Southern District of New York

United States Attorney for the Southern District of New York, Jay Clayton, and Acting Special Agent in Charge of the New York Field Office of Homeland Security Investigations (“HSI”), Michael Alfonso, announced today the unsealing of a Complaint charging RENATA SUPINA-SALTUS in connection with a long-running wire fraud scheme in which she fabricated invoices to embezzle approximately $750,000 from her then-employer, the Permanent Mission of the Republic of Croatia to the United Nations (the “PMRC”).  SUPINA-SALTUS was arrested and presented today in the District of Connecticut before U.S. Magistrate Judge Maria E. Garcia.

“When someone is given access to an organization’s finances, they are being trusted—plain and simple,” said U.S. Attorney Jay Clayton.  “Renata Supina-Saltus allegedly abused that trust and turned the Croation Mission into a personal piggy bank, stealing hundreds of thousands of dollars.”

“Renata Supina-Saltus held a position of trust as member of the Permanent Mission of the Republic of Croatia to the United Nations,” said HSI Acting Special Agent in Charge Michael Alfonso.  “She’s alleged today to have absolutely exploited that trust, enriching herself to the tune of $750,000.  Financial crime and corruption undermine institutions and HSI will leverage our international footprint to aggressively pursue those who abuse their positions to benefit themselves.”

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

From at least in or about July 2017 through in or about November 2023, SUPINA-SALTUS worked at the PMRC in a financial administrative capacity.  By virtue of her position, SUPINA-SALTUS had unique access to the PMRC’s vendor payment systems and was authorized to submit and process invoices on the PMRC’s behalf.

For approximately six years SUPINA-SALTUS used her access and position to carry out a fraudulent invoicing scheme to embezzle funds from the PMRC’s accounts into her own personal bank accounts.  SUPINA-SALTUS carried out this scheme by at least two different means.  SUPINA-SALTUS sometimes made double payments for certain invoices, which typically involved an authorized payment to the vendor for the PMRC and then a second payment of the same amount to one of SUPINA-SALTUS’s own bank accounts.  At other times, SUPINA-SALTUS created fake invoices—sometimes from fictitious vendors—and billed them to the PMRC, but then directed the fraudulent payments to bank accounts under her control.

In total, SUPINA-SALTUS embezzled at least approximately $750,000 over the course of her fraudulent invoicing scheme and used the funds for her personal benefit.

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SUPINA-SALTUS, 59, of West Haven, Connecticut, is charged with one count of wire fraud, which carries a maximum sentence of 20 years in prison; and two counts of money laundering, each of which carries a maximum sentence of 10 years in prison.

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

Mr. Clayton thanked the State Attorney's Office of the Republic of Croatia, Office for the Suppression of Corruption and Organised Crime.  Mr. Clayton also praised the outstanding investigative work of HSI, its New England Field Office and Attache in Vienna, as well as the New York City Police Department.

The case is being handled by the Office’s General Crimes Unit.  Assistant U.S. Attorney Nicholas Pavlis is in charge of the prosecution.  The Department of Justice Criminal Division’s Office of Overseas Prosecutorial Development, Assistance and Training Regional Resident Legal Advisor at U.S. Embassy Zagreb, Croatia provided assistance.

[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.

United States Attorney for the Southern District of New York, Jay Clayton, announced the guilty plea of MICHAEL BROWN for his operation of a nationwide online marketing scheme to make money by posting fake advertisements for rental properties across the United States on a classified advertisements website.  The purpose of the scheme was to fraudulently induce potential renters to enter their credit card information on credit monitoring websites owned by BROWN and pay for a credit report under false pretenses, including by automatically enrolling the customers in a paid monthly membership for credit monitoring services. BROWN pled guilty on Monday, March 30, to one count of conspiracy to commit wire fraud and one count of wire fraud before U.S. District Judge Katherine Polk Failla. 

“Many Americans rely on online websites to safely and securely search for housing,” said U.S. Attorney Jay Clayton.  “For years, Michael Brown perpetrated an online scam by tricking ordinary Americans looking for housing, including here in New York, into paying for services they did not need and did not want.  The defendant’s company made millions from over 160,000 victims.  Mass online fraudsters try to hide by hitting each victim for a small amount.  As demonstrated in this case, that will not work.” 

According to the charging documents and statements made in public filings and public court proceedings: 

BROWN owned and operated Credit Bureau Center, LLC, formerly known as MyScore LLC (“MyScore”), a company that provided credit reports and credit monitoring services via the websites eFreeScore.com, FreeCreditNation.com, and CreditUpdates.com, among other sites (collectively, the “MyScore Websites”).  In order to drive potential customers to the MyScore Websites, BROWN employed the use of affiliate marketers.  In affiliate marketing, a seller of goods or services such as MyScore uses other firms or individuals known as “affiliates” to market the seller’s goods or services by attracting customers to the seller’s websites.

From at least in or about 2014 through at least on or about January 10, 2017, BROWN and his affiliate marketers engaged in a nationwide online marketing scheme to post fake advertisements for rental properties across the United States on a classified advertisements website (the “Advertising Website”).  The purpose of the scheme was to fraudulently induce prospective renters to enter their credit card information on the MyScore Websites and pay for a credit report under false pretenses in order to automatically enroll them in paying for a monthly membership for credit monitoring services.

The advertisements used in the scheme typically contained photos of the supposed rental properties and showcased properties in desirable locations for below-market prices in order to attract interest.  The advertisements were posted for rental properties in metropolitan areas across the United States, including, among other locations, New York City, Miami, Atlanta, Houston, Los Angeles, and San Diego. In actuality, the rental properties did not exist as advertised or were not actually available for rent through the posts on the Advertising Website.  The advertisements also did not disclose the specific address of the rental properties but instead contained a contact email address inviting prospective renters to contact the property owner if they were interested in the rental property.

When prospective renters inquired about the rental properties posted on the Advertising Website by responding to the advertisements, they received a form email purporting to be from the property owner requiring the prospective renter to obtain a copy of their credit report, and referring the prospective renter to one of the MyScore Websites to obtain a credit report, before scheduling a tour of the property.  The form email typically described purported features of the advertised property and falsely informed the prospective renter, in substance and in part, that he or she was the second person to respond to the advertisement, that the first responder no longer needed the property, and that the property owner was ready to lease the property to the prospective renter with flexible terms and had just completed all new renovations. 

Once a prospective renter clicked on the hyperlink in the form email from the purported property owner to obtain a copy of their credit report, the prospective renter was directed to the “landing page” of one of the MyScore Websites.  The landing page of the MyScore Websites typically featured a large banner that stated, in substance and in part, “Get Your Free Credit Score and Report” with significantly smaller text referencing an unspecified “7-day trial” and a “Monthly membership of $29.94 automatically charged after trial.” In order to get the credit report, prospective renters were required to enter identifying information and credit card information through a series of webpages.  Once the prospective renter entered credit card information, the prospective renter was charged $1.00 and was automatically enrolled in a monthly membership for credit monitoring services with recurring charges of typically $29.94 per month until the membership was canceled.

When prospective renters responded to the purported property owner asking to schedule a tour of the advertised property now that they had a copy of their credit report, there was typically no response, as the property was not actually available for rent as advertised and the scheme had succeeded in fraudulently generating a monthly membership subscription for MyScore.  Many prospective renters who obtained a credit report from the MyScore Websites as a result of the scheme did not realize that they had been automatically enrolled in MyScore’s membership until they discovered the monthly charges on their credit card statements.  Some prospective renters also had difficulties canceling the membership when they contacted MyScore’s customer service department.

BROWN continued to execute the scheme through at least on or about January 10, 2017, despite numerous complaints during the course of the scheme from customers and consumer organizations about the fraudulent nature of the rental advertisements on the Advertising Website, the automatic enrollment of customers in MyScore’s monthly membership with recurring charges without their knowledge, and the difficulties in cancelling the monthly membership. 

In total, the scheme caused over approximately 2.7 million unique visits to the MyScore Websites and generated at least $6.8 million in revenue from at least 169,000 customers who were automatically enrolled in MyScore’s monthly membership for credit monitoring services through the scheme.

If you believe you may be a victim of the conduct described in this press release, please call 1-800-CALL-FBI (1-800-225-5324) or use the online tips page: https://tips.fbi.gov.

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BROWN, 41, of Indian Trail, North Carolina, pled guilty to one count of conspiracy to commit wire fraud and one count of wire fraud, each of which carries a maximum sentence of 20 years in prison, for a total maximum sentence of 40 years in prison.

The maximum potential sentences in this case are prescribed by Congress and are provided here for informational purposes only, as any sentencing of the defendant will be determined by the judge.  BROWN is scheduled to be sentenced by Judge Failla on September 1, 2026. 

Mr. Clayton praised the outstanding investigative work of the Federal Bureau of Investigation.  Mr. Clayton also thanked the Federal Trade Commission for their assistance with the case.

The prosecution of this case is being handled by the Office’s Complex Frauds and Cybercrime Unit.  Assistant U.S. Attorneys Connie L. Dang, Matthew Weinberg, and Shaun E. Werbelow are in charge of the prosecution.

United States Attorney for the Southern District of New York, Jay Clayton, and Assistant Director in Charge of the Federal Bureau of Investigation (“FBI”), James C. Barnacle, Jr., announced today the arrest of LOUIS K. WEST III.  WEST, a registered sex offender, is charged with communicating online with an individual he believed to be a 14-year-old girl and attempting to meet the individual to engage in sexual activities and record the encounter.  WEST was taken into federal custody on Friday, March 27, 2026, presented before U.S. Magistrate Judge Judith C. McCarthy in White Plains federal court, and detained.

“There are few crimes as horrific as the sexual exploitation of our children, particularly in cases like this one where the defendant has a history of sexual violence,” said U.S. Attorney Jay Clayton.  “New York families have zero tolerance for this conduct, and we are acting on their behalf.  Please read the allegations in this complaint and, if you think you see something similar, say something: call 1-800-CALL-FBI (1-800-225-5324) or use the online tips page:  https://tips.fbi.gov.”

“Louis West, a registered sex offender, allegedly attempted to arrange a sexual encounter with a minor victim before authorities intercepted him,” said FBI Assistant Director in Charge James C. Barnacle, Jr.  “West allegedly sought to sexually abuse a young teenager for his own twisted gratification.  The FBI continues to partner with state and local law enforcement to target sexual predators seeking to harm vulnerable children.”

As alleged in the Complaint:[1]

On March 26, 2026, WEST was identified as part of a multi-agency enticement operation.  WEST attempted to meet with an underage minor female for the purpose of engaging in sex acts.  WEST negotiated the details of a sexual encounter with an undercover law enforcement officer (“Officer-1”).  Officer-1 and WEST agreed on a place to meet for WEST to engage in sex with the minor.

Later that evening, WEST arrived at the agreed upon meeting location and spoke with another undercover law enforcement officer (“Officer-2”).  When asked if he had brought condoms, WEST confirmed that he had and flashed a condom from inside his pocket.  WEST confirmed that he could “take his time” with the minor.  Officer-2 moved to enter the location where WEST believed the 14-year-old to be located, and WEST followed.  At that point, WEST was arrested by FBI agents.  Upon searching WEST, agents found covert recording equipment, including a hidden camera disguised as an alarm clock and a pair of apparent video recording eyeglasses.

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WEST, 50, of Poughkeepsie, New York, is charged with one count of attempted sexual exploitation of a minor, one count of coercion and enticement of a minor, and one count of committing a felony offense involving a minor as a registered sex offender.  The statutory minimum for these charges is 35 years in prison, and the maximum is life in prison.

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

Mr. Clayton praised the efforts of the FBI’s New York Hudson Valley Safe Streets Task Force, New York State Police - Troop F, Internet Crimes Against Children Proactive Investigations Unit - Albany, Special Operation Response Team, Orange County Sheriff's Office, Town of Newburgh Police Department, Hudson Valley Crime Analysis Center, the New York State Intelligence Center, Dutchess County Sheriff’s Office, and the Town of Poughkeepsie Police Department.

The prosecution is being handled by the Office’s White Plains Division. Assistant U.S. Attorney Isabelle Lelogeais 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 should be treated as an allegation.

United States Attorney for the Southern District of New York, Jay Clayton, and Kevin Murphy, Acting Special Agent in Charge of Homeland Security Investigations (“HSI”) San Diego, announced the unsealing of an Indictment charging JONATHAN SPALLETTA, a/k/a “Cthulhon,” a/k/a “Jspalletta,” with computer fraud and money laundering in connection with his hacks of the decentralized cryptocurrency exchange Uranium Finance (“Uranium”).  SPALLETTA surrendered today and will be presented this afternoon before U.S. Magistrate Judge Ona T. Wang.  The case is assigned to U.S. District Judge Jed S. Rakoff.

“As alleged, Jonathan Spalletta repeatedly hacked smart contracts to steal millions of dollars’ worth of other people’s money for himself, and destroyed a cryptocurrency exchange in the process,” said U.S. Attorney Jay Clayton.  “In describing his alleged ‘heist,’ Spalletta told another individual ‘Crypto is just fake internet money anyway.’  Stealing from a crypto exchange is stealing—the claim that ‘crypto is different’ does not change that.  For the victims, there is nothing different about having your money taken.  Spalletta cost real victims real losses of tens of millions of dollars, and now he’s under real arrest.”

“This indictment demonstrates HSI’s commitment to protecting the integrity of financial systems and holding cybercriminals accountable, regardless of the complexity or novelty of their schemes,” said HSI Acting Special Agent in Charge Kevin Murphy.  “HSI will continue to aggressively pursue those who exploit vulnerabilities in emerging technologies for personal gain and ensure that justice is served for victims of these crimes.”

As alleged in the Indictment:[1]

Uranium was a decentralized cryptocurrency exchange that allowed users to deposit and exchange different kinds of cryptocurrencies via liquidity pools.  In April 2021, SPALLETTA committed two separate hacks of Uranium.

In the first hack, on April 8, 2021, SPALLETTA engaged in a deceptive series of transactions with Uranium’s smart contract that SPALLETTA used to withdraw far more “rewards” in cryptocurrency than he was authorized to receive.  He repeated those transactions over and over until he had drained the liquidity pool of nearly all its rewards tokens.  In total, SPALLETTA successfully extracted cryptocurrency worth approximately $1.4 million in the first hack.  Approximately two weeks after he fraudulently obtained the funds, SPALLETTA told another individual in writing, “I did a crypto heist of $1.5MM a couple of weeks ago . . . There was a bug in a smart contract, and I exploited it . . . Crypto is all fake internet money anyway.”  SPALLETTA subsequently extorted Uranium into agreeing to allow him to keep approximately $386,000 of the money he stole as a sham “bug bounty” to help him evade prosecution in exchange for return of the remainder of the stolen money to Uranium.

In the second hack, on April 28, 2021, SPALLETTA exploited an error in the Uranium smart contract that governed how much cryptocurrency he could withdraw in a liquidity pool on Uranium. SPALLETTA exploited that issue across 26 separate Uranium liquidity pools, fraudulently obtaining approximately $53.3 million in cryptocurrency and causing Uranium to shut down due to lack of funds.

SPALLETTA then laundered the funds he had fraudulently obtained from Uranium through a complex series of cryptocurrency transactions, including by using the cryptocurrency mixer Tornado Cash.

After laundering the funds, SPALLETTA used the money he had fraudulently obtained to purchase personal collectable items, including but not limited to (i) rare cards for the trading card game Magic: The Gathering (“Magic Cards”); (ii) rare cards for the trading card game Pokémon (the “Pokémon Cards”); and (iii) antique Roman coins (the “Antique Coins”), among other items.  In particular, SPALLETTA used the fraudulently obtained funds to purchase: (i) a “Black Lotus” Magic Card for approximately $500,000; (ii) 18 packs of sealed “Alpha Booster” Magic Cards for approximately $1,512,500; (iii) one sealed box of first edition “Booster” Pokémon Cards for approximately $257,500; (iv) one first edition complete base set of Pokémon Cards for approximately $750,000; (v) a piece of fabric from the original Wright brothers’ airplane that was subsequently transported to the surface of the moon by astronaut Neil Armstrong on the first moon landing, for approximately $137,500; (vi) one “Eid Mar Denarius,” an Antique Coin commemorating the assassination of Julius Caesar, for approximately $601,545.

Photographs of the Black Lotus Magic Card, the piece of fabric from the original Wright brothers’ airplane that was subsequently transported to the surface of the moon by astronaut Neil Armstrong, and certain of the Antique Coins, all of which were seized from the residence of SPALLETTA pursuant to a judicially-authorized search warrant, are below.

In addition, on February 24, 2025, law enforcement seized pursuant to a judicially-authorized seizure warrant cryptocurrency worth approximately $31 million at the time of seizure that SPALLETTA had fraudulently obtained from Uranium.

If you believe you have been a victim of the Uranium hack, please contact UraniumVictims@hsi.dhs.gov.

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SPALLETTA, 36, of Rockville, Maryland, is charged with one count of computer fraud, which carries a maximum sentence of 10 years in prison; and one count of money laundering, which carries a maximum sentence of 20 years in prison. 

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

Mr. Clayton praised the outstanding work of HSI.

The case is being prosecuted by the Office’s Complex Frauds and Cybercrime Unit. Assistant U.S. Attorneys Kevin Mead and William C. Kinder are in charge of the prosecution.

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

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

United States Attorney for the Southern District of New York, Jay Clayton, announced today the unsealing of an Indictment charging RONALD SMITH, formerly a registered broker at a brokerage firm in New York City, with securities fraud, wire fraud, falsification of records, and conspiracy.  The charges arise from an alleged insider trading scheme in which SMITH used confidential corporate deal information stolen from an investment bank in New York City to make millions of dollars in illegal profits trading securities on behalf of himself, his girlfriend, and his brokerage clients.  SMITH will be presented today before U.S. Magistrate Judge Ona T. Wang.  The case has been assigned to U.S. District Judge George B. Daniels.

“As alleged, Ronald Smith used confidential deal information stolen from an investment bank in New York City to generate millions in profits for himself, his girlfriend, and his clients,” said U.S. Attorney Jay Clayton.  “The hallmarks of our world-leading securities markets are transparency and fairness.  Insider trading undermines those principles, and our Office will continue to work vigorously to hold insider traders accountable.”

As alleged in the Indictment unsealed today in Manhattan federal court:

SMITH was a registered broker at a brokerage firm in New York City, where he worked with his fellow broker and friend, Jordan Meadow.  Over time, SMITH and Meadow came to share a book of clients and would split commissions on trades executed in those clients’ accounts.  In 2021, Meadow started receiving information about planned corporate acquisitions from a source with illicit access to confidential investment banking documents.  Meadow provided the stolen information to SMITH, and they each placed securities trades based on the information even though they understood the information had been wrongfully obtained.

Meadow received the stolen information from his friend, Steven Teixeira, who obtained it by secretly accessing confidential work documents on a computer belonging to Teixeira’s then-girlfriend, an executive assistant at an investment bank.  Those documents contained confidential information about planned corporate acquisitions in which the investment bank served as an adviser.

Among the planned corporate acquisitions that Teixeira learned about by secretly accessing his then-girlfriend’s computer were planned acquisitions of Score Media and Gaming Inc. and of VMware, Inc.  Teixeira shared that information with Meadow, who, in turn, shared it with SMITH.  Despite knowing that the information came from an illicit source, SMITH and Meadow profitably traded on it: they purchased Score and VMware securities before any public announcement of acquisitions and then sold those securities at a profit after the public announcements of the acquisitions caused the stock prices to rise.  SMITH and Meadow used the stolen information not only to trade for themselves, but also to place trades on behalf of some of their brokerage firm clients.  As a result of that trading, SMITH earned approximately $484,000 in profits on Score and $47,000 on VMware; he earned his girlfriend approximately $25,000 in profits trading the securities; and together, SMITH and Meadow earned nearly $5 million in profits for their clients, on which they earned approximately $500,000 in commissions.  In exchange for receiving the profitable confidential information, SMITH and Meadow agreed to give gifts or other compensation to the sources of the information, including Rolex watches (although they never followed through on providing compensation).

In the fall of 2021, FINRA contacted SMITH and Meadow, inquiring into what motivated their decision to invest in Score.  SMITH and Meadow coordinated their responses, in which they falsely conveyed that their Score trades were based on research into publicly available information about the company and its sector, and not based on material nonpublic information.

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SMITH, 37, of Stamford, Connecticut, is charged with three counts of securities fraud under Title 15, one count of wire fraud, and one count of falsification of records, each of which carries a maximum sentence of 20 years in prison; one count of securities fraud under Title 18, which carries a maximum sentence of 25 years in prison; and two counts of conspiracy, each of which carries a maximum sentence of five years in prison.

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

Mr. Clayton praised the outstanding work of the Federal Bureau of Investigation.  Mr. Clayton also thanked the U.S. Securities and Exchange Commission, which today filed a separate action.

This case is being handled by the Office’s Securities and Commodities Fraud Task Force.  Assistant U.S. Attorneys Nicholas W. Chiuchiolo and Samuel P. Rothschild are in charge of the prosecution.

United States Attorney for the Southern District of New York, Jay Clayton, and Assistant Director in Charge of the New York Field Office of the Federal Bureau of Investigation (“FBI”), James C. Barnacle, Jr., announced today the filing of charges against, and the guilty plea of, GERARD RYAN in connection with his participation in a scheme to commit insider trading securities fraud based on material nonpublic information that RYAN obtained from a family member who worked at a Manhattan-based pharmaceutical company.  RYAN pled guilty today before U.S. District John P. Cronan.

“As he admitted today, Gerard Ryan transformed confidential drug approval information into profits for himself and others,” said U.S. Attorney Jay Clayton.  “Trading on stolen information harms both other market participants and the marketplace itself.  SDNY’s Securities and Commodities Fraud Task Force will continue to work with our law enforcement partners to protect American markets and investors.”

"Gerard Ryan leveraged confidential information about the official announcement of a new pharmaceutical drug to make thousands of illegal trades before informing his associate to do the same," said FBI Assistant Director in Charge James C. Barnacle, Jr.  "Ryan’s conduct undermined the integrity and fairness of our securities markets. The FBI does not tolerate those who use privileged details to disrupt our economic system to line their pockets with ill-gotten gains."

According to the allegations contained in the Information, other public court documents, and statements made during court proceedings:

Kadmon Pharmaceuticals was a biopharmaceutical company based in New York, New York that developed treatments for rare diseases and conditions, specifically therapies for autoimmune diseases, fibrotic conditions, and oncology.  Rezurock was Kadmon’s flagship drug and was intended to treat chronic graft-versus-host disease, a serious complication that can occur after bone marrow or stem cell transplants.  In or around 2021, Kadmon was seeking FDA approval for the drug.  On July 16, 2021, Kadmon announced that the FDA had approved Rezurock.

Kadmon maintained the confidentiality of information around Rezurock and its FDA approval, and prohibited its employees from, among other things, disclosing confidential business information to third parties.  A family member of RYAN, who worked at Kadmon in the summer of 2021 and was subject to these confidentiality policies, was warned that Kadmon’s ongoing engagement with the FDA was “HIGHLY CONFIDENTIAL” and that discussions about those activities should be limited only to within Kadmon.

Notwithstanding Kadmon’s confidentiality policies, in advance of the public announcement that the FDA had approved Rezurock, RYAN’s family member told RYAN material nonpublic information regarding Kadmon’s interactions with the FDA.  RYAN used that information, which he knew had been improperly shared with him, to execute securities transactions.  For example, on or about July 15, 2021, at approximately 5:58 p.m.—after the FDA had informed Kadmon that it had approved Rezurock, but before it had been publicly announced—RYAN spoke with his family member who worked at Kadmon.  After the call, RYAN purchased thousands of shares of Kadmon.

RYAN also shared the material nonpublic information about the FDA announcement with an associate who traded on the basis of that information.  On or about July 16, 2021—before the public announcement of the FDA approval—the individual that RYAN tipped purchased 2,250 shares of Kadmon.  RYAN texted that individual the ticker symbol for Kadmon and RYAN’s “prediction” that Kadmon’s stock price would rise approximately 355%, to “$16.99” upon the FDA announcement.  RYAN’s associate then sent a text message to RYAN, “What time is the news,” a reference to the non-public FDA approval, and RYAN responded with a shush emoji, “🤫” a reference to the nonpublic information he had shared.

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RYAN, 62, of Oxford, Mississippi, pled guilty to one count of securities fraud, which carries a maximum sentence of 20 years in prison.

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

This prosecution is being handled by the Office’s Securities and Commodities Fraud Task Force.  Assistant U.S. Attorneys Nicholas W. Chiuchiolo, Peter J. Davis, and Sarah Mortazavi are in charge of the prosecution.

United States Attorney for the Southern District of New York, Jay Clayton, announced that HENRY YAU, a former supervisory deportation officer in U.S. Immigration and Customs Enforcement (“ICE”), pled guilty today before U.S. District Judge Colleen McMahon to conspiring to solicit and accept bribes and gratuities.  In exchange for bribes and gratuities, YAU abused his influence and status as a supervisory deportation officer to disclose confidential law enforcement information to unauthorized recipients, tip off an individual about an ongoing investigation by the Federal Bureau of Investigation (“FBI”), and arrest a particular individual (“Individual-1”) that members of a bank fraud conspiracy were seeking to silence and intimidate.

“U.S. Immigration and Customs Enforcement Officers are entrusted with enforcing our country’s immigration laws to preserve national security and public safety,” said U.S. Attorney Jay Clayton.  “They deserve our respect when they carry out their duties with integrity and professionalism.  Henry Yau failed his fellow officers and the people of New York when he breached their trust in exchange for bribes and gratuities.  He does not deserve our respect.  He deserves a conviction.”

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

YAU was a Supervisory Deportation Officer with ICE, which is a law enforcement agency within the U.S. Department of Homeland Security (“DHS”).  ICE’s stated mission includes protecting the U.S. through criminal investigations and enforcing immigration laws to preserve national security and public safety.  Between in or about 2015 and in or about November 2024, YAU was employed as a Deportation Officer with ICE.  In or around September 2021, YAU was promoted to Supervisory Deportation Officer.  YAU was assigned to the ICE New York Field Office, located in Manhattan.  As an ICE Deportation Officer, YAU was given access to several password-protected law enforcement databases operated by DHS and other law enforcement agencies, including U.S. Customs and Immigration Service (“USCIS”) databases containing the status of immigration-related applications filed by aliens, U.S. Customs and Border Protection (“CBP”) databases containing information about border crossings, criminal history databases containing people’s arrest and conviction records, and ICE databases containing records relating to arrests and removals of aliens from the U.S. 

From at least in or about 2015 through at least in or about 2024, YAU participated with others in a scheme to obtain bribes and gratuities in exchange for disseminating confidential law enforcement and immigration information, processing the entry of foreign nationals and other individuals into the United States, and arresting Individual-1 at the request of members of a bank fraud conspiracy.  The confidential information that YAU disclosed to others included confidential law information regarding the status of a pending federal investigation into a particular individual by the FBI, as well as information about the immigration status of foreign nationals and border crossing histories.  The bribes and gratuities that YAU solicited and accepted included, among other things, cash payments, dinners at expensive restaurants, and top-shelf bottles of alcohol.

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YAU, 43, of New York, New York, pled guilty to one count of conspiracy to accept bribes and gratuities, which carries a maximum sentence of five years in prison.

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

Mr. Clayton praised the outstanding investigative work of the FBI.  Mr. Clayton also thanked CBP’s Office of Professional Responsibility, the DHS Office of Inspector General, and the New York City Department of Investigation for their assistance with the investigation.  

This case is being handled by the Office’s Public Corruption Unit and Violent Organizations & Crime Unit.  Assistant U.S. Attorneys Andrew K. Chan, James Ligtenberg, and Ni Qian are in charge of the prosecution. 

United States Attorney for the Southern District of New York, Jay Clayton, and Special Agent in Charge of the New York Field Office of Internal Revenue Service, Criminal Investigation (“IRS-CI”), Harry T. Chavis, Jr., announced the unsealing of an Indictment charging JOHN REVELLA with four counts of subscribing to false tax returns for 2019 through 2022.  REVELLA surrendered today and was presented in White Plains federal court before U.S. Magistrate Judge Judith C. McCarthy.

“John Revella allegedly filed false tax returns that underreported income from his law practice,” said U.S. Attorney Jay Clayton.  “Cheating on your taxes is stealing from those who pay their fair share and from the public services that New Yorkers rely on.  This Office will continue to pursue those who attempt to criminally shift their obligations onto honest taxpayers.”

“When a licensed attorney with real knowledge of the law tries to hide his alleged misconduct, IRS‑CI is there to follow the money and bring the facts to light,” said IRS-CI Special Agent in Charge Harry T. Chavis, Jr.  “Today’s indictment reflects the power of coordinated financial investigations and underscores IRS‑CI’s commitment to following the facts, uncovering the truth, and holding individuals accountable when they abuse the financial system for personal gain.”

As alleged in the Indictment:[1]

REVELLA was admitted to the practice of law in New York and maintained a solo practice in Walden, New York, that focused primarily on real estate transactions. REVELLA deposited funds he received in the course of his law practice into an Interest on Lawyer Account ("IOLA") he maintained on behalf of his law practice.  REVELLA did not maintain an operating bank account for his law practice.

REVELLA withdrew legal fees he earned from his practice's IOLA account primarily by drawing checks made payable to himself from the account and then cashing those checks at the bank.  From 2018 to 2022 inclusive, REVELLA cashed approximately 1,700 checks in a total amount exceeding $1.1 million.

Although REVELLA reported between $22,700 to $30,750 in income from his law practice on his 2019 through 2022 tax returns, he failed to report a total of more than $1 million in such income during that period.  As a result, REVELLA failed to pay a total of more than $380,000 in taxes during those four years.

*                      *                      *

REVELLA, 48, of Walden, New York, is charged with four counts of subscribing to false tax returns, which carries a maximum sentence of 12 years in prison.

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

Mr. Clayton praised the investigative work of the Special Agents of the U.S. Attorney's Office and the IRS-CI.

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

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

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

United States Attorney for the Southern District of New York, Jay Clayton, announced today the arrest of GABRIELLE EICHERT for receiving and distributing child pornography.  EICHERT was taken in federal custody today and presented before U.S. Magistrate Judge Judith C. McCarthy in White Plains federal court.

“The sexual exploitation of children is way too common,” said U.S. Attorney Jay Clayton.  “We need to get predators off the streets and send the message:  you will be caught, and you will go to prison.  As alleged, Gabrielle Eichert received and distributed material that re-victimizes vulnerable children and fuels further abuse.  We are committed to identifying and holding accountable those who participate in these offenses.  We will use every available tool to protect children and ensure that justice is served.  If you have information to report, please contact the FBI at 1-800-CALL-FBI (1-800-225-5324) or https://tips.fbi.gov.”

As alleged in the Complaint:[1]

On March 17, 2026, Gregory Graff was charged in the Southern District of New York with one count of attempted coercion and enticement of a minor.  Those charges followed his arrest in Orange County, New York, on January 22, 2026, by the New York State Police.  The investigation of Graff, who lived and worked in the Southern District of New York since at least in or about June 2024, revealed that Graff and EICHERT used a chat application to exchange numerous images of minors, including prepubescent minors, engaged in sexual activity.  During their exchange of messages, Graff and EICHERT discussed their mutual interest in sexually explicit images of minors and discussed their efforts to obtain additional such images.

EICHERT was arrested on March 24, 2026, by New York State Police. Prior to her arrest, EICHERT admitted that she exchanged messages with Graff, and that she and Graff exchanged images of minors, including prepubescent minors, engaged in sexual activity.

There may be other victims. If you have information to report, please contact the FBI at 1-800-CALL-FBI (1-800-225-5324) or https://tips.fbi.gov.

*                *                *

EICHERT, 32, of Kingston, New York, is charged with one count of receipt and distribution of child pornography, which carries a minimum sentence of five years in prison and a maximum sentence of 20 years in prison. 

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

Mr. Clayton praised the efforts of the Federal Bureau of Investigation’s New York Hudson Valley Safe Streets Task Force, New York State Police Troop F – Computer Crimes Unit, New York State Police Troop F, New York State Police Troop K, the Orange County District Attorney’s Office, the Dutchess County District Attorney’s Office, the Ulster County Sheriff’s Office, and the Ulster County District Attorney’s Office.                         

The prosecution is being handled by the Office’s White Plains Division. Assistant U.S. Attorneys Marcia S. Cohen and John Wynne 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 should be treated as an allegation.

United States Attorney for the Southern District of New York, Jay Clayton, Special Agent in Charge of the New York Task Enforcement Division of the Drug Enforcement Administration (“DEA”), Farhana Islam, and the Commissioner of the New York City Police Department (“NYPD”), Jessica S. Tisch, announced today the unsealing of an Indictment charging ARISTIDES CABRERA, a/k/a “Buddha,” with drug crimes resulting in the fatal poisoning of a 12‑year-old child in the Bronx on June 28, 2022.  The Indictment also charges CABRERA with having used, carried, and possessed firearms in connection with his drug trafficking crimes.  Today, CABRERA was brought into federal custody from New York State custody, where he had been serving state sentences for other firearm and drug crimes.  CABRERA will be presented today before U.S. Magistrate Jennifer E. Willis.  The case is assigned to U.S. District Judge J. Paul Oetken.

“As alleged, Aristides Cabrera was an armed drug dealer who pumped deadly drugs into the Bronx for years,” said U.S. Attorney Jay Clayton.  “The havoc that his alleged drug trafficking wrought did not stop at his own doorstep; it resulted in the tragic death of a vulnerable 12-year-old boy in Cabrera’s own home.  But even the boy’s death did not stop Cabrera from allegedly continuing to deal drugs, exposing others to the same life-threatening poison that claimed the life of an innocent child.  Fentanyl kills.  It kills children.  If you deal fentanyl, you are dealing death.  The women and men of the SDNY, the DEA, the NYPD and all our New York law enforcement partners will hold dealers of death accountable.”

“Weapons, drugs, and violence are too often the hallmarks of drug trafficking organizations operating in our communities,” said DEA New York Enforcement Division Special Agent in Charge Farhana Islam.  “Today’s indictment of Aristides Cabera underscores that deadly reality—linking narcotics distribution, firearms, and the devastating loss of a 12-year-old child to fentanyl poisoning.  No family should have to endure the pain of losing a child to this poison and the DEA New York Enforcement Division remains vigilant and unwavering in our mission to target these individuals and ensure justice is delivered.”

“Aristedes Cabrera showed a callous disregard for human life, allegedly selling fentanyl in a home where a 12-year-old boy was exposed to the drugs that killed him,” said NYPD Commissioner Jessica S. Tisch.  “This case is a devastating example of the danger fentanyl poses, especially when it is brought into a home where children are present.  I thank the NYPD officers whose undercover work helped build this case and the U.S. Attorney’s Office for their partnership.”

As alleged in the Indictment and other public filings:[1]

From at least in or about November 2017 through at least in or about January 2024, CABRERA and his co-conspirators distributed heroin, fentanyl, and para-fluorofentanyl in the Bronx.  CABRERA sold large quantities of heroin and fentanyl to undercover law enforcement officers.  In a covert video recording of CABRERA during one of those undercover drug sales—in which CABRERA sold an undercover officer nearly $2,000 worth of fentanyl-laced heroin—CABRERA can be heard, in substance and in part, describing how he was charging higher prices for pills because “it’s a fucking opioid epidemic out here.”  At the height of his drug trafficking, CABRERA was making up to approximately $10,000 a week from dealing drugs.

On June 28, 2022, exposure to the fentanyl and para-fluorofentanyl distributed by CABRERA caused the death of a twelve-year-old boy who had been residing with CABRERA and others in an apartment in the Bronx.

CABRERA kept significant quantities of his drugs in the apartment, including in a safe stored in a closet just outside of the bedroom that the twelve-year-old boy shared with at least one of his siblings.  CABRERA kept two guns in the same safe.  He also stored additional drugs, including pills, in the apartment’s primary bedroom, including in bags that he kept there.  In the early morning of June 29, 2022, after returning from the hospital where the twelve-year-old boy had been taken and pronounced dead, CABRERA began looking for one of the bags where he stored his drug supply, texting another person he wanted “to make sure nothing is missing.”

Following the boy’s fatal overdose, CABRERA continued to sell drugs throughout New York, including from behind bars in New York state custody while detained during the pendency of the separate firearms and drug charges that resulted in his recent state court convictions.

*               *                *

CABRERA, 34, of the Bronx, New York, is charged with one count of conspiracy to distribute narcotics resulting in death and one count of distribution of narcotics resulting in death, both of which crimes carry a mandatory minimum sentence of 20 years in prison and a maximum sentence of life in prison.  CABRERA is also charged with one count of firearms use, carrying, and possession, which carries a mandatory minimum sentence of five years in prison and a maximum sentence of life in prison.

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

Mr. Clayton praised the outstanding work of the NYPD in connection with this investigation, along with their federal partners at the DEA.  Mr. Clayton also thanked the Bronx District Attorney’s Office.

This case is being handled by the Office’s Narcotics Unit.  Assistant U.S. Attorneys Benjamin M. Burkett, Lisa Daniels, and Amanda C. Weingarten are in charge of the prosecution.

The charges contained 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 in this release constitute only allegations, and every fact described should be treated as an allegation.

United States Attorney for the Southern District of New York, Jay Clayton, announced that GIBRAN GUERRERO, a/k/a “Cojito,” was sentenced yesterday to 27 years in prison by U.S. District Judge Lorna G. Schofield for participating in several gunpoint robberies as part of his membership in the violent gang known as the Trinitarios, including a robbery that resulted in the murder of Johnny Gaston.  GUERRERO previously pled guilty to one count of racketeering conspiracy and two counts of use of a firearm during and in relation to the robberies.

“For too long, the Trinitarios have used intimidation, robbery, and deadly force to terrorize communities,” said U.S. Attorney Jay Clayton.  “The defendant and his fellow gang members carried out a series of brazen, gunpoint robberies and, in December 2022, lured victims into an ambush that left one man dead, and another seriously wounded.  He is now where New Yorkers want him—in prison for 27 years.  Today’s 27-year sentence sends a clear message that gang violence will be met with significant consequences.”

As alleged in statements made in public filings and public court proceedings:

From at least in or about 2021 up to and including 2023, GUERRERO was a member of the Trinitarios gang.  In order to fund the gang, protect its territory, and promote its standing, members of the Trinitarios, including GUERRERO, engaged in, among other things, robberies, frauds, narcotics trafficking, and other acts of violence, including murder.

On December 15, 2022, GUERRERO and other Trinitarios members lured two victims to a location in the Bronx and robbed them.  During the robbery, one of the victims, Johnny Gaston, was shot and killed.  The other victim was shot but survived.

In addition, on or about July 30, 2022, and September 26, 2022, GUERRERO and other Trinitarios members participated in gunpoint robberies of several victims located in the Bronx.

*                *                *

In addition to the prison term, GUERRERO, 22, of the Bronx, New York, was sentenced to three years of supervised release.

Mr. Clayton praised the outstanding efforts of Homeland Security Investigations and the New York City Police Department.

The prosecution is being handled by the Office’s Violent Organizations and Crime Unit.  Assistant U.S. Attorney Timothy Ly, with assistance from former Assistant U.S. Attorneys Mathew Andrews and Rushmi Bhaskaran, is in charge of the prosecution.

United States Attorney for the Southern District of New York, Jay Clayton, announced today that the United States has entered into a settlement resolving a 17-year forfeiture litigation that will result in the payment of approximately $318 million to hundreds of victims of Iranian state-sponsored terrorism. 

In 2008, the United States commenced a forfeiture action that exposed an Iranian government-owned bank’s secret interest in 650 Fifth Avenue, a 36-story commercial and office tower located in the heart of Manhattan.  Following the filing of the forfeiture complaint, hundreds of victims of Iranian government-sponsored terrorism filed claims and initiated separate litigation to enforce judgments obtained against the Government of Iran.  After more than 17 years of complex litigation, all remaining parties to the related actions have entered into a global settlement that will result in a multi-hundred-million-dollar payment to these long-suffering victims, including victims and family members of the 1984 bombings of U.S. military facilities in Beirut, Lebanon; of the September 11, 2001 terrorist attacks in New York and Washington, D.C.; and Iranian proxy terrorist organizations’ attacks against civilians, including U.S. citizens, in Israel and elsewhere.

“Iran has sponsored terrorism for decades,” said U.S. Attorney Jay Clayton.  “Since the inception of this litigation, the overriding goal of the Department of Justice has been to vindicate the rights of victims of the Government of Iran’s long-standing policy of supporting and promoting terror attacks across the world, including 9/11.  This Office’s many years of determined litigation show our unrelenting commitment to victims’ rights, and has led to this significant recovery.  For nearly two decades, we pursued hidden Iranian government assets tied to a Manhattan skyscraper to ensure those funds would ultimately compensate victims of Iran-sponsored terrorism rather than terrorists and their enablers.”

According to the Complaint, Amended Complaint, public court filings, and other public litigation records:

The building at 650 Fifth Avenue (the “Building”) was originally constructed by a charitable foundation controlled by the former Shah of Iran, Mohammad Reza Pahlavi, prior to the Islamic Revolution that led to the installation of the current regime in Iran in 1979.  The new regime took over control of the charitable foundation and created a partnership with Bank Melli Iran, an Iranian government-owned bank sanctioned by the U.S. government for its role in financing Iran’s weapons of mass destruction programs.  Bank Melli Iran controlled its interest in the Building through front companies known as Assa that were established in the Isle of Man and in New York.  The highest levels of the Iranian regime orchestrated this deceptive structure in the 1980s, including the Iranian Central Bank and the offices of the Prime Minister and the President of Iran.

After the imposition of broad sanctions against the Government of Iran by the United States in 1995, the owners of the Building concealed Bank Melli Iran’s ownership interest and facilitated the payment of tens of millions of dollars of income from the Building’s operations to Bank Melli through Assa.

In October 2008, this Office filed a forfeiture complaint against Bank Melli Iran’s interest in the Building.  In November 2009, this Office filed an amended forfeiture complaint against the entire Building and other related properties. Following the filing of the complaint and the amended complaint, numerous groups of judgment creditors holding judgments against the Government of Iran for injuries resulting from state-sponsored terrorism filed claims and independent judgment-enforcement actions against Assa, the Building, and the Building’s owner.

In April 2014 and July 2017, the Office entered into settlements with these victims’ groups providing that any recovery the Government obtained through forfeiture would be distributed to the victims.  In July 2017 and May 2021, the Office and the victims’ groups all obtained judgments against Assa’s interests in the Building and in related partnership distributions from the Building’s income.

In January 2025, this Office, the victims’ groups, and the Building’s owner entered into a further, final settlement providing for the dismissal of all remaining claims in exchange for a payment of $318 million to the victims’ groups, consisting of an initial payment of $129 million and a deferred payment of $189 million to be paid in three years, plus interest.  The initial $129 million payment was completed Friday, March 20, 2026.  

In addition to providing for recovery for terrorism victims, in connection with the settlement the partnership that owned the Building and the majority partner are being dissolved and the Building is being transferred to a new successor entity.  The transfer of the Building and the transactions to consummate the global settlement agreement received approvals from the Office of the New York Attorney General’s Charities Bureau and the U.S. Department of the Treasury, Office of Foreign Assets Control.

*               *                *

Mr. Clayton praised the outstanding investigative work of the Federal Bureau of Investigation (“FBI”) and its New York Field Office Counterintelligence/Cyber Division; the FBI’s Joint Terrorism Task Force; the Internal Revenue Service, Criminal Investigation Division; and the New York City Police Department.  Mr. Clayton also thanked the Counterterrorism Section of the Department of Justice National Security Division for their assistance in this case.

This case is being handled by the Office’s Illicit Finance and Money Laundering Unit.  Assistant U.S. Attorney Michael D. Lockard is in charge of the civil forfeiture action. 

United States Attorney for the Southern District of New York, Jay Clayton, announced today that WINSTON COLON CORREA was sentenced to 25 years in prison for enticing minors and possessing child pornography.  COLON CORREA’s sentence was imposed by U.S. District Judge Jennifer H. Rearden, who also presided over the guilty plea.

“Winston Colon Correa preyed on children by pressuring them to record and send videos of themselves engaged in sexually explicit conduct,” said U.S. Attorney Jay Clayton. “On at least two occasions, he even met with one of his child victims and pressured her to have sex, which Colon Correa recorded.  New Yorkers want those who engage in such heinous conduct off our streets.  This Office, and our law enforcement partners, will pursue every lead and use every tool to rid our communities of those who sexually exploit our children.  The message to predators from our Office is clear: there is no place for you in New York other than prison.”

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

Beginning in at least 2022, COLON CORREA engaged in sexually explicit text message conversations with numerous minor girls he met online, during which he induced the production of child pornography of at least Minor Victim-1, Minor Victim-2, Minor Victim-3, and Minor Victim-4.  Law enforcement’s review of COLON CORREA’s electronic devices revealed that for multiple years, he engaged in sexually explicit text message conversations with many other unidentified individuals believed to also be minor girls.  COLON CORREA committed these crimes despite knowing that he was communicating with minors.  In fact, many of the minors made clear to COLON CORREA that they were underage—e.g., that they were in school, that they lived at home with their parents, and in multiple cases, their actual ages. On at least two occasions, COLON CORREA falsely represented to minor girls that he was only 17 years old. In addition, COLON CORREA met in person on at least two occasions with one identified victim, Minor Victim-4, during which COLON CORREA pressured Minor Victim-4 to perform oral sex and have sexual intercourse. Thereafter, when he was confronted by law enforcement, COLON CORREA falsely claimed that he had ceased contact with Minor Victim-4 after learning that she was a minor.  In reality, COLON CORREA had exchanged sexually explicit messages with Minor Victim-4, and attempted to make plans to meet her again, just one day earlier.

Anyone who believes they have information concerning the exploitation of children is urged to contact the FBI at 1-212-384-1000 or https://tips.fbi.gov/.

*                *                *

In addition to the prison term, COLON CORREA, 34, of the Bronx, New York, was sentenced to 20 years of supervised release.

Mr. Clayton praised the outstanding work of the Federal Bureau of Investigation and the Washington, D.C. Metropolitan Police Department in connection with this investigation.

The prosecution is being handled by the Office’s General Crimes Unit.  Assistant U.S. Attorney William C. Kinder is in charge of the prosecution.

United States Attorney for the Southern District of New York, Jay Clayton, Assistant Director of the Counterintelligence and Espionage Division of the Federal Bureau of Investigation (“FBI”), Roman Rozhavsky, and Assistant Director in Charge of the New York Field Office of the FBI, James C. Barnacle, Jr., announced today the unsealing of an Indictment charging YIH-SHYAN “Wally” LIAW, RUEI-TSANG “Steven” CHANG, and TING-WEI “Willy” SUN, for conspiring to divert high-performance computer servers assembled in the United States and integrating sophisticated U.S. artificial intelligence technology to China, in violation of U.S. export controls laws.  LIAW, a U.S. citizen, and SUN, a citizen of Taiwan, were arrested today and presented in the Northern District of California.  CHANG, a citizen of Taiwan, remains a fugitive.  The case has been assigned to U.S. District Judge Edgardo Ramos.

“As alleged in the Indictment, the defendants participated in a systematic scheme to divert massive quantities of U.S. artificial intelligence technology to customers in China,” said U.S. Attorney Jay Clayton.  “They did so through a tangled web of lies, obfuscation, and concealment—all to drive sales and generate revenues in violation of U.S. law.  Diversion schemes like those disrupted today generate billions of dollars in ill-gotten gains and pose a direct threat to U.S. national security.  Crimes involving sensitive technology must be met with swift action otherwise the law is meaningless.  I commend the women and men of our Office, the FBI, and the Department of Commerce for their swift action in identifying, charging, and stopping this brazen evasion of our laws that protect national security and U.S. competitiveness.  We will continue to doggedly investigate and prosecute these illegal diversion schemes.” 

“The FBI’s investigation revealed that Liaw, Chang, and Sun allegedly conspired to sell billions of dollars’ worth of servers integrating sensitive, controlled graphic processing units to buyers in China, in violation of U.S. export control laws,” said Assistant Director Roman Rozhavsky of the FBI’s Counterintelligence and Espionage Division.  “Controlling the export of sensitive U.S. artificial intelligence technology is essential to safeguarding our national security and defending the homeland.  That’s why combating export violations is among the FBI’s highest priorities, and we will continue working with our law enforcement, private sector, and international partners to bring to justice all who take action to undermine U.S. national security.”

“Yih-Shyan Liaw, Ruei-Tsang Chang, and Ting-Wei Sun allegedly defrauded the United States by conspiring to divert significant quantities of servers with advanced artificial intelligence capabilities to Chinese customers,” said FBI Assistant Director in Charge James C. Barnacle, Jr.  “These defendants allegedly fabricated documents, staged bogus equipment to pass audit inventories, and used a pass-through company to conceal their misconduct and true clientele list.  The FBI will hold accountable individuals who use American companies to provide export-controlled technology to our adversaries.”

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

To protect U.S. national security and foreign policy interests, the U.S. Department of Commerce has implemented license requirements for the export and reexport of artificial intelligence technologies to China and Hong Kong.  In particular, the U.S. Department of Commerce has placed restrictions on the export and reexport of items that could make a significant contribution to the military potential or nuclear proliferation of other nations or that could be detrimental to the foreign policy or national security of the United States.  For these reasons, among others, advanced artificial intelligence accelerator chips, and servers incorporating such chips, are subject to export license requirements for transfers to China and Hong Kong.  Those regulations reflect a formal determination that the computing capabilities in advanced artificial intelligence accelerator hardware are of sufficient strategic significance that their transfer to China poses an unacceptable risk to national security.

LIAW is a co-founder, board member, and Senior Vice President of Business Development of a publicly traded U.S.-based manufacturer that designs and builds high-performance computer servers for artificial intelligence and cloud computing applications (the “U.S. Manufacturer”), including servers that integrate artificial intelligence graphics processing units (“GPUs”).  CHANG is a general manager in the U.S. Manufacturer’s Taiwan office.  SUN is a third-party broker and “fixer” who has worked with LIAW, CHANG, and others to divert U.S.-export controlled technology to China.  Together, the defendants and others conspired to systematically divert the U.S. Manufacturer’s servers with certain GPUs to China without a license to do so from the U.S. Department of Commerce.

The scheme operated as follows.  LIAW and CHANG, who worked closely with third-party brokers with customers based in China, directed certain executives of a company based in Southeast Asia (“Company-1”) to place purchase orders with the U.S. Manufacturer for servers with certain GPUs, purportedly for Company-1.  Those servers were often assembled in the United States and shipped to the U.S. Manufacturer’s facilities in Taiwan, then delivered to Company-1 elsewhere in Southeast Asia. Company-1, in consultation with the defendants, then used a shipping and logistics company to repackage the U.S. Manufacturer’s servers and place them in unmarked boxes to conceal their content prior to shipping them to their final destinations in China.  To ensure that these server allocations were approved internally at the U.S. Manufacturer, the defendants and executives at Company-1 prepared false documents and records, and transmitted false communications, purporting to show that Company-1 was the end user of the servers.

At the defendants’ direction, between 2024 and 2025, Company-1 purchased approximately $2.5 billion worth of servers from the U.S. Manufacturer, many of which were assembled in the United States.  The defendants’ scheme became more brazen over time and resulted in massive quantities of servers with controlled U.S. artificial intelligence technology being sent to China.  Between late April 2025 and mid-May 2025 alone, at least approximately $510 million worth of the U.S. Manufacturer’s servers, assembled in the United States, were diverted to China in violation of U.S. export control laws as part of the defendants’ scheme.

The defendants and their co-conspirators took extensive measures to conceal their scheme.  As just one example, to deceive the U.S. Manufacturer’s compliance team, responsible for ensuring adherence to U.S. export control laws, the defendants staged thousands of “dummy” servers—non-working, physical replicas of the U.S. Manufacturer’s servers—for inspection at the locations where Company-1 was purportedly storing the servers it had purchased from the U.S. Manufacturer.  However, the actual servers purchased by Company-1 from the U.S. Manufacturer had already been unlawfully shipped to China.  Photographs of some of the dummy servers that were staged at a warehouse rented by Company-1 in connection with an August 2025 audit conducted by the U.S. Manufacturer are below:

Some of those same dummy servers were also later staged at a warehouse rented by Company-1 in an attempt to pass an inspection being conducted by the U.S. Department of Commerce of Company-1’s purchases of the U.S. Manufacturer’s servers.  In advance of the inspection, SUN and one of the third-party brokers who works closely with the defendants to divert servers to China (“Broker-1”) staged dummy servers at the warehouse by, among other things, unboxing the dummy servers; using a hair dryer to remove and affix labels and serial number stickers to the server boxes and to the dummy servers themselves; and then re-packaging the dummy servers in the U.S. Manufacturer’s boxes.  Surveillance cameras recorded their work and captured them preparing the dummy servers, including as shown in the images below, in which SUN (left) and Broker-1 (right) are circled in white:

Throughout the scheme, the defendants coordinated closely with each other, executives of Company-1, and third-party brokers with end customers in China using encrypted messaging applications.  Those communications related to, among other topics, the quantities of servers for Company-1 to order, the locations in China where those servers were to be shipped, and efforts to conceal the nature of the scheme from the U.S. Manufacturer’s compliance team, U.S. authorities, and others.  At no point did the defendants or the U.S. Manufacturer have a license from the U.S. Department of Commerce to export or reexport U.S.-manufactured servers to China.

*               *                *

LIAW, 71, of Fremont, California; CHANG, 53, of Taiwan; and SUN, 44, of Taiwan, are each charged with one count of conspiring to violate the Export Controls Reform Act, which carries a maximum sentence of 20 years in prison; one count of conspiring to smuggle goods from the United States, which carries a maximum sentence of five years in prison; and one count of conspiring to defraud the United States, which carries a maximum sentence of five years in prison. 

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

Mr. Clayton praised the outstanding work of the FBI and its New York Field Office’s Counterintelligence and Cyber Division, the Department of Commerce’s Bureau of Industry and Security, and the Department of Justice’s National Security Division, Counterintelligence and Export Control Section. Mr. Clayton also thanked the FBI’s San Francisco Field Office and the Department of Justice’s Office of International Affairs for their assistance. 

This case is being handled by the Office’s National Security and International Narcotics Unit and Securities and Commodities Fraud Task Force.  Assistant U.S. Attorneys Juliana N. Murray, David J. Robles, and Kevin T. Sullivan are in charge of the prosecution, with assistance from Trial Attorneys Maria Fedor and Mark Murphy of the National Security Division’s Counterintelligence and Export Control Section.

The charges contained in the 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 Indictment and the descriptions of the Indictment constitute only allegations, and every fact described should be treated as an allegation.

United States Attorney for the Southern District of New York, Jay Clayton, announced that KENNETH THOM, a/k/a “K$,” a/k/a “K Money,” pled guilty today before U.S. District Judge Edgardo Ramos to investment adviser fraud.  THOM is scheduled to be sentenced by Judge Ramos on June 25, 2026. 

“Kenneth Thom pretended online to be a successful investor and adviser when in fact he was a suspended broker and grifter,” said U.S. Attorney Jay Clayton.  “He recruited social media followers, convinced them to invest with him, and then stole their money.  Our Office will continue to work with our law enforcement partners to protect investors from fraud no matter where they seek their investment advice.  Especially on social media, we remind investors to always protect themselves from fraud by verifying the credentials of those they invest with, and to always protect investments through due diligence.”

According to the allegations contained in the Indictment and other information in the public record:

In May 2006, THOM passed securities licensing examinations and registered as a broker with the Financial Industry Regulatory Authority (“FINRA”).  In or around January 2011, FINRA suspended THOM’s broker registration after he failed to pay an arbitration award to an investor.  THOM also admitted around that time to the FBI that he had commingled that investor’s money with his own money in a brokerage account that THOM controlled and lost most of the money through unsuccessful trading.  THOM further admitted that when the investor sought to withdraw her funds, he did not tell the investor that he had lost her money and instead invented fake excuses and then ignored the investor altogether.

After being suspended by FINRA, THOM turned to social media and promoted himself online as a successful trader.  Using the monikers “K$” and “K Money,” THOM described himself as a “Wall Street veteran,” a “luminary,” and a “beacon of knowledge,” and he used his online platforms to sell trading courses and trade suggestions to his followers.  One of THOM’s platforms was a Facebook group called, at relevant times, the “K$ Trading Group” (the “K$ Facebook Group”), in which THOM posted the results of his purportedly successful trades.

Beginning in late 2023, THOM invited members of the K$ Facebook Group to participate in “shared accounts” that THOM would manage in exchange for a percentage of the trading profits.  THOM eventually raised nearly $800,000 from approximately 67 clients.  Of this sum, THOM invested only approximately $350,000, diverting most of the remainder for his own personal use, including on travel, dining, and luxury goods.

Of the $350,000 that THOM invested, he lost more than $250,000 trading options, for a net loss of approximately 73% between in or around March 2024 and March 2025.  To hide these losses, THOM published false performance updates showing significant gains.  For example, on or around July 3, 2024, THOM posted in the K$ Facebook Group that each of his three purported shared accounts was positive year-to-date, with returns ranging from 4% to 120%.  In fact, as of the close of the preceding trading day, THOM had lost approximately 31% of the client funds he invested to date.

In or about January 2025, the name of the K$ Facebook Group was changed to “AYBABTU”—an acronym for the Internet meme “all your base are belong to us”—and THOM stopped responding to clients.

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THOM, 42, of Westfield, New Jersey, pled guilty to investment adviser fraud, which carries a maximum sentence of five years in prison.

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

Mr. Clayton praised the outstanding work of the FBI.  Mr. Clayton also expressed appreciation for the assistance of the U.S. Securities and Exchange Commission.

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

United States Attorney for the Southern District of New York, Jay Clayton, announced the guilty plea today of MICHAEL SMITH for his role in a scheme to defraud music streaming platforms and musicians of royalty payments.  To carry out the scheme, SMITH created hundreds of thousands of songs with artificial intelligence and used automated programs called “bots” to fraudulently stream his AI-generated songs billions of times, in an effort to mimic the genuine streaming activity of real consumers.  SMITH pled guilty today to conspiracy to commit wire fraud before U.S. District Judge John G. Koeltl.

“Michael Smith generated thousands of fake songs using artificial intelligence and then streamed those fake songs billions of times,” said U.S. Attorney Jay Clayton.  “Although the songs and listeners were fake, the millions of dollars Smith stole was real.  Millions of dollars in royalties that Smith diverted from real, deserving artists and rights holders.  Smith’s brazen scheme is over, as he stands convicted of a federal crime for his AI-assisted fraud.”

According to the charging documents and statements made in public filings and public court proceedings:

Music can be streamed through music streaming platforms such as Amazon Music, Apple Music, Spotify, and YouTube Music (the “Streaming Platforms”).  Each time a song is streamed through one of the Streaming Platforms, the songwriter who composed the song, the musician who performed it, and in certain cases other rights holders, are entitled to small royalty payments.  Royalty payments are made proportionately to musicians and songwriters from a pool of funds.  As a result, streaming fraud diverts funds from musicians and songwriters whose songs were legitimately streamed by real consumers to those who use automation to falsely create the appearance of legitimate streaming.

SMITH created thousands of accounts on the Streaming Platforms (the “Bot Accounts”) that he could use to stream songs.  He then used software to cause the Bot Accounts to continuously stream songs that he owned.

SMITH spread his automated streams across thousands of songs to avoid anomalous streaming as to any single song, which would likely cause the Streaming Platforms to discover his scheme. To obtain the necessary number of songs for his scheme to succeed, SMITH turned to artificial intelligence, which he used to create hundreds of thousands of AI-generated songs for which he could manipulate the streams. 

SMITH’s hundreds of thousands of AI-generated songs were streamed by his Bot Accounts billions of times, which allowed him to fraudulently obtain more than $8 million in royalties.

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SMITH, 54, of Cornelius, North Carolina, pled guilty to one count of conspiracy to commit wire fraud, which carries a maximum sentence of five years in prison.  SMITH also agreed to pay $8,091,843.64 in forfeiture.

The maximum potential sentence in this case is prescribed by Congress and provided here for informational purposes only, as any sentencing of the defendant will be determined by the judge.   SMITH is scheduled to be sentenced by Judge Koeltl on July 29, 2026.

Mr. Clayton praised the outstanding work of the Federal Bureau of Investigation. 

The case is being prosecuted by the Office’s Complex Frauds and Cybercrime Unit. Assistant U.S. Attorneys Nicholas W. Chiuchiolo and Kevin Mead are in charge of the prosecution.

United States Attorney for the Southern District of New York, Jay Clayton, and Administrator of the U.S. Drug Enforcement Administration (“DEA”), Terrance Cole, announced that MAXIMILIANO DAVILA PEREZ was sentenced today to 25 years in prison for participating in a cocaine-importation conspiracy and a related weapons offense.  DAVILA PEREZ is the former director of Bolivia’s chief anti-narcotics law enforcement agency, Fuerza Especial de Lucha Contra el Narcotráfico (“FELCN”) and was extradited to the United States from Bolivia in December 2024.  Davila Perez was convicted on October 23, 2025, following a one-week jury trial before U.S. District Judge Denise L. Cote, who imposed today’s sentence. 

“Maximiliano Davila Perez wielded extraordinary power as Bolivia’s top counternarcotics officer and chose to abuse that power to support the very drug traffickers he was sworn to investigate, all to send massive quantities of cocaine to New York,” said U.S. Attorney Jay Clayton.  “Now, because of Davila Perez’s corruption and brazen attempt to flood our streets with cocaine, he will spend 25 years in federal prison.  Our Office, alongside our partners at the DEA’s Special Operations Division, will continue to root out high-level narco-corruption around the globe that threatens our country and New Yorkers.” 

“Betrayal of public trust by a law enforcement official is a complete abandonment of the oath they swore to uphold,” said DEA Administrator Terrance Cole.  “Maximiliano Dávila Pérez turned his office into a criminal enterprise—protecting traffickers, ensuring the movement of cocaine, and directly enabling the flow of drugs into the United States.  His actions fueled violence, corruption, and addiction.  Today’s sentence makes clear that no badge, no title, and no position will shield those who choose crime over duty.  DEA will identify, expose, and bring to justice anyone who abuses power to traffic drugs into our communities, wherever they operate.”

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

Between approximately February 2019 and November 2019, while DAVILA PEREZ served as the Director of FELCN, and thereafter, he exploited his office and his powerful political and law enforcement connections to facilitate massive, international-scale cocaine trafficking.  DAVILA PEREZ’s methods included both diverting law enforcement from investigating favored cocaine traffickers and providing heavily armed FELCN personnel as security for cocaine shipments leaving Bolivian airports.  DAVILA PEREZ conspired with others to manufacture, ship, and provide armed protection for more than one metric ton of cocaine destined for the United States, and specifically, for New York.

DAVILA PEREZ did so during meetings and calls with his co-conspirators that were recorded by DEA confidential sources (the “CSes”) who also participated between approximately 2019 and 2020.  Those meetings and calls resulted in the arrangement of a 10-kilogram sample of cocaine, authorized by DAVILA PEREZ, to be provided to the CSes in Lima, Peru, in December 2019.  Throughout the conspiracy, DAVILA PEREZ repeatedly emphasized his willingness to participate in and provide protection for a shipment of over one ton of cocaine leaving Bolivia and transiting through the Dominican Republic before ultimately reaching New York.

DAVILA PEREZ made explicit his plans to facilitate that shipment.  During recorded calls and meetings, DAVILA PEREZ suggested certain airports where he controlled airport security and could divert FELCN personnel to ensure a plane would successfully be loaded with cocaine.  Specifically, DAVILA PEREZ said that on the day of the cocaine shipment, he would carry out an operation elsewhere and “take out everyone,” that is, ensure no investigative or operational FELCN personnel were available to interfere with the drug plot.  He also committed to sending certain FELCN agents to guard the plane with their standard issue firearms—high-powered machineguns— as it was loaded with cocaine. DAVILA PEREZ also made explicit that he intended to profit from this cocaine deal, telling one of the CSes on a recording that “you are also going to profit, I am going to win too.”  As the plot progressed over several months, DAVILA PEREZ continued to assure his co-conspirators and the CSes that he would arrange for the armed protection of the cocaine shipment so that it could safely leave Bolivia.  And DAVILA PEREZ made clear that he had no regard for the fact that the cocaine was destined for the United States, telling a co-conspirator that he did not “give a shit,” because “the important thing is that the plane should take off and that we receive our money.”

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In addition to the prison term, DAVILA PEREZ, 62, was sentenced to five years of supervised release.

Mr. Clayton praised the outstanding efforts of the DEA’s Special Operations Division Bilateral Investigations Unit, as well as the U.S. Department of Justice’s Office of International Affairs.

This case is being handled by the Office’s National Security and International Narcotics Unit.  Assistant U.S. Attorneys Matthew J.C. Hellman, David J. Robles, and Chelsea L. Scism are in charge of the prosecution. 

United States Attorney for the Southern District of New York, Jay Clayton, announced today the arrest of Gregory Graff in connection with communicating online with an individual he believed to be a 13-year-old girl and attempting to meet the individual to engage in sexual activities.  Graff was taken in federal custody today, presented before U.S. Magistrate Judge Andrew E. Krause in White Plains federal court, and detained.

“Gregory Graff is every parent’s nightmare,” said U.S. Attorney Jay Clayton.  “He allegedly used the internet to convince an individual, whom he believed to be a minor, to meet him for sexual activity.  This prosecution shows that we will use every tool available to law enforcement to prosecute and punish to the fullest extent of the law those who exploit New York’s most vulnerable citizens: our children.  There may be other victims.  If you have information to report, please contact the FBI at 1-800-CALL-FBI (1-800-225-5324) or https://tips.fbi.gov.”

As alleged in the Complaint:[1]

On January 21 and January 22, 2026, a New York State Police Investigator (“Investigator‑1”), posing as a 13-year-old girl named “Sammi” on a social media application, communicated with GRAFF. During the communications, GRAFF asked “Sammi” for sexually explicit photos and indicated that he wanted to meet with her to have sex. 

Furthermore, in her conversations with GRAFF, Investigator-1 referred on multiple occasions to the fact that she was 13 years old, also telling GRAFF that she was in 8th grade. Among other things, GRAFF told her, “It’s risky to talk to you but it’s quite hot.”  GRAFF described in detail various sexual activities that he wanted to engage in with her and said that he would want her to call him “daddy” when they have sex.  During their communications, GRAFF sent Investigtor-1 a number of sexually explicit photos, as well photos of his face, including this one:

On January 21, 2026, GRAFF made a plan to meet “Sammi” in Orange County, New York.  On January 22, 2026, when GRAFF arrived at the agreed-upon meeting spot, he was arrested by the New York State Police.  Following his arrest, GRAFF was charged in the Town of Wallkill with Attempted Rape in the Second Degree, Attempted Act in the Manner to Injure a Child Less than 17, and Disseminating Indecent Material to Minors in the 1st Degree.

There may be other victims. If you have information to report, please contact the FBI at 1-800-CALL-FBI (1-800-225-5324) or https://tips.fbi.gov.

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GRAFF, 27, of Poughkeepsie, New York is charged with one count of attempted coercion and enticement of a minor, which carries a minimum of 10 years in prison and a maximum sentence of life in prison. 

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

Mr. Clayton praised the efforts of the Federal Bureau of Investigation’s New York Hudson Valley Safe Streets Task Force, New York State Police Troop F – Computer Crimes Unit, New York State Police Troop K, the Orange County District Attorney’s Office, and the Dutchess County District Attorney’s Office.

The prosecution is being handled by the Office’s White Plains Division. Assistant U.S. Attorneys Marcia S. Cohen and John Wynne 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 should be treated as an allegation.

United States Attorney for the Southern District of New York, Jay Clayton, announced that Joseph Crocco was sentenced to a total of 15 years in prison for dealing guns, fentanyl, and crack in Poughkeepsie, New York, while on federal supervised release.  In June 2025, the defendant was convicted following a four-day trial before U.S. District Judge Cathy Seibel, who imposed yesterday’s sentence.

“Joseph Crocco sold deadly drugs and loaded guns to New Yorkers, understanding that they would be used to violent and poisonous ends,” said U.S. Attorney Jay Clayton.  “New York families want repeat offenders, particularly those who deal in fentanyl and guns, off the streets. This sentence delivers that.”

According to the allegations in the Indictment, the evidence at trial, court filings, and statements made in court:

Between June and July 2024, CROCCO sold narcotics and firearms from his residence in Poughkeepsie, New York, to an undercover New York State Police officer.  During a series of controlled purchases made at CROCCO’s home, CROCCO sold fentanyl, crack, cocaine, and cutting agents such as xylazine, also known as “tranq.”  CROCCO also sold two loaded semi-automatic handguns and boxes of ammunition to the undercover officer as part of one of the drug deals.

Firearms, Ammunition, and a Portion of the Drugs Sold by CROCCO

On July 24, 2024, law enforcement executed a search warrant at CROCCO’s residence and recovered additional narcotics, drug paraphernalia, and ammunition.  CROCCO had previously been convicted of multiple felony offenses that made it illegal for him to possess a firearm, including voluntary manslaughter.  At the time he committed these offenses, CROCCO was on supervised release following a prior federal bank robbery conviction.

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In addition to the prison term, CROCCO, 49, of Poughkeepsie, New York, was sentenced to three years of supervised release and ordered to forfeit all of the firearms and ammunition involved in the offense.

Mr. Clayton praised the outstanding investigative work of the Bureau of Alcohol, Tobacco, Firearms and Explosives, the New York State Police, and the City of Poughkeepsie Police Department.

The case is being handled by the Office’s White Plains Division. Assistant U.S. Attorneys Benjamin Levander, Reyhan Watson, and Benjamin Klein are in charge of the prosecution, with assistance from Paralegal Specialist Samantha Olsen. 

United States Attorney for the Southern District of New York, Jay Clayton, announced that JAMES PAVLOUNIS was sentenced today to 37 months in prison for perpetrating a 12-year scheme to defraud the Social Security Administration and obtain disability benefits to which he was not entitled, and causing his valet parking service business to evade paying corporate income taxes for five years.  In September 2025, PAVLOUNIS pled guilty before U.S. District Judge Philip M. Halpern, who imposed today’s sentence.

“James Pavlounis stole hundreds of thousands of dollars from a government program meant to support those truly in need, while also evading taxes through his business,” said U.S. Attorney Jay Clayton.  “Programs like Social Security depend on honesty, and tax obligations fund essential services that New Yorkers rely on. Those who exploit these systems for personal gain will be held accountable.”

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

From January 2013 through March 2025, PAVLOUNIS obtained approximately $646,370 in Social Security benefits by providing false information to the Social Security Administration. He claimed he was too disabled to support himself and failed to disclose he was receiving hundreds of thousands of dollars from the operation of valet parking service businesses. 

Further, from January 2018 through December 2022, PAVLOUNIS evaded the collection of the taxes of Select Parking Systems Inc. (“SPS”), one of the valet parking service businesses, due for the years 2017 through 2021, by making it appear that he was not operating SPS, concealing the income he was earning from SPS from the Internal Revenue Service (“IRS”), and making it appear that SPS was not profitable. Through this scheme, PAVLOUNIS caused SPS to evade payment of approximately $248,810 in taxes.

PAVLOUNIS perpetrated the scheme by, among other things: having a family member named as the owner of SPS; paying for his personal expenses using money from SPS’s business bank account; failing to inform SPS’s tax return preparer (the “Preparer”) that he was paying his personal expenses using money from SPS’s bank account; not filing his own individual income tax returns with the IRS, thereby not reporting any individual income; providing ledgers to the Preparer and representing that they contained SPS’s expenses for renting parking lots when there were no such expenses (the “False Ledgers”); causing the Preparer to falsely report on SPS’s corporate income tax returns that SPS paid a total of $1,054,204 in expenses for renting parking lots over the years 2017 through 2021; falsely representing, during a meeting with IRS Special Agents that all the information contained on SPS’s tax returns for 2017 through 2021 was true and correct and that reported rental expenses were amounts expended to rent parking lots where SPS valets parked cars for valet customers; and, producing the False Ledgers in response to a grand jury subpoena.

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In addition to the prison term, PAVLOUNIS, 62, of New Rochelle, New York, was sentenced to three years of supervised release and ordered to pay restitution of approximately $895,180 and forfeiture of approximately $646,370.

Mr. Clayton praised the outstanding investigative work of the Social Security Administration Office of Inspector General and the Internal Revenue Service-Criminal Investigation.

This case is being handled by the Office’s White Plains Division.  Assistant United States Attorney Margery Feinzig is in charge of the prosecution. 

United States Attorney for the Southern District of New York, Jay Clayton, Northeast Regional Associate Chief of Operations of the Drug Enforcement Administration (“DEA”), Frank A. Tarentino III, and Commissioner of the New York City Police Department (“NYPD”), Jessica S. Tisch, announced today the unsealing of an Indictment charging ADAM SLOAN, a/k/a “Slug,” with distribution of narcotics resulting in death in connection with the July 15, 2025, fentanyl overdose death of a resident of New York, New York.  The case has been assigned to U.S. District Judge Lewis A. Kaplan.

“As alleged, Adam Sloan sold fentanyl to a victim in Manhattan, causing his death,” said U.S. Attorney Jay Clayton.  “Fentanyl is an extraordinarily dangerous drug that has no place in the streets of New York.  When drug dealers sell fentanyl, the cost is paid in human lives.  Together with the DEA, the NYPD, and our other law enforcement partners, the women and men of the SDNY will fight for these victims and hold killers accountable.”

“While fentanyl remains the greatest drug threat this nation has ever faced, the greatest danger comes from the individuals who continue to push this poison into our communities,” said DEA New York Task Force Division Special Agent in Charge Christopher Roberts.  “Today’s indictment sends a clear message to those threatening our families.  We will find you; and we will bring you to justice.  The DEA remains relentless in ensuring justice is delivered to the families who have lost loved ones to this drug epidemic.”   

“The defendant showed zero regard for life when he allegedly sold a lethal amount of fentanyl to a New Yorker who was trying to turn his life around—and now a family is left grieving that loss,” said NYPD Commissioner Jessica S. Tisch.  “We know how dangerous even the smallest trace of this poison can be, and we will continue to hold accountable any drug peddler who carelessly puts our communities at risk.  I thank our NYPD investigators, our partners at the DEA, and the U.S. Attorney’s Office for their continued commitment to keeping our streets safe.”

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

On July 15, 2025, SLOAN sold fentanyl to a Manhattan man, killing him.

This was not the victim’s first overdose.  In October 2024, after suffering a nonfatal overdose, the victim tried to turn his life around by entering inpatient drug treatment and keeping handwritten notes to try to avoid relapse.

When the victim ultimately relapsed, however, SLOAN was ready and willing to sell fentanyl to the victim.  On the evening of July 15, 2025, the victim and the defendant arranged to meet.  Surveillance video footage likewise shows that the victim and the defendant left their respective homes, walked towards one another for the meeting, and then returned to their respective homes.  After consuming the fentanyl that SLOAN had sold him, the victim suffered a fatal overdose.

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SLOAN, 44, of New York, New York, is charged with one count of distribution of narcotics resulting in death, which carries a mandatory minimum sentence of 20 years in prison and a maximum sentence of life in prison.

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

Mr. Clayton praised the outstanding investigative work of the DEA and NYPD.

This case is being handled by the Office’s Narcotics Unit.  Assistant U.S. Attorney James Mandilk is in charge of the prosecution.

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

United States Attorney for the Southern District of New York, Jay Clayton, announced today that KOSTAS FEKKAS, a/k/a “Constantine Fekkas,” a/k/a “C.J. Justice,” was sentenced to 13 years in prison by U.S. District Judge Cathy Seibel for coercing and enticing two minors to send him sexually explicit images and videos of themselves.  FEKKAS previously pled guilty on September 5, 2025, before Judge Seibel.

“Teachers are entrusted with the safety, mentorship, and care of our children,” said U.S. Attorney Jay Clayton.  “Instead of keeping them safe, Kostas Fekkas coerced a 12-year-old girl and a 16-year-old teenager into sending him sexually explicit photographs and video of themselves.  Today’s 13-year sentence reflects the seriousness of that betrayal and the profound harm caused to these victims.  This Office will never stop aggressively pursuing predators who sexually exploit our city’s children.  If you suspect sexual exploitation, please reach out to our law enforcement partners.” 

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

In or about 2022, FEKKAS, coerced a 12-year-old girl (“Victim-1”) to send him sexually explicit photographs and video of herself via Snapchat.  When law enforcement searched FEKKAS’s cellphone in March 2023, they found a video of Victim-1 masturbating, along with still shots taken of the same video.  Additionally, from October 2022 through September 2023, FEKKAS engaged in sexually explicit text-message conversations with a 16-year-old teenager (“Victim-2”) and coerced and enticed her to send him photographs and video of herself engaging in sexually explicit activity, which Victim-2 sent to FEKKAS.

Any individuals with information concerning the sexual exploitation of children are asked to contact Homeland Security Investigations through its toll-free Tip Line at 1-866-DHS-2423 or by completing its online tip form.  Both are staffed around the clock by investigators.  From outside the U.S. and Canada, callers should dial 802-872-6199.  Hearing-impaired users can call TTY 802-872-6196.

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In addition to the prison term, FEKKAS, 36, of Hartsdale, New York, was sentenced to 10 years of supervised release.  

Mr. Clayton praised the efforts of HSI and the Rockland County District Attorney’s Office.

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

United States Attorney for the Southern District of New York, Jay Clayton, announced today that TED ALBIN was sentenced to five years in prison for his role in orchestrating a multimillion-dollar Medicare fraud scheme.  The defendant was convicted on June 24, 2025, following a 12-day jury trial before U.S. District Judge John G. Koeltl, who imposed today’s sentence.

“Ted Albin used fraudulent prescriptions to cheat Medicare out of millions,” said U.S. Attorney Jay Clayton.  “Schemes like this cost every New Yorker, including by driving up healthcare costs and diverting resources from seniors and the disabled who need care.  Today’s sentence makes clear that those who cheat Medicare will face serious consequences.”

According to court documents, statements made in court, and evidence presented at trial:

From approximately 2016 through April 2021, ALBIN operated Grapevine Professional Services (“Grapevine”), a medical billing company, which he used to submit fraudulent reimbursement claims for durable medical equipment (“DME”), including back braces, knee braces, wrist braces, and shoulder braces.  ALBIN submitted thousands of fraudulent claims on behalf of DME supply companies that had engaged Grapevine for its billing services, including multiple DME supply companies owned and controlled by ALBIN and his sister, Erin Foley.  ALBIN’s fraudulent claims were based on prescriptions for DME which he knew had been illegally purchased with kickbacks paid by the DME supply companies.  Many of the kickback-tainted prescriptions billed by ALBIN were generated with forged doctor’s signatures and without regard to the medical need of the patients for whom braces had been prescribed.  ALBIN knew of the fraudulent nature of the claims he submitted to Medicare and nonetheless continued to submit such claims, over and over, for years. In total, the DME companies for which ALBIN submitted claims billed Medicare for over $38 million, on which Medicare paid out over $12 million.

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In addition to the prison term, ALBIN, 49, of Stuart, Florida, was sentenced to three years of supervised release.  The Court deferred the calculation of restitution until a later date.

Mr. Clayton praised the outstanding investigative work of the U.S. Department of Health and Human Services – Office of Inspector General.

This case is being handled by the Office’s Complex Frauds and Cybercrime Unit.  Assistant U.S. Attorneys William Kinder, Jackie Delligatti, Brandon Thompson, and Ryan Finkel are in charge of the prosecution.  

United States Attorney for the Southern District of New York, Jay Clayton, announced that TODD FAUSTIN pled guilty today before U.S. District Judge Lewis J. Liman to making false statements relating to healthcare matters in connection with use of force incidents that took place within Rikers Island.

“Todd Faustin fraudulently received hundreds of thousands of dollars from the City of New York by faking injuries after some of the most delicate and dangerous interactions within our criminal justice system—incidents where force is used against an incarcerated person,” said U.S. Attorney Jay Clayton.  “False workers’ compensation claims place a large cost on all New Yorkers.  It’s even worse when the perpetrator is a City employee.  The vast majority of our correction officers do a tough job well and honestly.  Faustin is not one of them.”

According to the Indictment, plea agreement, and statements made in court:

The New York State Workers’ Compensation Board (the “Board”) administers New York State’s no-fault workers’ compensation system, which guarantees medical care and cash benefits to people who are injured at work, including employees of the New York City Department of Correction (“DOC”).  Payments by the Board made to DOC employees are paid from the New York City Treasury. For years, FAUSTIN was employed by the DOC as a correction officer and was assigned to work at Rikers Island. During that time, FAUSTIN falsely claimed that he was injured while on duty at Rikers Island during incidents with incarcerated individuals requiring the use of force.  In total, FAUSTIN received at least $370,336.79 in benefits to which he was not entitled.  FAUSTIN’s resignation with DOC is effective today, March 17, 2026.

*                *                *

FAUSTIN, 43, of New York, New York, pled guilty to one count of making false statements related to health care matters, which carries a maximum sentence of five years in prison.

The maximum potential sentence in this case is prescribed by Congress and provided here for informational purposes only, as any sentencing of the defendant will be determined by the judge.  FAUSTIN is scheduled to be sentenced on July 7, 2026.

Mr. Clayton praised the outstanding work of the New York City Department of Investigation, the New York State Office of Inspector General, and the Special Agents and Task Force Officers assigned to the U.S. Attorney’s Office for the Southern District of New York. 

The prosecution of this case is being handled by the Office’s Civil Rights and Human Trafficking Unit and the Public Corruption Unit.  Assistant U.S. Attorneys Kaiya Arroyo and Stephanie Simon are in charge of the prosecution.

United States Attorney for the Southern District of New York, Jay Clayton, announced that CHRISTOPHER B. FERGUSON and BRIAN MCFADDEN pled guilty before U.S. District Judge Colleen McMahon to falsification of books, records, and accounts for causing the submission of falsified records from Edison Nation, Inc.—a publicly traded diversified consumer products business for which FERGUSON was the CEO and chairman and MCFADDEN was a consultant—in response to an inquiry from the Financial Industry Regulatory Authority (“FINRA”).  FERGUSON pled guilty on January 28, 2026, and MCFADDEN pled guilty on March 16, 2026.

“Edison Nation claimed to have over $10 million in orders,” said U.S. Attorney Jay Clayton. “When FINRA, a self-regulatory organization important to ensuring the integrity of our securities markets, requested documentation to support that, CEO Christopher Ferguson and consultant Brian McFadden caused the company to submit falsified documents.  There is no place for that conduct in our markets.”

According to the charging instruments, plea agreements, and statements made in court:

FERGUSON and MCFADDEN caused the submission to FINRA of falsified records related to purchase orders purportedly received by Edison Nation, where FERGUSON was the CEO and MCFADDEN was a consultant.  Following the emergence of the COVID-19 pandemic, Edison Nation expanded its business to include products that were in high demand such as hand sanitizer and face masks.  On April 16, 2020, Edison Nation issued a press release announcing that it had “received over $10 million in orders for the purchase of personal protective equipment.”

Although the defendants had discussed a $9 million hand sanitizer purchase with a potential buyer earlier that month, two days before the issuance of the above-mentioned press release, that buyer notified Edison Nation that it was unable to proceed with the transaction. As a result, when the press release was issued, Edison Nation did not, in fact, have “over $10 million in orders.”

On April 23, 2020, about a week after the press release was issued, FINRA requested copies of the purchase orders supporting the “$10 million in orders” referenced in the press release.  Thereafter, MCFADDEN asked a business associate at another company to create a $9 million backdated purchase order for hand sanitizer.  In response, that other company provided MCFADDEN with the requested purchase order, backdated to April 12, 2020—before the press release was issued.  That purchase order did not reflect a true order.

On April 28, 2020, the defendants knowingly caused the submission to FINRA of the backdated purchase order, along with a spreadsheet falsely listing the backdated purchase order as having been received on April 12, 2020.  Then, on May 6, 2020, the defendants knowingly caused the submission to FINRA of an email that contained false and misleading statements about the backdated purchase order.

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FERGUSON, 57, of Fishers, Indiana, and MCFADDEN, 40, of Safety Harbor, Florida, pled guilty to one count of falsification of books, records, and accounts, which carries a maximum sentence of 20 years in prison. 

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

Mr. Clayton praised the outstanding work of the Federal Bureau of Investigation and the U.S. Securities and Exchange Commission.

This prosecution is being handled by the Office’s Securities and Commodities Fraud Task Force.  Assistant U.S. Attorneys Nicholas W. Chiuchiolo, Maggie Lynaugh, and Samuel P. Rothschild are in charge of the prosecution.

United States Attorney for the Southern District of New York, Jay Clayton, and Assistant Director in Charge of the New York Field Office of the Federal Bureau of Investigation (“FBI”), James C. Barnacle, Jr., announced the arrest of TYRON DUMEL, a/k/a “Boogie,” and NICOLE DUMEL in connection with a sex trafficking operation based in Rockland County, New York.  TYRON DUMEL and NICOLE DUMEL were arrested March 11, 2026, and presented in White Plains federal court on Thursday, March 12, 2026, before U.S. Magistrate Judge Victoria Reznik.  TYRON DUMEL was ordered detained, and NICOLE DUMEL was released on bond.

“The message from New York families is clear: stop the sex trafficking,” said U.S. Attorney Jay Clayton.  “It is corroding our communities.  Since August 2025, the defendants have allegedly conspired to traffic at least 10 women to engage in commercial sex.  In furtherance of that operation, Tyron Dumel allegedly exerted ruthless control over sex trafficking victims through lies, intimidation, violence, and psychological abuse, while he and Nicole Dumel allegedly reaped thousands of dollars in profits.  This kind of conduct should shock the conscience of every New Yorker, and it will not be tolerated.  This Office and our law enforcement partners are committed to bringing the perpetrators of such crimes to justice.”

“These defendants allegedly operated a human trafficking network in which Tyron Dumel forced victims to engage in sexual acts for profit through physical and psychological coercion, while Nicole Dumel collected their illicit proceeds,” said FBI Assistant Director in Charge James C. Barnacle, Jr.  ‘The Dumels allegedly exploited and abused nearly a dozen women across the country to generate a twisted cash flow.  The FBI will target human traffickers who abuse and torment victims for personal enrichment.”

As alleged in the Indictment:[1]

From at least in or about August 2025 through at least in or about February 2026, TYRON DUMEL and NICOLE DUMEL conspired to traffic women to engage in prostitution (the “DUMEL Trafficking Operation”). TYRON DUMEL advertised the DUMEL Trafficking Operation on a popular social media platform, which he used to recruit women to engage in commercial sex.  As part of the DUMEL Trafficking Operation, and in furtherance thereof, TYRON DUMEL transported at least ten women to locations in New York, New Jersey, Connecticut, Arizona, Tennessee, and Michigan, among other places, to engage, at his direction and under his supervision, in commercial sex.

TYRON DUMEL used means of force, fraud, and coercion to cause a victim (“Victim-1”) and others to engage in commercial sex acts.  He physically assaulted Victim-1 and others, threatened to cause physical harm to Victim-1 and others, sprayed Victim-1 and others with pepper spray, forced Victim-1 and others to engage in sexual intercourse with him, required Victim-1 and others to tattoo their bodies with his personal “brand,” used his control of the proceeds of his sex trafficking operation to coerce Victim-1 and others to accede to his demands by withholding, and threatening to withhold, food, and lied to Victim-1 and others concerning the whereabouts of the proceeds of the DUMEL Trafficking Operation.

Also as part of the DUMEL Trafficking Operation, and in furtherance thereof, NICOLE DUMEL agreed, among other things, to (i) set up an online account that TYRON DUMEL used to post commercial sex advertisements; (ii) edit digital photographs of at least one female commercial sex worker for the purpose of creating commercial sex advertisements; and (iii) receive electronic funds transfers from purchasers of commercial sex to accounts controlled by NICOLE DUMEL and route such funds to accounts controlled by NICOLE DUMEL and TYRON DUMEL.  From in or about August 2025 through in or about February 2026, NICOLE DUMEL received thousands of dollars in proceeds from commercial sex acts conducted as part of the DUMEL Trafficking Operation.

*               *                *

TYRON DUMEL, 28, is charged with one count of sex trafficking by force, fraud, or coercion, which carries a maximum sentence of life in prison and a mandatory minimum sentence of 15 years in prison, one count of transportation for purposes of prostitution, which carries a maximum sentence of 10 years in prison, and one count of conspiracy to transport individuals for purposes of prostitution, which carries a maximum sentence of five years in prison. 

NICOLE DUMEL, 30, is charged with one count of conspiracy to transport individuals for purposes of prostitution, which carries a maximum sentence of five years in prison. 

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

Mr. Clayton praised the outstanding investigative work of the FBI New York Office Westchester Safe Streets Task Force, Greenburgh Police Department, Clarkstown Police Department, White Plains Police Department, and Orangetown Police Department.

The case is being handled by the Office’s White Plains Division. Assistant U.S. Attorney Jake Sidransky is in charge of the prosecution.

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

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

United States Attorney for the Southern District of New York, Jay Clayton, announced that SOLOMON LICHTENSTEIN pled guilty today before U.S. Magistrate Judge Victoria Reznik to securities fraud in connection with a scheme to defraud investors in two investment vehicles he managed and promoted.   

“Solomon Lichtenstein solicited and received millions of dollars from friends, relatives, and members of his community on the back of false statements and misrepresentations regarding his investment qualifications and strategy, track record, and returns,” said U.S. Attorney Jay Clayton.  “When investment advisers abuse the trust of their clients and use New Yorkers’ hard-earned money for their personal benefit, our Office will hold them criminally accountable.”

According to the Information, plea agreement, and statements made in court:

Over a period of roughly two years from July 2022 through August 2024, LICHTENSTEIN defrauded investors in two investment entities he operated.  He raised more than $3 million from dozens of victims.   LICHTENSTEIN falsely represented to investors and prospective investors that his unique trading and risk mitigation strategies were generating large returns. In reality, he invested less than $600,000 of the funds he received and incurred significant losses on those funds through losing trades.  LICHTENSTEIN also took approximately $1 million in investor funds for personal use, including home mortgage payments, travel and dining expenses, and cash withdrawals. Accounting for funds that were returned, investors lost more than $1.5 million through LICHTENSTEIN’s scheme.                

*                *                *

LICHTENSTEIN, 30, of Stony Point, New York, pled guilty to one count of securities fraud, which carries a maximum sentence of five years in prison. 

The maximum potential sentence in this case is prescribed by Congress and provided here for informational purposes only, as any sentencing of the defendant will be determined by the judge.  LICHTENSTEIN is scheduled to be sentenced on July 8, 2026.  

Mr. Clayton praised the outstanding investigative work of the Federal Bureau of Investigation.  Mr. Clayton also thanked the U.S. Securities and Exchange Commission, which has filed a separate civil action against LICHTENSTEIN, for its assistance and cooperation in the investigation.                

The prosecution is being handled by the Office’s White Plains Division. Assistant U.S. Attorneys Reyhan Watson, James McMahon, and John Sarlitto are in charge of the prosecution.   

United States Attorney for the Southern District of New York, Jay Clayton, announced that THOMAS ALEXANDER BRANDENSTEIN, a German national, was sentenced today to 121 months in prison by Judge Lewis A. Kaplan in connection with BRANDENSTEIN’s enticement of a 15-year old minor victim (the “Minor Victim”) to engage in sexual activity, and then traveling across state lines in order to engage in illicit sexual activity with the Minor Victim in 2023. On September 8, 2025, BRANDENSTEIN pled guilty to one count of enticement of a minor before U.S. Magistrate Judge Valerie Figueredo.

“Brandenstein twice traveled from Germany to New York to entice a minor victim—over forty years his junior—to engage in illegal sexual acts,” said U.S. Attorney Jay Clayton.  “Thanks to the extraordinary investigative work of our law enforcement partners at HSI and NYPD, Brandenstein was apprehended before he could prey on other innocent victims.  Sexual abuse of children can cause severe trauma, often lasting into victims’ adulthood or their entire lives.  This needs to stop.  New Yorkers want law enforcement to do everything we can to prevent underage abuse, and we will.  Today’s sentence underscores our commitment to prosecuting those who engage in predatory sexual behavior with our city’s children.” 

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

From March 2023 through September 2023, BRANDENSTEIN, a German national, enticed a 15-year-old boy residing in New York (the “Minor Victim”) to engage in illegal sexual activity.  While in Germany, BRANDENSTEIN, who was 57-years-old at the time, used internet-enabled messaging applications to send sexually explicit communications to the Minor Victim, including an image of a naked male in which the male’s penis was exposed.  BRANDENSTEIN also sent sexually explicit videos to the Minor Victim, which depicted BRANDENSTEIN lying in bed, blowing kisses, and exposing his penis and masturbating, among other things.  BRANDENSTEIN further communicated with the Minor Victim over these messaging applications about his plans to travel to New York with his spouse and co-defendant JOHN-PHILIPP PIEHL-BRANDENSTEIN, who is also a German national, and sent the Minor Victim a video message depicting the two men on an airplane and writing, “next stop, New York.”

In June 2023, BRANDENSTEIN and PIEHL-BRANDENSTEIN traveled from Germany to the United States.  In July 2023, they arrived in New York, where they met with the Minor Victim to engage in illegal sexual activity at a Manhattan hotel (the “Hotel”).  BRANDENSTEIN and PIEHL-BRANDENSTEIN reserved a room at the Hotel from July 5, 2023 until July 13, 2023.  BRANDENSTEIN brought the Minor Victim to the Hotel where BRANDENSTEIN and PIEHL-BRANDENSTEIN engaged in illegal sexual activity with the Minor Victim.  Some of that illegal sexual activity was video recorded by BRANDENSTEIN.  On July 13, 2023, BRANDENSTEIN and PIEHL-BRANDENSTEIN departed from New York and returned to Germany.

Following the July 2023 trip, BRANDENSTEIN continued to maintain consistent contact with the Minor Victim through frequent video calls, some of which involved sharing sexually explicit conduct.  Several images recovered from BRANDENSTEIN’s phone, which was seized incident to his arrest, depict stills of those video calls. 

In September 2023, BRANDENSTEIN returned to the United States for the purpose of engaging in additional sex acts with the Minor Victim. The defendant made a reservation at a hotel in Brooklyn where he directed the Minor Victim to meet him. On September 29, 2023, the defendant flew from Berlin to Queens, New York.  The defendant was arrested upon arriving at the airport.  

*                *                *

In addition to the prison sentence, BRANDENSTEIN, 59, of Berlin, Germany, was sentenced to five years of supervised release.

Mr. Clayton praised the outstanding investigative efforts of Homeland Security Investigations and the New York City Police Department.

The prosecution of this case is being handled by the Office’s Civil Rights and Human Trafficking Unit in the Criminal Division.  Assistant U.S. Attorney Mitzi S. Steiner is in charge of the prosecution.

United States Attorney for the Southern District of New York, Jay Clayton, announced that ROBERT W. LEDERHILGER III was sentenced today to 73 months in prison for perpetrating a seven-year scheme to defraud small businesses across the United States, which resulted in losses of nearly $9 million to tens of thousands of victims.  In September 2025, the defendant was convicted following a six-day trial before U.S. District Judge Andrew L. Carter, who imposed today’s sentence. 

“Robert Lederhilger stole millions of dollars from tens of thousands of small businesses, $180 at a time,” said U.S. Attorney Jay Clayton.  “Lederhilger thought his large scale, small sum fraud would go undetected. He was wrong.  Stealing $5 million $180 at a time got him 73 months.  Fraudsters like him should beware.  This Office and our law enforcement partners will work to bring to justice anyone who takes advantage of the good people of New York and beyond.  Today’s sentence reinforces that message.”

According to the Indictment, statements made in public court proceedings and filings, and the evidence at trial:

Between 2015 and 2022, LEDERHILGER designed and ran a sophisticated fraud scheme in which he mailed, and caused others to mail, nearly three million deceptive mailers that falsely appeared to their recipients—primarily small businesses that already had websites—to be invoices for purported web hosting services. The invoices typically listed $180 as the amount due.  Tens of thousands of victims, believing that they owed the defendant money for web hosting services, paid the defendant’s “invoices.”  Those victims, whose websites were hosted by other providers, received nothing from the defendant except another “invoice,” a year later, asking for more money.  LEDERHILGER personally obtained at least approximately $5.2 million from the scheme.

*                *                *

In addition to the prison term, LEDERHILGER, 44, of Bradenton, Florida, was sentenced to 3 years of supervised release and ordered to pay forfeiture of approximately $5.2 million.  The Court further ordered LEDERHILGER to pay restitution in an amount to be determined later.

Mr. Clayton praised the outstanding investigative work of the U.S. Postal Inspection Service. 

This case is being handled by the Office’s General Crimes Unit.  Assistant U.S. Attorneys Getzel Berger, Camille L. Fletcher, Kevin Grossinger, and Daniel G. Nessim are in charge of the prosecution.

United States Attorney for the Southern District of New York, Jay Clayton, Attorney General for the United States, Pamela Bondi, Deputy Attorney General for the United States, Todd Blanche, Assistant Director in Charge of the New York Field Office of the Federal Bureau of Investigation (“FBI”), James C. Barnacle, Jr., and Commissioner of the New York City Police Department (“NYPD”), Jessica S. Tisch, announced today charges against EMIR BALAT and IBRAHIM KAYUMI alleging that they attempted to detonate two explosive devices in the vicinity of Gracie Mansion, and that they were acting in support of ISIS, a designated foreign terrorist organization.

“As alleged, on Saturday, March 7, during protests taking place outside Gracie Mansion on the Upper East Side, Emir Balat and Ibrahim Kayumi attempted to detonate two improvised explosive devices amongst the protesters,” said U.S. Attorney Jay Clayton.  “Moreover, after being apprehended by NYPD officers, both Balat and Kayumi stated they were aligned with ISIS.  Free speech and peaceable assembly are the bedrock of American democracy.  Violence is not protected speech, and it’s not protected protest.  In New York, violence—particularly acts of terror—will be met with swift justice.  This investigation remains ongoing, and we encourage anyone with further information to please contact tips.fbi.gov online or 1-800-CALL-FBI.”

“This was an alleged ISIS-inspired act of terrorism that could have killed American citizens,” said Attorney General Pamela Bondi.  “We will not allow ISIS’s poisonous, anti-American ideology to threaten this nation—our law enforcement officers will remain vigilant, as they were when these devices were brought to a protest.”

“These men allegedly sought to inflict mass casualties in service to ISIS with the hope of exceeding the carnage of the Boston Marathon bombing,” said Deputy Attorney General Todd Blanche.  “We are tremendously grateful to the brave law enforcement officers who ran into harm’s way to apprehend these individuals and disarm the explosives before anyone was harmed.  Thanks to the quick investigative work by federal law enforcement, this Department of Justice will prosecute these men, who pledged allegiance to a foreign terrorist organization, to the fullest extent.”

“Inspired by ISIS, a designated terrorist organization, Emir Balat and Ibrahim Kayumi allegedly threw one improved explosive device, and attempted to toss another, into a crowd gathered on East End Avenue,” said FBI Assistant Director in Charge James C. Barnacle, Jr.  “Balat and Kayumi sought to incite fear and mass suffering through this alleged attempted terror attack.  Alongside the NYPD, the FBI’s New York Joint Terrorism Task Force will not tolerate those who use violence against targets in New York City to broadcast their terrorist ideologies.”

“As alleged in the complaint, the crimes committed by Emir Balat and Ibrahim Kayumi were not random,” said NYPD Commissioner Jessica S. Tisch.  “This was an act of ISIS-inspired terrorism.  From the first moments since the attack, the NYPD has been working seamlessly with the FBI and the U.S. Attorney’s Office for the Southern District of New York, and I am deeply grateful for their partnership in this investigation.  The men and women of the NYPD will continue to stand watch over this city and selflessly run towards the danger to keep the public safe.”

As alleged in the Complaint:[1]

On or about March 7, 2026, a protest called “Stop the Islamic Takeover of New York City, Stop New York City Public Muslim Prayer” and a counter-protest called “Run Nazis Out of New York City” were held outside of Gracie Mansion in Manhattan, New York.  Gracie Mansion is the official residence of the Mayor of New York City.

At approximately 12:15 p.m., BALAT ignited and threw an explosive device (“Device-1”) toward the area where the protesters were gathered, as pictured below:

Immediately after throwing Device-1, BALAT ran to another location down the block and received a second explosive device (“Device-2”) from KAYUMI, as pictured below:

After apparently igniting Device-2, BALAT dropped Device-2 near where several NYPD officers were standing, ran away from the NYPD officers, and jumped over a barricade.  He was tackled and arrested by NYPD officers shortly thereafter, as was KAYUMI.  Pictured below are BALAT mid-flight and Device-2 hitting the ground:

Following his arrest, while en route to the NYPD precinct, BALAT stated to NYPD officers: “this isn’t a religion that just stands when people talk about the blessed name of the prophet . . . We take action!  We take action!”; and “if I didn’t do it someone else will come and do it.”  Then, after arriving at the NYPD precinct, BALAT requested a piece of paper and, after being given a paper and pen, wrote the following: “All praise is due to Allah lord of all worlds!  I pledge my allegiance to the Islamic State.  Die in your rage yu [sic] kuffar!  Emir B.” “Kuffar” is an Arabic term that refers to “non-believers” or “infidels,” and “Die in your rage” is a slogan used by ISIS.

Law enforcement officers later asked BALAT if he was familiar with the Boston Marathon bombing, and if that was what BALAT had hoped to accomplish.  BALAT responded: “No, even bigger.  It was only three deaths.”

After KAYUMI was arrested, and as he was being placed inside an NYPD vehicle to be transported from the scene to an NYPD precinct, an individual from the surrounding crowd yelled to KAYUMI and asked why KAYUMI had done this.  KAYUMI responded, “ISIS.”  Then, at the NYPD precinct, in response to a question from law enforcement about whether he was affiliated with ISIS, KAYUMI indicated that he was.  He further stated, in substance and part, that: (i) he has watched ISIS propaganda on his phone; (ii) his actions that day were partly inspired by ISIS; (iii) he did not feel comfortable holding the Devices earlier that day; and (iv) he would not feel comfortable if the Devices were in the interrogation room with him.

After BALAT and KAYUMI were arrested and the Devices were secured, an FBI Special Agent Bomb Technician (“SABT”) conducted a preliminary examination of the Devices and determined that they were each approximately the size of a mason jar; that they each had an attached fuse; and that they each had nuts and bolts attached to the exterior, surrounded by duct tape.  A preliminary analysis of Device-1, the device that BALAT threw into the crowd of protesters, showed that it contained TATP, a highly volatile explosive that is colloquially known as the “Mother of Satan” and extremely sensitive to impact, friction, and heat.  TATP has been used in multiple terrorist attacks over the last decade.

Pictured below are the contents inside Device-1 after it was opened by law enforcement:

On or about March 8, 2026, law enforcement officers located a parked vehicle registered to a family member of BALAT a few blocks from Gracie Mansion.  From inside the vehicle, law enforcement officers recovered a coiled green material consistent in appearance with hobby fuse, an empty metal can of the same approximate dimensions and appearance as the can recovered from inside Device-1, and a notebook containing handwritten notes.  One page of the notebook contains the note “TATP explosive”; another page contains a list of chemical ingredients, including “hydrogen peroxide,” “sulfuric acid,” and “acetone”; and a third page contains a list of components and quantities, such as “aluminum can x6,” and “a box of bolts ect [sic] 2x.”

*                *                *

BALAT, 18, of Langhorne, Pennsylvania, and KAYUMI, 19, of Newtown, Pennsylvania, are charged with attempted provision of material support and resources to a designated foreign terrorist organization, which carries a maximum sentence of 20 years in prison; use of a weapon of mass destruction, which carries a maximum sentence of life in prison; transportation of explosive materials, which carries a maximum sentence of 10 years in prison; interstate transportation and receipt of explosives, which carries a maximum sentence of 10 years in prison; and unlawful possession of destructive devices, which carries a maximum sentence of 10 years in prison.

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

Mr. Clayton praised the outstanding efforts of the New York Joint Terrorism Task Force of the FBI, which consists of investigators and analysts from the FBI, the NYPD, and over 50 other federal, state, and local agencies. Mr. Clayton also thanked the Counterterrorism Section of the Department of Justice’s National Security Division, the New York City Police Department, U.S. Customs and Border Protection, the New York State Police, Homeland Security Investigations, the FBI Newark Field Office, the FBI Philadelphia Field Office, the Port Authority of New York and New Jersey, and the Bureau of Alcohol, Tobacco, Firearms and Explosives for their assistance.

This case is being handled by the Office’s National Security and International Narcotics Unit.  Assistant U.S. Attorneys Jonathan L. Bodansky and Jane Y. Chong are in charge of the prosecution, with assistance from Trial Attorney James Donnelly of the Counterterrorism Section and paralegal specialist Juan Muñoz.

[1] As the introductory phrase signifies, the entirety of the charging instrument to date constitutes only allegations, and every fact described herein should be treated as an allegation.

Federal sex offenses are all too prevalent in our society and all too often go unreported and unpunished.  The truth is sex trafficking and other federal sex offenses are present in many walks of life and we have not done enough to root it out.  The abuse inflicted upon the victims is disgusting, scarring, and should not be tolerated.  Our prosecutors, and our law enforcement partners, are committed to breaking these conspiracies, bringing the perpetrators to justice, and sending a message to anyone who would commit or enable these horrific acts.  

Today, we take an important step in our fight against sex trafficking.

Moments ago, a unanimous Manhattan jury found three brothers, Alon, Oren, and Tal Alexander guilty of multiple federal sex offenses, including conspiracy to commit sex trafficking.  The verdict comes after a weekslong trial where evidence and testimony from 11 brave victims demonstrated that the Alexander brothers conspired to repeatedly lure, drug, and rape young women.  These are chilling, reprehensible, and unacceptable acts.  We commend the victims for their courage in coming forward and testifying at the trial.  They bravely overcame the pain of reliving the abuses inflicted upon them and, as a result, prevented others from becoming victims.   

We also commend the jury of New Yorkers for their attention, care, and commitment to our judicial system.  The jury saw the Alexander’s conduct for what it was—calculated, brutal sexual abuse that, unimaginably, the defendants celebrated.  

This verdict cannot undo the effects of heinous abuse the Alexanders’ many victims endured, but it does send a message:  New Yorkers want to bring an end to sex trafficking in all our communities.  We encourage anyone who has been a victim of federal sex offenses, or suspects such conduct, to contact our office or our law enforcement partners.  

We also acknowledge and thank the women and men of this Office’s Civil Rights and Human Trafficking Unit and our valued colleagues at FBI-NYPD Child Exploitation and Human Trafficking Task Force for their commitment to this case. They worked tirelessly on behalf of all victims of sexual abuse and with an unwavering commitment to stopping sex trafficking.  

If you have been the victim of sexual abuse, or believe you have seen evidence of sexual abuse, please contact the FBI at 1-800-CALL-FBI.  

United States Attorney for the Southern District of New York, Jay Clayton, announced today the filing of a civil rights lawsuit against the TOWN OF BEEKMAN (“BEEKMAN”) in Dutchess County.  The lawsuit alleges that BEEKMAN refused to allow Bunkhouse Recovery Ranch (“Bunkhouse”) to operate an existing residential property as a sober living home that assists people with disabilities, specifically persons in recovery from drug and alcohol abuse, in violation of the Fair Housing Act.  Bunkhouse seeks to assist men who are in recovery from alcoholism or drug addiction to achieve and maintain sobriety, with a focus on veterans, first responders, and family members of veterans or first responders.

“Those who are struggling to defeat their dependence on drugs or alcohol deserve support, not obstruction, especially when they are among our veterans, first responders, and their families,” said U.S. Attorney Jay Clayton.  “The Fair Housing Act makes clear that individuals in recovery are protected from discrimination, and municipalities cannot use zoning classifications or procedural delays to block lawful housing.  When a community refuses to treat a sober living home like any other residence, it denies individuals in recovery a fair chance to rebuild their lives.  The women and men of this Office are committed to ensuring that federal civil rights protections are fully and fairly enforced.”

According to the Complaint filed in federal court in White Plains:

In June 2023, Bunkhouse founder Patrick Potter (“Potter”) sought to develop a sober living home in New York State for the benefit of male veterans, first responders, and family members of veterans or first responders.  He initially received a positive reception from local officials and purchased an existing 4,650 square foot residential property in BEEKMAN.  Once Potter purchased the property, however, BEEKMAN, through its Zoning Administrator and counsel, began to erect hurdles to prevent Bunkhouse from operating.  In particular, BEEKMAN misclassified the property as an “alternate care facility or nursing home,” required Potter to submit costly and unnecessary site plans and permits, and failed to respond to Potter’s efforts to meet BEEKMAN’s shifting requirements.

The United States Attorney’s Office initially contacted BEEKMAN in October 2024, in an effort to avoid litigation, but BEEKMAN continued to refuse to engage with Potter’s efforts to operate a sober living home on his property.  Although Potter submitted applications for a special use permit and site plan approval in April 2025 to meet BEEKMAN’s supposed requirements, BEEKMAN has ignored these good-faith efforts for ten months and counting.

The Fair Housing Act prohibits, among other things, discrimination on the basis of disability, and defines disability to include drug or alcohol addiction where the person is not currently using illegal drugs and is in recovery from addiction. Prospective residents seeking admission to Bunkhouse must be sober and free of illegal drugs and must commit to remaining sober and free of illegal drugs throughout their residency.

To file a complaint alleging discrimination in housing, use the Civil Rights Complaint Form available on the United States Attorney’s Office website: https://www.justice.gov/usao-sdny/civil-rights. Complaints should be emailed or sent by mail to:

U.S. Attorney’s Office, Southern District of New York

86 Chambers Street, 3rd Floor

New York, New York 10007

Attention: Chief, Civil Rights Unit

USANYS-CivilRights@usdoj.gov

The case is being handled by the Office’s Civil Rights Unit in the Civil Division. Assistant U.S. Attorneys David J. Kennedy and Tomoko Onozawa are in charge of the case.    

United States Attorney for the Southern District of New York, Jay Clayton, announced the settlement of a lawsuit against the VILLAGE OF SPRING VALLEY (“SPRING VALLEY”), which will result in the completion of 22 units of affordable rental housing within the Village over the next five years.

The settlement under the Fair Housing Act (“FHA”) resolves a claim that SPRING VALLEY breached a Voluntary Compliance Agreement and Conciliation Agreement (“VCA”), which it entered into in 2018 with the U.S. Department of Housing and Urban Development (“HUD”).  The lawsuit remains pending as to ROCKLAND COUNTY, the other defendant in the action, which was also a party to the VCA.

“I applaud the commitment of the Village of Spring Valley to build more affordable housing as part of this resolution,” said U.S. Attorney Jay Clayton.  “Local regulations, including restrictions on new construction and unduly burdensome permitting processes, are driving housing construction costs out of sight.  It’s basic economics: if it costs too much to build new homes, the cost of existing homes is only going to go up.  This agreement shows there is a way forward, and we appreciate the commitment of Spring Valley to lower the costs of, and time it takes, to build affordable housing.”

According to the Complaint filed in White Plains federal court and the Agreement entered by the court:

The VCA between HUD, SPRING VALLEY, and ROCKLAND COUNTY resolved a prior HUD investigation into allegations regarding a private developer who used HUD funds overseen by SPRING VALLEY and ROCKLAND COUNTY to build affordable housing, but unlawfully designed and marketed the resulting units almost exclusively for sale to White Hasidic Jewish prospective homebuyers, in violation of federal law.  Administrative complaints made to HUD alleged that SPRING VALLEY and ROCKLAND COUNTY became aware of allegations that the developer was excluding interested homebuyers based on protected characteristics, but failed to ensure that appropriate remedial steps were taken before the project was completed and the units were sold.

In 2018, SPRING VALLEY and ROCKLAND COUNTY entered into the VCA with HUD to resolve those administrative complaints.  The VCA required SPRING VALLEY and ROCKLAND COUNTY to build 62 units of affordable housing, meeting specified criteria for affordability by specified deadlines.  However, only four affordable units qualifying under the VCA were built by the time this lawsuit was filed in 2025, despite an amendment of the VCA in 2021 that provided SPRING VALLEY and ROCKLAND COUNTY additional time to complete the required units.

The resolution between the United States and SPRING VALLEY, in the form of a court-approved settlement agreement (the “Agreement”), was entered yesterday by U.S. District Judge Cathy Seibel. The Agreement requires SPRING VALLEY to ensure the completion of 22 affordable rental units by December 1, 2030.  These units are required to be occupied by households with incomes at or below 75% of the Area Median Income for Rockland County, with deed restrictions or other legal measures to ensure continued affordability for at least 50 years.  The Agreement also requires SPRING VALLEY to ensure appropriate monitoring of HUD grantees and institute training for the Village’s employees regarding the FHA and related federal requirements.  SPRING VALLEY also agreed to pay a $15,000 civil penalty.

As stated previously, the lawsuit against ROCKLAND COUNTY remains pending.

Mr. Clayton thanked the staff of HUD’s Office of Fair Housing and Equal Opportunity for their assistance in this matter.

The case is being handled by the Office’s Civil Rights Unit in the Civil Division.  Assistant U.S. Attorney Samuel Dolinger is in charge of the case.   

United States Attorney for the Southern District of New York, Jay Clayton, announced that GIOVANNI PENNETTA pled guilty today before U.S. Magistrate Judge Gary Stein to wire fraud for running a scheme to fraudulently induce multiple investment clients to part with millions of dollars in exchange for economic exposure to shares of non-public companies.

“Giovanni Pennetta, manager of a New York-based financial firm, raised millions of dollars by claiming he could give investors access to shares of private companies before they went public,” said U.S. Attorney Jay Clayton.  “That access did not exist.  Instead, Pennetta diverted more than $10 million for his own benefit.  Protecting the integrity of New York’s public and private financial markets is a central part of our Office’s mission, and for the safety of investors, we will continue to hold fraudsters like Pennetta criminally accountable.”

According to the Indictment, plea agreement, and statements made in court:

Over a period of roughly six years, PENNETTA, the manager of a Manhattan-based investment adviser and private equity firm, engaged in a scheme to defraud investors who had entrusted him with millions of dollars to access shares of private companies.  PENNETTA induced investors to contribute capital to his private equity fund by promising them economic exposure to shares of pre-IPO companies.  Instead, PENNETTA misappropriated more than $10 million in investor money, moving much of it to his personal bank account.

*               *                *

PENNETTA, 50, of New York, New York, and Italy, pled guilty to one count of wire fraud, which carries a maximum sentence of 20 years in prison.

The maximum potential sentence in this case is prescribed by Congress and provided here for informational purposes only, as any sentencing of the defendant will be determined by the judge.  PENNETTA is scheduled to be sentenced on June 9, 2026.

Mr. Clayton praised the outstanding work of the FBI and the U.S. Securities and Exchange Commission.

This prosecution is being handled by the Office’s Securities and Commodities Fraud Task Force.  Assistant U.S. Attorneys Alexandra N. Rothman and Samuel P. Rothschild are in charge of the prosecution.

United States Attorney for the Southern District of New York, Jay Clayton, announced the guilty plea of DERRICK VAN YEBOAH, a/k/a “Van,” for his role in an international criminal organization that stole more than $100 million from victims via romance scams and business email compromises.  VAN YEBOAH pled guilty today to conspiracy to commit wire fraud before U.S. District Judge Arun Subramanian.

“Derrick Van Yeboah pled guilty today to a massive criminal scheme targeting elderly men and women in online romance scams,” said U.S. Attorney Jay Clayton.  “Many New Yorkers search for companionship online, and no one deserves to have their vulnerability met with fraud and theft.  Van Yeboah cruelly exploited those vulnerabilities for over $10 million in illicit profit.  Today’s plea is a reminder to be vigilant online—especially on dating websites, never give money to someone you just met—and if it seems too good to be true, it probably is.”

According to the charging documents and statements made in public filings and public court proceedings:

VAN YEBOAH was a member of a criminal organization primarily based in Ghana that committed romance scams and business email compromises against individuals and businesses located across the United States.  Many of the conspiracy’s victims were vulnerable older men and women who were tricked into believing that they were in online romantic relationships with persons who were, in fact, fake identities assumed by members of the conspiracy.  Once members of the conspiracy had gained the trust of their victims, they deceived those victims into sending their money to the enterprise or into helping them launder funds from other victims.  The conspirators also committed business email compromises to trick and deceive businesses into wiring funds to the enterprise.  In total, the conspiracy stole and laundered more than $100 million from dozens of victims.  After stealing the money, the fraud proceeds were then laundered to West Africa.

VAN YEBOAH personally perpetrated many of the romance scams by impersonating fake romantic partners in communications with victims.  He is being held responsible for more than $10 million he stole from victims via his romance scams.

*               *                *

VAN YEBOAH, 40, of Ghana, pled guilty to one count of conspiracy to commit wire fraud, which carries a maximum sentence of 20 years in prison.  VAN YEBOAH also agreed to make restitution and pay forfeiture, both in the amount of $10,149,429.17.

The maximum potential sentence is prescribed by Congress and is provided here for informational purposes only, as any sentencing of the defendant will be determined by the judge.   VAN YEBOAH is scheduled to be sentenced by Judge Subramanian on June 3, 2026. 

Mr. Clayton praised the outstanding work of the Federal Bureau of Investigation.  He also thanked Ghana and the U.S. Department of Justice’s Office of International Affairs for their assistance. 

The case is being prosecuted by the Office’s Complex Frauds and Cybercrime Unit. Assistant U.S. Attorneys Kevin Mead and Mitzi Steiner are in charge of the prosecution.

United States Attorney for the Southern District of New York, Jay Clayton, announced today that MITTEL PATEL, a United Kingdom national, was sentenced to 186 months in prison by U.S. District Judge Jennifer H. Rearden, before whom he previously pled guilty, for his participation in a conspiracy to import approximately 400 kilograms of cocaine into the United States.

“The illicit trafficking of narcotics and weapons poses an extreme threat to all New Yorkers and all Americans—and that threat is real,” said U.S. Attorney Jay Clayton.  “Mittel Patel conspired to sell an arsenal of military-grade weaponry to persons he believed to be working for a violent drug cartel so the purported cartel could protect a shipment of hundreds of kilograms of deadly narcotics into the United States.  The contemplated weapons and drugs could kill thousands of innocent Americans.  Thanks to the extraordinary investigative work of the DEA and our other law enforcement partners, Patel was apprehended before he could make good on his efforts to endanger American lives, and he is now incarcerated.  Large-scale drug trafficking and the provision of weapons pose a broad and deadly threat to our safety, security, and freedom.  Every American should know: the success of drug and weapons suppliers, and the cartels and other transnational criminal organizations they serve, comes at the cost of innocent American lives.”

As reflected in the Complaint, the Indictment, and other filings and information in the public record:

PATEL was a narcotics and weapons trafficker based in London, United Kingdom.  In 2021, an undercover DEA agent (“UC-1”) began communicating with PATEL about possible narcotics and weapons transactions, including PATEL and PATEL’s U.S.-based co-conspirators illegally providing UC-1 with an assortment of military-grade weapons, including machine guns, assault rifles, sniper rifles, and rocket-propelled grenades (“RPGs”).  As the discussions evolved, UC-1 conveyed to PATEL that UC-1 had arranged to purchase approximately 400 kilograms of cocaine from the Sinaloa Cartel, on the condition that UC-1 provide weapons to the Sinaloa Cartel to protect the drug shipment as it crossed the border from Mexico to the United States and in exchange for PATEL providing additional security for future drug shipments.

In August 2022, PATEL and his co-conspirators agreed to provide two sample firearms to UC-1, in exchange for $10,000.  PATEL and his co-conspirators then executed those sample weapons transactions and sent to an address located in the United States, in five separate packages, the parts for an AR-15 assault rifle and a sniper rifle with a scope, both pictured below:

PATEL understood from UC-1 that these weapons would be provided as a sample to the Sinaloa Cartel, as a prelude to the 400-kilogram drug transaction and a larger weapons order.  PATEL confirmed that, for the larger order, he and his co-conspirators could provide, in addition to the sample weapons, machine guns and RPGs.

On February 14, 2023, PATEL met with UC-1 in Athens, Greece to continue their discussions.  PATEL was arrested by Greek authorities following the meeting, and he was extradited to the United States on February 15, 2024.

*          *          *

In addition to the prison term, PATEL, 47, was sentenced to five years of supervised release.

Mr. Clayton praised the outstanding efforts of the DEA’s Special Operations Division Bilateral Investigations Unit.  Mr. Clayton also thanked the DEA New York Field Office, DEA Athens, the Office of International Affairs of the Department of Justice’s Criminal Division, and our law enforcement partners in Greece for their assistance.

The case is being handled by the Office’s National Security and International Narcotics Unit.  Assistant U.S. Attorneys Jonathan L. Bodansky and Jacob H. Gutwillig are in charge of the prosecution.

United States Attorney for the Southern District of New York, Jay Clayton, announced the conviction of DARRYL COHEN for defrauding three professional basketball players who were among his former financial advisory clients, following a five-week jury trial before U.S. District Judge Vernon S. Broderick. 

“Financial Advisor Darryl Cohen built trust with successful pro athletes—then betrayed it, stealing their money to fund personal luxuries, including a state-of-the-art gym in his own backyard,” said U.S. Attorney Jay Clayton.  “New Yorkers deserve honest financial advice—not advisors who scheme to steal clients’ funds, rather than protect their financial interests—and this Office is committed to removing bad actors from our markets.”   

According to the charging documents, statements made in public filings, and public court proceedings, including evidence presented at trial:

From at least in or about 2017 through in or about 2020, COHEN, a registered investment adviser, orchestrated a scheme to defraud three different professional basketball player clients—Chandler Parsons, Courtney Lee, and Jrue Holiday—of a total of over $5 million by taking advantage of his advisory and fiduciary relationships with them. 

First, COHEN and accountant BRIAN GILDER fraudulently induced Parsons, Lee, and Holiday to purchase viatical life insurance policies at massive markups.  COHEN did not disclose that GILDER had arranged for a law firm (“Law Firm-1”) that he controlled to purchase the policies and then to sell them to the athletes at markups of 222%, 310%, and 244%, respectively.  Indeed, Law Firm-1 made approximately $4.5 million in profit from the sale of the policies to COHEN’s athlete clients.  COHEN and GILDER used a substantial portion of these illicit proceeds to pay their own personal expenses.  In particular, COHEN: (i) used approximately $178,462 of the funds to renovate his home and to perform work on his pool; (iii) used approximately $67,500 of the funds to pay off his personal credit card bill; and (iv) transferred approximately $200,000 of the funds to an individual with whom he was in a romantic relationship.

Second, COHEN directed that $500,000 be transferred from the accounts of Parsons and Lee as purported donations to a non-profit organization, Beast Basketball.  COHEN then used approximately $238,000 of the funds purportedly donated to the non-profit to build a state-of-the-art athletic gym in the backyard of his home.  Parsons and Lee never, in fact, authorized any transfers of their funds to Beast Basketball.  When Parsons confronted COHEN about the donations, COHEN told Parsons in a text message, in substance and in part, that Parsons’s money had “[h]elped a lot of future prospects and a lot of underprivileged kids.”  COHEN did not disclose to Parsons that a substantial portion of Parsons’s donations had, in fact, been used to build a state-of-the-art athletic gym in COHEN’s backyard.

Third, COHEN used a sports agency and another law firm to channel approximately $328,125 of Parsons’s money to repay a former professional baseball player, Nyjer Morgan, who was a disgruntled client of COHEN’s.  Morgan had expressed concern to COHEN about investments and loans that COHEN made on Morgan’s behalf and demanded to be repaid.  On or about February 19, 2020, in the midst of making the payments of Parsons’s money to Morgan, COHEN messaged GILDER, “We gotta send [Morgan] more to get rid of him.”  Parsons did not authorize COHEN to use of funds from his account to pay off Morgan. 

*                *                *

COHEN, 52, of Chatsworth, California, was convicted of one count of wire fraud, which carries a maximum sentence of 20 years in prison, as well as one count of investment adviser fraud, which carries a maximum sentence of five years in prison.

The maximum potential sentences are prescribed by Congress and are provided here for informational purposes only, as any sentencing of the defendant will be determined by a judge. COHEN is scheduled to be sentenced by Judge Broderick at a date to be determined.

Mr. Clayton praised the outstanding work of the Federal Bureau of Investigation.  Mr. Clayton also thanked the United States Attorney’s Offices for the Central District of California, the Northern District of Georgia, and the Southern District of Texas for their assistance in the investigation.  Mr. Clayton further thanked the U.S. Securities and Exchange Commission, which filed a parallel civil action against COHEN, for its assistance and cooperation in this investigation.

The case is being prosecuted by the Office’s Complex Frauds and Cybercrime Unit.  Assistant U.S. Attorneys Kevin Mead, Brandon Thompson, and William Kinder are in charge of the prosecution.

United States Attorney for the Southern District of New York, Jay Clayton, announced today that CHRISTINE HUNSICKER, the founder and former Chief Executive Officer of CaaStle Inc. (“CaaStle”), pled guilty to one count of securities fraud in connection with a scheme to defraud hundreds of investors in CaaStle, a retail-technology business.  As part of her plea, HUNSICKER agreed to forfeit nearly $300 million in proceeds from her illegal scheme, as well as from a scheme to defraud investors in P180, a related business venture.  HUNSICKER pled guilty today before U.S. District Judge J. Paul Oetken. 

“Christine Hunsicker fashioned a massive fraud scheme, built on forged documents, fabricated audits, and material misrepresentations to hundreds of venture capital investors,” said U.S. Attorney Jay Clayton.  “Today’s guilty plea sends a clear message: individuals who exploit investor trust for personal gain will be held accountable.  Fraud in the venture capital ecosystem not only harms investors financially, but also undermines innovation and confidence in emerging businesses. We will continue to pursue those who deceive investors and distort our private markets.”

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

HUNSICKER, a well-known entrepreneur and successful businessperson in the fashion-tech industry, founded and was the CEO of CaaStle, a clothing technology business.  While promoting CaaStle as a rapidly growing business valued at more than $1.4 billion, HUNSICKER knew that CaaStle was in financial distress with limited cash and significant expenses.  To raise the capital for CaaStle’s operations, HUNSICKER provided investors with falsified income statements, fake audited financial statements, fictitious bank records, and sham corporate documents that grossly overstated CaaStle’s operating profit, revenue, and available cash.  She also misrepresented to investors that their funds would be used to purchase discounted shares from existing shareholders who needed liquidity, when in fact she fabricated the existence of those shareholders and used the money as new capital for CaaStle while concealing the company’s cash needs.

When confronted by an audit firm in October 2023 about transmitting a fake audit to an investor, HUNSICKER lied, falsely claiming that she had created the fake audit in connection with a lecture she gave at Princeton University, and that sending the audit to the investor had been a one-time error.  In reality, HUNSICKER had provided two fake audits to the investor while soliciting an investment.  She later repaid that investor to prevent the public disclosure of her fraud. Undeterred, she continued the scheme, providing an investor with fake bank account screenshots showing nearly $200 million in available cash when CaaStle had less than $200,000.  One month later, in October 2024, HUNSICKER provided a different investor with a fake draft audit.  In 2024, HUNSICKER also falsified the signatures of two Board directors to make it appear that the Board had authorized the grant of stock options to another investor, raising more than $20 million for CaaStle.

In 2024, HUNSICKER extended her fraudulent activities to P180, a new business venture. HUNSICKER intended for P180 to acquire clothing brands. P180 would then pay for and leverage the CaaStle service, which would infuse CaaStle with desperately needed cash.  HUNSICKER raised millions of dollars for P180 from existing CaaStle investors. In soliciting these investments, HUNSICKER repeated misrepresentations about CaaStle’s financial performance, and failed to disclose that her prior representations regarding CaaStle had been false.

In December 2024, the CaaStle Board removed HUNSICKER as Chair and prohibited her from soliciting investments. HUNSICKER, however, continued her fraudulent activities and raised and attempted to raise new capital for CaaStle and P180.  In February 2025, HUNSICKER attempted to sell an additional $19 million of her CaaStle shares to another investor.  HUNSICKER persisted in her deceptive practices even after law enforcement agents seized her electronic devices in March 2025, continuing to meet with the investor about a fake audit without revealing its fraudulent nature, her removal from the Board, or the prohibition against her selling shares.  CaaStle filed for Chapter 7 bankruptcy on June 20, 2025.

If you believe you have been a victim of the schemes described above, and you wish to provide information to law enforcement in connection to sentencing or to receive additional information, please contact Valeen Defendre, the Victim Witness Coordinator at the U.S. Attorney’s Office of the Southern District of New York, at 866-874-8900 or valeen.defendre@usdoj.gov.

*               *                *

HUNSICKER, 48, of Lafayette, New Jersey, pled guilty to one count of securities fraud, which carries a maximum sentence of 20 years in prison.            

The maximum potential sentence is prescribed by Congress and provided here for informational purposes only, as any sentencing of the defendant will be determined by the judge.  HUNSICKER is scheduled to be sentenced by Judge Oetken on August 5, 2026.

Mr. Clayton praised the outstanding work of the FBI.  Mr. Clayton also thanked the U.S. Securities and Exchange Commission, which has filed a separate civil action, for its assistance and cooperation in the investigation.

The case is being handled by the Office’s Securities and Commodities Fraud Task Force.  Assistant U.S. Attorneys Marguerite B. Colson and Alexandra N. Rothman are in charge of the prosecution.

United States Attorney for the Southern District of New York, Jay Clayton, Administrator of the Drug Enforcement Administration (“DEA”), Terrance Cole, and Assistant Attorney General for National Security, John A. Eisenberg, announced today that TAKESHI EBISAWA, a Japanese national, was sentenced today to 20 years in prison by U.S. District Judge Colleen McMahon for his participation in a conspiracy to traffic nuclear materials, including uranium and weapons-grade plutonium, from Burma to other countries, as well as his participation in international narcotics trafficking, weapons, and money laundering crimes.  EBISAWA previously pled guilty to six counts for those offenses before Judge McMahon.

“The illicit trafficking of nuclear materials is an existential threat to every New Yorker and every American,” said U.S. Attorney Jay Clayton.  “Takeshi Ebisawa tried to sell uranium, thorium, and plutonium to fuel a purported nuclear weapons program, along with deadly drugs destined for U.S. streets.  In exchange, Ebisawa hoped to procure battlefield weapons for insurgent groups and profit for himself.  This case is a testament to the extraordinary efforts of our law enforcement partners, who worked across three continents to stop Ebisawa and bring him to justice in the United States.”

“National security and public safety are the very tenets of DEA’s mission, and this case demonstrates our ability to dismantle the world’s most dangerous criminal networks,” said DEA Administrator Terrance Cole.  “Today’s sentence should send a clear message: threatening the United States by trafficking nuclear materials, narcotics, and military-grade weapons will trigger an uncompromising response.  DEA will hold conspirators accountable—no matter the distance, no matter their allegiance.”

“Thanks to the exceptional work of the DEA and our DOJ prosecutors, Takeshi Ebisawa has been held accountable for his crimes, including an attempt to sell weapons-grade plutonium to Iran and to flood New York with deadly narcotics,” said Assistant Attorney General for National Security John A. Eisenberg.  “The National Security Division will continue to work with our law enforcement partners to identify and dismantle criminal networks that seek to profit from the illicit trade in deadly weapons and substances.”

As reflected in the Complaint, the Superseding Indictment, and other filings and information in the public record:

From in or about 2019 until EBISAWA’s arrest on or about April 4, 2022, the DEA investigated EBISAWA in connection with the large-scale trafficking of narcotics, weapons, and nuclear materials.  During the investigation, EBISAWA unwittingly introduced an undercover DEA agent (“UC-1”), posing as a narcotics and weapons trafficker, to EBISAWA’s international network of criminal associates, which spanned Japan, Thailand, Burma, Sri Lanka, and the United States, among other places, for the purpose of arranging criminal transactions.  Over the course of three years, EBISAWA and his associates negotiated four sets of transactions with UC-1.

First, EBISAWA attempted to broker the sale of nuclear materials in exchange for military-grade weapons, including surface-to-air missiles, for an ethnic insurgent group in Burma.  EBISAWA intended to sell this nuclear material to UC-1’s associate, who was posing as an Iranian general in charge of Iran’s nuclear weapons program (the “General”). After initially offering uranium, EBISAWA proposed to supply the General with “plutonium” that would be even “better” and more “powerful” than uranium for Iran’s use.  In or about February 2022, EBISAWA and two co-conspirators met with UC-1 in Thailand, where one of the co-conspirators showed UC-1 samples of the nuclear materials (the “Nuclear Samples”).  With the assistance of Thai authorities, the Nuclear Samples were seized and subsequently transferred to the custody of U.S. law enforcement.  A U.S. nuclear forensic laboratory examined the Nuclear Samples and determined they contained detectable quantities of uranium, thorium, and weapons-grade plutonium.

Second, EBISAWA attempted to broker the sale of methamphetamine and heroin to UC-1 in exchange for heavy weapons for another ethnic insurgent group in Burma.  EBISAWA planned for the heroin and methamphetamine to be distributed in the New York market, and he understood the weapons to have been manufactured in the United States and taken from U.S. military bases in Afghanistan.  In or about February 2021, EBISAWA traveled to Denmark to inspect some of the purported weapons, including anti-tank rocket weapons, machine guns, and automatic rifles.

Third, EBISAWA conspired to sell, in a separate transaction, approximately 500 kilograms of methamphetamine and 500 kilograms of heroin to UC-1 for distribution in New York.  In furtherance of that transaction, in or about June 2021 and September 2021, one of EBISAWA’s co-conspirators provided samples in Thailand of approximately one kilogram of methamphetamine and approximately 1.4 kilograms of heroin.  The methamphetamine had a purity of approximately 98%, and the heroin had a purity of approximately 86% to 87%.

Finally, EBISAWA laundered $100,000, which UC-1 described to EBISAWA as narcotics proceeds, from the United States to Japan, in exchange for a 15% commission.  In or about November 2021, the DEA transferred $100,000 to U.S. bank accounts controlled by one of EBISAWA’s co-conspirators, and EBISAWA then delivered the Yen equivalent of approximately $85,000 in cash in Tokyo.

*          *          *

In addition to the prison term, EBISAWA, 61, was sentenced to five years of supervised release.

Mr. Clayton praised the outstanding efforts of the DEA’s Special Operations Division Bilateral Investigations Unit and the Internal Revenue Service – Criminal Investigation.  Mr. Clayton also thanked the DEA Tokyo Country Office, DEA Bangkok Country Office, DEA Chiang Mai Resident Office, DEA Jakarta Country Office, DEA Copenhagen Country Office, DEA New York Field Office, DEA New Delhi Country Office, the Counterterrorism Section of the Department of Justice’s National Security Division, the Office of International Affairs of the Department of Justice’s Criminal Division, and our law enforcement partners in Denmark, Indonesia, Japan, and the Kingdom of Thailand for their assistance.

The case is being handled by the Office’s National Security and International Narcotics Unit. Assistant U.S. Attorneys Kaylan E. Lasky, Alexander Li, and Kevin T. Sullivan are in charge of the prosecution, with assistance from the Counterterrorism Section.

Today, Takeshi Ebisawa, a Japanese national, was sentenced to 20 years in prison for his participation in a conspiracy to traffic nuclear materials, including uranium and weapons-grade plutonium, from Burma to other countries, as well as his participation in international narcotics trafficking, weapons, and money laundering crimes. Ebisawa previously pleaded guilty to six counts for those offenses before U.S. District Judge Colleen McMahon for the Southern District of New York.

“National security and public safety are the very tenets of DEA’s mission, and this case demonstrates our ability to dismantle the world’s most dangerous criminal networks,” said Administrator Terrance Cole of the U.S. Drug Enforcement Administration. “Today’s sentence should send a clear message: threatening the United States by trafficking nuclear materials, narcotics, and military-grade weapons will trigger an uncompromising response. DEA will hold conspirators accountable—no matter the distance, no matter their allegiance.”

“Thanks to the exceptional work of the DEA and our DOJ prosecutors, Takeshi Ebisawa has been held accountable for his crimes, including an attempt to sell weapons-grade plutonium to Iran and to flood New York with deadly narcotics,” said Assistant Attorney General for National Security John A. Eisenberg. “The National Security Division will continue to work with our law enforcement partners to identify and dismantle criminal networks that seek to profit from the illicit trade in deadly weapons and substances.”

“The illicit trafficking of nuclear materials is an existential threat to every New Yorker and every American,” said U.S. Attorney Jay Clayton for the Southern District of New York. “Takeshi Ebisawa tried to sell uranium, thorium, and plutonium to fuel a purported nuclear weapons program, along with deadly drugs destined for U.S. streets. In exchange, Ebisawa hoped to procure battlefield weapons for insurgent groups and profit for himself. This case is a testament to the extraordinary efforts of our law enforcement partners, who worked across three continents to stop Ebisawa and bring him to justice in the United States.”

As reflected in the Complaint, the Superseding Indictment, and other filings and information in the public record:

From in or about 2019 until Ebisawa's arrest on or about April 4, 2022, the DEA investigated Ebisawa in connection with the large-scale trafficking of narcotics, weapons, and nuclear materials. During the investigation, Ebisawa unwittingly introduced an undercover DEA agent (“UC-1”), posing as a narcotics and weapons trafficker, to Ebisawa's international network of criminal associates, which spanned Japan, Thailand, Burma, Sri Lanka, and the United States, among other places, for the purpose of arranging criminal transactions. Over the course of three years, Ebisawa and his associates negotiated four sets of transactions with UC-1.

First, Ebisawa attempted to broker the sale of nuclear materials in exchange for military-grade weapons, including surface-to-air missiles, for an ethnic insurgent group in Burma. Ebisawa intended to sell this nuclear material to UC-1’s associate, who was posing as an Iranian general in charge of Iran’s nuclear weapons program (the “General”). After initially offering uranium, Ebisawa proposed to supply the General with “plutonium” that would be even “better” and more “powerful” than uranium for Iran’s use. In or about February 2022, Ebisawa and two co-conspirators met with UC-1 in Thailand, where one of the co-conspirators showed UC-1 samples of the nuclear materials (the “Nuclear Samples”). With the assistance of Thai authorities, the Nuclear Samples were seized and subsequently transferred to the custody of U.S. law enforcement. A U.S. nuclear forensic laboratory examined the Nuclear Samples and determined they contained detectable quantities of uranium, thorium, and weapons-grade plutonium.

Second, Ebisawa attempted to broker the sale of methamphetamine and heroin to UC-1 in exchange for heavy weapons for another ethnic insurgent group in Burma. Ebisawa planned for the heroin and methamphetamine to be distributed in the New York market, and he understood the weapons to have been manufactured in the United States and taken from U.S. military bases in Afghanistan. In or about February 2021, Ebisawa traveled to Denmark to inspect some of the purported weapons, including anti-tank rocket weapons, machine guns, and automatic rifles.

Third, Ebisawa conspired to sell, in a separate transaction, approximately 500 kilograms of methamphetamine and 500 kilograms of heroin to UC-1 for distribution in New York. In furtherance of that transaction, in or about June 2021 and September 2021, one of Ebisawa's co-conspirators provided samples in Thailand of approximately one kilogram of methamphetamine and approximately 1.4 kilograms of heroin. The methamphetamine had a purity of approximately 98%, and the heroin had a purity of approximately 86% to 87%.

Finally, Ebisawa laundered $100,000, which UC-1 described to Ebisawa as narcotics proceeds, from the United States to Japan, in exchange for a 15% commission.  In or about November 2021, the DEA transferred $100,000 to U.S. bank accounts controlled by one of Ebisawa's co-conspirators, and Ebisawa then delivered the Yen equivalent of approximately $85,000 in cash in Tokyo.

In addition to the prison term, Ebisawa, 61, was sentenced to five years of supervised release.

The investigation was led by the DEA’s Special Operations Division Bilateral Investigations Unit and the IRS Criminal Investigation. The DEA Tokyo Country Office, DEA Bangkok Country Office, DEA Chiang Mai Resident Office, DEA Jakarta Country Office, DEA Copenhagen Country Office, DEA New York Field Office, DEA New Delhi Country Office, the Counterterrorism Section of the Department of Justice’s National Security Division, the Office of International Affairs of the Department of Justice’s Criminal Division, and law enforcement partners in Denmark, Indonesia, Japan, and the Kingdom of Thailand provided assistance.

Assistant U.S. Attorneys Kaylan E. Lasky, Alexander Li, and Kevin T. Sullivan for the Southern District of New York's National Security and International Narcotics Unit are in charge of the prosecution, with assistance from the National Security Division's Counterterrorism Section.

United States Attorney for the Southern District of New York, Jay Clayton, and Special Agent in Charge of the New York Field Office of the Internal Revenue Service, Criminal Investigation (“IRS-CI”), Harry T. Chavis, Jr., announced that PHILIP CASTRACUCCO pled guilty today to filing false U.S. Individual Income Tax Returns before U.S. District Judge Jessica G. L. Clarke in White Plains federal court.

“As he admitted today in court, Philip Castracucco filed false tax returns that underreported income from his business,” said U.S. Attorney Jay Clayton.  “Castracucco attempted to avoid paying his full obligation back to the government, one we all collectively share for essential services and infrastructure.  He has now pled guilty to a federal crime and faces time in prison.  Cheating on your taxes is stealing from your fellow New Yorkers.” 

“Philip Castracucco concealed income from the IRS and evaded the payment of taxes, contributing to our nation’s tax gap in the process.  With today’s guilty plea, he is being held accountable.  This outcome demonstrates the strength of our investigative efforts and our commitment to safeguarding the public from financial misconduct.  He now faces the consequences of choosing fraud over compliance,” said IRS-CI Special Agent in Charge Harry T. Chavis, Jr. 

According to the Information, public court proceedings and filings, as well as CASTRACUCCO’s admissions during his plea allocation:

CASTRACUCCO was the owner of a contracting business (“Company-1”) that performed construction work, primarily for masonry projects in the vicinity of Westchester County, New York. From 2017 through 2022, CASTRACUCCO caused Company-1 business receipt checks in a total amount of more than $3.5 million to be cashed through a check cashing business and converted to cash, rather than deposited into Company-1’s business bank account. CASTRACUCCO used this cash to pay salaries and wages to himself and his employees; for other items purchased for his own benefit; and for materials used by Company-1.

From 2018 through 2023, CASTRACUCCO filed with the Internal Revenue Service (“IRS”) U.S. Income Tax Returns for an S Corporation, IRS Forms 1120-S, for Company-1 that omitted its gross receipts from the aforementioned checks and more than $1 million of salaries and wages paid by Company-1 to CASTRACUCCO and others. CASTRACUCCO also caused to be filed with the IRS Forms 941, Employer’s Quarterly Federal Tax Returns, for Company-1 that omitted these salaries and wages.

From 2020 through 2023, CASTRACUCCO filed and caused to be filed with the IRS personal U.S. Individual Income Tax Returns, IRS Forms 1040, that omitted more than $900,000 of business income CASTRACUCCO received from Company-1.

*               *                *

CASTRACUCCO, 63, of Tuckahoe, New York, pled guilty to one count of making and subscribing to false U.S. Individual Income Tax Returns, which carries a maximum sentence of three years in prison.  CASTRACUCCO has agreed to pay restitution to the IRS, representing the additional tax due and owing as a result of his conduct, in an amount no less than $359,646.57.  Sentencing before Judge Clarke is scheduled for September 9, 2026.

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

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

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

Jay Clayton, the United States Attorney for the Southern District of New York, Roman Rozhavsky, Assistant Director of the FBI’s Counterintelligence & Espionage Division, and James C. Barnacle, Jr., the Assistant Director in Charge of the New York Field Office of the FBI, announced today that DENIS ALIMOV, a/k/a “Denis Nazarovich Alimov,” a/k/a “Denis N Alimov,” a/k/a “Denis Nevsky,” a/k/a “Dionis Nevsky,” a/k/a “Denis Klimenkov,” a/k/a “Denis Nazarovich Klimenkov,” was arrested on February 24, 2026 in Bogotá, Colombia, based on an Interpol Red Notice related to charges filed in Superseding Indictment S2 25 Cr. 122 (JPC) in the Southern District of New York. The Superseding Indictment charges ALIMOV with participating in an alleged plot to murder or kidnap two well-known dissidents abroad, as well as related terrorism offenses. U.S. authorities plan to seek the extradition of ALIMOV from Colombia. The case is assigned to U.S. District Judge John P. Cronan.

“As alleged, Denis Alimov and his co-conspirators tried to murder or kidnap two well-known dissidents, with Alimov offering a co-conspirator $1.5 million for each victim,” said U.S. Attorney Jay Clayton. “This chilling attempt shows not only the lengths malign actors will go to silence critics, but also, the resolve, expertise, and ability of American law enforcement and our partners abroad to disrupt those plots and bring those responsible to justice.”

“Alimov has been arrested for his alleged involvement in a plot to locate, kidnap, and murder political dissidents who dared to speak out against their authoritarian regime,” said Assistant Director Roman Rozhavsky of the FBI’s Counterintelligence & Espionage Division. “Transnational repression poses a serious and growing threat to individual rights and freedoms, and the FBI is committed to investigating all plots involving U.S.-based criminal actors or victims. Today’s announcement makes clear that combating this threat is among our highest priorities, and we will work with our partners at home and abroad to find and hold accountable those who use threats and violence to silence dissent.”

“Denis Alimov allegedly plotted with others to kidnap or murder two foreign dissidents and offered a co-conspirator a bounty for his help carrying out that plot,” said FBI Assistant Director in Charge James C. Barnacle. “The FBI will continue to prevent hired guns from prowling the globe to carry out the nefarious agenda of others, no matter where they are.”

As alleged in the Superseding Indictment unsealed today and Indictment 25 Cr. 122 (JPC):[1]

An investigation by the FBI revealed that from at least in or about October 2024 through in or about March 2025, ALIMOV orchestrated a plot, with others, to kidnap or murder two well-known dissidents residing abroad (collectively, the “Targets”) from a republic in a particular foreign country. The Targets have previously been the subject of multiple reprisal and assassination attempts. In furtherance of the plot, in or about October 2024, ALIMOV met with an alleged co-conspirator, Darko Durovic,[2] at a restaurant near the headquarters of a particular foreign country’s internal security and counterintelligence service. During that meeting, ALIMOV paid Durovic approximately $60,000 to finance the plot. ALIMOV also agreed to pay Durovic approximately $1.5 million in exchange for murdering or kidnapping each of the Targets.

Following their meeting in or about October 2024, ALIMOV repeatedly communicated with Durovic regarding the planning and status of the plot, including providing Durovic with IP address and phone number information for one of the Targets. Durovic, among other things, researched Glock handguns while planning travel to a European country to find one of the Targets; traveled to a second European country to locate another of the Targets; and recruited another co-conspirator to participate in the plot, who discussed with Durovic the need to “finance a hunting team” to find the Targets.

*        *        *

ALIMOV, 42, is charged with one count of conspiracy to commit murder and kidnapping in a foreign country, which carries a maximum sentence of life in prison; one count of conspiracy to provide material support to terrorists, which carries a maximum sentence of 15 years in prison; one count of provision and attempted provision of material support to terrorists, which carries a maximum sentence of 15 years in prison; one count of conspiracy to finance terrorism, which carries a maximum sentence of 20 years in prison; and one count of financing of terrorism, which carries a maximum sentence of 20 years in prison.

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

Mr. Clayton praised the outstanding efforts of the FBI New York Counterintelligence Office, the FBI Counterintelligence and Espionage Division, and the FBI International Operations Division. Mr. Clayton also thanked the Counterterrorism Section of the Department of Justice’s National Security Division, the Office of International Affairs of the Department of Justice’s Criminal Division, the Judicial Attaché Office in Bogotá, our partners at the United States Embassy to Colombia, and our law enforcement partners in Colombia, for their assistance.

This case is being handled by the Office’s National Security and International Narcotics Unit. Assistant U.S. Attorneys Nicholas S. Bradley and Kaylan E. Lasky are in charge of the prosecution, with assistance from Trial Attorney Michael Dittoe of the Counterterrorism Section.

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

[2] Durovic was subsequently arrested in or about March 2025, and his case is pending before Judge Cronan.

United States Attorney for the Southern District of New York, Jay Clayton, announced today that JOSHUA SCHUSTER pled guilty before U.S. District Judge Valerie E. Caproni to securities fraud for his role in a scheme to defraud investors in large real estate development projects located in New York City. SCHUSTER is scheduled to be sentenced on July 9, 2026.   

“Joshua Schuster promised to use investor funds to develop real estate projects throughout our City,” said U.S. Attorney Jay Clayton. “Schuster instead constructed a fraud, stealing more than $13 million from his investors in order to fund his lifestyle and pay off earlier investors in a Ponzi-like fashion. Fraud in the Real Estate market costs all New Yorkers, including through higher rents and home prices. This Office will continue to work with our law enforcement partners to protect investors in this market—and all markets—from fraudsters who line their own pockets at the expense of New Yorkers.”

According to the Indictment, plea agreement, and statements made in Court:

Over a five year period, JOSHUA SCHUSTER engaged in a scheme to defraud investors who had entrusted him with millions of dollars to finance real estate development projects in New York City. SCHUSTER induced investors to contribute capital to his projects by promising them equity in high-end real estate developments, and by representing that investor funds would be used exclusively for the acquisition and development of specific New York-based projects. Instead, SCHUSTER misappropriated in excess of $13 million dollars in investor money to fund his lifestyle, including over $1 million in personal credit card payments and hundreds of thousands of dollars in gambling losses; to repay earlier investors in a Ponzi-like fashion; and to cover unrelated business obligations and payroll.

*               *                *

SCHUSTER, 42, of Boca Raton, Florida, pled guilty to one count of securities fraud, which carries a maximum sentence of 20 years in prison.

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

Mr. Clayton praised the outstanding work of the FBI. Mr. Clayton also thanked the U.S. Securities and Exchange Commission, which has filed a separate civil action against SCHUSTER, for its assistance and cooperation in the investigation.

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

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United States Attorney for the Southern District of New York, Jay Clayton, and Assistant Director in Charge of the New York Field Office of the Federal Bureau of Investigation (“FBI”), James C. Barnacle, Jr., announced today that Ukrainian national YURII NAZARENKO, a/k/a “Yuriy Nazarenko,” a/k/a “Uriel Septimberus,” a/k/a “Tor Ford,” a/k/a “John Wick,” has been charged and pled guilty for his role in operating the website “OnlyFake,” which sold fake photos of identification documents such as passports and driver’s licenses (“Digital Fake IDs”).  NAZARENKO pled guilty today to conspiracy to commit fraud in connection with identification documents, authentication features, and information before U.S. District Judge Margaret M. Garnett.

“We rely on government issued IDs to combat terrorism, hijackings, fraud, money laundering, and a host of other crimes,” said U.S. Attorney Jay Clayton.  “OnlyFake’s manufacture of fraudulent IDs and other documents puts us all at risk and must be stopped.”

“Yurii Nazarenko developed a website to produce more than 10,000 fake identification documents, earning hundreds of thousands of dollars from these illicit sales.  This platform offered its clients a myriad of criminal opportunities, including bypassing traditional regulations to launder money.  The FBI will not tolerate any individual who exploits technology to allow others to conceal their true identity for potentially nefarious purposes,” said FBI Assistant Director in Charge James C. Barnacle, Jr.

According to the charging documents and statements made in public filings and public court proceedings:

OnlyFake offered its customers the ability to generate various types of Digital Fake IDs.  For example, OnlyFake allowed its customers to generate fake U.S. identification documents, including digital versions of driver’s licenses for each of the fifty states, United States passports, United States passport cards, and Social Security cards.  OnlyFake also offered customers the ability to generate fake digital versions of identification documents of various other countries, including passports for approximately 56 countries other than the United States.

OnlyFake customers could customize the type of Digital Fake ID they wanted, including whether the Digital Fake ID should appear to be a scan of a real identification document, or appear to be a photograph of a real identification document taken on a surface like a table.  Photos of the menu to generate a Digital Fake ID and of a fake United States passport generated through OnlyFake are below:

Customers paid OnlyFake for Digital Fake IDs in cryptocurrency.  OnlyFake offered discounts for bulk purchases of Digital Fake IDs and offered packages of as many as 1,000 Digital Fake IDs at once. NAZARENKO operated and controlled OnlyFake.  From approximately 2021, up to and including 2024, OnlyFake received at least approximately hundreds of thousands of dollars from customers purchasing Digital Fake IDs, and OnlyFake was used to generate at least approximately 10,000 Digital Fake IDs.

Banks and cryptocurrency exchanges generally require individuals seeking to open accounts to provide some type of government-issued identification document to prove their real identity (called Know Your Customer, or “KYC” programs) in order to prevent money laundering.  Many of those financial institutions allow individuals to submit scans or photographs of their government-issued identification documents to establish their identity.  The Digital Fake IDs sold by OnlyFake allowed individuals to circumvent KYC programs and to launder money by concealing their real identities.

*               *                *

NAZARENKO, 27, of Ukraine, pled guilty to one count of conspiring to commit fraud in connection with identification documents, authentication features, and information, which carries a maximum sentence of 15 years in prison.  NAZARENKO also agreed to forfeit $1,200,000, representing the proceeds of OnlyFake’s activity.

The maximum potential sentence is prescribed by Congress and is provided here for informational purposes only, as any sentencing of the defendant will be determined by the judge.  NAZARENKO is scheduled to be sentenced by Judge Garnett on June 26, 2026.

Mr. Clayton praised the outstanding work of the FBI.  He also thanked Romanian authorities and the U.S. Department of Justice’s Office of International Affairs for their assistance in securing Nazarenko's September 2025 extradition from Romania. 

The case is being prosecuted by the Office’s Complex Frauds and Cybercrime Unit.  Assistant U.S. Attorneys Kevin Mead and Angela Zhu are in charge of the prosecution.

United States Attorney for the Southern District of New York, Jay Clayton, announced today the settlement of a civil rights lawsuit against the NEW YORK CITY DEPARTMENT OF PARKS & RECREATION (“PARKS”) and the HISTORIC HOUSE TRUST (“HHT”).  The settlement resolves violations of the Americans with Disabilities Act (“ADA”) at the Van Cortlandt House Museum in Van Cortlandt Park, in the Bronx, New York. 

“The ADA applies to all places of public accommodation, even those that predate our Declaration of Independence,” said U.S. Attorney Jay Clayton.  “The settlement approved today will expand access at the Van Cortlandt House Museum so more visitors, including people with disabilities, can experience this important piece of New York City history.”

According to the Complaint filed in Manhattan federal court, the Agreement entered by the court, and information from the Van Cortlandt House Museum:

The Van Cortlandt House was built in 1748 as the residence of the Van Cortlandt family.  During the Revolutionary War, General George Washington stayed at the House in 1776 and 1783.  At the end of the nineteenth century, the Van Cortlandt family sold the property to the City of New York.  The City has operated the property as a museum since 1897, in coordination with the HHT.  A Cottage was added to the property in 1910 that now serves as a welcome center and gift shop.  The Van Cortlandt House Museum aspires to recreate the furnishings and decoration of the home from 1749 to 1823.

The settlement, in the form of a court-approved stipulation and order (the “Agreement”), was entered today by U.S. District Judge J. Paul Oetken and requires PARKS, among other things, to embark on a long-term capital project that seeks to provide barrier-free access to the basement and the first floor of the House.  In the near term, the Agreement obliges PARKS to remove barriers to accessibility at the Cottage, many of which have already been removed.  After the United States issued its findings letter to PARKS regarding the violations of the ADA, PARKS installed a wooden ramp that for the first time provided access to the Cottage.  The Agreement obliges PARKS to maintain this ramp pending completion of the broader capital project.  While providing physical access to the second and third floors of the House is not readily achievable due to architectural constraints, the ADA requires places of public accommodation to explore other methods of accessibility.  As a result, the Agreement requires PARKS to offer iPads or similar electronic devices at the Cottage that provide a virtual 360-degree tour of the entirety of the House.

Mr. Clayton thanked the Disability Rights Section of the Department of Justice, and particularly its architectural staff, for their assistance in this matter.

Since President George H.W. Bush signed the ADA into law in 1990, the U.S. Attorney’s Office for the Southern District of New York has played a significant role in bringing numerous New York City institutions into compliance with the ADA and its regulations.  The Office’s enforcement efforts include, among many others, Yankee Stadium, Madison Square Garden, Radio City Music Hall, the Shubert Theaters, the Nederlander Theaters, the Jujamcyn Theaters, Avery Fisher Hall at Lincoln Center, the Metropolitan Opera, the Apollo Theater, the Rainbow Room, The Vessel at Hudson Yards, and dozens of hotels and restaurants.

To file a complaint alleging that any place of public accommodation within the Southern District of New York is not accessible to persons with disabilities, use the Civil Rights Complaint Form available on the United States Attorney’s Office’s website, https://www.justice.gov/usao-sdny/civil-rights.  Complaints should be emailed or sent by mail to:

U.S. Attorney’s Office, Southern District of New York

86 Chambers Street, 3rd Floor

New York, New York 10007

Attention: Chief, Civil Rights Unit

USANYS-CivilRights@usdoj.gov

The case is being handled by the Office’s Civil Rights Unit in the Civil Division. Assistant U.S. Attorney David J. Kennedy is in charge of the case. 

U.S. Attorney for the Southern District of New York, Jay Clayton, announced today the Office’s new Corporate Enforcement and Voluntary Self-Disclosure Program for illegal activity involving fraud and financial misconduct affecting market integrity. The program, building on years of experience with corporate self-reporting, a focus on individual accountability, and a commitment to the interests of victims, is designed to protect investors, root out wrongdoing more quickly, and strengthen the integrity of the financial markets by encouraging companies to promptly disclose misconduct and take swift remedial measures.

The program establishes clear guidelines and predictable treatment for companies that voluntarily disclose certain classes of criminal activity to this Office. Under this program, eligible companies that self-report qualifying illegal activity, fully cooperate with law enforcement, commit to ongoing reporting of criminal conduct for three years, and remediate harm caused by the misconduct will have a clear, agreed path to a declination. Specifically, the Office will extend a conditional declination letter to qualifying companies shortly after they make a qualifying self-report. After a company satisfies its cooperation and remediation obligations and restitutes victim losses, the Office will provide a final declination letter, concluding the matter without criminal charges.

“The self-reporting program rests on a simple principle: prompt corporate disclosure and cooperation in rooting out and remedying wrongdoing is in the best interest of victims, shareholders, employees, and our markets generally,” said U.S. Attorney Jay Clayton. “When companies do the right thing—report quickly, cooperate fully, and remediate harm—they should know where they stand. With this program, we expect there will be strong alignment among corporate fiduciary duties, corporate cooperation with the Department of Justice, and the interests of victims, shareholders, and the public generally. To be sure, companies that choose not to cooperate proactively and are found to have engaged in criminal conduct, will face significant corporate consequences.”

The program builds on the Office’s longstanding practice of favorably weighing voluntary disclosures and sincere cooperation in its charging decisions. Consistent with this new program, the Office already has extended a conditional declination letter to a self-reporting company within a month of that company making a disclosure. These types of self-reports also enable the Office to focus on holding individuals accountable. During U.S. Attorney Clayton’s tenure, the Office has brought criminal charges against individual executives and employees based on information originally obtained through corporate self-disclosures and will continue to do so. These actions demonstrate that early disclosure and cooperation under this program will help this Office hold accountable individual wrongdoers, while also offering swift resolution and certainty to self-reporting entities that commit to remediation and cooperation.

Additional details about the SDNY Corporate Enforcement and Voluntary Self-Disclosure Program for Financial Crimes, including information about eligibility criteria and a model conditional declination letter, are available on the U.S. Attorney’s Office website. Please visit https://www.justice.gov/usao-sdny/self-reporting-program.

United States Attorney for the Southern District of New York, Jay Clayton, announced today that KYLE WHITE was sentenced to 20 years in prison for advertising and distributing child pornography on his online marketplace he called “The Ho Zone.”  On October 21, 2025, WHITE pled guilty before U.S. District Judge Colleen McMahon, who imposed today’s sentence.

“Kyle White’s operation of the large-scale online pornography marketplace he callously dubbed ‘The Ho Zone’ caused immeasurable harm to his over one thousand child and adult victims whose sexual abuse materials he distributed to thousands of paying customers,” said U.S. Attorney Jay Clayton.  “White’s high-volume, illegal pornography enterprise earned him a staggering profit at the expense of innocent children and young women whose sexual trauma he broadcast to the world.  There is a clear message from today's 20-year sentence:  anyone who seeks to profit from the sexual exploitation of children will face justice for their heinous crimes.  Every New York family wants Kyle White's 'Ho Zone' operation shut down and Mr. White off the streets.”

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

WHITE ran an online pornography marketplace known as “The Ho Zone” on the messaging application Telegram, earning a profit of over $387,000.  WHITE categorized the pornography he advertised and sold on “The Ho Zone” into dozens of groups and channels with thousands of members and subscribers, such as “Other Teen (18+) Leaks,” “THZ Black Market,” “MOST POPULAR GIRLS LISTS,” “Tiktoker Private Leaks,” “ATHLEAKS,” and more.  Within each of these groups and channels, WHITE further categorized the pornography by the name of the woman or minor girl featured in the sexually explicit content.  Each group and channel on “The Ho Zone” featured a variety of free content as a preview of what users could get if they were to pay WHITE for full access. Such access cost between $15 and $75 depending on the pornography purchased.  Once a user paid WHITE for the content of a specific woman or minor girl available on “The Ho Zone,” the user gained permanent access to numerous sexually explicit photographs and videos of that woman or minor girl that WHITE had compiled, enhanced, and edited.

WHITE advertised and sold child pornography on “The Ho Zone,” which depicted minor victims as young as 11 years old, as well as minor victims engaging in sexually explicit conduct with their minor victim siblings.  WHITE also sold illegally obtained adult pornography on “The Ho Zone,” including pornography that had been hacked from women’s cellphones and pornography that was the product of blackmail and extortion.  Most of the women featured were between 18 and 23 years old.  In total, WHITE advertised and distributed illegal pornography of over one thousand adult and minor victims.

WHITE knew that running “The Ho Zone” was illegal but he continued to sell child pornography and illegally obtained adult pornography on the marketplace because it was lucrative. For example, WHITE claimed in a message to another Telegram user that he “made over 300k in the first year” of operating “The Ho Zone.”[1] WHITE also stated that he did not want to stop selling child pornography because “[i]t’s just easier said than done givin up $1,000’s,” and WHITE was “sure the feds got more important things to worry abt [sic] lol.”

After the FBI searched WHITE’s home and seized his electronic devices, WHITE engaged in obstruction of justice.  Although WHITE pretended to assist the FBI in shutting down “The Ho Zone,” in reality, WHITE continued running “The Ho Zone” on a backup account from a new cellphone.

Victims of WHITE and “The Ho Zone” are encouraged to visit https://forms.fbi.gov/victims/THZVictims to learn about available resources that may assist them.

*               *                *

In addition to the prison term, WHITE, 27, of Louisville, Kentucky, was sentenced to 20 years of supervised release. 

Mr. Clayton praised the outstanding investigative work of the Federal Bureau of Investigation, and in particular, the victim specialists with FBI’s New York Division.

This case is being supervised by the Office’s General Crimes Unit.  Assistant U.S. Attorney Chelsea L. Scism is in charge of the prosecution.
 

[1] Communications referenced herein are described in substance and in part.

United States Attorney for the Southern District of New York, Jay Clayton, announced that a jury found RAMON RODRIGUEZ, a/k/a “Pollo,” guilty today of murder in aid of racketeering, attempted murder in aid of racketeering, firearms offenses, and racketeering conspiracy.  The convictions relate to RODRIGUEZ’s participation in the “Shooting Boys” gang (a set of the Trinitarios), the June 21, 2021, murder of Milton Grant during a robbery in Manhattan, and the attempted murder of another victim during that same robbery.  RODRIGUEZ was convicted following a two-week jury trial before U.S. District Judge Jed S. Rakoff, who will impose sentence on June 30, 2026.

“For years, Ramon Rodriguez—along with members of the Shooting Boys—committed shootings, robberies, drug trafficking, fraud, and witness retaliation throughout New York City,” said U.S. Attorney Jay Clayton.  “Worst of all, Rodriguez murdered Milton Grant in cold blood during a robbery, senselessly killing him for his watch, and attempted to murder another innocent victim at the same time.  Gang violence poses a grave threat to our communities.  Thanks to our prosecutors and law enforcement partners, including the NYPD, whose detectives drove this murder case from the beginning, New York streets are safer tonight.”

According to the allegations in the Indictment, public court filings, and evidence presented at the jury trial:

From at least 2018 through 2025, RODRIGUEZ was a member of the Trinitarios and an associate of the Shooting Boys, a set of the Trinitarios.  The Shooting Boys, who operated primarily in the Bronx and Manhattan, engaged in murders, attempted murders, robberies, drug trafficking, fraud, and witness retaliation.

On June 13, 2021, RODRIGUEZ and members of the Shooting Boys committed a robbery outside a Bronx nightclub.  During the robbery, RODRIGUEZ shot a man in the leg, causing significant injuries.

Just eight days later, on June 21, 2021, RODRIGUEZ and members of the Shooting Boys committed another robbery outside a Manhattan nightclub.  During the robbery, RODRIGUEZ shot Milton Grant in the head, killing him, then stole Grant’s watch from his lifeless body.  As Grant’s friend ran away, RODRIGUEZ shot at him as well, attempting to kill him.

After being arrested and detained at the Metropolitan Detention Center in Brooklyn, RODRIGUEZ continued to participate in the Shooting Boys gang, including by repeatedly possessing weapons.  On December 3, 2023, RODRIGUEZ and other members and associates of the Shooting Boys ambushed, stabbed, and slashed an inmate who was cooperating with law enforcement in order to retaliate against that potential witness and deter others from cooperating.

*              *             *

RODRIGUEZ, 21, of the Bronx, was convicted of one count of murder in aid of racketeering, which carries a maximum sentence of life 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; two counts of using, carrying, and possessing firearms—which were brandished and discharged—during and in relation to a crime of violence, each of which carries a maximum sentence of life in prison and a mandatory minimum sentence of 10 years in prison, which must run consecutively to any other term of imprisonment imposed; and one count of racketeering conspiracy with a special sentencing factor, which carries a maximum sentence of life in prison.

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

Mr. Clayton praised the outstanding investigative work of the New York City Police Department and Homeland Security Investigations and thanked the New York County District Attorney’s Office for its assistance.   

The case is being prosecuted by the Office’s Violent Organizations and Crime Unit.  Assistant U.S. Attorneys Dominic A. Gentile and Jim Ligtenberg are in charge of the prosecution, with the assistance of Paralegal Specialists William Coleman and Sandy Alcantara.

United States Attorney for the Southern District of New York, Jay Clayton, announced today that DEREK HASSELBRINK, a/k/a “Derek Spear,” was sentenced to 15 years in prison by U.S. District Judge Nelson S. Román for enticing a minor to engage in unlawful sexual activity.

“Sexual exploitation of children is a heinous crime,” said U.S. Attorney Jay Clayton.  “New Yorkers want sexual predators who target minors arrested promptly, prosecuted rigorously, and sentenced in line with horrific nature of their crimes.  Thanks to our prosecutors, Hasselbrink will not threaten our children for a long time.  If you suspect sexual exploitation, please reach out to our law enforcement partners.” 

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

From at least in or about April 2023 up to on or about July 2, 2023, HASSELBRINK, a convicted sex offender, engaged in sexually explicit message conversations with a 15-year-old girl (“Victim-1”), and traveled to meet Victim-1 near her home in Dutchess County, New York, to engage in sexual activity.

Any individuals with information concerning the sexual exploitation of children are asked to contact the Federal Bureau of Investigation at 1-800-CALL-FBI (225-5324) or https://tips.fbi.gov.

*                *                *

In addition to the prison term, HASSELBRINK, 49, of Quincy, Illinois, was sentenced to 15 years of supervised release.  

Mr. Clayton praised the efforts of the FBI, the Dutchess County Sheriff’s Office, the Quincy, Illinois Police Department, the Adams County States Attorney’s Office, Carroll County Job and Family Services, the Office of the Attorney General of Kentucky, the Springfield, Illinois Field Office of the FBI, and the Canton, Ohio Resident Agency of the FBI in connection with this investigation.

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

United States Attorney for the Southern District of New York, Jay Clayton, and Assistant Director in Charge of the New York Field Office of the Federal Bureau of Investigation (“FBI”), James C. Barnacle, Jr., announced today that NOMMA ZARUBINA, a Russian citizen, pled guilty to making false statements to the FBI relating to her relationship with the Federal Security Service of the Russian Federation (“FSB”), and to naturalization fraud for lying about her involvement in prostitution-related offenses.  ZARUBINA pled guilty today before Chief U.S. District Judge Laura Taylor Swain and is scheduled to be sentenced on June 11, 2026.

“While Nomma Zarubina was trying to cultivate relationships with American law enforcement, civil society organizations, and others, she was lying to the FBI about her ties to the Russian Federation,” said U.S. Attorney Jay Clayton.  “Today’s plea demonstrates our commitment to protecting the integrity of the naturalization process and reinforces that those who lie to federal authorities will incur serious consequences.”

“After years of lies, Nomma Zarubina finally confessed to her repeated denial to FBI special agents of her contacts and relationship with Russian intelligence services, as well as to her failure to disclose her involvement in an interstate prostitution network in an effort to secure U.S. citizenship,” said FBI Assistant Director in Charge James C. Barnacle, Jr. “Zarubina’s intentional concealment of her misconduct and her lies about her affiliation with Russian intelligence were an affront to law enforcement’s national security efforts.  The FBI continues to defend our homeland from those who seek to impede federal investigations and deceive U.S. authorities.”

As alleged in public court filings, statements at public court proceedings, and the charging documents in the case:

The FSB is Russia’s principal security agency and is the successor agency to the Soviet Union’s Committee for State Security, otherwise known as the KGB.  The FSB is believed to engage in, among other things, intelligence gathering and other covert operations abroad, including in the United States.  The FSB and particular FSB officers have been sanctioned in the United States by both the U.S. Department of the Treasury and U.S. Department of State.

ZARUBINA began meeting with the FBI in or around October 2020 in connection with the FBI’s ongoing investigation into Elena Branson, a Russian national who had a close relationship with ZARUBINA and who was later charged in March 2022 for acting as an unregistered foreign agent.  During an April 2021 meeting with the FBI, ZARUBINA told interviewing agents, in substance and in part, that she had recently traveled to Russia but did not have any contact with Russian intelligence services.  Then, in September 2023, ZARUBINA told the FBI, in substance and in part, that she had been interviewed once by the FSB on her way back to Russia from the United States, but that she had not been interviewed by the FSB or Russian intelligence services on any other occasions.

ZARUBINA’s statements to the FBI in 2021 and 2023 about her contacts with Russian intelligence services, specifically the FSB, were false. Indeed, in June and July 2024, ZARUBINA admitted to the FBI that she had previously lied to federal law enforcement officers about her relationship with the FSB, stating, in substance and in part, that: in or around December 2020, while in Russia, ZARUBINA met with an officer whom she understood was from the FSB, agreed to help the FSB with “network marketing,” and was given the FSB code name “Alyssa”; between in or about December 2020 and in or about June 2022, ZARUBINA met with the FSB officer several times and communicated with the FSB officer on numerous occasions using encrypted messaging applications; and the FSB officer instructed ZARUBINA to share contact information of journalists in the United States, to attend the 2021 St. Petersburg International Economic Forum, and to look into a particular individual in the United States, which ZARUBINA agreed to do.

In addition, between at least 2018 and 2024, while residing in the United States, ZARUBINA participated in a scheme to transport women between New York and New Jersey to engage in prostitution at a massage parlor business in East Brunswick, New Jersey.  Notwithstanding her involvement in that conduct, in July 2022, ZARUBINA falsely stated in response to a question in her application for naturalization in the United States that she had never “procured anyone for prostitution.”

Finally, after being indicted and while on bail in the instant case, ZARUBINA sought to unlawfully influence a witness by sending numerous unsolicited and harassing messages to one of the FBI agents involved in her case.  ZARUBINA’s obstructive conduct continued for several months, including after being admonished by the Court to stop contacting the agent, and resulted in the revocation of her bail.

*               *                *

ZARUBINA, 35, of Brooklyn, New York, pled guilty to one count of making false statements to the FBI, which carries a maximum sentence of five years in prison, and one count of naturalization fraud, which carries a maximum sentence of five years in prison.

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

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

This case is being handled by the Office’s National Security and International Narcotics Unit.  Assistant U.S. Attorneys Sarah L. Kushner, David J. Robles, and Henry L. Ross are in charge of the prosecution.