investors they victimized with their fraudulent schemes.  Investors should be wary of social media endorsements of investment opportunities.” 

FBI Assistant Director William F. Sweeney Jr. said:  “As alleged, McAfee and Watson used social media to perpetrate an age-old pump-and-dump scheme that earned them nearly two million dollars. Additionally, they allegedly used the same social media platform to promote the sale of digital tokens on behalf of ICO issuers without disclosing to investors the compensation they were receiving to tout these securities on behalf of the ICO. When engaging in illegal activity, simply finding new ways to carry out old tricks won’t produce different results. Investment fraud and money laundering schemes carry a strict penalty under federal law.”

According to the allegations in the charging documents unsealed today in Manhattan federal court, including the Indictment against JOHN DAVID MCAFEE and JIMMY GALE WATSON JR. and an earlier-filed criminal Complaint against MCAFEE:[1]

During the period from in or about December 2017 through in or about October 2018, JOHN DAVID MCAFEE and JIMMY GALE WATSON JR., and other members of the McAfee Team, perpetrated two fraudulent schemes relating to the promotion to investors of cryptocurrencies qualifying under federal law as commodities or securities. 

The first scheme involved a fraudulent practice called “scalping,” which is sometimes referred to as a “pump and dump” scheme.  This scalping scheme generally consisted of the following.  First, MCAFEE, WATSON, and other McAfee Team members bought large quantities of publicly traded cryptocurrency altcoins, which qualified as commodities or securities, at inexpensive market prices with advance knowledge that MCAFEE planned to publicly endorse them via his widely followed Twitter account (the “Official McAfee Twitter Account”).  Second, after these purchases, MCAFEE published false and misleading endorsement tweets via his Official McAfee Twitter Account recommending those altcoins to members of the investing public for investment in order to artificially inflate (or “pump” up) their market prices without disclosing that MCAFEE owned large quantities of the promoted altcoins, even though MCAFEE had given false assurances that he would disclose such information in various tweets and public statements during the scalping scheme.  Third, MCAFEE, WATSON, and other McAfee Team members then sold (or “dumped”) their respective investment positions in the promoted altcoins into the temporary but significant short-term market price increases that MCAFEE’s deceptive tweets typically generated, often for significant profits.  From in or about December 2017 through in or about January 2018, MCAFEE, WATSON, and other McAfee Team members collectively earned more than $2 million in illicit profits from their altcoin scalping activities while the long-term value of the recommended altcoins purchased by investors declined substantially as of a year after the promotional tweets.  From in or about December 2017 through in or about October 2018, MCAFEE, WATSON, and other McAfee Team members engaged in various efforts to liquidate the digital asset proceeds of their scalping activities into United States currency. 

In the second scheme, MCAFEE, WATSON, and other McAfee Team members also used MCAFEE’s Official McAfee Twitter Account to publicly tout fundraising events called “initial coin offerings” (“ICOs”) in which startup businesses (“ICO issuers”) issued and sold digital tokens qualifying as securities to the investing public, without disclosing and, in fact, concealing that the ICO issuers were compensating MCAFEE and his team for his promotional tweets with a substantial portion of the funds raised from ICO investors.  As the United States Securities and Exchange Commission had publicly warned, and as MCAFEE and WATSON well knew, the federal securities laws required them to disclose any compensation paid by ICO issuers for touting securities offerings styled as ICOs.  From approximately on or about December 20, 2017 through on or about February 10, 2018, MCAFEE, WATSON, and other McAfee Team members collectively earned more than $11 million in undisclosed compensation that they took steps to affirmatively hide from ICO investors.  In each instance, MCAFEE and WATSON failed to disclose to ICO investors that the ICO Issuers were paying the McAfee Team a substantial portion of the funds raised from ICO investors for their touting efforts, despite knowing that they were required to disclose such compensation under federal securities laws.  Furthermore, in several instances during this ICO touting scheme, MCAFEE and WATSON took active steps to conceal their secret compensation arrangements with ICO issuers from ICO investors, and MCAFEE made false and misleading statements and omissions to hide such deals from ICO investors.  From approximately in or about December 2017 through in or about October 2018, MCAFEE, WATSON, and other McAfee Team members engaged in various efforts to liquidate the digital asset proceeds of their ICO touting activities into United States dollars.

During the period from in or about December 2017 through in or about October 2018, MCAFEE and WATSON caused another McAfee Team member to engage in banking transactions to launder proceeds of the fraudulent ICO touting scheme. 

In separate parallel enforcement actions, the United States Securities and Exchange Commission (the “SEC”) and Commodity Futures Trading Commission (“CFTC”) have filed civil charges against MCAFEE and WATSON.          

*                      *                      *

MCAFEE, 75, and WATSON, 40, are United States citizens.  Both of them are charged in a seven-count Indictment with one count of conspiracy to commit commodities and securities fraud, which carries a maximum potential sentence of five years in prison; one count of conspiracy to commit securities and touting fraud, which carries a maximum potential sentence of five years in prison; two counts of conspiracy to commit wire fraud and two counts of substantive wire fraud, each of which carries a maximum potential sentence of 20 years in prison; and one count of conspiracy to commit money laundering, which carries a maximum potential sentence of ten years in prison.  In addition to potential prison sentences, each of these charges also carries potential financial penalties.  The maximum potential prison sentences in this case are prescribed by Congress and are provided here for informational purposes only, as any sentences to be imposed on the defendants will be determined by the judge. 

Ms. Strauss praised the work of the FBI on the investigation of this case and thanked the SEC and CFTC, both of which conducted separate parallel investigations, for their assistance.

This case is being handled by this Office’s Securities and Commodities Fraud Task Force.  Assistant United States Attorneys Samson Enzer and Elizabeth Hanft are in charge of the prosecution.

The allegations contained in the charging documents in this case are merely accusations, and the defendants are presumed innocent unless and until proven guilty.

 

---

[1]  As the introductory phrase signifies, the entirety of the texts of the Complaint and Indictment and the description of those charging documents 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, William F. Sweeney Jr., Assistant Director-in-Charge of the New York Office of the Federal Bureau of Investigation (“FBI”), Dermot Shea, Commissioner of the New York City Police Department (“NYPD”), and Kevin P. Bruen, Acting Superintendent of the New York State Police (“NYSP”), announced that BRENDAN VAUGHAN was sentenced today to 60 months in prison, in connection with threats VAUGHAN made to classmates and law enforcement to carry out a school shooting in Washingtonville, New York.  VAUGHAN pled guilty to a three-count Information on December 3, 2019, before U.S. Magistrate Judge Judith C. McCarthy, and was sentenced today by U.S. District Judge Kenneth M. Karas. 

U.S. Attorney Audrey Strauss said:  “In the wake of the many recent tragic school shootings committed in our country, parents, school administrators, and students are increasingly alert to the frightening possibility that their community could be next.  The defendant callously preyed on those fears in one community with a series of terrifying threats spread out over months, and took steps to act on those threats.  Today’s sentencing sends a clear message that making violent threats will merit a serious prison sentence.”

FBI Assistant Director William F. Sweeney Jr. said:  “No child should have to live in a society where the simple act of going to school invokes a sense of fear.  Unfortunately, for many school-aged children, this has become an all-too-familiar reality.  Vaughan’s clear and direct threats to his fellow classmates and others were so egregious that he was ultimately charged and convicted of a federal crime.  May this, along with the sentencing he received today, serve as a message to others like him – there are life-changing penalties for this type of behavior.” 

State Police Acting Superintendent Kevin P. Bruen said:  “I applaud the work done by the State Police and our law enforcement partners on this case, which no doubt saved lives.  Threats to our schools and the communities we serve are always taken seriously, and investigated to the fullest. We are committed to working with our law enforcement partners to combat and prevent these types of crimes from occurring.  Our priority is the safety of all New Yorkers.”

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

In May 2018, VAUGHAN, who was then a senior at a high school in Washingtonville, New York, communicated to a number of classmates via a social media chat group that he intended to carry out a school shooting on the final day of school.  Even after being visited by law enforcement toward the end of May 2018, VAUGHAN continued his threatening behavior by sending additional threatening messages to a classmate about committing a school shooting and asking that classmate “not to go to the cops.”  VAUGHAN also took some preliminary steps toward carrying out such an attack, including drafting a kill list, compiling lists of his “favorite” school shooters, researching “pipe bombs” on the Internet, accessing a website to purchase a firearm, and composing diary entries expressing his desire for imminent “revenge.”  VAUGHAN also told a law enforcement officer that he intended to kill a specific classmate. 

In August 2018, VAUGHAN sent a number of additional messages on social media in which he threatened an imminent attack in Washingtonville.  Specifically, on successive days, VAUGHAN posted:  

• a message that said:  “I regret nothing,”
• a graphic that included the text “The 845” (that is, the designated area code for Hudson Valley) and a series of 15 gun and bomb emojis,
• a video depicting a red plastic gas container and pool chemicals with the text:  “[smiley face emoji] Plans [smiley face emoji] bang.bang,” and,
• immediately following the posting of the pool chemical video, a video of himself in a car in which he was turning the ignition on and clutching the steering wheel.

After VAUGHAN was detained in March 2019, he continued his threatening behavior, compiling another kill list that included classmates, family members, medical personnel, and the FBI agent and Assistant U.S. Attorney assigned to his case.

*                      *                      *

In addition to his prison sentence, VAUGHAN, 20, of Campbell Hall, New York, was sentenced to three years of supervised release.

Ms. Strauss 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 New York City Police Department, the Washingtonville Police Department, the New York State Police, and the Orange County District Attorney’s Office.

This prosecution is being handled by the Office’s Terrorism and International Narcotics Unit.  Assistant U.S. Attorney Sam Adelsberg is in charge of the prosecution.

Ilan T. Graff, the Attorney for the United States, Acting Under Authority Conferred by 28 U.S.C. § 515, announced that SOHRAB SHARMA, a/k/a “Sam Sharma” was sentenced today to eight years in prison in connection with his leading role in a scheme to induce victims to invest more than $25 million worth of digital funds in Centra Tech, Inc. (“Centra Tech”), a Miami-based company he co-founded and that purported to offer cryptocurrency-related financial products.  SHARMA previously pled guilty to conspiring to commit securities fraud, wire fraud, and mail fraud in connection with his and his co-conspirators’ use of material misrepresentations and omissions to solicit investors to purchase securities, in the form of digital tokens issued by Centra Tech, through fraudulent fundraising efforts that included an initial coin offering (“ICO”) beginning in approximately July 2017.  U.S. District Judge Lorna G. Schofield imposed the sentence in Manhattan federal court.

Mr. Graff said:  “Sohrab Sharma led a scheme to deceive investors by falsely claiming that the start-up he co-founded had developed fully functioning, cutting-edge cryptocurrency-related financial products.  In reality, Sharma’s most notable inventions were the fake executives, fake business partnerships, and fake licenses that he and his co-conspirators touted to trick victims into handing over tens of millions of dollars.  We will continue to aggressively pursue digital securities frauds like this one.”

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

In or about July 2017, SHARMA, along with codefendants Robert Farkas and Raymond Trapani, founded a company called Centra Tech that claimed to offer cryptocurrency-related financial products, including a purported debit card, the “Centra Card,” that supposedly allowed users to make purchases using cryptocurrency at establishments accepting Visa or Mastercard payment cards.  From approximately July 30, 2017, through October 5, 2017, SHARMA and his codefendants solicited investors to purchase unregistered securities, in the form of digital tokens issued by Centra Tech (“Centra tokens” or “CTR tokens”), including through a so-called “initial coin offering” or “ICO.”  As part of this effort, SHARMA and his codefendants represented, in oral and written offering materials that were disseminated via the internet: (a) that Centra Tech had an experienced executive team with impressive credentials, including a purported CEO named “Michael Edwards” with more than 20 years of banking industry experience and a master’s degree in business administration from Harvard University; (b) that Centra Tech had formed partnerships with Bancorp, Visa, and Mastercard to issue Centra Cards licensed by Visa or Mastercard; and (c) that Centra Tech had money transmitter and other licenses in 38 states, among other claims.  Based in part on these claims, victims provided millions of dollars’ worth of digital funds in investments for the purchase of Centra Tech tokens.  In or about October 2017, at the end of the defendants’ fundraising efforts, those digital funds raised from victims were worth more than $25 million.  At certain times in 2018, as the defendants’ fraud scheme was ongoing, those funds were worth more than $60 million.

The claims that SHARMA and his co-conspirators made to help secure these investments, however, were false.  In fact, the purported CEO “Michael Edwards” and another supposed member of Centra Tech’s executive team were fictional people who were fabricated to dupe investors, Centra Tech had no such partnerships with Bancorp, Visa, or Mastercard, and Centra Tech did not have such licenses in a number of those states.

In 2018, this Office and the Federal Bureau of Investigation (“FBI”) seized, pursuant to judicially authorized seizure warrants, 100,000 Ether units, consisting of digital funds raised from victims who purchased digital tokens issued by Centra Tech during its fundraising efforts based on fraudulent misrepresentations and omissions.  The United States Marshals Service sold the seized Ether units for approximately $33.4 million earlier this year.  Following entry of a final order of forfeiture, these funds and other forfeited fraud proceeds will be available for potential use in a remission program that the Department of Justice intends to create to compensate victims of the Centra Tech fraud.

*                *                *

In addition to the prison term, SHARMA, 29, of Aventura, Florida, was also sentenced to three years of supervised release and ordered to pay a fine of $20,000.  He was further ordered to forfeit $36,088,960.

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

This case is being handled by the Office’s Securities and Commodities Fraud Task Force.  Assistant United States Attorneys Samson Enzer, Negar Tekeei, and Daniel Loss are in charge of the prosecution.

Audrey Strauss, the United States Attorney for the Southern District of New York, announced today that RICHARD SCHIRRIPA pled guilty to making materially false statements to officers of the Drug Enforcement Administration (“DEA”).  On two occasions in 2020, SCHIRRIPA falsely represented that, as part of the recent closure of his pharmacy in Manhattan, he had sold, transferred, or destroyed all controlled substances.  In fact, he remained in possession of thousands of controlled substance pills/patches in his home, including fentanyl and oxycodone, which had been prescribed to others.  SCHIRRIPA pled guilty today before U.S. District Judge George B. Daniels, to whom his case is assigned.

Manhattan U.S. Attorney Audrey Strauss said:  “When a pharmacy closes, powerful controlled substances frequently change hands – a potentially fraught moment.  As Richard Schirripa admitted today, he lied to the DEA twice about what he had done with large quantities of dangerous controlled substances, including potentially lethal fentanyl, when he closed his pharmacy.  Schirripa now awaits sentencing for his crime.”

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

In or around January 2020, Madison Avenue Pharmacy (“MAP”) – which SCHIRRIPA had owned for many years – closed.  Under federal regulations, before a pharmacy discontinues business activities, it must notify the DEA at least 14 days in advance.  SCHIRRIPA did not comply with this requirement.  The DEA learned that MAP had closed when DEA officers attempted to conduct a routine audit of MAP and saw a piece of paper on the storefront that announced MAP’s closure and noted that MAP’s controlled substances had been transferred to a specified local pharmacy.  The DEA officers then went, in person, to that specified local pharmacy.  Shortly thereafter, SCHIRRIPA wrote the DEA (in January 2020) and met with the DEA (in February 2020). 

On both occasions, SCHIRRIPA made material false statements to the DEA.  On both occasions, SCHIRRIPA falsely represented that as part of the recent closure of MAP, he had transferred to others, sold, or destroyed all controlled substances.  In fact, SCHIRRIPA remained in possession of thousands of controlled substance pills/patches, including fentanyl, oxycodone, and oxymorphone.  These substances were all recovered from a safe in SCHIRRIPA’s home on Long Island.  When agents executed a search warrant at SCHIRRIPA’s home in April 2020, SCHIRRIPA acknowledged that these controlled substances were from his pharmacy and that he needed to destroy them.  There were nearly 4,000 pills/patches in total, many of which contained labels indicating that they had been prescribed to others.

Under the terms of his plea agreement, SCHIRRIPA also admitted to various regulatory violations, including regarding controlled substances.  SCHIRRIPA also agreed to:  Surrender of his pharmacy and pharmacist licenses; a three-year ban before he can reapply for such licenses; and a three-year ban on any employment that involves his possessing, controlling, or distributing controlled substances.

*                *                *

SCHIRRIPA, 67, of Fort Salonga, New York, pled guilty to one count of making false statements, which carries a maximum sentence of five years in prison.  The maximum potential sentence in this case is prescribed by Congress and is provided here for informational purposes only, as any sentencing of the defendant will be determined by the judge.  SCHIRRIPA is scheduled to be sentenced by Judge Daniels on July 13, 2021, at 10:30 a.m.

Ms. Strauss praised the outstanding investigative work of the New York Office of Homeland Security Investigations (“HSI”), the U.S. Postal Inspection Service, the DEA, the New York City Police Department, U.S. Customs and Border Protection, the Internal Revenue Service, and the Port Authority Police Department.  She also expressed gratitude to the U.S. Department of Health and Human Services, the New York State Department of Corrections and Community Supervision, and the Northvale, New Jersey, Police Department.

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, United States Attorney for the Southern District of New York, and Keith J. Byrne,  Special Agent in Charge of the U.S. Department of State’s Diplomatic Security Service (“DSS”), New York Field Office, announced today the unsealing of a complaint charging RODNEY ROBINSON, a/k/a “Alim Shariff,” with forgery and false use of a passport, false statements, and aggravated identity theft in connection with his years-long effort to fraudulently pose as a medical professional and Naval Reserve Officer.  ROBINSON was arrested this morning in New York, New York, and will be presented before U.S. Magistrate Judge Sarah Netburn later today. 

Manhattan U.S. Attorney Audrey Strauss said: “As alleged, Rodney Robinson abused the trust of his employers, colleagues, and clients by claiming to be someone he is not.  He has finally been caught in his web of lies.”

DSS Special Agent-in-Charge Keith J. Byrne said:  “The Diplomatic Security Service is firmly committed to working with the U.S. Attorney’s Office of the Southern District of New York to investigate allegations of crimes related to passport fraud and identity theft.  We are very pleased to have apprehended Mr. Robinson to face the charges levied against him.”

According to the allegations in the Complaint:[1]
 

ROBINSON spent years posing as “Dr. Alim Shariff” – a “board certified behavior analyst,” “licensed psychological examiner,” and Naval Reserve Officer.  Using the Shariff identity, ROBINSON gained employment at multiple New York City area social service and rehabilitation providers.  In applying for these positions of trust, ROBINSON used fake identification documents, claimed stolen identification information, and made false statements to federal agencies.           

*                *                *

ROBINSON, 55, of New York, New York, is charged with two counts of forgery and false use of a passport, each of which carries a maximum sentence of 10 years in prison, one count of false statements, which carries a maximum penalty of five years in prison, and three counts of aggravated identity theft, each of which carries a mandatory consecutive term of two years in prison. 

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

Ms. Strauss praised the outstanding investigative work of the Diplomatic Security Service.

If you believe you were a victim of this crime, including a victim entitled to restitution, and you wish to provide information to law enforcement and/or receive notice of future developments in the case or additional information, please contact Wendy Olsen-Clancy, the Victim Witness Coordinator at the United States Attorney’s Office for the Southern District of New York, at (866) 874-8900, or Wendy.Olsen@usdoj.gov.  For additional information, go to: http://www.usdoj.gov/usao/nys/victimwitness.html.

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

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

 

---

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

Audrey Strauss, the United States Attorney for the Southern District of New York, announced that WILLIAM TAYLOR, the former chief operating officer of MiMedx Group, Inc. (“MiMedx”), a publicly traded biopharmaceutical company, was sentenced today in Manhattan federal court to one year in prison for orchestrating a multimillion-dollar scheme to fraudulently inflate MiMedx’s revenue.  TAYLOR and co-defendant Parker H. Petit were found guilty on November 19, 2020, following a four-week jury trial before U.S. District Court Judge Jed S. Rakoff, who imposed today’s sentence.  Judge Rakoff sentenced Petit to one year in prison in a separate proceeding yesterday.

Manhattan U.S. Attorney Strauss said:  “William Taylor and his co-defendant used secret agreements and corrupt financial inducements to materially misstate quarterly and annual sales revenue of MiMedx.  They deceived the SEC, auditors, and the investing public.  Now Taylor, like Parker Petit yesterday, has been sentenced to prison for his crimes.”

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

MiMedx was headquartered in Marietta, Georgia, and its securities traded under the symbol “MDXG” on the NASDAQ.  MiMedx sold regenerative biologic products, such as skin grafts and amniotic fluid, both directly to end users, such as public and private hospitals, and to various stocking distributors, which, in turn, resold the product to end users. 

One of the most critical financial metrics disclosed in MiMedx’s public filings with the Securities and Exchange Commission (“SEC”), and touted in MiMedx’s accompanying press releases, was MiMedx’s quarterly and annual sales revenue.  Under Generally Accepted Accounting Principles (GAAP) and SEC guidance, a company like MiMedx that engages in the sale of products through a distributor may recognize revenue upon transfer of the product to a distributor if certain requirements are satisfied, including that delivery has occurred or services have been rendered, the seller’s price to the buyer is fixed or determinable, and collectability of payment is reasonably assured.  TAYLOR and Petit, MiMedx’s former chief executive officer, repeatedly demonstrated and touted their understanding of these rules governing revenue recognition.  They also publicly identified revenue as the principal metric reflecting MiMedx’s growth, and touted MiMedx’s consistent record of quarter-over-quarter revenue growth and meeting or exceeding revenue guidance in 17 consecutive quarters, from 2011 through year-end 2015.  By 2015, however, it became increasingly difficult for MiMedx to reach its revenue guidance due to decreased demand from certain distributors and the increasingly aggressive revenue targets that MiMedx had publicly announced. 

Confronted with the difficulties faced by MiMedx in meeting its quarterly and annual revenue guidance by legitimate means, TAYLOR and Petit orchestrated a fraudulent scheme to falsely recognize revenue upon the shipment of MiMedx product to four stocking distributors, CPM, SLR, Stability Biologics (“Stability”), and First Medical, in the second through fourth quarters of 2015.  TAYLOR and Petit caused MiMedx to report fraudulently inflated revenue figures to the investing public in order to ensure that the reported figures fell within MiMedx’s publicly announced revenue guidance, and to fraudulently convey to the investing public that MiMedx was accomplishing consistent growth quarter after quarter, as TAYLOR and Petit had falsely touted to the investing public.  The fraudulent scheme involved the following central features:

• As to CPM, in the second quarter of 2015, TAYLOR and Petit caused MiMedx fraudulently to recognize $1.4 million in revenue by (1) making a $200,000 sham “consulting” payment to CPM’s owner to bribe CPM to buy MiMedx product and (2) secretly agreeing to send CPM approximately $1.1 million of product it did not want and did not intend to sell, while promising that CPM could return the product to MiMedx and swap it for different product in a subsequent quarter.  TAYLOR and Petit entered into the sham “consulting” agreement to conceal that the payment was a bribe to purchase product, and CPM’s owner performed no consulting work for the payment.  Neither TAYLOR nor Petit disclosed to MiMedx’s outside auditors the “consulting” payment or product swap. 

• As to SLR, in the third quarter of 2015, TAYLOR and Petit caused MiMedx fraudulently to recognize $4.6 million in revenue by booking the revenue despite understanding that SLR would not make a timely payment for the product, and certainly would not do so within contractual terms.  To hide from MiMedx’s auditors that the collectability of payment from SLR was questionable, during the fourth quarter 2015, Petit arranged for his adult children to use a shell company to loan money to SLR (money that came from a trust fund established by Petit for their benefit), with the understanding that the loan proceeds would be used in substantial part to pay down SLR’s debt to MiMedx.

• As to Stability, in the third and fourth quarters of 2015, TAYLOR and Petit caused MiMedx improperly to recognize $2.6 million of revenue, where they (1) failed to agree with Stability on the essential terms of the deal, including when payment was due; (2) reached a secret understanding that Stability could swap or return unwanted product in subsequent quarters; and (3) understood that Stability could not pay for the product in a timely fashion.  In fact, TAYLOR later signed a sham distribution agreement to hide the fact that the original sale had been made without agreement on the essential terms.     

• As to First Medical, in the fourth quarter of 2015, TAYLOR caused MiMedx improperly to recognize $2.2 million in revenue by making an undisclosed promise to First Medical that it could return any product that it could not sell and that MiMedx would not leave First Medical with any losses.  To carry out the scheme, TAYLOR sent two emails four seconds apart to First Medical.  The first was a “cover story” that purported to require payment within a fixed period, as required by MiMedx’s accountants.  TAYLOR forwarded the first email to MiMedx’s accounting department.  The second email, sent only four seconds after the first, memorialized the true terms of the deal, which involved an agreement to defer payment and take back product if it could not be sold.  TAYLOR hid the second email from MiMedx’s internal accountants and outside auditors.  TAYLOR also arranged for a false audit “confirmation,” which falsely represented that First Medical was required to pay within a fixed period and omitted the true terms of the deal, to be provided to MiMedx’s outside auditors.

TAYLOR and Petit’s fraudulent manipulation of MiMedx’s revenue caused MiMedx to report materially inflated revenue in the second, third, and fourth quarters of 2015, and for the full year 2015.  In its 2015 10-K, MiMedx reported annual revenue that was fraudulently inflated by approximately $8.2 million.  Absent this fraudulent inflation of revenue, MiMedx would have missed both (1) its quarterly revenue guidance in the third and fourth quarters of 2015 and annual revenue guidance for 2015 and (2) analyst revenue consensus for the second through fourth quarters of 2015 and the full year 2015.  As a result of the fraud, shareholders sustained losses of approximately $35 million.

*                *                *

In addition to his prison term, TAYLOR, 52, of Marietta, Georgia, was ordered to pay a fine of $250,000. 

Ms. Strauss praised the investigative work of the United States Postal Inspection Service and thanked the SEC, 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 Edward A. Imperatore, Scott A. Hartman, and Daniel M. Tracer are in charge of the prosecution.

 

Audrey Strauss, the United States Attorney for the Southern District of New York, announced that RICHARD LEAF, a resident of Somers, was arrested this morning and charged with receiving and possessing videos and images containing child pornography.  LEAF was presented today before U.S. Magistrate Judge Andrew E. Krause in White Plains federal court.

U.S. Attorney Audrey Strauss said: “Richard Leaf is alleged to have engaged in deeply disturbing sexual communications with minors, and in being in possession of child pornography. Child pornography inflicts immeasurable damage upon innocent victims, and this Office and our FBI partners will continue to exhaustively detect, identify, and charge any individuals engaged in this sinister conduct. Below, the various usernames alleged to have been used by Leaf to engage with under-aged victims are listed, please call 1-800-CALL-FBI if you believe you have information helpful to this investigation.”

FBI Assistant Director William F. Sweeney Jr. said:  “As our society continues to become more reliant on technology, more of our children are exposed to the most despicable predators - those searching out young children to sexually exploit them. As we allege in this case, Mr. Leaf used Skype to chat with his victims. I'd like to stress to parents that although these contacts may occur in a virtual world, they harm your children in the real world. These criminals inflict lasting damage to their victims, and both parents and guardians need to be aware of the dangers their children face. The list below provides known fake handles Mr. Leaf allegedly used to contact children. Please take a look and have a conversation with your child. If you believe they've been in contact with Mr. Leaf, please call us at 1-800-CALL-FBI or reach us online at tips.fbi.gov."

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

Between March 2019 and April 2020, LEAF posed as a teenager named “Alex Bronson” to communicate via Skype with a minor (“Minor-1”), who LEAF believed was 15 years old.  During the course of these communications, Minor-1 sent LEAF a video of himself masturbating in the shower and a fully nude photo of himself in a bedroom.  In addition, law enforcement officers uncovered almost a dozen images and videos containing child pornography on LEAF’s home computer.

The Complaint further alleges that LEAF created fictitious accounts on Chat Avenue, an online chatroom website, and Skype to communicate with minors.  The usernames of some of LEAF’s fictitious accounts include:

alex bronson

sportsboi.15

alex15

15brandon

zach.914

runnerboi.14

austinf19

sportsgirl.914

brandon.williams.23

dan.dan77771

beachsand.7

Austin A

If you have information to report or if you interacted or sent under-aged photos or videos of a sexual nature to any of the above accounts, please contact the Federal Bureau of Investigation at 1-800-CALL-FBI.

*                       *                      *

LEAF, 72, of Somers, New York, is charged with one count of receiving child pornography, which carries a mandatory minimum sentence of 5 years in prison and a maximum sentence of 20 years in prison, and one count of possessing child pornography, which carries a maximum sentence of 10 years in prison. The statutory maximum penalty 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 efforts of the FBI and its Westchester County Safe Streets Task Force.  She added that the investigation is ongoing.

This case is being handled by the Office’s White Plains Division.  Assistant United States Attorney Jennifer Ong 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.

 

---

[1] As the introductory phrase signifies, the entirety of the text of the Complaint and the descriptions 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, announced that PARKER H. PETIT, the former chief executive officer of MiMedx Group, Inc. (“MiMedx”), a publicly traded biopharmaceutical company, was sentenced today in Manhattan federal court to one year in prison for orchestrating a multimillion-dollar scheme to fraudulently inflate MiMedx’s revenue.  PETIT and co-defendant William Taylor were found guilty on November 19, 2020, following a four-week jury trial before U.S. District Court Judge Jed S. Rakoff, who imposed today’s sentence. 

Manhattan U.S. Attorney Strauss said:  “Parker Petit used secret agreements and corrupt financial inducements with four distributors to materially misstate the quarterly and annual sales revenue of MiMedx.  He deceived the SEC, auditors, and the investing public.  Now he has been sentenced to prison for his crimes.”

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

MiMedx was headquartered in Marietta, Georgia, and its securities traded under the symbol “MDXG” on the NASDAQ.  MiMedx sold regenerative biologic products, such as skin grafts and amniotic fluid, both directly to end users, such as public and private hospitals, and to various stocking distributors, which, in turn, resold the product to end users. 

One of the most critical financial metrics disclosed in MiMedx’s public filings with the Securities and Exchange Commission (“SEC”), and touted in MiMedx’s accompanying press releases, was MiMedx’s quarterly and annual sales revenue.  Under Generally Accepted Accounting Principles (GAAP) and SEC guidance, a company like MiMedx that engages in the sale of products through a distributor may recognize revenue upon transfer of the product to a distributor if certain requirements are satisfied, including that delivery has occurred or services have been rendered, the seller’s price to the buyer is fixed or determinable, and collectability of payment is reasonably assured.  PETIT and Taylor, MiMedx’s former chief operating officer, repeatedly demonstrated and touted their understanding of these rules governing revenue recognition.  They also publicly identified revenue as the principal metric reflecting MiMedx’s growth, and touted MiMedx’s consistent record of quarter-over-quarter revenue growth and meeting or exceeding revenue guidance in 17 consecutive quarters, from 2011 through year-end 2015.  By 2015, however, it became increasingly difficult for MiMedx to reach its revenue guidance due to decreased demand from certain distributors and the increasingly aggressive revenue targets that MiMedx had publicly announced. 

Confronted with the difficulties faced by MiMedx in meeting its quarterly and annual revenue guidance by legitimate means, PETIT and Taylor orchestrated a fraudulent scheme to falsely recognize revenue upon the shipment of MiMedx product to four stocking distributors, CPM, SLR, Stability Biologics (“Stability”), and First Medical, in the second through fourth quarters of 2015.  PETIT and Taylor caused MiMedx to report fraudulently inflated revenue figures to the investing public in order to ensure that the reported figures fell within MiMedx’s publicly announced revenue guidance, and to fraudulently convey to the investing public that MiMedx was accomplishing consistent growth quarter after quarter, as PETIT and Taylor had falsely touted to the investing public.  The fraudulent scheme involved the following central features:

• As to CPM, in the second quarter of 2015, PETIT and Taylor caused MiMedx fraudulently to recognize $1.4 million in revenue by (1) making a $200,000 sham “consulting” payment to CPM’s owner to bribe CPM to buy MiMedx product and (2) secretly agreeing to send CPM approximately $1.1 million of product it did not want and did not intend to sell, while promising that CPM could return the product to MiMedx and swap it for different product in a subsequent quarter.  PETIT and Taylor entered into the sham “consulting” agreement to conceal that the payment was a bribe to purchase product, and CPM’s owner performed no consulting work for the payment.  Neither PETIT nor Taylor disclosed to MiMedx’s outside auditors the “consulting” payment or product swap. 

• As to SLR, in the third quarter of 2015, PETIT and Taylor caused MiMedx fraudulently to recognize $4.6 million in revenue by booking the revenue despite understanding that SLR would not make a timely payment for the product, and certainly would not do so within contractual terms.  To hide from MiMedx’s auditors that the collectability of payment from SLR was questionable, during the fourth quarter 2015, PETIT arranged for his adult children to use a shell company to loan money to SLR (money that came from a trust fund established by PETIT for their benefit), with the understanding that the loan proceeds would be used in substantial part to pay down SLR’s debt to MiMedx.  PETIT did not disclose the loan to MiMedx’s outside auditors and made false and misleading statements to the auditors about SLR’s ability to pay MiMedx.

• As to Stability, in the third and fourth quarters of 2015, PETIT and Taylor caused MiMedx improperly to recognize $2.6 million of revenue, where they (1) failed to agree with Stability on the essential terms of the deal, including when payment was due; (2) reached a secret understanding that Stability could swap or return unwanted product in subsequent quarters; and (3) understood that Stability could not pay for the product in a timely fashion.  In fact, PETIT granted the right of return to Stability in a back-dated letter he hid from MiMedx’s internal accountants and outside auditors.     

• As to First Medical, in the fourth quarter of 2015, Taylor caused MiMedx improperly to recognize $2.2 million in revenue by making an undisclosed promise to First Medical that it could return any product that it could not sell and that MiMedx would not leave First Medical with any losses.  To carry out the scheme, Taylor sent two emails four seconds apart to First Medical.  The first was a “cover story” that purported to require payment within a fixed period, as required by MiMedx’s accountants.  Taylor forwarded the first email to MiMedx’s accounting department.  The second email, sent only four seconds after the first, memorialized the true terms of the deal, which involved an agreement to defer payment and take back product if it could not be sold.  Taylor hid the second email from MiMedx’s internal accountants and outside auditors.  Taylor also arranged for a false audit “confirmation,” which falsely represented that First Medical was required to pay within a fixed period and omitted the true terms of the deal, to be provided to MiMedx’s outside auditors.

PETIT’s and Taylor’s fraudulent manipulation of MiMedx’s revenue caused MiMedx to report materially inflated revenue in the second, third, and fourth quarters of 2015, and for the full year 2015.  In its 2015 10-K, MiMedx reported annual revenue that was fraudulently inflated by approximately $8.2 million.  Absent this fraudulent inflation of revenue, MiMedx would have missed both (1) its quarterly revenue guidance in the third and fourth quarters of 2015 and annual revenue guidance for 2015 and (2) analyst revenue consensus for the second through fourth quarters of 2015 and the full year 2015.  PETIT’s offense caused approximately $35 million in losses to MiMedx shareholders.

*                *                *

In addition to his prison term, PETIT, 81, of Marietta, Georgia, was ordered to pay a fine of $1 million. 

Taylor was found guilty of conspiracy to commit securities fraud, to make false statements in filings with the SEC, and to mislead auditors.  Taylor will be sentenced tomorrow at 4:00 p.m. before Judge Rakoff. 

Ms. Strauss praised the investigative work of the United States Postal Inspection Service and thanked the SEC, 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 Edward A. Imperatore, Scott A. Hartman, and Daniel M. Tracer are in charge of the prosecution.

Audrey Strauss, the United States Attorney for the Southern District of New York, William F. Sweeney Jr., the Assistant Director-in-Charge of the New York Field Office of the Federal Bureau of Investigation (“FBI”), and Dermot Shea, Commissioner of the New York City Police Department (“NYPD”), announced today that ERIC SPENCER has been arrested for his participation in an armed robbery of a luxury retail store in New York, New York, on February 2, 2021.  SPENCER was apprehended on Saturday, February 20, in Ft. Lauderdale, Florida, and will be presented in federal court in Ft. Lauderdale, Florida, later today.

U.S. Attorney Audrey Strauss said:  “As alleged, Eric Spencer put the public and store personnel in grave danger when he committed a brazen daylight armed robbery of a SoHo boutique earlier this month.  Spencer allegedly threatened a store security guard by displaying the handle of his gun as he barked orders to his co-conspirators to ‘grab everything.’  Now the FBI and NYPD have grabbed Spencer, who is in federal custody and awaiting his day in court.”

NYPD Commissioner Dermot Shea said:  “Spencer’s arrest highlights the importance of good investigative work and the continuing efforts of the FBI-NYPD Joint Major Theft Task Force.  I commend our partners in the United States Attorney’s Office in the Southern District of New York for their commitment to bringing justice for the victims in this despicable crime.”

FBI Assistant Director William F. Sweeney Jr. said:  “We allege Mr. Spencer was part of a robbery crew, and in this instance he carried a firearm, during a violent takeover of a retail store.  Mr. Spencer’s alleged actions violated federal law, and he is now in our custody.  For others who plan to behave in the same manner, listen up – the FBI is committed to using every tool at our disposal to hold violent criminals accountable for their decisions, and our partnership with the NYPD is airtight.  When you break federal law, expect to spend some time in one of our courtrooms.  As always, thank you to the NYPD detectives for their outstanding work in this investigation, their constant efforts are essential to keeping our citizens safe.”

According to the allegations in the Complaint[1]:

On the afternoon of February 2, 2021, SPENCER robbed a luxury retail store located in the SoHo neighborhood in Manhattan.  SPENCER and three other co-conspirators entered the store and began grabbing handbags and other items off the walls.  When a security guard confronted SPENCER, he said, “What are you going to do? Shoot me?” SPENCER then reached into his waistband, where the security guard could see the handle of a firearm.  SPENCER yelled, “Nobody touch me! Get everything! Grab everything!”  SPENCER and his co-conspirators made off with handbags and other merchandise valued at $189,500. 

The next day, SPENCER bragged on social media about having so many items from the store that he could “OPEN A SMALL BOUTIQUE.” 

*                *                *

SPENCER, 29, of Brooklyn, New York, is charged with one count of robbery, which carries a maximum sentence of 20 years in prison.  The maximum potential sentence is prescribed by Congress and is provided here for informational purposes only, as any sentencing of the defendant would be determined by a judge.

Ms. Strauss praised the outstanding investigative work of the FBI-NYPD Joint Major Theft Task Force and the NYPD’s Manhattan North Grand Larceny Squad, and thanked the FBI’s Miami Field Office for its assistance.  She added that the investigation is ongoing.

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

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

 

 

---

 

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

Audrey Strauss, the United States Attorney for the Southern District of New York, Kathy A. Michalko, Special Agent in Charge of the New York Field Office of the United States Secret Service (“USSS”), and New York Police Department (“NYPD”) Commissioner Dermot Shea, announced the arrest today of TRACII SHOW-HUTSONA on wire fraud and identity theft charges.  Specifically, SHOW-HUTSONA is charged with embezzling more than one million dollars as part of a confidence scheme.  SHOW-HUTSONA used her position as a personal assistant to funnel money from her victim’s financial accounts, including the victim’s children’s college savings accounts, into her own spending account in order to fund a lavish lifestyle.   SHOW HUTSONA was arrested on February 17, 2021, and was presented in federal court in the District of Arizona before United States Magistrate Judge Michelle H. Burns.

U.S. Attorney Audrey Strauss stated:  “Traccii Show-Hutsona, a personal assistant and founding partner of Elite Lux Life, branded her concierge service as the ‘VIP Concierge Company (SPECIALIZING IN THE GOOD LIFE) Jets-Yachts-Vacation Rentals-Exotic Vehicles.’ As alleged, Show-Hutsona afforded herself the same swanky accommodations she promised her clientele – only she did so with their money.  Thanks to our partners at the NYPD and U.S. Secret Service, Tracii Show-Hutsona’s alleged high-flying confidence scheme has now been grounded, and she faces embezzlement charges in federal court.”

USSS Special Agent-in-Charge Kathy A. Michalko stated:  “The U.S. Secret Service remains focused on bringing those who commit financial crimes to justice.  The accused was employed by the victim and allegedly used her position to embezzle over one million dollars for her own personal gain.  Due to the tireless investigative efforts of the Secret Service and the New York City Police Department, the accused will answer the charges against her in the Southern District of New York.”

NYPD Commissioner Dermot Shea stated:  “As alleged in this federal complaint, Tracii Show-Hutsona turned her clients into victims, betraying their trust to carry out her own embezzlement scheme. I applaud the work done in this case by our NYPD investigators and our partners in the United States Secret Service and the United States Attorney’s Office in the Southern District of New York to make sure this individual would be brought to justice.”

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

TRACII SHOW HUTSONA, a/k/a “Tracii Show,” a/k/a “Tracii Show Vician,” was the “founding partner” of Elite Lux Life, a full-service concierge firm that “accommodates the most discerning traveler” and is the “go-to service for wanting to enjoy the very best life has to offer.” In its social media posts, Elite Lux Life markets itself as a “VIP Concierge Company (SPECIALIZING IN THE GOOD LIFE) Jets-Yachts-Vacation Rentals-Exotic Vehicles.”

From in or around 2015 until late 2019, SHOW HUTSONA engaged in a long-running confidence scheme to embezzle money.  SHOW HUTSONA used the confidence she gained from her position as a personal assistant to gain access to financial accounts.  In connection with one victim of the scheme (“Victim-1”), SHOW HUTSONA stole and spent over $1 million of Victim-1’s money in order to finance her own luxury lifestyle.  When Victim-1 confronted her about the scheme, SHOW HUTSONA promised to make amends.  In fact and in reality, SHOW HUTSONA continued to spend Victim-1’s money without permission or authorization, including transferring money from the college savings accounts of Victim-1’s children.  

SHOW HUTSONA was previously convicted in federal court in 2008 for committing fraud and aggravated identity theft in connection with the submission of fraudulent invoices for a staffing agency in Japan, in another fraud scheme.  See United States v. Show Vician, 08 Cr. 0058 (C.D. Cal. Oct. 16, 2008).

*                *                *

SHOW HUTSONA, 52, of Phoenix, Arizona, is charged with one count of wire fraud, which carries a maximum sentence of 20 years in prison, and one count of aggravated identity theft, which carries a mandatory consecutive sentence of two years in prison.  The statutory maximum 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. 

Ms. Strauss praised USSS and the NYPD for their outstanding work on this case and noted that the investigation is ongoing.  

This matter is being handled by the Office’s Complex Frauds and Cybercrime Unit.  Assistant United States Attorneys Timothy V. Capozzi and Michael C. McGinnis are in charge of the prosecution.

 

---

[1] As the introductory phrase signifies, the entirety of the text of the Complaint and the description of the Complaint set forth 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, and Jonathan D. Larsen, Special Agent in Charge of the New York Field Office of the Internal Revenue Service, Criminal Investigation (“IRS-CI”), announced today that ROBERTO PEREZ RAMIREZ, the owner of a tax preparation business named RAP Tax Service in the Bronx, New York, pled guilty to 10 counts of aiding and assisting the preparation of false and fraudulent income tax returns for the tax years 2013 to 2016.  As part of the plea agreement, RAMIREZ agreed to make restitution to the IRS in the amount of $2,974,547.  RAMIREZ pled guilty this morning before U.S. District Judge Andrew L. Carter Jr.

Manhattan U.S. Attorney Audrey Strauss said:  “As he admitted in court today, Roberto Ramirez submitted false and fraudulent tax returns on behalf of numerous taxpayers, often falsely claiming dependents, nonexistent charitable deductions, or bogus business expenses on behalf of clients who paid Ramirez to do so.  Now he awaits sentencing for his admitted crimes.”

IRS-CI Special Agent in Charge Jonathan D. Larsen said:  “The defendant’s admissions today, at the kickoff of the filing season, are a timely reminder of the vital need for the taxpayer to do their due diligence in choosing a preparer.  A preparer who is claiming to offer an unusually large return or one who is charging exorbitant fees should automatically raise red flags with the taxpayer.”

According to the allegations contained in the Information to which RAMIREZ pled guilty, RAMIREZ’s plea agreement, and statements made in court:

Through his Bronx tax preparation business, RAP Tax Service, RARMIREZ prepared and filed nearly 3,000 individual income tax returns on behalf of taxpayers for the tax years 2013 to 2016. 

On many of the returns that he prepared for the tax years 2013 to 2016, RAMIREZ falsely claimed dependents who were not in fact dependents of the named taxpayers.  The false dependents included real persons located in Puerto Rico, among other places.  By including false dependents, RAMIREZ fraudulently inflated the refunds that could be obtained on the named taxpayers’ returns.  RAMIREZ sometimes charged clients a $1,000 fee to add a false dependent. 

In addition to reporting false dependents, RARMIREZ also reported false Schedule A deductions, such as gifts to charity or unreimbursed employee business expenses, and false Schedule C business expenses.  By including false Schedule A deductions and false Schedule C expenses, RAMIREZ fraudulently inflated the refunds that could be obtained on the named taxpayers’ returns. 

For the tax years 2013 through 2016, RAMIREZ’s scheme caused an estimated tax loss to the IRS of approximately $3 million.

*                *                *

RAMIREZ, 59, of Hackensack, New Jersey, pled guilty to 10 counts of aiding and assisting the preparation of false and fraudulent income tax returns for the tax years 2013 to 2016.  Each count carries a maximum sentence of three years in prison.  As part of the plea agreement, RAMIREZ has agreed to pay restitution to the IRS in the amount of $2,974,547.  RAMIREZ is scheduled to be sentenced by Judge Carter on June 25, 2021, at 10:00 a.m.

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

Ms. Strauss praised the outstanding investigative work of IRS-CI in this case.

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

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 Field Office of Homeland Security Investigations (“HSI”), Timothy Donovan, Assistant Director of the Northeast Division, National Oceanic and Atmospheric Administration (“NOAA”), Office of Law Enforcement (“OLE”), and Bethanne M. Dinkins, the Special Agent-in-Charge of the New York Field Office of the Office of the Inspector General for the United States Department of Agriculture (“USDA-OIG”), announced the unsealing today of a Complaint charging MAHMUD CHOWDHURY, a/k/a “Masum Chowdhury,” a/k/a “Uncle Masum,” SHAKIL AHMED, BELAYET HUSSAIN, a/k/a “Belayet Sohel,” and FIROZ AHAMMAD with participating in a conspiracy to smuggle banned catfish into the United States through the Southern District of New York.  All four defendants were taken into custody today and will be presented this afternoon before United States Magistrate Judge Katharine H. Parker.

U.S. Attorney Audrey Strauss said:  “As alleged, food safety for U.S. consumers was seriously compromised by these defendants, who disguised their importation and distribution of dangerous fish and fish products.  Thankfully, investigators with HSI, NOAA, and USDA-OIG detected something fishy and reeled in the defendants, who now face serious federal charges.”

HSI Special Agent-in-Charge Peter C. Fitzhugh said:  “Something smelled fishy, and this investigation led to this transnational criminal organization as the center of an alleged smuggling operation moving multiple shipments of catfish from prohibited countries into our ports to further a very lucrative scheme.  It is a major concern when food entering the U.S. does not meet our strict health and safety guidelines, and HSI New York, working with CBP and our law enforcement partners, will continue to protect the public from potentially contaminated, diseased or adulterated food products and bring to justice those who choose to line their pockets at the expense of our food supply chain.”

NOAA-OLE Northeast Division Assistant Director Timothy Donovan said:  “This case demonstrates the importance of our cooperation with U.S. government partners to interdict illegal products before they enter the country.  OLE continues to work to protect consumers and fishermen from seafood fraud and the illegal importation of seafood through initiatives like our Seafood Import Monitoring Program.”

USDA-OIG Special Agent-in-Charge Bethanne M. Dinkins said:  “Protecting the safety of food is a top priority for USDA-OIG, and we will continue to dedicate investigative resources and work with our law enforcement and prosecutorial partners to protect the integrity of the food supply and bring to justice those who circumvent food safety protocols and put consumers at risk.” 

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

Since in or about 2017, the importation into the United States from most countries of fish of the order Siluriformes, which includes multiple species of fish commonly referred to as catfish, has been prohibited by federal law, in order to ensure the safety of food for human consumption in the United States.  From at least in or about January 2018 up to and including at least in or about October 2019, notwithstanding this ban, MAHMUD CHOWDHURY, a/k/a “Masum Chowdhury,” a/k/a “Uncle Masum,” SHAKIL AHMED, BELAYET HUSSAIN, a/k/a “Belayet Sohel,” and FIROZ AHAMMAD, the principals of Asia Foods Distributor Inc. (“AFD”), a trading company based in New York City, conspired to smuggle large quantities of prohibited catfish into the United States through the Southern District of New York for distribution to their customers around the United States.  The defendants implemented a scheme through which the banned catfish were listed as other species of fish in the shipping documents of foreign exporters presented at customs, and also in the commercial invoices that they provided to their customers, thereby disguising their importation and distribution.  In or about 2019, a customs inspection of a shipping container bound for AFD led to the discovery of the prohibited catfish.  Further quantities of illegally imported catfish were also found at AFD’s warehouse and at certain of AFD’s customers’ stores during site inspections.  The ensuing investigation of HSI, NOAA, and USDA-OIG led to the seizure of multiple shipping containers bound for AFD, in which banned catfish were identified.  Moreover, the execution of a search warrant at AFD’s warehouse resulted in the seizure of evidence documenting AFD’s orders to foreign exporters and communications between the defendants about how to avoid the detection of their scheme and the accompanying risk of potential arrest and imprisonment.

*                      *                     *

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

 

Ms. Strauss praised the outstanding investigative work of HSI, NOAA, and USDA-OIG, as well as the assistance of United States Customs and Border Protection (“CBP”).

This case is being handled by the Office’s General Crimes Unit.  Assistant United States Attorney Thomas John Wright 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.

COUNT

CHARGE

DEFENDANTS

MAX. PENALTIES

1

Catfish smuggling conspiracy

 

18 U.S.C. § 371

MAHMUD CHOWDHURY,

a/k/a “Masum Chowdhury,”

a/k/a “Uncle Masum,”

SHAKIL AHMED,

BELAYET HUSSAIN,

a/k/a “Belayet Sohel,” and FIROZ AHAMMAD

5 years in prison

2

Catfish smuggling

 

18 U.S.C. § 545

MAHMUD CHOWDHURY,

a/k/a “Masum Chowdhury,”

a/k/a “Uncle Masum,”

SHAKIL AHMED,

BELAYET HUSSAIN,

a/k/a “Belayet Sohel,” and FIROZ AHAMMAD

20 years in prison

 

 

---

 

[1]              As the introductory phrase signifies, the entirety of the text of the Complaint and the descriptions of the Complaint 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 JAMES PETRO, the former Planning and Zoning Coordinator and Property Development Manager for the Town of New Windsor, and RICHARD MCGOEY, the former Town Engineer by contract for the Town of New Windsor, each pled guilty today to one count of negligently causing the releasing of asbestos into the ambient air, thereby negligently placing other persons in imminent danger of death and serious bodily injury.  PETRO and MCGOEY pled guilty before United States Magistrate Judge Judith C. McCarthy in White Plains federal court.

U.S. Attorney Audrey Strauss said:  “As they admitted in court today, James Petro and Richard McGoey decided to cut corners and do things on the cheap, soliciting bids for demolition work without disclosing that the property contained asbestos.  The contract was awarded to a contractor unqualified to do asbestos abatement work, and as a result Petro and McGoey jeopardized the health and safety of the people they had a responsibility to protect.”

According to the allegations in the Informations to which PETRO and MCGOEY pled guilty and other court documents:

In or about 1999, the Town of New Windsor (the “Town”) acquired 250 acres adjacent to Stewart Airport from the Department of the Army.  The property contained dozens of military barracks and other buildings that the Army had constructed in or about the 1940’s, when the property was part of an Army Air Force base.  These buildings included 10 buildings contained on the parcel of land bordered by International Boulevard to the south, Reed Street to the north, Aviation Avenue to the east and Raz Avenue to the west (the “10 Buildings”).  The 10 Buildings contained asbestos.           

After it acquired the 250 acres, the Town entered into an agreement with a real estate developer (the “Developer”) pursuant to which the Developer would lease the land and develop it.  From in or about 2006 through in or about 2009, the Town applied for various government grants to abate the asbestos in some of the buildings on the 250 acres and to demolish those buildings.  PETRO and MCGOEY participated with others in preparing and submitting the grant applications.

In or about May 2008, the Developer obtained a report from an asbestos inspector that indicated the 10 Buildings had asbestos-containing material.  The report stated that any disturbance or abatement of the asbestos was required to be performed by a licensed contractor in accordance with federal and state regulations.  PETRO and MCGOEY knew of the existence of this report prior to August 2015.

In or about June 2012, PETRO, MCGOEY, and others discussed the need to prepare a written request for bids to abate the asbestos in, and demolish, the 10 Buildings.  The Town initially requested bids from asbestos inspectors to conduct asbestos surveys of the 10 Buildings.  PETRO, MCGOEY, and others decided asbestos surveys were unnecessary because the 10 Buildings had already been surveyed in May 2008.

From May 2015 to June 2015, PETRO, MCGOEY, and others drafted a request for proposals to demolish the 10 Buildings.  This request for proposals did not disclose the presence of asbestos containing materials in the 10 Buildings but said only that the demolition materials were to be disposed of in accordance with all federal, state, and local regulations.  The Town published this request for proposals on or about June 5, 2015.

In July 2015, the Town awarded the contract to demolish the 10 Buildings to Contractor-1, who had submitted the lowest bid of $262,000.  Contractor-1 was not a licensed asbestos contractor and had limited experience with asbestos.  Although Contractor-1 did not submit a plan to abate the asbestos in the 10 Buildings or an asbestos clearance letter to the Town, the Town gave Contractor-1 permits to demolish the 10 Buildings.

From August 11, 2015 through August 16, 2015, Contractor-1 and his crew demolished the 10 Buildings without removing the asbestos contained therein by knocking the buildings down with a backhoe, thereby releasing the asbestos to the open air.  During this period, both PETRO and MCGOEY visited the site while the buildings were being knocked down.  On August 19, 2015, an official with the Asbestos Control Bureau of the New York State Department of Labor suspended work on removing the debris piles resulting from the demolition of the 10 Buildings.

*                *                *

PETRO, 68, of New Windsor, New York, and MCGOEY, 71, of Monticello, New York, each pled guilty to one count of negligently causing the release of asbestos into the ambient air, thereby negligently placing other persons in imminent danger of death and serious bodily injury.  This offense carries a maximum sentence of one year 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 PETRO and MCGOEY will be determined by a judge.  The defendants are scheduled to be sentenced by Judge McCarthy on May 27, 2021.

Ms. Strauss praised the outstanding investigative work of the U.S. Environmental Protection Agency and Special Agents of the United States Attorney’s Office for the Southern District of New York.

The prosecution of this case is being handled by the Office’s White Plains Division.  Assistant United States Attorneys Margery Feinzig and James McMahon are in charge of the prosecution.

Audrey Strauss, the United States Attorney for the Southern District of New York, William F. Sweeny Jr., the Assistant Director-in-Charge of the New York Field Office of the Federal Bureau of Investigation (“FBI”), Patricia Menges, the New York Asylum Director of United States Citizenship and Immigration Services (“USCIS”), and Jason J. Molina, the Special Agent-in-Charge of the Newark Field Office of U.S. Immigration and Customs Enforcement’s Homeland Security Investigations (“HSI”), announced the unsealing of two indictments charging nine individuals in two respective schemes to prepare and submit fraudulent asylum applications, affidavits and other documents to USCIS, and to coach asylum seekers to lie under oath during immigration proceedings.

ILONA DZHAMGAROVA and ARTHUR ARCADIAN, two immigration attorneys based in Brooklyn, New York, and their associate, IGOR REZNK, were charged in one indictment with conspiracy to commit asylum fraud (the “Dzhamgarova Indictment”).  The case has been assigned to U.S. District Court Judge Mary Kay Vyskocil.  All three defendants were taken into custody today.  DZHAMGAROVA and ARCADIAN are expected to be presented in the Southern District of Florida.  REZNIK is expected to be presented in the District of Maryland.

In a separate indictment, YURY MOSHA, ULADZIMIR DANSKOI, JULIA GREENBERG, ALEKSEI KMIT, TYMUR SHCHERBYNA, and KATERYNA LYSYUCHENKO were charged with conspiracy to defraud the United States and conspiracy to commit asylum fraud.  That case has been assigned to U.S. District Court Judge Alison J. Nathan.  Five defendants were taken into custody today.  MOSHA and DANSKOI are expected to be presented in the Southern District of New York today before U.S. Magistrate Judge Katharine H. Parker.  GREENBERG and KMIT are expected to be presented in the Districts of Colorado and Idaho, respectively.  LYSYUCHENKO was arrested in Milan, Italy, and is pending extradition.

U.S. Attorney Audrey Strauss said: “Fear of violence and persecution, be it on the basis of race, religion, or sexual orientation, is a daily reality for too many across the world. To exploit and profit from the fears of the victims of persecution is cynical; to do so through lies and for money is fraud. As alleged, these defendants engaged in a scheme to deceive asylum officers of the United States through carefully scripted lies, trading on deeply held concerns for actual victims of persecution in an effort to obtain money and illegal immigration documents. Asylum fraud was not merely a means of lining these defendants’ pockets. It is a burden on the asylum system and a hindrance to those legitimately in need of our country’s protection.”

FBI Assistant Director-in-Charge William F. Sweeney Jr. said:  “The elaborate deceptions allegedly created by the groups of attorneys and managers in this investigation are astounding.  As we allege, they told their clients to lie on asylum applications and under oath about being persecuted in their home countries, and they even created ghost-written blogs to bolster those false claims. As these defendants will learn, engaging in this kind of conduct has grave consequences. Creating false narratives to conceal the identities of people seeking asylum in the United States threatens our national security, and we will continue to address it accordingly."

USCIS New York Asylum Director Patricia Menges said: “USCIS is committed to finding and stopping those who want to cheat the immigration system, and preserving it for those who qualify for immigration benefits.”

Special Agent-in-Charge, HSI, Newark Jason J. Molina said: “Under the guise of fictitious stories of persecution to gain asylum, these individuals allegedly exploited their fellow Russians for financial gain. Their arrest should serve as a warning to others of his ilk that the cooperative efforts of law enforcement agencies will track and persecute them to the fullest extent of the law.”

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

The charges in these two Indictment arise from an investigation into two New York City immigration firms, the “Dzhamgarova Firm” and “Russian America,” which helped their respective clients – primarily aliens from Russia and the Commonwealth of Independent States – seek visas, asylum, citizenship, and other forms of legal status in the United States.  Among other things, both firms advised certain of their clients in the manner in which they were most likely to obtain asylum in this country, fully understanding that those clients did not legitimately qualify for asylum.  The firms also prepared and submitted to USCIS clients’ fraudulent Form I-589 asylum applications, asylum affidavits – statements of an asylum applicant’s personal history and claimed basis for asylum, often including allegations of past persecution – and related supporting documentation.  Members and associates of each firm also coached certain clients to lie under oath during interviews conducted by USCIS Asylum Officers and provided legal representation to their clients during various immigration proceedings.

 

The Dzhamgarova Indictment

Between November 2018 and December 2021, ILONA DZHAMGAROVA, an immigration attorney, maintained the Dzhamgarova Firm, based in Brooklyn, New York.  Among other things, DZHAMGAROVA advised clients to seek asylum by falsely claiming that they were members of the Lesbian, Gay, Bisexual, Transgender and Queer (“LGBTQ”) community who suffered persecution in their native countries, when DZHAMGAROVA fully understood that these clients were not members of that community and suffered no such persecution.  Additionally, DZHAMGAROVA and her husband, ARTHUR ARCADIAN, also an attorney, prepared and submitted clients’ fraudulent asylum applications and affidavits to USCIS, under penalty of perjury, fully understanding that these documents at times contained material falsehoods.  DZHAMGAROVA and REZNIK also coached certain clients to lie in asylum interviews conducted by USCIS asylum officers and represented clients during immigration proceedings.

The Dhzamgarova Firm also employed writers and bloggers, including IGOR REZNIK, who knowingly concocted and drafted clients’ fraudulent asylum affidavits so that they could be submitted as part of clients’ asylum applications.  These affidavits, which were designed to support clients’ persecution claims, conveyed purported aspects of clients’ personal histories that were filled with falsehoods, including events and incidents of alleged persecution that were completely manufactured by REZNIK.  

 

The Mosha Indictment

 

YURY MOSHA and ULADZIMIR DANSKOI operated and maintained Russian America’s Manhattan and Brooklyn offices, respectively. Each advised and aided clients to seek asylum under fraudulent pretenses.  Among other things, MOSHA encouraged certain clients to establish and maintain online blogs that were critical of the clients’ home countries, as a way to generate a claim that, based on the clients’ invented political opinions, it was unsafe for them to return to their native countries.  MOSHA did so understanding that the clients’ decision to blog was prompted not by their own idea or initiative, but by MOSHA’s instruction, and that the clients’ motive for blogging was to contrive a basis for asylum, rather than to publicly express a sincerely held opinion.  MOSHA also understood that, in some instances, these clients lacked the desire, topical knowledge, journalistic ability, and/or technical expertise to write blogposts and maintain these blogs.  In those instances, MOSHA connected some Russian America clients with TYMUR SHCHERBYNA, a Ukraine-based purported journalist, with the understanding that, in exchange for a fee, SHCHERBYNA would and did maintain and ghost-write the clients’ blogs.  MOSHA also personally prepared and submitted clients’ asylum applications and related paperwork under penalty of perjury, knowing that these documents contained material falsehoods.  ALEKSEI KMIT, who worked directly under MOSHA in Russian America’s Manhattan Office, and who understood that certain clients were seeking asylum under fraudulent pretenses, served as a liaison between these clients and Russian America employees and at times advised these clients regarding their fraudulent applications.

DANSKOI performed similar functions as MOSHA, but in Russian America’s Brooklyn Office.  For example, DANSKOI advised one Russian America client, a confidential FBI source (the “Source”), to seek asylum on the fraudulent basis that the client was persecuted in Ukraine for being a gay male, when in fact DANSKOI fully understood that the Source was a heterosexual male who suffered no such persecution.  DANSKOI also advised the Source on how to most effectively advance this fraudulent claim.

Both MOSHA and DANSKOI referred certain clients to KATERYNA LYSYUCHENKO – an Italy-based associate, who helped certain Russian America clients draft fraudulent Asylum Affidavits by, among other things, sending them template Asylum Affidavits to model off of, and advising clients about what information to include in their affidavits, understanding these documents to be fraudulent – and JULIA GREENBERG, a New York immigration attorney, who coached clients to lie to Asylum Officers and provided legal representation to such clients during immigration proceedings.  For example, GREENBERG, understanding that the Source was a heterosexual male who did not suffer persecution in his home country, prepared the Source for questioning by an Asylum Officer and advised the Source how to falsely answer certain anticipated questions from the Asylum Officer.

*                      *                      *

DZHAMGAROVA, 44, and ARCADIAN, 42, both of Brooklyn, NY; and REZNIK, 39, of New York, NY, are charged with one count of conspiracy to commit immigration fraud, which carries a maximum sentence of five years in prison. 

MOSHA, 45, DANSKOI, 54, and GREENBERG, 41, each of Staten Island, New York; KMIT, 30, of Boise, Idaho; SHCHERBYNA, 35, of Ukraine, and LYSYUCHENKO, 39, of Italy, are each charged with one count of conspiracy to defraud the United States and conspiracy to commit asylum fraud. 

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

Ms. Strauss praised the outstanding investigative work of the FBI’s New York Eurasian Organized Crime Task Force, Homeland Security Investigations, USCIS New York Asylum Office and Fraud Detection and National Security unit, and thanked United States Customs and Border Protection and the New York City Police Department for their assistance.

 

            These cases are being prosecuted by the Office’s Money Laundering and Transnational Criminal Enterprises Unit.  Assistant U.S. Attorney Jonathan E. Rebold is in charge of the prosecution. 

 

---

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

Audrey Strauss, the United States Attorney for the Southern District of New York, William F. Sweeney Jr., Assistant Director-in-Charge of the New York Field Office of the Federal Bureau of Investigation (“FBI”), and Jonathan D. Larsen, Special Agent in Charge of the New York Field Office of the Internal Revenue Service, Criminal Investigation (“IRS-CI”), announced the arrests of FAROUK APPIEDU, FRED ASANTE, CELVIN FREEMAN, LORD ANING, SADICK EDUSEI KISSI, and FAISAL ALI, a/k/a “Clarence Graveley,” for charges in connection with their roles in a fraud and money laundering conspiracy based in the Republic of Ghana (“Ghana”) involving the theft of tens of millions of dollars.  FREEMAN and ALI were arrested earlier today in New Jersey and will be presented in Manhattan federal court later today.  ASANTE and ANING were arrested earlier today in Virginia and will be presented in the United States District Court for the Eastern District of Virginia in Alexandria, Virginia.  APPIEDU was previously arrested in Queens, New York on October 18, 2020.  KISSI was previously arrested in Fargo, North Dakota on February 5, 2020.  

Manhattan U.S. Attorney Audrey Strauss said:  “The fraud schemes alleged that these defendants facilitated were lucrative, diverse, and most of all, callous. As alleged, they engaged in email spoofing, duping elderly online daters into wiring them money, and applying for government-funded Coronavirus relief funds earmarked for the benefit of small businesses affected by the pandemic. Thanks to the determination of the IRS and FBI, these defendants face serious prison time, and their next online profiles could potentially appear in a place where they’ll be unable to catfish anymore – the website for the Bureau of Prisons.” 

FBI Assistant Director William F. Sweeney Jr. said:  “The scams we allege in this investigation include romance scams targeting the elderly, business e-mail compromise scams, and even fraudulent COVID-19 relief loans.  In many of these and similar fraud cases, victims are reluctant to come forward because they fear embarrassment or reputational damage.  Some may even believe the perpetrators are beyond our reach because they often live abroad.  These arrests and indictments should serve as a reminder that the FBI and our law enforcement partners are here to help you and bring these bands of criminals to justice.”

IRS-CI Special Agent in Charge Jonathan D. Larsen said:  “The arrests of the alleged ringleaders of this more than $50 million scheme today dealt a death blow to the vast criminal activity in which the defendants were engaged, including elderly scams, COVID-19 fraud, money laundering, among others. IRS Criminal Investigation will continue to aggressively pursue those who profit from illegal activity and ensure they are brought to justice.”

According to allegations in the indictments filed against APPIEDU, ASANTE, FREEMAN, ANING, and KISSI, a criminal complaint filed against ALI, and other court documents[1]: 

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

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

Collectively, from in or about 2013 through at least in or about 2020, APPIEDU, ASANTE, FREEMAN, and ANING controlled more than 45 bank accounts that had deposits that totaled over approximately $55 million during that time period.  A vast majority of the deposits consisted of large wire transfers and check or cash deposits from various U.S.-based individuals and entities that were victims of fraud schemes of the Enterprise, or payments for vehicles, food products, and other goods sold by the defendants that were purchased using fraud proceeds.  As part of the investigation of APPIEDU, the Government has seized and is seeking the forfeiture of four luxury cars purchased, at least in part, with fraud proceeds, including two 2019 Rolls Royce Cullinans, a 2020 Bentley Continental GT, and one 2020 Mercedes-Benz G63 AMG.   

KISSI received fraud proceeds from victims of the Enterprise in bank accounts that he controlled that were located in the Bronx, New York and elsewhere.  Once he received the fraud proceeds in bank accounts under his control, KISSI withdrew, transported, and laundered those fraud proceeds to other members of the Enterprise located in Ghana. 

ALI received fraud proceeds from victims of the Enterprise into a series of at least thirteen bank accounts at six different banks, which ALI controlled in the Bronx, New York.  ALI used the name and identity of another person to open several of these bank accounts in order to conceal the proceeds of the fraud scheme.  Once ALI received the fraud proceeds in bank accounts under his control, he withdrew, transported, and laundered those fraud proceeds to other members of the Enterprise.             

                                                               *                      *                      *

FAROUK APPIEDU, 35, of the Bronx, New York, FRED ASANTE, 35, of Fredericksburg, Virginia, CELVIN FREEMAN, 47, of East Orange, New Jersey, and LORD ANING, 28, of Woodbridge, Virginia, were each charged in Indictment No. 21 Cr. 88 with one count of conspiracy to commit wire fraud, one count of wire fraud, and one count of conspiracy to commit money laundering, which each carry a maximum sentence of 20 years in prison; one count of conspiracy to receive stolen money, which carries a maximum sentence of five years in prison; and one count of receipt of stolen money, which carries a maximum sentence of 10 years in prison.  The case against APPIEDU, ASANTE, FREEMAN, and ANING is assigned to U.S. District Judge Jed S. Rakoff.

SADICK EDUSEI KISSI, 24, of Dickinson, North Dakota, was charged in Indictment No. 21 Cr. 64 with one count of conspiracy to commit wire fraud and one count of conspiracy to commit money laundering, which each carry a maximum sentence of 20 years in prison; one count of conspiracy to receive stolen money, which carries a maximum sentence of five years in prison; and one count of receipt of stolen money, which carries a maximum sentence of 10 years in prison.  The case against KISSI is assigned to U.S. District Judge Paul A. Crotty.

FAISAL ALI, a/k/a “Clarence Graveley,” 34, of Orange, New Jersey, was charged in a criminal complaint with one count of conspiracy to commit money laundering, which carries a maximum sentence of 20 years in prison; one count of making false statements to a bank, which carries a maximum sentence of 30 years in prison; one count of conspiracy to receive stolen money, which carries a maximum sentence of five years in prison; and one count of aggravated identity theft, which carries a mandatory sentence of two years in prison to be served consecutively to any other sentence imposed. 

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

 Ms. Strauss praised the outstanding investigative work of the FBI and IRS-CI.  Ms. Strauss also thanked U.S. Customs and Border Protection, Homeland Security investigations, the Office of the Inspector General of the U.S. Department of Justice, FBI Field Offices in Washington, D.C., Newark, New Jersey, Fredericksburg, Virginia, and Fargo, North Dakota, U.S. Attorney’s Office for the Eastern District of Virginia, the Virginia State Police, the police departments of Fredericksburg, Arlington, and Prince William County, Virginia, and the Sheriff’s Office of Stafford County, Virginia for their assistance in the investigation of this case.

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

 

---

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