Southern District of New York

Geoffrey S. Berman, the United States Attorney for the Southern District of New York, and James D. Robnett, the Special Agent-in-Charge of the New York Field Office of the Internal Revenue Service, Criminal Investigation (“IRS-CI”), announced today the unsealing of a criminal complaint charging TODD KOZEL with wire fraud conspiracy, wire fraud, and money laundering conspiracy in connection with a scheme to defraud his ex-wife by hiding tens of millions of dollars’ worth of assets in a foreign trust and using a portion of those assets secretly to purchase a $12.75 million condominium in Manhattan.  KOZEL was arrested this afternoon at John F. Kennedy airport and will be presented before U.S. Magistrate Judge Debra Freeman in Manhattan federal court later today.

Manhattan U.S. Attorney Geoffrey S. Berman said:  “As alleged, Todd Kozel defrauded his ex-wife by hiding millions of dollars in assets in an offshore trust, and purchasing expensive Manhattan real estate and masking his ownership.  Kozel is now in custody facing these serious charges.”

IRS-CI Special Agent-in-Charge James D. Robnett said:  “Those who create elaborate schemes that have no purpose other than to mislead run a very high risk of prosecution.  IRS-CI, and our partners at the Large Business and International Division, have made it a priority to investigate abusive trusts that are setup offshore to hide the true beneficial owner of income and assets.”       

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

Between 2010 and 2014, KOZEL, a United States citizen, earned an average of approximately $10 million in income per year as the chief executive officer of a foreign oil company.  KOZEL did not, however, file U.S. tax returns for tax years 2011 through 2014.  In August 2010, KOZEL and his ex-wife filed for divorce in Florida state court.  From February 2012 through the present, KOZEL engaged in a fraudulent scheme with others to hide assets from his ex-wife during their divorce proceedings and in violation of orders entered by the Florida court, which required KOZEL fully to disclose and not dissipate his assets and to make certain payments to his ex-wife. 

In furtherance of the scheme to defraud his ex-wife, KOZEL, among other things, transferred valuable assets, including approximately 29 million shares of his foreign oil company, into a foreign trust organized under the laws of the Isle of Jersey, and repeatedly lied under oath about his control and ownership of the foreign trust.  KOZEL also used approximately $12.75 million of his assets from the foreign trust to purchase a condominium in Manhattan.  Further, KOZEL fraudulently concealed his ownership interest in the Manhattan condominium by creating a New York limited liability company that was secretly controlled by the foreign trust to pose as the paper “owner” of the condominium; entering into a sham lease transaction to make it appear as though KOZEL were leasing the condominium and did not own it; and entering into a backdated sham sale transaction to prevent his ex-wife from seizing the condominium after the Florida state court ordered KOZEL to pay his ex-wife an additional $34 million in September 2015.  As a result of this fraudulent scheme, KOZEL caused his ex-wife to suffer tens of millions of dollars in financial harm.

                         *                *                *

KOZEL, 51, of New York, New York, is charged with wire fraud conspiracy, wire fraud, and money laundering conspiracy, each of which carries a maximum sentence of 20 years in prison.  The maximum potential sentences in this case are prescribed by Congress and are provided here for informational purposes only, as any sentencing of the defendant will be determined by the judge.   

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

This case is being handled by the Office’s Complex Frauds and Cybercrime Unit.  Assistant United States Attorneys Jennifer L. Beidel and Sarah E. Paul are in charge of the prosecution.

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

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

Ahmed Mohammed El Gammal, 46, a resident of Arizona, was sentenced today to 12 years in prison for providing and conspiring to provide material support to the Islamic State of Iraq and al-Sham (ISIS), a designated foreign terrorist organization, aiding and abetting the receipt of military-type training from ISIS, and conspiring to receive such training. A jury convicted El Gammal of these charges on Jan. 30, 2017, following a three-week trial.

Assistant Attorney General for National Security John C. Demers and U.S Attorney Geoffrey S. Berman for the Southern District of New York made the announcement.  U.S. District Judge Edgardo Ramos presided over the trial and issued the sentence.

According to documents publicly filed in this case and evidence presented at trial:

Beginning in at least April 2014, El Gammal was an outspoken online supporter of ISIS and ISIS’s Caliphate, or Islamic government, in Syria. Among other things, El Gammal announced on social media that he was “with” “[t]he State of Iraq and the Levant,” referring to ISIS; celebrated ISIS’s achievements in battle and announcement of the establishment of a Caliphate; proclaimed that he “support[s] jihad everywhere”; and declared that “[b]eheadings have a magical effect.” El Gammal additionally announced that “[i]f Daesh [i.e., ISIS] gets to Egypt, I will go join them, so I can torture the Egyptians, and whip them.”

As of at least August 2014, a 24-year-old New York City resident named Samy El-Goarany began to express his support for ISIS on social media as well. On August 14, 2014, El-Goarany learned that El Gammal had made comments supportive of ISIS. Minutes later, El-Goarany contacted El Gammal and they communicated via an encrypted communications platform. Less than an hour after this online conversation, El Gammal sent El-Goarany a documentary on life in the Islamic State that outlined the type of training ISIS provides. Over the next several months, El Gammal and El-Goarany continued corresponding over the Internet, although El Gammal and El-Goarany ultimately deleted many of these exchanges.

In the midst of these communications, in October 2014, El Gammal traveled to New York City, where El-Goarany was enrolled in college, and met with El-Goarany. During this October 2014 trip, El Gammal provided El-Goarany with the phone number for El Gammal’s contact in Turkey, Ateia Aboualala, who would be responsible for helping El-Goarany travel from Turkey across the border to ISIS in Syria. While in New York City, El Gammal also contacted Aboualala in Turkey regarding El-Goarany’s plans to travel. El Gammal later provided El-Goarany with social media contact information for Aboualala. Thereafter, in a coded conversation, El Gammal assured Aboualala that he had vetted El-Goarany and El-Goarany could be trusted.

In late January 2015, El-Goarany left New York City for Istanbul, Turkey. Upon arriving in Turkey, El-Goarany immediately reached out to Aboualala. While El-Goarany was in Turkey, El Gammal continued to communicate with El-Goarany over the Internet, providing advice on traveling toward Syria and on meeting with Aboualala. After arriving in Syria, El-Goarany received religious training and advanced military-type training from ISIS throughout 2015. On May 7, 2015, in the midst of his training with ISIS, El-Goarany reported to El Gammal that “everything [was] going according to plan.” A few months later, on July 16, 2015, El-Goarany wrote to El Gammal: “Life has changed a lot for me at this new job but I love it and I don’t regret taking up the offer,” and “May God reward you with goodness,” to which El Gammal responded, “Great.”

In May 2015, El-Goarany’s father traveled to Turkey and met with Aboualala, in an attempt to locate his son. Upon learning of this, El Gammal instructed Aboualala, “Don’t ever ever mention me. Not even my name[,]” and urged Aboualala not to meet with El-Goarany’s father. On May 5, 2015, Aboualala reported back to El Gammal, assuring El Gammal that, when Aboualala met up with El-Goarany’s father, “I covered up for you.”

In coded messages in mid-2015, El Gammal reached out to El-Goarany to inquire about the possibility of El Gammal’s traveling to ISIS in Syria. On July 13, 2015, El-Goarany, again in a coded message, responded that he needed to ask his “supervisors at work first,” but commented that “it’s risky because the parking lot these days is going under a lot of renovation, especially in the north side,” alluding to military operations occurring in northern Syria at the time.

On November 23, 2015, El-Goarany’s brother received a message from a member of ISIS with an attached letter from El-Goarany. The letter read: “if you’re reading this then know that I’ve been killed in battle and am now with our Lord, inshaAllah. Remember what I told you . . . we will win this war one day, this war between Iman (Belief) and Kufr (Disbelief) between Good and Evil. . . .”

* * *

In addition to the prison term, El Gammal was sentenced to 3 years’ supervised release.

Mr. Demers and Mr. Berman praised the outstanding investigative work of the FBI’s New York Joint Terrorism Task Force – which principally consists of agents from the FBI and detectives from the NYPD. Mr. Demers and Mr. Berman also thanked the U.S. Attorney’s Office for the District of Arizona and the Phoenix Field Office of the FBI for their assistance.

Assistant U.S. Attorneys Negar Tekeei, Brendan F. Quigley, and Andrew J. DeFilippis of the Southern District of New York are in charge of the prosecution, with assistance from Trial Attorney Ranganath Manthripragada of the National Security Division’s Counterterrorism Section. 

Geoffrey S. Berman, the United States Attorney for the Southern District of New York, and John C. Demers, Assistant Attorney General for National Security, announced that AHMED MOHAMMED EL GAMMAL, a resident of Arizona, was sentenced today by U.S. District Judge Edgardo Ramos to 12 years in prison for providing and conspiring to provide material support to the Islamic State of Iraq and Syria (“ISIS”), aiding and abetting the receipt of military-type training from ISIS, and conspiring to receive such training.  A jury convicted EL GAMMAL of these charges on January 30, 2017, following a three-week trial before Judge Ramos.

U.S. Attorney Geoffrey S. Berman said:  “Ahmed Mohammed El Gammal, a fervent ISIS supporter, was convicted of assisting a fellow supporter and aspiring ISIS fighter to receive military-type training.  Through the use of coded messaging, the two conspired to navigate foreign travel, and avoid law enforcement roadblocks to get the would-be fighter to his ultimate goal – a Syrian battlefield.  El Gammal – who extoled the virtues of violence, and chillingly even beheadings, in the name of ISIS – has now witnessed first-hand how a fair justice system works, and has been sentenced to a lengthy term in federal prison.”

According to documents publicly filed in this case and evidence presented at trial:

Beginning in at least April 2014, EL GAMMAL was an outspoken online supporter of ISIS and ISIS’s Caliphate, or Islamic government, in Syria.  Among other things, EL GAMMAL announced on social media that he was “with” “[t]he State of Iraq and the Levant,” referring to ISIS; celebrated ISIS’s achievements in battle and announcement of the establishment of a Caliphate; proclaimed that he “support[s] jihad everywhere”; and declared that “[b]eheadings have a magical effect.”  EL GAMMAL additionally announced that “[i]f Daesh [i.e., ISIS] gets to Egypt, I will go join them, so I can torture the Egyptians, and whip them.”

As of at least August 2014, a 24-year-old New York City resident named Samy El-Goarany began to express his support for ISIS on social media as well.  On August 14, 2014, El-Goarany learned that EL GAMMAL had made comments supportive of ISIS.  Minutes later, El-Goarany contacted EL GAMMAL and they communicated via an encrypted communications platform.  Less than an hour after this online conversation, EL GAMMAL sent El-Goarany a documentary on life in the Islamic State that outlined the type of training ISIS provides.  Over the next several months, EL GAMMAL and El-Goarany continued corresponding over the Internet, although EL GAMMAL and El-Goarany ultimately deleted many of these exchanges.

In the midst of these communications, in October 2014, EL GAMMAL traveled to New York City, where El-Goarany was enrolled in college, and met with El-Goarany.  During this October 2014 trip, EL GAMMAL provided El-Goarany with the phone number for EL GAMMAL’s contact in Turkey, Ateia Aboualala, who would be responsible for helping El-Goarany travel from Turkey across the border to ISIS in Syria.  While in New York City, EL GAMMAL also contacted Aboualala in Turkey regarding El-Goarany’s plans to travel.  EL GAMMAL later provided El-Goarany with social media contact information for Aboualala.  Thereafter, in a coded conversation, EL GAMMAL assured Aboualala that he had vetted El-Goarany and El-Goarany could be trusted.

In late January 2015, El-Goarany left New York City for Istanbul, Turkey.  Upon arriving in Turkey, El-Goarany immediately reached out to Aboualala.  While El-Goarany was in Turkey, EL GAMMAL continued to communicate with El-Goarany over the Internet, providing advice on traveling toward Syria and on meeting with Aboualala.  After arriving in Syria, El-Goarany received religious training and advanced military-type training from ISIS throughout 2015.  On May 7, 2015, in the midst of his training with ISIS, El-Goarany reported to EL GAMMAL that “everything [was] going according to plan.”  A few months later, on July 16, 2015, El-Goarany wrote to EL GAMMAL:  “Life has changed a lot for me at this new job but I love it and I don’t regret taking up the offer,” and “May God reward you with goodness,” to which EL GAMMAL responded, “Great.”

In May 2015, El-Goarany’s father traveled to Turkey and met with Aboualala, in an attempt to locate his son.  Upon learning of this, EL GAMMAL instructed Aboualala, “Don’t ever ever mention me.  Not even my name[,]” and urged Aboualala not to meet with El-Goarany’s father.  On May 5, 2015, Aboualala reported back to EL GAMMAL, assuring EL GAMMAL that, when Aboualala met up with El-Goarany’s father, “I covered up for you.”

In coded messages in mid-2015, EL GAMMAL reached out to El-Goarany to inquire about the possibility of EL GAMMAL’s traveling to ISIS in Syria.  On July 13, 2015, El-Goarany, again in a coded message, responded that he needed to ask his “supervisors at work first,” but commented that “it’s risky because the parking lot these days is going under a lot of renovation, especially in the north side,” alluding to military operations occurring in northern Syria at the time.

On November 23, 2015, El-Goarany’s brother received a message from a member of ISIS with an attached letter from El-Goarany.  The letter read: “if you’re reading this then know that I’ve been killed in battle and am now with our Lord, inshaAllah.  Remember what I told you . . . we will win this war one day, this war between Iman (Belief) and Kufr (Disbelief) between Good and Evil. . . .”

*                *                *

In addition to the prison term, EL GAMMAL was sentenced to three years of supervised release.

Mr. Berman praised the outstanding investigative work of the Federal Bureau of Investigation’s (“FBI”) New York Joint Terrorism Task Force – which principally consists of agents from the FBI and detectives from the New York City Police Department.  Mr. Berman also thanked the Counterterrorism Section of the Department of Justice’s National Security Division, the U.S. Attorney’s Office for the District of Arizona, and the Phoenix Field Office of the FBI for their assistance.

The prosecution is being handled by the Office’s Terrorism and International Narcotics Unit.  Assistant U.S. Attorneys Negar Tekeei, Brendan F. Quigley, and Andrew J. DeFilippis are in charge of the prosecution, with assistance from Trial Attorney Ranganath Manthripragada of the National Security Division’s Counterterrorism Section. 

U.S. Attorney Geoffrey S. Berman said:  “Therese Okoumou was convicted in federal court today for a dangerous stunt last July 4th that endangered herself and the NYPD and U.S. Park Police officers who rescued and apprehended her.  The act of climbing the base of the Statue of Liberty went well beyond peaceable protest, a right we certainly respect.  It was a crime that put people at grave risk.  We commend Judge Gorenstein’s decision to hold Therese Okoumou accountable for her dangerous and reckless conduct.”

Geoffrey S. Berman, the United States Attorney for the Southern District of New York, announced today that MOSHE BENENFELD, a/k/a “Michael Benenfeld,” pleaded guilty to bank fraud in connection with hundreds of unauthorized transactions that BENENFELD conducted in bank customer accounts while employed by two different New York-area banks. BENENFELD’s bank fraud scheme resulted in losses totaling more than $5 million.  BENENFELD pleaded guilty before U.S. District Judge Loretta A. Preska.  Sentencing is scheduled for April 17, 2019.

Manhattan U.S. Attorney Geoffrey Berman said:  “Moshe Benenfeld, a branch manager for two separate New York banks, admitted today to abusing his position of trust by stealing from the banks’ customers.  Benenfeld used his position of access to withdraw and transfer funds from victims’ accounts by falsely authorizing transactions and forging signatures. Today, he has admitted to his crime, which victimized more than 20 individuals and totaled more than five million dollars.”

According to the allegations in the Complaint and the Indictment, to which BENENFELD pleaded guilty:

From 2000 to 2016, BENENFELD was the branch manager at a branch of a New York-area bank (“Bank-1”).  Beginning in or about 2004 and continuing into 2016, while employed at Bank-1, BENENFELD conducted hundreds of unauthorized transactions involving the accounts of over 20 bank customers, including the accounts of BENENFELD’s relatives.  BENENFELD made unauthorized draws on, and payments to, the customers’ lines of credit; made unauthorized withdrawals from, and deposits to, the customers’ deposit accounts; and used the customers’ deposit accounts as collateral for other customers’ lines of credit without authorization.  To effect the unauthorized transactions, BENENFELD, among other things, forged the signatures of bank customers and used a document previously signed by a bank customer to create paperwork that falsely purported to authorize a different transaction.  In or about April 2016, after having discovered BENENFELD’s conduct, Bank-1 terminated BENENFELD’s employment.  In or about June 2016, BENENFELD was hired by another New York-area bank (“Bank-2”).  At Bank-2, BENENFELD continued to conduct unauthorized transactions involving customer accounts.  As a result of the unauthorized transactions conducted by BENENFELD, Bank-1 sustained losses of over $5 million.

*                *                *

BENENFELD, 49, of Brooklyn, New York, pleaded guilty to one count of bank fraud, which carries a maximum sentence of 30 years in prison.  The maximum potential sentence is prescribed by Congress and is provided here for informational purposes only, as any sentencing of the defendant will be determined by the judge.

Mr. Berman praised the investigative work of the U.S. Postal Inspection Service’s New York Division.

The case is being prosecuted by the Office’s Complex Frauds and Cybercrime Unit.  Assistant United States Attorney Dina McLeod is in charge of the prosecution.

Geoffrey S. Berman, the United States Attorney for the Southern District of New York, announced today that DARIN WEBB was sentenced in Manhattan federal court to two years in prison for defrauding Donadio & Olson, a Manhattan-based literary agency (the “Agency”), and its clients of over $3.3 million.  WEBB provided bookkeeping services for the Agency and carried out his scheme by making unauthorized transfers from the Agency’s bank accounts, and then making changes to the Agency’s accounting system to evade detection.  WEBB pled guilty on July 25, 2018, to one count of wire fraud before U.S. District Judge Edgardo Ramos, who also imposed today’s sentence.

U.S. Attorney Geoffrey S. Berman said:  “Darin Webb, a bookkeeper for a literary agency, admitted to embezzling more than $3.3 million from the agency, and then changing their accounting system to evade detection.  Webb’s theft was eventually uncovered, and he is now sentenced to two years in federal prison.”

According to allegations contained in the Information filed against Webb and statements made in related court filings and proceedings:  

From 2001 through March 2018, WEBB was engaged as a bookkeeper for the Agency.  From January 2011 through March 2018, WEBB used his position as the Agency’s bookkeeper to transfer more than $3.3 million of funds, belonging to the Agency and its clients, from the Agency’s bank accounts to bank accounts that WEBB controlled.  In order to evade detection of his criminal conduct and carry out his scheme, WEBB made changes to the Agency’s accounting records to disguise the nature of the transfers.

*                    *                    *

In addition to his prison term, WEBB, 48, of Manhattan, New York, was sentenced to three years of supervised release, a forfeiture money judgment in the amount of $3,300,000, and restitution in an amount to be determined.

Mr. Berman praised the work of the FBI.

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

Geoffrey S. Berman, United States Attorney for the Southern District of New York, and Raymond Donovan, Special Agent in Charge of the New York Division of the Drug Enforcement Administration (“DEA”), announced that former New York City Police Department (“NYPD”) Detective SAED RABAH pled guilty to knowingly providing misinformation to a federal law enforcement officer in order to obstruct a narcotics investigation.  RABAH pled guilty before the U.S. Magistrate Judge Judith C. McCarthy.  RABAH’s case has been assigned to U.S. District Judge Vincent L. Briccetti.

Manhattan U.S. Attorney Geoffrey S. Berman said:  “As an NYPD detective, Saed Rabah swore to uphold the law – not to break it and help a known criminal continue trafficking drugs.  Now this corrupt former officer faces serious prison time for his crimes.”

According to the Information filed today, to which RABAH pled guilty, and a previously filed criminal complaint: 

The target of a narcotics investigation was a cooperator in another court proceeding, and RABAH was his handler.  Despite his obligation as a cooperator to engage in no further criminal conduct, the target continued to operate a sophisticated narcotics distribution business.  In May 2016, RABAH was contacted by law enforcement and informed that the target was under investigation for narcotics related offenses.  In September 2016, RABAH was again contacted by law enforcement, this time about whether RABAH had a phone number for the target.  RABAH waited to respond and, when he did, intentionally provided a phone number for the target that RABAH knew the target was no longer using, rather than providing the target’s active phone number through which RABAH and the target were regularly communicating at that time. 

As alleged in the complaint, RABAH’s obstruction of the investigation was only one component of his corrupt relationship with the target.  For example, RABAH shared in the target’s proceeds from operating an illegal sports betting business by bringing in betters.  In addition, RABAH and the target traveled to Las Vegas together in July 2016.  Moreover, RABAH warned the target when RABAH observed one of the target’s employees make a drug delivery in a manner that RABAH believed could have drawn the attention of law enforcement.

*                *                *

RABAH, 46, of Brooklyn, New York, is charged with one count of obstruction of justice, which carries a maximum sentence of 20 years in prison.  The maximum potential sentence in this case is prescribed by Congress and is provided here for informational purposes only, as any sentencing of the defendant will be determined by the judge.

RABAH is scheduled to be sentenced March 18, 2019.

Mr. Berman praised the outstanding investigative work of the DEA’s Westchester Tactical Diversion Squad comprising agents and officers of the DEA, Yonkers Police Department, Orangetown Police Department, New York City Police Department, Westchester Police Department, Putnam Sheriff’s Office, Rockland County Sheriff’s Office, New Windsor Police Department, and the Woodbury Police Department.  He also thanked the Special Agents of the United States Attorney’s Office for the Southern District of New York for their assistance

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

Geoffrey S. Berman, the United States Attorney for the Southern District of New York, announced today that the United States has settled its federal Fair Housing Act (“FHA”) lawsuit against WEBSTER AV MANAGEMENT LLC (“WEBSTER”).  Under the settlement, WEBSTER has agreed to make retrofits to the Riverdale Parc rental complex in the Bronx and the Bluestone Commons rental complex in Maybrook, New York, which together contain more than 120 apartments, in order to make those apartments more accessible to individuals with disabilities.  WEBSTER also has agreed to establish procedures to ensure that its future residential development projects will comply with the accessibility requirements of the FHA.  Additionally, the settlement requires WEBSTER to provide up to $105,000 to compensate aggrieved persons and to pay a civil penalty of $37,500.  The resolution of this lawsuit was approved yesterday by U.S. District Judge Paul G. Gardephe.  Previously, on January 26, 2017, the United States obtained a court-ordered preliminary injunction on consent in this lawsuit that requires WEBSTER to ensure accessibility at two other rental complexes currently under development in the Bronx. 

Manhattan U.S. Attorney Geoffrey S. Berman said:  “The Fair Housing Act’s accessibility provisions protect people with disabilities wherever they live.  Today’s settlement is part of the Office’s long-standing effort to fulfill the FHA’s promise of accessibility throughout the counties in the Southern District of New York.”

The FHA’s accessible design and construction provisions require new multifamily housing complexes constructed after 1991 to have basic features accessible to persons with disabilities.  According to the allegations in the complaint and the factual admissions in the settlement stipulation, the Riverdale Parc and Bluestone Commons rental complexes, which WEBSTER designed and constructed, have a number of inaccessible features, including bedroom, bathroom, and balcony doors that are not wide enough to accommodate people in wheelchairs, excessively high thresholds within individual units, thermostats and light switches located too high above the floor, and common area bathrooms that lack grab bars.    

Pursuant to the settlement, WEBSTER agreed to make retrofits to both the public and common use areas and the individual units to ensure that Riverdale Parc and Bluestone Commons are accessible.  The settlement also requires WEBSTER to establish procedures to ensure FHA compliance at its future development projects, including to retain an FHA compliance consultant to assess the design documents and conduct site visits to identify non-compliant conditions.  In addition, WEBSTER agreed to institute policies and training to ensure that its employees and agents will comply with the FHA’s accessibility requirements.

The settlement requires WEBSTER to provide up to $105,000 to compensate aggrieved persons.  Aggrieved persons may be entitled to monetary compensation from the fund created through today’s settlement.  Aggrieved individuals may include those who:

• Were discouraged from living at Riverdale Parc or Bluestone Commons because of the lack of accessible features;
• Have been hurt in any way by the lack of accessible features at Riverdale Parc or Bluestone Commons;
• Paid to have an apartment at Riverdale Parc or Bluestone Commons made more accessible to persons with disabilities; or
• Otherwise were discriminated against on the basis of disability at Riverdale Parc or Bluestone Commons as a result of inaccessible design and construction.

            Any individual who may be entitled to compensation can file a claim by using the Civil Rights Complaint Form available on the United States Attorney’s Office’s website http://www.justice.gov/usao/nys/civilrights.html, or by sending a written claim 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

Finally, WEBSTER also agreed to pay a civil penalty of $37,500.

The case is being handled by the Office’s Civil Rights Unit.  Assistant U.S. Attorneys Natasha W. Teleanu, Li Yu, and Jacob Lillywhite are in charge of the case.

Geoffrey S. Berman, the United States Attorney for the Southern District of New York, William F. Sweeney Jr., Assistant Director-in-Charge of the New York Office of the Federal Bureau of Investigation (“FBI”), and James P. O’Neill, Commissioner of the New York City Police Department (“NYPD”), announced the unsealing of five indictments and three superseding indictments charging a total of 19 with participating in the sex trafficking of minor girls and young women.  As alleged, the defendants trafficked or recruited to engage in prostitution at least 15 minor girls in the child welfare system, including at least nine minors who resided at a particular non-incarceratory residential treatment facility located in Westchester County (“Facility-1”).  Facility-1 provided housing for at-risk and troubled children and adolescents on behalf of departments of social welfare for certain counties in New York State.  

Eight of the 19 charged defendants were arrested yesterday, two are in state custody on unrelated charges, and eight other defendants were previously charged.  One remains at large.  These defendants were identified as part of an ongoing criminal investigation into the sex trafficking of minor victims, some of whom were as young as 13 years old, in the social welfare system.  As detailed below, the charges are set forth in a total of eight separate indictments. 

In each of these eight indicted cases, victims of the charged conduct included one or more minors who resided at Facility-1 and were in the New York State’s social welfare system.  The conduct charged in the eight cases occurred, as detailed below, between the years of 2010 and 2018. 

U.S. Attorney Geoffrey S. Berman stated:  “Children in the child welfare system are among the most vulnerable in our society.  As alleged in today’s charges, the defendants and their conspirators callously recruited girls as young as 13 from a residential treatment facility for at-risk youth, then sexually trafficked and prostituted them for financial profit.  Together with our partners in the FBI, we will work tirelessly to ensure that anyone who sexually traffics a minor is subject to the full force of the law.”

FBI Assistant Director-in-Charge William F. Sweeney Jr. said:  “Sex traffickers routinely prey on young people and those in our communities who are the most defenseless. As alleged, the defendants targeted vulnerable women and girls, including residents of a facility for at-risk children and adolescents, knowing that the victims would be more susceptible to their claims.  The FBI Human Trafficking and Child Exploitation Task Force and our law enforcement partners will aggressively pursue and hold accountable anyone who exploits others for their own profit.”

The 11 newly charged defendants are CARLTON VANIER, RUBEN MORCIGLIO, SAEED NORRIS, LLOYD KIDD, LUIDI BENJAMIN, LAWRENCE WALSH, CIMMIE WRIGHT, ADRIENNE ROBERTS, CHRISTOPHER BULLOCK, DARIEL BRAHAM, and STEVEN LESANE.  These defendants and the defendants already in federal custody were presented yesterday in the Southern District of New York.

In addition to the charges against the new defendants, Superseding Indictments were unsealed against HUBERT DUPIGNY, HENSLEY DUPIGNY, NAZEER VICKERS, SEAN MERCHANT, REUBEN SANDS, MARTIQUE MCGRIFF, JERMAINE MYRIE, and JABARI KENNEDY, who were first charged in the summer of 2018 for their participation in the trafficking of minor victims and young women. 

*                *                *

If you believe you are a victim of a similar crime, or if you have information concerning the exploitation of children, contact the Federal Bureau of Investigation at (212) 384-1000 or https://tips.fbi.gov/.

A chart outlining the charges and maximum prison sentences for each of the defendants is below.  The maximum potential sentences and the mandatory minimum sentences are prescribed by Congress and are provided here for informational purposes only, as any sentencings of the defendants would be determined by the respective judges.

Mr. Berman praised the outstanding investigative work of the FBI, the NYPD, and, in particular, the New York Child Exploitation and Human Trafficking Task Force.  Mr. Berman also thanked the New York City Department of Corrections and the Human Resources Administration for their assistance.  The prosecutions of these cases are being handled by the Office’s General Crimes and Public Corruption Units.  Assistant United States Attorneys Mollie Bracewell, Elinor Tarlow, Jacob Gutwillig, and Alex Rossmiller are in charge of the prosecutions.

U.S. v. Merchant, et al., 18 Cr. 527 (KMW)

COUNT

CHARGE

DEFENDANTS/AGES

MAX SENTENCE

1

Conspiracy to commit sex trafficking between January 2016 and June 2018

(18 U.S.C. § 1594(c))

Sean Merchant (31)

Martique Mcgriff (30)

Jermaine Myrie (34)

Reuben Sands (59)

Steven Lesane (31)

Life in prison

2

Sex trafficking of a minor under the age of 14 (18 U.S.C. §§ 1591(a), (b)(1), (b)(2), and 2)

Sean Merchant (31)

Life in prison; mandatory minimum sentence of 10 years in prison (under 18 U.S.C. § 1591(b)(2)); and mandatory minimum sentence of 15 years in prison (under 18 U.S.C. § 1591(b)(1))

3

Sex trafficking of a minor (18 U.S.C. §§ 1591(a), (b)(2) and 2)

Sex trafficking by force, threats of force, fraud, and coercion (18 U.S.C. §§ 1591(a), (b)(1) and 2)

Sean Merchant (31)

Life in prison; mandatory minimum sentence of 10 years in prison (under 18 U.S.C. § 1591(b)(2)); and mandatory minimum sentence of 15 years in prison (under 18 U.S.C. § 1591(b)(1))

4

Sex trafficking by force, threats of force, fraud, and coercion (18 U.S.C. §§ 1591(a), (b)(1), and 2)

Sean Merchant (31)

Life in prison; mandatory minimum sentence of 15 years in prison

5

Sex trafficking of a minor (18 U.S.C. §§ 1591(a), (b)(2), and 2)

Sex trafficking by force, threats of force, fraud, and coercion (18 U.S.C. §§ 1591(a), (b)(1), and 2)

Jermaine Myrie (34)

Life in prison; mandatory minimum sentence of 10 years in prison (under 18 U.S.C. § 1591(b)(2)); and mandatory minimum sentence of 15 years in prison (under 18 U.S.C. § 1591(b)(1))

6

Sex trafficking by force, threats of  force, fraud, and coercion (18 U.S.C. §§ 1591(a), (b)(1), and 2)

Martique Mcgriff (30)

Life in prison; mandatory minimum sentence of 15 years in prison

7

Sex trafficking by force, threats of force, fraud, and coercion (18 U.S.C. §§ 1591(a), (b)(1), and 2)

Steven Lesane (31)

Life in prison; mandatory minimum sentence of 15 years in prison

U.S. v. Hubert Dupigny, et al., 18 Cr. 528 (JMF)

COUNT

CHARGE

DEFENDANTS/AGES

MAX. PENALTIES

1

Conspiracy to commit sex trafficking between August 2016 to May 2017 (18 U.S.C. § 1594(c))

Hubert Dupigny (34)

Hensley Dupigny (29)

Dariel Braham (45)

Christopher Bullock (36)

Adrienne Roberts (59)

Life in prison

2

Sex trafficking of a minor (18 U.S.C. §§ 1591(a), (b)(2), and 2)

Sex trafficking by force, threats of force, fraud, and coercion (18 U.S.C. §§ 1591(a), (b)(1), and 2)

Hubert Dupigny (34)

Life in prison; mandatory minimum sentence of 10 years in prison (under 18 U.S.C. § 1591(b)(2)); and mandatory minimum sentence of 15 years in prison (under 18 U.S.C. § 1591(b)(1))

3

Sex trafficking of a minor (18 U.S.C. §§ 1591(a), (b)(2), and 2)

Sex trafficking by force, threats of force, fraud, and coercion (18 U.S.C. §§ 1591(a), (b)(1), and 2)

Hubert Dupigny (34)

Life in prison; mandatory minimum sentence of 10 years in prison (under 18 U.S.C. § 1591(b)(2)); and mandatory minimum sentence of 15 years in prison (under 18 U.S.C. § 1591(b)(1))

4

Sex trafficking of a minor (18 U.S.C. §§ 1591(a), (b)(2), and 2)

Sex trafficking by force, threats of force, fraud, and coercion (18 U.S.C. §§ 1591(a), (b)(1), and 2)

Hubert Dupigny (34)

Life in prison; mandatory minimum sentence of 10 years in prison (under 18 U.S.C. § 1591(b)(2)); and mandatory minimum sentence of 15 years in prison (under 18 U.S.C. § 1591(b)(1))

5

Sex trafficking of a minor (18 U.S.C. §§ 1591(a), (b)(2), and 2)

Hensley Dupigny (34)

Life in prison; mandatory minimum of 10 years in prison

U.S. v. Luidji Benjamin et al., 18 Cr. 874

COUNT

CHARGE

DEFENDANTS

MAX. PENALTIES

1

Conspiracy to commit sex trafficking in the Fall of 2015 (18 U.S.C. § 1594(c))

Luidji Benjamin (22)

Lawrence Walsh (25

Life in prison

2

Sex trafficking of a minor (18 U.S.C. §§ 1591(a), (b)(2), and 2)

Luidji Benjamin (22)

Life in prison; mandatory minimum sentence of 10 years in prison

U.S. v. Jabari Kennedy et al, 18 Cr. 529 (JFK)

COUNT

CHARGE

DEFENDANTS

MAX. PENALTIES

1

Conspiracy to commit sex trafficking between January 2017 to May 2018 (18 U.S.C. § 1594(c))

Jabari Kennedy (26)

Cimmie Wright (24)

Life in prison

2

Sex trafficking of a minor (18 U.S.C. §§ 1591(a), (b)(2), and 2)

Sex trafficking by force, threats of force, fraud, and coercion (18 U.S.C. §§ 1591(a), (b)(1), and 2)

Jabari Kennedy (26)

Life in prison; mandatory minimum sentence of 10 years in prison (under 18 U.S.C. § 1591(b)(2)); and mandatory minimum sentence of 15 years in prison (under 18 U.S.C. § 1591(b)(1))

3

Sex trafficking by force, threats of force, fraud, and coercion (18 U.S.C. §§ 1591(a), (b)(1), and 2)

Jabari Kennedy (26)

Life in prison; mandatory minimum sentence of 15 years in prison

4

Sex trafficking of a minor (18 U.S.C. §§ 1591(a), (b)(2), and 2)

Cimmie Wright (24)

Life; mandatory minimum sentence of ten years

U.S. v. Nazeer Vickers, 18 Cr. 530 (LGS)

COUNT

CHARGE

DEFENDANTS

MAX. PENALTIES

1

Conspiracy to commit sex trafficking between June 2017 and August 2017 (18 U.S.C. § 1594(c))

Nazeer Vickers (36)

Life in prison

2

Sex trafficking of a minor (18 U.S.C. §§ 1591(a), (b)(2), and 2)

Sex trafficking by force, threats of force, fraud, and coercion (18 U.S.C. §§ 1591(a), (b)(1), and 2)

Nazeer Vickers (36)

Life in prison; mandatory minimum sentence of 10 years in prison (under 18 U.S.C. § 1591(b)(2)); and mandatory minimum sentence of 15 years in prison (under 18 U.S.C. § 1591(b)(1))

3

Sex trafficking of a minor (18 U.S.C. §§ 1591(a), (b)(2), and 2)

Sex trafficking by force, threats of force, fraud, and coercion (18 U.S.C. §§ 1591(a), (b)(1), and 2)

Nazeer Vickers (36)

Life in prison; mandatory minimum sentence of 10 years in prison (under 18 U.S.C. § 1591(b)(2)); and mandatory minimum sentence of 15 years in prison (under 18 U.S.C. § 1591(b)(1))

U.S. v. Saeed Malik Thomas Norris, 18 Cr. 871

COUNT

CHARGE

DEFENDANTS

MAX. PENALTIES

1

Conspiracy to commit sex trafficking between July 2016 and August 2016 (18 U.S.C. § 1594(c))

Saeed Malik Thomas Norris (24)

Life in prison

2

Sex trafficking of a minor (18 U.S.C. §§1591(a), (b)(2), and 2)

Saeed Malik Thomas Norris (24)

Life in prison; mandatory minimum sentence of 10 years  in prison

U.S. v. Ruben Morciglio and Carlton Vanier, 18 Cr. 873

COUNT

CHARGE

DEFENDANTS

MAX. PENALTIES

1

Conspiracy to commit sex trafficking between 2011 and October 2018 (18 U.S.C. §1 594(c))

Ruben Morciglio (31)

Carlton Vanier (26)

Life in prison

2

Sex trafficking of a minor (18 U.S.C. §§ 1591(a), (b)(2), and 2)

Sex trafficking by force, threats of force, fraud, and coercion (18 U.S.C. §§ 1591(a), (b)(1), and 2)

Ruben Morciglio (31)

Life in prison; mandatory minimum sentence of 10 years in prison (under 18 U.S.C. § 1591(b)(2)); and mandatory minimum sentence of 15 years in prison (under 18 U.S.C. § 1591(b)(1))

3.

Sex trafficking of a minor (18 U.S.C. §§1591(a), (b)(2), and 2)

Sex trafficking by force, threats of force, fraud, and coercion (18 U.S.C. §§ 1591(a), (b)(1), and 2)

Carlton Vanier (26)

Life in prison; mandatory minimum sentence of 10 years in prison (under 18 U.S.C. § 1591(b)(2)); and mandatory minimum sentence of 15 years in prison (under 18 U.S.C. § 1591(b)(1))

4.

Sex trafficking of a minor (18 U.S.C. §§1591(a), (b)(2), and 2)

Sex trafficking by force, threats of force, fraud, and coercion (18 U.S.C. §§ 1591(a), (b)(1), and 2)

Ruben Morciglio (31)

Life in prison; mandatory minimum sentence of 10 years in prison (under 18 U.S.C. § 1591(b)(2)); and mandatory minimum sentence of 15 years in prison (under 18 U.S.C. § 1591(b)(1))

5.

Sex trafficking of a minor (18 U.S.C. §§1591(a), (b)(2), and 2)

Sex trafficking by force, threats of force, fraud, and coercion (18 U.S.C. §§ 1591(a), (b)(1), and 2)

Carlton Vanier (26)

Life in prison; mandatory minimum sentence of 10 years in prison (under 18 U.S.C. § 1591(b)(2)); and mandatory minimum sentence of 15 years in prison (under 18 U.S.C. § 1591(b)(1))

U.S. v. Lloyd Kidd, 18 Cr. 872

COUNT

CHARGE

DEFENDANTS

MAX. PENALTIES

1

Sex trafficking of a minor (18 U.S.C. §§ 1591(a), (b)(2), and 2)

Sex trafficking by force, threats of force, fraud, and coercion (18 U.S.C. §§ 1591(a), (b)(1), and 2)

Lloyd Kidd (28)

Life in prison; mandatory minimum sentence of 10 years in prison (under 18 U.S.C. § 1591(b)(2)); and mandatory minimum sentence of 15 years in prison (under 18 U.S.C. § 1591(b)(1))

2

Sex trafficking of a minor  (18 U.S.C. §§ 1591(a), (b)(2), and 2)

Lloyd Kidd (28)

Life in prison; mandatory minimum sentence of 10 years in prisons

Geoffrey S. Berman, the United States Attorney for the Southern District of New York, Philip R. Bartlett, Inspector-in-Charge of the New York Office of the U.S. Postal Inspection Service (“USPIS”), and William F. Sweeney Jr., Assistant Director-in-Charge of the New York Office of the Federal Bureau of Investigation (“FBI”), announced that HECTOR MAY, the president of Executive Compensation Planners, Inc. (“ECP”), a registered investment adviser and financial planning firm located in New City, New York, pled guilty today to participating in a conspiracy to defraud certain investment advisory clients (the “Victims”) out of more than $11 million.  MAY pled guilty before U.S. Magistrate Judge Judith C. McCarthy.

Manhattan U.S. Attorney Geoffrey S. Berman said:  “As Hector May admitted today, for decades he and his co-conspirator violated his clients’ trust by siphoning money from their accounts to line their pockets and continue to perpetrate their illegal scheme.  In total, May and his co-conspirator stole more than $11 million.  Now, he has confessed to his crimes and faces significant time in prison.”

USPIS Inspector-in-Charge Philip R. Bartlett said:  “This case has all the markings of a classic Ponzi Scheme with payments made to investors with other investor money, bogus account statements, etc. Mr. May also used investor money to pay personal and business expenses. His day of reckoning has arrived.”

FBI Assistant Director-in-Charge William F. Sweeney Jr. said:  “Hector May spent decades defrauding investors and gaming the system to make himself wealthier, all at the expense of those who trusted him to serve as a responsible steward of their funds.  This kind of criminal behavior undermines the strength and security of our financial systems.  Today’s conviction should serve as a warning to those who think they can get away with similar schemes -- the FBI and our law enforcement partners will discover the truth and hold you accountable for your actions.”

According to the Information filed today, to which MAY pled guilty:        

Since 1982, MAY has been the president of ECP and has provided financial advisory services to numerous clients.  Since 1994, MAY has been a registered representative of a broker dealer (“Broker Dealer-1”).  In its role as a broker dealer, Broker Dealer-1 facilitated the buying and selling of securities for clients of Broker Dealer-1’s registered representatives, including clients of MAY.  To that end, Broker Dealer-1 and associated clearing firms maintained securities accounts for ECP’s clients and, through those accounts, held ECP’s clients’ money, executed their securities trades, produced account statements reflecting activity in the clients’ accounts, and forwarded these account statements to ECP’s clients.

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

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

Specifically, in some cases, MAY used Victims’ funds to make purported bond interest payments to other Victims.  In other cases, MAY used Victims’ funds to make payments to other Victims who wished to withdraw funds from their accounts.  MAY and CC-1 also created phony “consolidated” account statements that they issued through ECP and sent to the Victims.  These “consolidated” account statements purported to reflect the Victims’ total portfolio balances and included the names of bonds MAY falsely represented that he purchased for the Victims and the amounts of interest the Victims were supposedly earning on the bonds.  In order to create the phony consolidated account statements, MAY provided CC-1 with bond names and false interest earnings, and CC-1 created ECP computerized account statements and had them distributed to the Victims.

To keep track of the money that the co-conspirators were taking from the Victims, CC-1 processed the Victims’ payments for the purported bonds, entered them in a computerized accounting program, and, through that program, kept track of how MAY and CC-1 received and spent the Victims’ stolen money.  In this way, from the late 1990’s through March 9, 2018, MAY and CC-1 induced Victims to forward them more than $11,400,000.

*                *                *

MAY, 77, of Orangeburg, New York, pled guilty to one count of conspiracy to commit wire fraud, which carries a maximum sentence of 20 years in prison and a maximum fine of $250,000 or twice the gross gain or loss from the offense; and one count of investment adviser fraud, which carries a maximum sentence of five years in prison and a maximum fine of $10,000 or twice the gross gain or loss from the offense.  Sentencing before Judge Vincent L. Briccetti has been scheduled for March 15, 2019.

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

Mr. Berman praised the outstanding investigative work of the U.S. Postal Inspection Service, Special Agents of the United States Attorney’s Office, and the Federal Bureau of Investigation.

In a related case, the Securities & Exchange Commission brought a civil action today against May and another in the White Plains federal court. 

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

Geoffrey S. Berman, the United States Attorney for the Southern District of New York, announced that SEAN PETER, a/k/a “Huggie,” JASON CAMPBELL, a/k/a “Holiday,” a/k/a “Fish,” and STEVEN SYDER, were found guilty yesterday of the murder of 20-year-old Brian Gray in the Bronx on October 2, 2012.  PETER, CAMPBELL, and SYDER were also found guilty of conspiring to distribute marijuana and related firearms offenses.  The defendants were convicted following a six-day trial before United States District Judge Naomi Reice Buchwald.

U.S. Attorney Geoffrey S. Berman said:  “For years, the defendants thought they had gotten away with murder.  Yesterday, a unanimous jury said otherwise.  We thank our partners at the FBI and the NYPD for their extraordinary work on this case, and for making sure that, no matter the passage of time, justice was done.”

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

In retaliation for an attempted drug robbery, the defendants followed Gray and three friends in the early morning hours of October 2, 2012, from a local bodega to a nearby porch on Barker Avenue in the Bronx.  The defendants then left the area to arm themselves, returned to where Gray and his friends were located, and opened fire, fatally wounding Gray and injuring two other individuals. 

*                *                *

PETER, 35, CAMPBELL, 32, and SYDER, 35, all of the Bronx, New York, were found guilty of conspiring to distribute or possess with intent to distribute marijuana, murder in relation to a drug trafficking crime, and discharging a firearm in relation to a drug trafficking crime.  The defendants each face a mandatory minimum sentence of five years in prison and a maximum sentence of life in prison.  Sentencing of the defendants before Judge Buchwald will be scheduled at a later date.

Mr. Berman praised the outstanding investigative work of the Federal Bureau of Investigation and the New York City Police Department.  Mr. Berman also thanked the Teaneck, New Jersey, Police Department for their assistance with the investigation. 

The case is being handled by the Office’s Violent and Organized Crime Unit.  Assistant United States Attorneys Sagar K. Ravi, Jacqueline Kelly, and Christopher J. Clore are in charge of the prosecution.

Robert Khuzami, Attorney for the United States, Acting Under Authority Conferred by 28 U.S.C. § 515, announced that MICHAEL COHEN was sentenced today to three years in prison for tax evasion, making false statements to a federally insured bank, and campaign finance violations.  COHEN pled guilty on August 21, 2018, to an eight-count information before U.S. District Judge William H. Pauley III, who imposed today’s sentence.  In a separate prosecution brought by the Special Counsel’s Office (“SCO”), COHEN pled guilty on November 29, 2018 to one count of making false statements to the U.S. Congress and was also sentenced on that case today, receiving a two-month concurrent sentence.

According to the allegations in Information 18 Cr. 602 (WHP), filed by the United States States Attorney’s Office for the Southern District of New York (the “Office”), as well as previous court filings and statements in public court proceedings:

Between 2012 and 2016, COHEN concealed more than $4 million in personal income from the Internal Revenue Service, avoiding more than $1.3 million in income tax.  COHEN also made false statements to a federally insured financial institution to obtain a $500,000 home equity loan.  Finally, in 2016, COHEN made or caused two separate payments to women to ensure that they did not publicly disclose their alleged affairs with a presidential candidate in advance of the election.  In one instance, COHEN caused American Media, Inc. (“AMI”), which was identified in previous court filings as “Corporation-1,” to make a $150,000 payment to one woman; in the other, COHEN made a $130,000 payment to another woman through an LLC he incorporated for the purpose of making the payment.  COHEN was reimbursed for the latter payment in monthly installments disguised as payments for legal services performed pursuant to a retainer, when in fact no such retainer existed.  COHEN made or caused both of these payments in order to influence the 2016 election and did so in coordination with one or more members of the campaign.

In addition to the sentence of imprisonment, Judge Pauley also ordered COHEN, 52, of New York, New York, to pay a fine of $50,000, to forfeit $500,000, to pay $1,393,858 in restitution to the IRS, and to pay a mandatory $800 special assessment.  Separately, COHEN was ordered to pay a $50,000 fine and to pay a $100 special assessment in the case brought by the SCO.  COHEN was also sentenced to concurrent three-year terms of supervised release in both cases, to follow his term of imprisonment. 

*                      *                      *

The Office also announced today that it has previously reached a non-prosecution agreement with AMI, in connection with AMI’s role in making the above-described $150,000 payment before the 2016 presidential election.  As a part of the agreement, AMI admitted that it made the $150,000 payment in concert with a candidate’s presidential campaign, and in order to ensure that the woman did not publicize damaging allegations about the candidate before the 2016 presidential election.  AMI further admitted that its principal purpose in making the payment was to suppress the woman’s story so as to prevent it from influencing the election.

Assuming AMI’s continued compliance with the agreement, the Office has agreed not to prosecute AMI for its role in that payment.  The agreement also acknowledges, among other things, AMI’s acceptance of responsibility, its substantial and important assistance in this investigation, and its agreement to provide cooperation in the future and implement specific improvements to its internal compliance to prevent future violations of the federal campaign finance laws.  These improvements include distributing written standards regarding federal election laws to its employees and conducting annual training concerning these standards.

*                      *                      *

Mr. Khuzami praised the work of the Federal Bureau of Investigation; the Internal Revenue Service, Criminal Investigation; and the Special Agents of the U.S. Attorney’s Office. 

This case is being handled by the Office’s Public Corruption Unit.  Assistant U.S. Attorneys Andrea M. Griswold, Rachel Maimin, Thomas McKay, and Nicolas Roos are in charge of the prosecution.  

Geoffrey S. Berman, the United States Attorney for the Southern District of New York, announced that FREDY RENAN NAJERA MONTOYA pled guilty yesterday in Manhattan federal court to charges that he conspired to import cocaine into the United States and possessed machineguns and destructive devices during the course of that conspiracy.  NAJERA, who arrived in the United States on March 14, 2018, pled guilty before U.S. District Judge Paul G. Gardephe.  NAJERA served in the National Congress of Honduras from 2006 until he arrived in the United States for prosecution.  NAJERA pled guilty to charges carrying a mandatory minimum sentence of 40 years in prison.  Sentencing is scheduled for April 19, 2019. 

Manhattan U.S. Attorney Geoffrey S. Berman said:  “As he has now admitted in a United States courthouse, Fredy Renan Najera Montoya used his power and influence as a Honduran congressman to facilitate the transporting of massive amounts of cocaine from Colombia through Honduras, and ultimately to the streets of the U.S.  He further admitted that he and his hired security teams used military-grade weapons, including machineguns, to protect the drug smuggling enterprise.  Now, Najera awaits sentencing for the serious crimes to which he has pled.”

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

From at least in or about 2008, up to and including in or about 2015, NAJERA abused his position as a Honduran congressman to lead large-scale and violent drug-trafficking activities in the same part of Honduras that he represented in his government position.  NAJERA helped distribute more than 30 metric tons of cocaine, which NAJERA and his co-conspirators received in Honduras through a variety of means and ultimately imported into the United States.  As part of these activities, NAJERA used, and employed security teams who used, military-grade weapons, including machineguns and rocket-propelled grenade launchers. 

Between approximately 2008 and 2015, NAJERA constructed, maintained, and staffed clandestine airstrips in Olancho that were used to receive multi-hundred-kilogram shipments of cocaine sent from Venezuela to Honduras.  NAJERA facilitated the receipt of cocaine-laden planes and helicopters at his airstrips, and coordinated the transportation of the cocaine westward in Honduras so that it could be imported into the United States.  NAJERA employed heavily armed security personnel who participated in all aspects of the receipt and transportation of these shipments.  NAJERA also cultivated criminal relationships with members of the Honduran National Police and the Honduran military in order to support his drug-trafficking activities by obtaining sensitive law enforcement information used by traffickers to avoid arrests and to plan transportation routes for U.S.-bound cocaine.

In 2009, NAJERA worked with narcotics trafficker Sergio Neftalí Mejía Duarte and Leonel Rivera Maradiaga, one the leaders of the violent Cachiros drug-trafficking organization, to hire members of the Honduran National Police to assassinate General Julian Arístides González.  Around that time, General Arístides González began investigating NAJERA and other drug traffickers in Honduras following a cocaine plane shipment to Olancho that drew law enforcement attention.  In retaliation, Mejía Duarte, on behalf of NAJERA, contacted other drug traffickers, including Leonel Rivera Maradiaga, and requested that they assist in killing General Arístides González in order to stop the investigation and other similar investigations.  Leonel Rivera Maradiaga, in turn, recruited members of the Honduran National Police to carry out the murder. 

Shortly after the murder, NAJERA and Mejía Duarte met with Leonel Rivera Maradiaga.  During that meeting, NAJERA told Leonel Rivera Maradiaga, in substance, that Leonel Rivera Maradiaga had done a good job killing General Arístides González.  Mejía Duarte also congratulated Leonel Rivera Maradiaga for arranging the murder.  NAJERA and Mejía Duarte then presented Leonel Rivera Maradiaga with the money to pay the assassins, in the form of approximately $300,000 in cash that they had laid out on a table nearby.  

In 2012, NAJERA also introduced members of the Sinaloa Cartel to Honduran officials who provided nearly unfettered access to a major commercial shipping hub in Puerto Cortés, Honduras.  In connection with these efforts, NAJERA accepted at least one cash payment and helped broker additional bribes paid to Fabio Lobo, the son of the former Honduran President, and others.  The Sinaloa Cartel relied on NAJERA’s connections to transport approximately 10 tons of cocaine through Puerto Cortés.

In 2013 and 2014, NAJERA was part of a group of current and former Honduran congressmen who worked with other drug traffickers in an effort to obtain political support and protection from other high-ranking Honduran officials.  One of the group’s objectives was to install a Cachiros associate as the leader of the Honduran Congress to promote trafficker-friendly policies, including with respect to extradition. 

Some of NAJERA’s co-conspirators have already been sentenced.  In May 2018, Mejía Duarte was sentenced in the Southern District of Florida to life in prison for conspiring to import cocaine into the United States.  In September 2017, Lobo was sentenced by U.S. District Judge Lorna G. Schofield to 24 years in prison for conspiring to import cocaine into the United States. 

*                *                *

NAJERA, 41, pled guilty to one count of conspiring to import cocaine into the United States, and to one count of possessing machineguns and destructive devices during the course of that conspiracy.  Count One carries a maximum term of life in prison and a mandatory minimum term of ten years in prison.  Count Two carries a maximum term of life in prison and a mandatory minimum of 30 years in prison, which must be served consecutive to any other term of imprisonment.  The minimum and maximum potential sentences in this case are prescribed by Congress and are provided here for informational purposes only, as any sentencing of NAJERA will be determined by Judge Gardephe.

Mr. Berman praised the outstanding efforts of the Bilateral Investigations Unit of the Special Operations Division of the DEA, New York Strike Force, and Tegucigalpa Country Office.  

This case is being handled by the Office’s Terrorism and International Narcotics Unit.  Assistant U.S. Attorneys Emil J. Bove III and Matthew J. Laroche are in charge of the prosecution.

Geoffrey S. Berman, the United States Attorney for the Southern District of New York, announced today that ALAIN KALOYEROS, the former President of the State University of New York Polytechnic Institute; STEVEN AIELLO, a founder and partner of COR Development (“COR”), a real estate development company based in the Syracuse, New York, area; JOSEPH GERARDI, also a founder and partner of COR; and LOUIS CIMINELLI, the former Chairman and CEO of LPCiminelli, a construction company based in Buffalo, New York, were sentenced to prison for fraud in connection with the rigging of bids for hundreds of millions of dollars of State-funded contracts under New York State’s “Buffalo Billion” economic development program.  KALOYEROS was sentenced today by U.S. District Judge Valerie E. Caproni, and AIELLO, GERARDI, and CIMINELLI were all sentenced last week by Judge Caproni.  The defendants received the following sentences:

ALAIN KALOYEROS

42 months in prison

STEVEN AIELLO

36 months in prison

JOSEPH GERARDI

30 months in prison

LOUIS CIMINELLI

28 months in prison

On July 12, 2018, KALOYEROS, AIELLO, GERARDI, and CIMINELLI were each convicted of wire fraud and wire fraud conspiracy, following a three-week trial before Judge Caproni, who imposed sentence on each of the defendants.  GERARDI was also convicted of making false statements to federal officers.  In addition to the bid-rigging offense, AIELLO’s sentence also reflected his conviction for paying bribes to Joseph Percoco, a former executive aide and campaign manager to the Governor of New York. 

U.S. Attorney Geoffrey Berman said:  “The Buffalo Billion program is an economic initiative intended to stimulate economic growth, and ultimately benefit the people of New York.  But a well-connected group of Albany insiders exploited the project to benefit themselves instead.  By manipulating the application process for awarding bids, these men effectively corrupted the bidding process to ensure that companies with which they had financial interests would be awarded the lucrative work.  Public corruption – especially at such a disconcertingly high level in Albany – contributes to the frustration and eroding faith of the people of New York in the integrity of their government.  We will continue to do everything within our power to ensure that funds intended for the greater good of New Yorkers will be used for just that – and not to line the pockets of influence-peddlers with high-level access.”

Judge Caproni said during AIELLO’s sentencing:  “I want this sentence to be heard around the state. . . .  This prosecution . . . should serve as a warning to others who interact with the government everywhere . . . when competing for projects from an entity like Fort Schuyler, you are playing with state money.  That means you have to be purer than Caesar’s wife, because the money you were trying to get comes from the hardworking men and women of New York State.  If you can’t live with that standard, then stick with private sector work, because if you remain at the public trough and you engage in corrupt means to get to public money, even if you did a good job for the public, the Court will show you no mercy. . . .”

According to the evidence introduced at trial, other proceedings in this case, and documents previously filed in Manhattan federal court:

KALOYEROS, AIELLO, GERARDI, and CIMINELLI conspired to deceive Fort Schuyler Management Corporation (“Fort Schuyler”), a State-funded entity charged with awarding State contracts worth hundreds of millions of dollars, by secretly rigging the bidding process so that the contracts offered in connection with the Buffalo Billion program would be awarded to COR and LPCiminelli.  KALOYEROS, who oversaw the application process for many of the State grants awarded under the Buffalo Billion and similar programs, retained Todd Howe to lobby the New York Governor’s office in order to maintain and expand KALOYEROS’s position.  KALOYEROS and Howe, who also worked for both COR and LPCiminelli, then conspired with AIELLO, GERARDI, and CIMINELLI to defraud Fort Schuyler by secretly tailoring the required qualifications for development deals in Syracuse and Buffalo so that COR and LPCiminelli would be awarded significant projects without any meaningful competition.  All the while, the defendants falsely represented to Fort Schuyler that the bidding process was fair, open, and competitive. 

More specifically, in or about October 2013, Fort Schuyler issued requests for proposals (“RFPs”) to solicit bids from interested and qualified developers for the Syracuse and Buffalo projects.  KALOYEROS oversaw the drafting of the RFPs and, unbeknownst to Fort Schuyler, KALOYEROS and Howe secretly solicited from AIELLO, GERARDI, CIMINELLI, and others at LPCiminelli:  (1) qualifications of COR and LPCiminelli to put in the RFPs, so that the RFPs would request qualifications specifically held by those companies, and (2) feedback on the RFPs, before they were released publicly.  For example, the Syracuse RFP requested the use of specific project management software used by COR.  After Howe emailed GERARDI and AIELLO a draft of the Syracuse RFP approximately two weeks before its public issuance, GERARDI sent back to Howe and AIELLO a handwritten mark-up of the draft RFP, on which GERARDI had, among other things, underlined the software names and wrote “too telegraphed??  I would leave out these specific programs.”  For its part, the Buffalo RFP, as initially issued, required 50 years of experience by a local developer – a qualification touted by LPCiminelli in promotional materials provided to KALOYEROS.

Additionally, after the Government’s investigation became public, both KALOYEROS and CIMINELLI deleted incriminating evidence from their personal email accounts.  GERARDI voluntarily met with government agents and lied about his criminal conduct.

In addition to his convictions for fraud in connection with the Buffalo Billion program, AIELLO was convicted in connection with a bribery conspiracy involving Percoco, who was also convicted and sentenced by Judge Caproni to 72 months in prison.  Beginning in early 2014, Percoco was paid bribes totaling approximately $35,000 from COR.  These bribe payments were orchestrated by AIELLO, who arranged them in exchange for Percoco’s official assistance for COR on an as-needed basis. 

Specifically, Percoco agreed with AIELLO to, and did, take official action for the benefit of COR to (a) reverse an adverse decision by the Empire State Development Corporation, which is the State’s main economic development agency, that would have required COR to enter into a costly labor peace agreement in connection with a development project in Syracuse, (b) free up a backlog of more than $14 million in State funds that had already been awarded to COR but were delayed in payment, and (c) secure a substantial pay raise for AIELLO’s son, who worked in the Governor’s office.  To disguise the nature and source of the bribe payments, COR’s bribes to Percoco were funneled through bank accounts and a shell company set up by Howe.

*                      *                     *

In addition to the prison term, KALOYEROS, 62, of Slingerlands, New York, was sentenced to 2 years of supervised release.  Judge Caproni also ordered KALOYEROS to pay a fine of $100,000. 

In addition to the prison terms, AIELLO, 60, of Fayetteville, New York, GERARDI, 59, of Fayetteville, New York, and CIMINELLI, 63, of Buffalo, New York, were each sentenced to two years of supervised release.  Judge Caproni also ordered AIELLO, GERARDI, and CIMINELLI each to pay a fine of $500,000 and to forfeit ill-gotten gains.

Mr. Berman praised the outstanding work of the Buffalo Field Office of the Federal Bureau of Investigation and the New York Office of the Internal Revenue Service-Criminal Investigation, which jointly conducted this investigation with Special Agents from the U.S. Attorney’s Office.

This case is being handled by the Office’s Public Corruption Unit.  Assistant U.S. Attorneys Janis Echenberg, Robert Boone, David Zhou, and Matthew Podolsky are in charge of the prosecution.

Geoffrey S. Berman, the United States Attorney for the Southern District of New York, Philip R. Bartlett, Inspector in Charge of the New York Office of the U.S. Postal Inspection Service (“USPIS”), Ari C. Shapira, Special Agent in Charge of the Miami Field Division of the Bureau of Alcohol, Tobacco, Firearms and Explosives (“ATF”), and Robert A. Bourbon, Special Agent in Charge of the Miami Field Office of the United States Department of Justice, Office of the Inspector General (“DOJ OIG”), announced the unsealing today of an Indictment charging DEA agent FERNANDO GOMEZ for his participation in a conspiracy to distribute cocaine and his possession of firearms, and aiding and abetting the possession of firearms, in furtherance of that drug conspiracy.  GOMEZ was arrested this morning in Chicago and will be presented Magistrate Judge Susan E. Cox in the Northern District of Illinois this afternoon.

As alleged in the Superseding Indictment[1], GOMEZ, while working as a detective with the City of Evanston Police Department in Illinois, obtained firearms from drug dealers, transported those firearms to Puerto Rico, and provided those firearms to Jose Martinez-Diaz, a/k/a “Tony Zinc,” who is also charged in the Superseding Indictment.  GOMEZ then joined the DEA so that he could help members of the narcotics conspiracy, including Martinez-Diaz, evade prosecution by law enforcement.    

Martinez-Diaz was previously charged for his participation in La Organizacion de Narcotraficantes Unidos (“La ONU”), a racketeering enterprise involved in drug dealing and murders.  Eight other members of La ONU were also charged with various racketeering, drug trafficking, murder, and firearms offenses.  In addition to the charges against GOMEZ, the Superseding Indictment contains charges that had previously been brought against Martinez-Diaz and the eight other defendants.  The case is assigned to U.S. District Judge Jesse M. Furman. 

U.S. Attorney Geoffrey S. Berman said:  “Fernando Gomez is a special agent of the DEA, an organization committed to upholding the nation’s drug laws and relentless in its pursuit of narcotics traffickers.  But as alleged, Gomez joined the DEA to betray those laws, and to help narcotics traffickers evade detection by law enforcement.  He will now be prosecuted to the full extent of the law.”

*                      *                     *

FERNANDO GOMEZ, 41, of Chicago, Illinois, is charged in the Superseding Indictment with one count of participating in a narcotics conspiracy involving the distribution of five kilograms or more of cocaine, and one count of using and carrying firearms during and in relation to the narcotics conspiracy, possessing firearms in furtherance of the narcotics conspiracy, and aiding and abetting and the possession of firearms, some of which were brandished and discharged.  GOMEZ faces a maximum penalty of life in prison and a mandatory minimum penalty of 20 years in prison.  The maximum potential sentence in this case is prescribed by Congress and is provided here for informational purposes only, as any sentencing of the defendant will be determined by the judge. 

Mr. Berman praised the outstanding investigative work of USPIS, DEA, ATF, DOJ OIG, and the Special Agents of the United States Attorney’s Office for the Southern District of New York.

This case is being handled by the Office’s Violent and Organized Crime Unit.  Assistant United States Attorneys Jordan Estes, Andrew Thomas, and Lara Pomerantz are in charge of the prosecution.

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

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

Geoffrey S. Berman, the United States Attorney for the Southern District of New York, announced that LUIS OMAR VARGAS, an unlicensed dentist, was convicted last Friday, after a two-week jury trial, for defrauding health insurance companies by billing for false claims, billing for claims performed by him as an unlicensed provider, and for conspiring to pay kickbacks to his patients.  The trial was presided over by United States District Judge Ronnie Abrams.

U.S. Attorney Geoffrey S. Berman said:  “Luis Omar Vargas defrauded taxpayer-funded health insurance plans and his patients by posing as a dentist licensed to practice, when he was not.  Vargas billed for services he never performed and induced his patients to visit his dental clinic by providing them kickback payments.  Now, for his fraud and abuse of the system, Vargas stands convicted of three crimes and faces a substantial term in prison.” 

According to allegations in the Indictment and evidence introduced at trial:

From in or around 2012 through at least November 2017, in the Southern District of New York and elsewhere, VARGAS and others conspired and participated in a scheme to defraud insurance providers of more than $2 million.  Vargas and others induced patients to be seen at a dental clinic on the Upper West Side of Manhattan by offering patients a $25 cash kickback.  Once the patients were in the door, VARGAS and his coconspirators charged insurance companies for services that were never performed and for services performed by VARGAS that he was not licensed to perform.

*                *                *

VARGAS, 46, of Roselle, New Jersey, was convicted of one count of health care fraud and one count of conspiracy to commit health care fraud, each of which carries a maximum sentence of 10 years in prison, and one count of conspiracy to violate the Anti-Kickback Statute, which carries a maximum sentence of five years in prison.  VARGAS will be sentenced on April 5, 2019, by Judge Abrams.

Other members of the conspiracy, including Dr. Mehmet Dikengil, 70, and Anna Jones, 60, previously pled guilty to related offenses.

 Mr. Berman praised the outstanding investigative work of the U.S. Department of Health and Human Services-Office of Inspector General in this investigation.

This case is being handled by the Office’s General Crimes Unit.  Assistant United States Attorneys Alexandra N. Rothman, Ryan B. Finkel, and Kristy J. Greenberg are in charge of the prosecution.

Geoffrey S. Berman, the United States Attorney for the Southern District of New York, announced that RICHARD BREGA was sentenced today to 50 months in prison for bribery, fraud, and theft from a program receiving government funds.  BREGA was found guilty of these crimes on May 2, 2018, by a jury at the conclusion of a three-week trial.  The sentence was imposed by United States District Judge Kenneth M. Karas.

U.S. Attorney Geoffrey S. Berman said:  “The successful prosecution of Richard Brega demonstrates the commitment of the federal government to rooting out corruption and fraud in Rockland County and throughout the Hudson Valley.  The taxpayers and the schoolchildren and their families there deserve far better than the criminal scheming Brega gave them.  The sentence imposed today serves a stern reminder that the criminal path Brega chose leads to one place: prison.”

The evidence at trial showed, among other things, the following:

BREGA defrauded a school district – Rockland BOCES – by falsely claiming to maintain the district’s buses, which BREGA knew were used to transport special-needs students, and bribing a Rockland BOCES employee to approve the false invoices for payment.  As a result, Rockland BOCES transported special-needs students on deteriorating, unmaintained buses as BREGA got paid.

In particular, BREGA owned and controlled vehicle repair and transportation companies in Rockland County, including Brega D.O.T. Maintenance Corp. (“Brega DOT”), a fleet-maintenance repair shop.  Rockland BOCES serves eight school districts in Rockland County.  Among the services that Rockland BOCES offers to its students – particularly children with special physical, intellectual, and emotional needs – is transportation, for which it has a fleet of buses and other vehicles (hereinafter collectively referred to as “Rockland BOCES buses” and “bus fleet”), some of which are specially equipped for students with physical disabilities.  Rockland BOCES receives federal funding each year, often in excess of $1 million.

From in or about 2008 or 2009, through in or about 2015, Brega DOT provided vehicle repair service and maintenance for Rockland BOCES bus fleet, including regular preventive maintenance (“Preventive Maintenance”), which is supposed to involve a thorough and detailed inspection and testing of the buses at Brega DOT’s facility, designed to ensure that the buses are defect-free and safe to operate with children aboard.  Brega DOT would fix any problems with the buses that it found during Preventive Maintenance inspections before releasing the buses back to Rockland BOCES.  Brega DOT also created invoices documenting the work done and provided those invoices to Rockland BOCES for payment.  Rockland BOCES’ director of transportation, William Popkave, would then approve the invoice as accurately stating work that was performed on Rockland BOCES buses, and Rockland BOCES would mail payment to Brega DOT.

From in or about 2012 through in or about 2014, BREGA stole money from Rockland BOCES by, among other things, billing Rockland BOCES for Preventive Maintenance inspections that were never performed.  To do so, BREGA directed his employees to prepare fraudulent invoices, as well as fraudulent supporting documentation, giving the false appearance that his company had performed regular Preventive Maintenance inspections on certain buses, when in fact those buses were not even brought to Brega DOT and Preventive Maintenance inspections were not performed.

To create the fraudulent invoices, and to obtain payment from Rockland BOCES for work that was never performed, BREGA bribed Popkave – who oversaw upkeep and maintenance of its buses – with tens of thousands of dollars’ worth of free personal vehicle repairs.  Popkave sent BREGA lists of buses and their mileages so that BREGA could create fraudulent invoices and supporting documentation, and thereafter approved payment of the fraudulent invoices at Rockland BOCES, even though Popkave and BREGA knew that the buses had not even been to Brega DOT on the days for which Brega DOT billed Rockland BOCES, and had not received Preventive Maintenance inspections.

*                      *                     *

BREGA, 51, of Rockland County, was convicted of three counts: (1) mail fraud, (2) bribery concerning a program receiving federal funds, and (3) theft from a program receiving federal funds. 

Popkave, 62, of Rockland County, New York, pled guilty before U.S. Magistrate Judge Judith C. McCarthy on January 24, 2017, to five counts: (1) conspiracy to commit mail fraud, which carries a maximum potential penalty of 20 years in prison; (2) mail fraud, which carries a maximum potential penalty of 20 years in prison; (3) theft concerning a program receiving federal funds, which carries a maximum potential penalty of 10 years in prison; (4) bribery concerning a program receiving federal funds, which carries a maximum potential penalty of 10 years in prison; and (5) obstruction of justice, which carries a maximum potential penalty of 20 years in prison.

The statutory maximum penalties are prescribed by Congress and are provided here for informational purposes only, as the sentencing of Popkave will be determined by the judge at a future date.

Mr. Berman praised the outstanding investigative work of the Federal Bureau of Investigation, the Rockland County District Attorney’s Office, and the United States Department of Transportation Office of Inspector General.  Mr. Berman also thanked the United States Department of Education, Office of Inspector General, for its assistance.

This case is being handled by the Office’s White Plains Division.  Assistant United States Attorneys Michael D. Maimin and Benjamin Allee are in charge of the prosecution.

Geoffrey S. Berman, United States Attorney for the Southern District of New York, announced the unsealing of a Complaint on Tuesday in White Plains federal court[1] charging SAMIR SULLIVAN, a/k/a “S,” with committing four armed carjackings of cabs in Mt. Vernon and the Bronx in the early morning hours of November 25 and November 29.  SULLIVAN was arrested on Tuesday, December 4 and presented in White Plains federal court before United States Magistrate Judge Paul E. Davison.

U.S. Attorney Geoffrey S. Berman stated:  “As alleged, four cab drivers in Mt. Vernon and the Bronx were doing their jobs transporting passengers when Samir Sullivan used a gun to take their cabs and, in three cases, their hard-earned money.  No driver should fear a gun being pointed at him when he simply picks up a passenger on the job.”

*                *                *

SULLIVAN, 32, of Mt. Vernon, New York, is charged with four counts of carjacking, which carry a maximum sentence of 15 years in prison. The maximum potential sentences in this case are prescribed by Congress and are provided here for informational purposes only, as any sentencing of the defendant will be determined by the judge.

Mr. Berman praised the outstanding investigative work of the FBI and the MVPD.

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

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

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

Geoffrey S. Berman, the United States Attorney for the Southern District of New York,  William F. Sweeney Jr., the Assistant Director-in-Charge of the New York Field Division of the Federal Bureau of Investigation (“FBI”), Thomas P. DiNapoli, New York State Comptroller,  and George P. Beach II, Superintendent of the New York State Police, announced today the arrest and guilty plea of ROBERT GERARDI, the former treasurer of the Putnam Engine & Hose Co. No. 2 (“Putnam Engine and Hose”), a unit of the Port Chester Volunteer Fire Department, for embezzlement of more than $38,000 from Putnam Engine and Hose.  GERARDI was arraigned on Monday in White Plains federal court and pled guilty today before U.S. Magistrate Judge Paul E. Davison.  This case has been assigned to U.S. District Judge Nelson S. Román.

U.S. Attorney Geoffrey S. Berman said:  Robert Gerardi was entrusted to oversee the finances of a unit of a volunteer fire company.  Gerardi betrayed that trust and lined his own pockets with money meant to be used in furtherance of protecting life and property.”

FBI Assistant Director William F. Sweeney Jr. said:  “Those who serve the public should be held to a higher standard of integrity and accountability.  Gerardi violated his most basic duty when he decided to use the funds entrusted to his care to cover his own financial losses.  The FBI and our state and local partners will continue to investigate and bring to justice public servants who abuse public trust.”

Comptroller Thomas DiNapoli said:  “Former treasurer Robert Gerardi allegedly fell for an online scam and stole nearly $40,000 to pay for it, violating his duty to the public and to his fellow firefighters.  This case illustrates the need for vigilant oversight of anyone in charge of public funds.  I thank U.S. Attorney Berman, the FBI, and the New York State Police for their partnership in this case.”

NYSP Superintendent George P. Beach II said:  “I want to commend our Troopers along with our state and federal partners for their outstanding work in this case. This investigation revealed that Robert Gerardi violated the public trust when he used his authority to steal funds that were meant to benefit the community.  We have zero tolerance for those who abuse their position for their own personal gain.”

According to the Information filed against GERARDI and statements made in related court filings and proceedings, including during the plea proceeding:

GERARDI was elected to the position of treasurer of Putnam Engine & Hose in or about October 2016.  GERARDI was given signatory authority over bank accounts held by Putnam Engine & Hose at that time.

From in or about November 2016 to in or about May 2017, GERARDI embezzled money from Putnam Engine & Hose by making withdrawals from its bank accounts and by charging personal expenses to its debit card.  GERARDI embezzled $38,236.99 from Putnam Engine & Hose through approximately 28 fraudulent transactions.  GERARDI told the president of Putnam Engine & Hose that the missing funds had been stolen from the bank accounts.

GERARDI, 62, of Port Chester, New York, pled guilty to one count of theft concerning a program receiving federal funds, which carries a maximum sentence of 10 years in prison.  The maximum potential sentence is prescribed by Congress and is provided here for informational purposes only, as the sentence will be determined by the court.  GERARDI is scheduled to be sentenced before Judge Román on March 8, 2019.

*                *                *

Mr. Berman praised the outstanding investigative work of the FBI, New York State Comptroller, and New York State Police.

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

Geoffrey S. Berman, the United States Attorney for the Southern District of New York, and William F. Sweeney Jr., Assistant Director-in-Charge of the New York Office of the Federal Bureau of Investigation (“FBI”), announced today the unsealing of two Complaints charging four defendants with firearms trafficking and narcotics distribution offenses in and around Port Chester, New York.  The defendants, WALTER JONES, FRANK MAXWELL, MARKEL CALHOUN, and JAMAR CALHOUN, were presented in White Plains federal court this afternoon before United States Magistrate Judge Paul E. Davison.

Manhattan U.S. Attorney Geoffrey S. Berman said:  “As alleged, these defendants were responsible for selling guns and drugs, two potentially lethal commodities that plague too many communities.  Thanks to the FBI and the Port Chester Police, the defendants are in custody and facing federal criminal charges.”

FBI Assistant Director William F. Sweeney Jr. said:  “Public safety is at risk when criminals think they can operate outside the law, selling guns and drugs in our communities.  The FBI's Westchester County Safe Streets Task Force is committed to working with our law enforcement partners to break the cycle of addiction and violence by removing those responsible for putting weapons and narcotics on the streets.”

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

In or about February and March 2017, JONES and MARKEL CALHOUN conspired to traffic in firearms, and sold four firearms in Port Chester, New York, and Riverside, Connecticut.  During about the same period, JONES and MARKEL CALHOUN also possessed firearms unlawfully despite their prior felon status.  From at least in or about February 2018 up to November 2018, JONES and MAXWELL conspired to distribute 28 grams or more of crack cocaine.  Between March and May 2018, JAMAR CALHOUN distributed crack cocaine on at least six occasions in and around Port Chester, New York.   

*                *                *

JONES, 30, and MARKEL CALHOUN, 26, are charged with one count of firearms trafficking conspiracy, which carries a maximum sentence of five years in prison.  MARKEL CALHOUN is charged with one count of being a felon in possession of a firearm and JONES is charged with two counts of being a felon in possession of a firearm, each of which carries a maximum sentence of 10 years in prison.  JONES and MAXWELL, 36, are charged with one count of conspiracy to distribute 28 grams or more of crack cocaine, which carries a mandatory minimum sentence of five years in prison and a maximum sentence of 40 years in prison.   JAMAR CALHOUN, 28, is charged with six counts of distribution of crack cocaine, which carries a maximum sentence of 20 years in prison.

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

Mr. Berman praised the outstanding investigative work of the FBI Westchester County Safe Streets Task Force and the Port Chester Police Department. 

These cases are being handled by the Office’s White Plains Division.  Assistant United States Attorneys Christopher Brumwell and Vladislav Vainberg are in charge of the prosecution.

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

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

Geoffrey S. Berman, the United States Attorney for the Southern District of New York, announced today that RANDY WANG was sentenced in Manhattan federal court to 18 months in prison for defrauding his former employer, a company based in Manhattan that manages a global airline alliance whose members consist of approximately 13 international airlines and their affiliates (the “Company”), by incurring more than $2.2 million in unauthorized charges on the Company’s credit card account.  WANG pled guilty on April 17, 2018, to one count of wire fraud before U.S. District Judge John F. Keenan, who also imposed today’s sentence.

U.S. Attorney Geoffrey S. Berman said: “Randy Wang took advantage of his positions of trust with his employer – and his access to the company’s purse strings.  He charged millions of dollars’ worth of electronics on his employer’s credit card for non-businesses purposes, and attempted to cover up his criminal conduct.  Today Wang has been sentenced to prison for his crime.”

According to the Information filed against Wang and statements made in related court filings and proceedings: 

During the relevant time period, WANG was employed as a business manager for the Company, and for approximately the last two months of the scheme, WANG also served as the Company’s interim chief financial officer.  From at least in or about January 2016 through in or about October 2017, WANG incurred more than $2.2 million of unauthorized charges on the Company’s credit card account by making hundreds of purchases at both online and brick-and-mortar retailers.  WANG’s purchases, which were entirely unrelated to his official duties and were not for the benefit of the Company, included approximately 443 laptop computers, 241 mobile electronic devices, 24 tablet computers, and numerous other electronics.  In order to evade detection of his criminal conduct, WANG made changes to the Company’s accounting records to disguise the nature of the credit card charges.

*                    *                    *

In addition to his prison term, WANG, 34, of Oakland Gardens, New York, was sentenced to 3 years of supervised release, a forfeiture money judgment in the amount of $2,294,982.00, and a restitution order in the amount of $2,294,982.00.

Mr. Berman praised the work of the Department of Homeland Security, Homeland Security Investigations, and the El Dorado Task Force. 

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

Geoffrey S. Berman, the United States Attorney for the Southern District of New York, announced that DAVID TAYLOR, a state-licensed doctor, was convicted by a jury for writing medically unnecessary prescriptions for oxycodone over a five-year period. The verdict followed a one-week jury trial before United States District Court Judge Andrew L. Carter, Jr.

U.S. Attorney Geoffrey S. Berman said:  “Dr. David Taylor violated his solemn Hippocratic oath to do no harm.  For cash and gifts, Taylor prescribed more than 100,000 oxycodone pills that quickly made its way to the streets of New York City, fueling the opioid epidemic.  Now, Taylor stands convicted and faces 20 years in prison for his crime.” 

According to allegations in the Indictment and evidence introduced at trial:

From January 2012 through at least June 2017, in the Southern District of New York and elsewhere, TAYLOR and others conspired to distribute and possess with the intent to distribute oxycodone.  During this time, TAYLOR operated out of three offices in Staten Island, New York, and prescribed more than 2.6 million 30-milligram oxycodone pills.  In exchange for cash and gifts, TAYLOR wrote prescriptions for over 100,000 oxycodone pills with a street value of more than $2 million for members of the conspiracy whom TAYLOR knew had no legitimate medical need for the drug.  The co-conspirators then illegally sold the oxycodone they obtained from TAYLOR on the streets.

*          *          *

TAYLOR, 75, was convicted of one count of conspiring to distribute and possess with intent to distribute oxycodone, which carries a maximum sentence of 20 years in prison.  TAYLOR will be sentenced by Judge Carter on April 5, 2019.

Other members of the conspiracy, including VITO GALLICCHIO, 51, NICHOLAS AVICOLLI, 54, DANIEL GARCIA, 57, LAWRENCE MONTALBANO, 52, and DON MICHAEL CARIM, 34, previously pleaded guilty to the same offense.

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

Mr. Berman praised the outstanding investigative work of the DEA’s Tactical Diversion Squad (Group TDS-NY), which comprises agents and officers from the DEA, the New York Police Department, the New York State Police, New York State Department of Financial Services, the New York National Guard, and New York City Department of Investigation.  He also acknowledged the assistance of Health and Human Services-OIG and the National Insurance Crime Bureau.

The case is being prosecuted by the Office’s Narcotics Unit.  Assistant U.S. Attorneys Kiersten A. Fletcher, Justin V. Rodriguez, and Nicolas Roos are in charge of the prosecution.

Geoffrey S. Berman, the United States Attorney for the Southern District of New York, and William F. Sweeney Jr., the Assistant Director-in-Charge of the New York Field Office of the Federal Bureau of Investigation (“FBI”), announced today the filing of a criminal complaint charging FABIO BRETAS DE FREITAS with commodities fraud, wire fraud, bank fraud, and identity theft in connection with BRETAS’s operation of two related investment companies, Phynance Capital Management LLC (“Phy Capital”) and Absolute Experience LLC (“Absolute”).  BRETAS is alleged to have misrepresented to investors the trading activity and use of funds invested in Phy Capital and Absolute, and, after acquiring investor funds, misappropriated a large portion of those funds for his personal benefit.  Additionally, after the initiation of an audit of BRETAS’s companies by the Commodity Futures Trading Commission (“CFTC”) and the National Futures Association (“NFA”), BRETAS allegedly attempted to deceive those regulators by impersonating a victim-investor using a fraudulent email account appearing to belong to that victim, but in fact controlled by BRETAS.  BRETAS was arrested this morning in Miami and will be presented before a U.S. Magistrate Judge in the Southern District of Florida later today.

Manhattan U.S. Attorney Geoffrey S. Berman said:  “As alleged, Fabio Bretas de Freitas used sham investment companies to steal both the money and the identities of his would-be investors. Thanks to the dedication of the FBI, and with the support and assistance of the CFTC and NFA, Bretas’s alleged scheme has collapsed around him and he will now be held to account.”  

FBI Assistant Director-in-Charge William F. Sweeney Jr. said:  “The defendant obtained more than $5.5 million from people who invested their money in good faith.  But as alleged, instead of investing those funds as he had promised, the defendant used it to cover his own personal expenses, even going so far as to impersonate one of his own victims to deceive investigators.  Bretas’s arrest should serve as a stark reminder that those who seek to manipulate our financial systems for their personal gain will be identified and disrupted.”

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

BRETAS started Phy Capital and Absolute in 2016, and ultimately obtained more than $5.5 million from various investors (the “Victims”).  While BRETAS conducted a minimal level of trading, his predominant use of his companies was the theft of investor money, using it to cover his personal expenses, and transferring investor funds abroad.  When his regulators, the CFTC and NFA, initiated an audit of BRETAS in 2017, BRETAS lied about his affiliation with Absolute, falsely claimed that his victims’ funds reflected mere loans to his company, lied about the use of those funds and the solicitation of investments, and ultimately created a fraudulent email account for the purpose of impersonating one victim in communications with the NFA. 

BRETAS, 53, of Miami, Florida, was arrested this morning in Miami.  BRETAS is charged with wire fraud, which carries a maximum sentence of 20 years in prison; bank fraud, which carries a maximum sentence of 30 years in prison; commodities fraud, which carries a maximum sentence of 25 years in prison; and aggravated identity theft, which carries a mandatory sentence of two years in prison.  The maximum potential sentences in this case are prescribed by Congress and are provided here for informational purposes only, as any sentencing of the defendant will be determined by the judge.

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

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

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

Geoffrey S. Berman, United States Attorney for the Southern District of New York, and Assistant Attorney General Brian A. Benczkowski of the Justice Department’s Criminal Division announced that CHI PING PATRICK HO, a/k/a “Patrick C.P. Ho,” a/k/a “He Zhiping,” was found guilty today after a jury trial before U.S. District Judge Loretta A. Preska of participating in a multi-year, multimillion-dollar scheme to bribe top officials of Chad and Uganda in exchange for business advantages for CEFC China Energy Company Limited (“CEFC China”).  HO was convicted of violations of the Foreign Corrupt Practices Act (“FCPA”), international money laundering, and conspiracy to commit both.  HO is scheduled to be sentenced before Judge Preska on March 14, 2019, at 10:00 a.m.

Manhattan U.S. Attorney Geoffrey S. Berman said:  “Patrick Ho now stands convicted of scheming to pay millions in bribes to foreign leaders in Chad and Uganda, all as part of his efforts to corruptly secure unfair business advantages for a multibillion-dollar Chinese energy company.  As the jury’s verdict makes clear, Ho’s repeated attempts to corrupt foreign leaders were not business as usual, but criminal efforts to undermine the fairness of international markets and erode the public’s faith in its leaders.”

Assistant Attorney General Brian A. Benczkowski:  “Patrick Ho paid millions of dollars in bribes to the leaders of two African countries to secure contracts for a Chinese conglomerate.  Today’s trial conviction demonstrates the Criminal Division’s commitment to prosecuting those who seek to utilize our financial system to secure unfair competition advantages through corruption and bribery.”

According to the Indictment, evidence presented at trial, and other public proceedings in the case:           

Overview 

HO was involved in two bribery schemes to pay top officials of Chad and Uganda in exchange for business advantages for CEFC China, a Shanghai-based multibillion-dollar conglomerate that operates internationally in multiple sectors, including oil, gas, and banking.  At the center of both schemes was HO, the head of a non-governmental organization based in Hong Kong and Arlington, Virginia, the China Energy Fund Committee (the “CEFC NGO”), which held “Special Consultative Status” with the United Nations (“UN”) Economic and Social Council.  CEFC NGO was funded by CEFC China.

In the first scheme (the “Chad Scheme”), HO, on behalf of CEFC China, offered a $2 million cash bribe, hidden within gift boxes, to Idriss Déby, the President of Chad, in an effort to obtain valuable oil rights from the Chadian government.  In the second scheme (the “Uganda Scheme”), HO caused a $500,000 bribe to be paid, via wires transmitted through New York, New York, to an account designated by Sam Kutesa, the Minister of Foreign Affairs of Uganda, who had recently completed his term as the President of the UN General Assembly.  HO also schemed to pay a $500,000 cash bribe to Yoweri Museveni, the President of Uganda, and offered to provide both Kutesa and Museveni with additional corrupt benefits by “partnering” with them in future joint ventures in Uganda.

The Chad Scheme

The Chad Scheme began in or about September 2014 when HO flew into New York, New York to attend the annual UN General Assembly.  At that time, CEFC China was working to expand its operations to Chad and wanted to meet with President Déby as quickly as possible.  Through a connection, HO was introduced to Cheikh Gadio, the former Minister of Foreign Affairs of Senegal, who had a personal relationship with President Déby.  HO and Gadio met at CEFC China’s suite at Trump World Tower in midtown Manhattan, where HO enlisted Gadio to assist CEFC China in obtaining access to President Déby.

Gadio connected HO and CEFC China to President Déby.  In an initial meeting in Chad in November 2014, President Déby described to HO and CEFC China executives certain lucrative oil rights that were available for CEFC China to acquire.  Following that meeting, Gadio advised HO and CEFC China to send a technical team to Chad to investigate the oil rights and make an offer to President Déby.  Instead, HO insisted on a prompt second meeting with the President.  The second meeting took place a few weeks later, in December 2014.  HO led a CEFC China delegation, which flew into Chad on a corporate jet with $2 million cash concealed within several gift boxes.  At the conclusion of a business meeting with President Déby, HO and the CEFC China executives presented President Déby with the gift boxes.

To the surprise of HO and the CEFC China executives, President Déby rejected the $2 million bribe offer.  HO subsequently drafted a letter to President Déby claiming that the cash had been intended as a donation to Chad.  Ultimately, HO and CEFC China did not obtain the unfair advantage that they had sought through the bribe offer, and by mid-2015, HO had turned his attention to a different “gateway to Africa”: Uganda.

The Uganda Scheme

The Uganda Scheme began around the same time as the Chad Scheme, when HO was in New York, New York for the annual UN General Assembly.  HO met with Sam Kutesa, who had recently begun his term as the 69th President of the UN General Assembly (“PGA”).  HO, purporting to act on behalf of CEFC NGO, met with Kutesa and began to cultivate a relationship with him.  During the year that Kutesa served as PGA, HO and Kutesa discussed a “strategic partnership” between Uganda and CEFC China for various business ventures, to be formed once Kutesa completed his term as PGA and returned to Uganda.

In or about February 2016 – after Kutesa had returned to Uganda and resumed his role as Foreign Minister, and Yoweri Museveni (Kutesa’s relative) had been reelected as the President of Uganda – Kutesa solicited a payment from HO, purportedly for a charitable foundation that Kutesa wished to launch.  HO agreed to provide the requested payment, but simultaneously requested, on behalf of CEFC China, an invitation to Museveni’s inauguration, business meetings with President Museveni and other high-level Ugandan officials, and a list of specific business projects in Uganda that CEFC China could participate in.

In May 2016, HO and CEFC China executives traveled to Uganda.  Prior to departing, HO caused the CEFC NGO to wire $500,000 to the account provided by Kutesa in the name of the so-called “foundation,” which wire was transmitted through banks in New York, New York.  HO also advised his boss, the Chairman of CEFC China, to provide $500,000 in cash to President Museveni, ostensibly as a campaign donation, even though Museveni had already been reelected.  HO intended these payments as bribes to influence Kutesa and Museveni to use their official power to steer business advantages to CEFC China.

HO and CEFC China executives attended President Museveni’s inauguration and obtained business meetings in Uganda with President Museveni and top Ugandan officials, including at the Department of Energy and Mineral Resources.  After the trip, HO requested that Kutesa and Museveni assist CEFC China in acquiring a Ugandan bank, as an initial step before pursuing additional ventures in Uganda.  HO also explicitly offered to “partner” with Kutesa and Museveni and/or their “family businesses,” making clear that both officials would share in CEFC China’s future profits.  In exchange for the bribes offered and paid by HO, Kutesa thereafter steered a bank acquisition opportunity to CEFC China.

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HO, 69, of Hong Kong, China, was convicted of one count of conspiring to violate the FCPA, four counts of violating the FCPA, one count of conspiring to commit international money laundering, and one count of committing international money laundering.  The maximum penalties for these charges are as follows: five years in prison for conspiring to violate the FCPA; five years in prison for each violation of the FCPA; 20 years in prison for conspiring to commit international money laundering; and 20 years in prison for committing international money laundering.  HO was acquitted of one count of international money laundering.

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

Mr. Berman praised the outstanding work of the Federal Bureau of Investigation and Internal Revenue Service-Criminal Investigation.  He also thanked the Department of Homeland Security, Homeland Security Investigations, and the Department of Justice, Criminal Division’s Office of International Affairs.

This case is being prosecuted by the Office’s Public Corruption Unit and the Criminal Division’s Fraud Section, FCPA Unit.  Assistant U.S. Attorneys Douglas S. Zolkind, Daniel C. Richenthal, and Catherine E. Ghosh, and Trial Attorney Paul A. Hayden of the Fraud Section, are in charge of the prosecution.

A federal jury in New York City today convicted the head of a nongovernmental organization (NGO) based in Hong Kong and Virginia on seven counts for his participation in a multi-year, multimillion-dollar scheme to bribe top officials of Chad and Uganda in exchange for business advantages for a Chinese oil and gas company, announced Assistant Attorney General Brian A. Benczkowski of the Justice Department’s Criminal Division and U.S. Attorney Geoffrey S. Berman of the Southern District of New York.

Chi Ping Patrick Ho, aka “Patrick C.P. Ho,” aka “He Zhiping,” 69, of Hong Kong, China, was found guilty today after a one-week jury trial before U.S. District Judge Loretta A. Preska in the Southern District of New York of one count of conspiring to violate the Foreign Corrupt Practices Act (FCPA), four counts of violating the FCPA, one count of conspiring to commit international money laundering and one count of committing international money laundering.  Ho is scheduled to be sentenced before Judge Preska on March 14, 2019, at 10:00 a.m. EDT.

“Patrick Ho paid millions of dollars in bribes to the leaders of two African countries to secure contracts for a Chinese conglomerate,” said Assistant Attorney General Benczkowski.  “Today’s trial conviction demonstrates the Criminal Division’s commitment to prosecuting those who seek to utilize our financial system to secure unfair competition advantages through corruption and bribery.”

“Patrick Ho now stands convicted of scheming to pay millions in bribes to foreign leaders in Chad and Uganda, all as part of his efforts to corruptly secure unfair business advantages for a multibillion-dollar Chinese energy company,” said U.S. Attorney Berman.  “As the jury’s verdict makes clear, Ho’s repeated attempts to corrupt foreign leaders were not business as usual, but criminal efforts to undermine the fairness of international markets and erode the public’s faith in its leaders.”

According to evidence presented at trial, Ho was involved in two bribery schemes to pay top officials of Chad and Uganda in exchange for business advantages for CEFC China, a Shanghai-based multibillion-dollar conglomerate that operates internationally in multiple sectors, including oil, gas, and banking.  At the center of both schemes was Ho, the head of a nongovernmental organization based in Hong Kong and Arlington, Virginia, the China Energy Fund Committee (the “CEFC NGO”), which held “Special Consultative Status” with the United Nations (UN) Economic and Social Council.  CEFC NGO was funded by CEFC China.

According to the evidence presented at trial, in the first scheme (the “Chad Scheme”), Ho, on behalf of CEFC China, offered a $2 million cash bribe, hidden within gift boxes, to Idriss Déby, the President of Chad, in an effort to obtain valuable oil rights from the Chadian government.  In the second scheme (the “Uganda Scheme”), Ho caused a $500,000 bribe to be paid, via wires transmitted through New York, New York, to an account designated by Sam Kutesa, the Minister of Foreign Affairs of Uganda, who had recently completed his term as the President of the UN General Assembly.  Ho also schemed to pay a $500,000 cash bribe to Yoweri Museveni, the President of Uganda, and offered to provide both Kutesa and Museveni with additional corrupt benefits by “partnering” with them in future joint ventures in Uganda.

The Chad Scheme

According to the evidence presented at trial, the Chad Scheme began in or about September 2014 when Ho flew into New York, New York to attend the annual UN General Assembly.  At that time, CEFC China was working to expand its operations to Chad and wanted to meet with President Déby as quickly as possible.  Through a connection, Ho was introduced to Cheikh Gadio, the former Minister of Foreign Affairs of Senegal, who had a personal relationship with President Déby.  Ho and Gadio met in midtown Manhattan, New York where Ho enlisted Gadio to assist CEFC China in obtaining access to President Déby.

Gadio connected Ho and CEFC China to President Déby.  In an initial meeting in Chad in November 2014, President Déby described to Ho and CEFC China executives certain lucrative oil rights that were available for CEFC China to acquire.  Following that meeting, Gadio advised Ho and CEFC China to send a technical team to Chad to investigate the oil rights and make an offer to President Déby.  Instead, Ho insisted on a prompt second meeting with the President.  The second meeting took place a few weeks later, in December 2014.  Ho led a CEFC China delegation, which flew into Chad on a corporate jet with $2 million cash concealed within several gift boxes.  At the conclusion of a business meeting with President Déby, Ho and the CEFC China executives presented President Déby with the gift boxes.

To the surprise of Ho and the CEFC China executives, President Déby rejected the $2 million bribe offer.  Ho subsequently drafted a letter to President Déby claiming that the cash had been intended as a donation to Chad.  Ultimately, Ho and CEFC China did not obtain the unfair advantage that they had sought through the bribe offer, and by mid-2015, Ho had turned his attention to a different “gateway to Africa”: Uganda.

The Uganda Scheme

According to the evidence presented at trial, the Uganda Scheme began around the same time as the Chad Scheme, when Ho was in New York, New York for the annual UN General Assembly.  Ho met with Sam Kutesa, who had recently begun his term as the 69th President of the UN General Assembly (“PGA”).  Ho, purporting to act on behalf of CEFC NGO, met with Kutesa and began to cultivate a relationship with him.  During the year that Kutesa served as PGA, Ho and Kutesa discussed a “strategic partnership” between Uganda and CEFC China for various business ventures, to be formed once Kutesa completed his term as PGA and returned to Uganda.

In or about February 2016 – after Kutesa had returned to Uganda and resumed his role as Foreign Minister, and Yoweri Museveni (Kutesa’s relative) had been reelected as the President of Uganda – Kutesa solicited a payment from Ho, purportedly for a charitable foundation that Kutesa wished to launch.  Ho agreed to provide the requested payment, but simultaneously requested, on behalf of CEFC China, an invitation to Museveni’s inauguration, business meetings with President Museveni and other high-level Ugandan officials, and a list of specific business projects in Uganda that CEFC China could participate in.

In May 2016, Ho and CEFC China executives traveled to Uganda.  Prior to departing, Ho caused the CEFC NGO to wire $500,000 to the account provided by Kutesa in the name of the so-called “foundation,” which wire was transmitted through banks in New York, New York.  Ho also advised his boss, the Chairman of CEFC China, to provide $500,000 in cash to President Museveni, ostensibly as a campaign donation, even though Museveni had already been reelected.  Ho intended these payments as bribes to influence Kutesa and Museveni to use their official power to steer business advantages to CEFC China.

Ho and CEFC China executives attended President Museveni’s inauguration and obtained business meetings in Uganda with President Museveni and top Ugandan officials, including at the Department of Energy and Mineral Resources.  After the trip, Ho requested that Kutesa and Museveni assist CEFC China in acquiring a Ugandan bank, as an initial step before pursuing additional ventures in Uganda.  Ho also explicitly offered to “partner” with Kutesa and Museveni and/or their “family businesses,” making clear that both officials would share in CEFC China’s future profits.  In exchange for the bribes offered and paid by Ho, Kutesa thereafter steered a bank acquisition opportunity to CEFC China.

This case was investigated by the FBI and IRS-CI.  U.S. Immigration and Customs Enforcement’s Homeland Security Investigations and the Department of Justice, Criminal Division’s Office of International Affairs provided assistance.

Trial Attorney Paul A. Hayden of the Criminal Division’s Fraud Section, FCPA Unit and Assistant U.S. Attorneys Douglas S. Zolkind, Daniel C. Richenthal and Catherine E. Ghosh of the U.S. Attorney’s Office for Southern District of New York’s Public Corruption Unit and the Criminal Division’s Fraud Section are prosecuting the case.

The Fraud Section is responsible for investigating and prosecuting all FCPA matters.  Additional information about the Justice Department’s FCPA enforcement efforts can be found at www.justice.gov/criminal/fraud/fcpa.

Geoffrey S. Berman, the United States Attorney for the Southern District of New York, Laura Wertheimer, Inspector General for the Federal Housing Finance Agency Office of Inspector General (“FHFA-OIG”), and Michael J. Missal, Inspector General for the U.S. Department of Veterans Affairs (“VA”) Office of Inspector General (“VA-OIG”), announced today the settlement of a civil fraud lawsuit against New York law firm Rosicki, Rosicki & Associates, P.C. (“ROSICKI”) and its wholly owned affiliates, Enterprise Process Service, Inc. (“ENTERPRISE”) and Paramount Land, Inc. (“PARAMOUNT”).  The settlement resolves the United States’ claims, asserted under the False Claims Act, alleging that ROSICKI used its affiliates, ENTERPRISE and PARAMOUNT, to systematically generate false and inflated bills for foreclosure-related and eviction-related expenses, and caused those expenses to be submitted to and paid for by the Federal National Mortgage Association, known colloquially as Fannie Mae.  The settlement also resolves claims arising from identical misconduct in connection with eviction-related expenses that were submitted to and paid for by the VA.  As part of the settlement approved by U.S. District Judge Jed S. Rakoff, ROSICKI, ENTERPRISE, and PARAMOUNT admitted and accepted responsibility for their conduct and must pay $4.6 million to the United States.  The settlement also requires ROSICKI to implement a compliance program with regular reporting over the next five years, and to publicly disclose the nature of its affiliation with ENTERPRISE and PARAMOUNT on its website.  

Manhattan U.S. Attorney Geoffrey S. Berman said:  “Lawyers are not above the law.  For years, the Rosicki firm submitted bills to Fannie Mae and the VA that contained inflated and unnecessary charges.  This Office will continue to hold accountable those who seek to achieve profits by fraudulent conduct.”

FHFA-OIG Inspector General Wertheimer said:  “FHFA is committed to holding accountable those who waste, steal, or abuse the resources of FHFA or any of the entities it regulates.  We work with U.S. Attorneys’ Offices across the country to protect the interests of the American taxpayers in the housing government-sponsored enterprises and are proud to have partnered with the U.S. Attorney’s Office for the Southern District of New York on this matter.”

VA-OIG Inspector General Michael J. Missal said:  “This civil settlement should send a clear message to individuals and businesses that VA-OIG and its law enforcement partners will vigorously investigate and expose false claims that fraudulently impact programs designed to benefit our veterans and their families.”     

ROSICKI is a New York law firm whose main practice area is mortgage foreclosures.  The two founding ROSICKI partners also own a number of affiliated entities, including ENTERPRISE, a service-of-process company, and PARAMOUNT, a title search company.  Fannie Mae approved ROSICKI to perform legal work in connection with foreclosures on residential properties for which Fannie Mae owned the mortgage loans.  Fannie Mae’s Servicing Guide required, among other things, that all foreclosure costs and expenses be “actual, reasonable, and necessary,” and that foreclosure law firms “must make every effort to reduce foreclosure-related costs and expenses in a manner that is consistent with all applicable laws.”  ROSICKI understood those requirements and represented at various times that the firm was complying with them.  

In fact, as ROSICKI, ENTERPRISE, and PARAMOUNT have admitted, from 2009 through 2018, on certain invoices for service of process (i.e., delivery or attempted delivery of legal papers) in connection with foreclosures or evictions, ENTERPRISE added additional charges to the costs charged by independent contractors and otherwise took actions that increased costs and expenses.  Similarly, on certain invoices for foreclosure searches and title continuations, PARAMOUNT added additional charges to the costs charged by independent contractors and otherwise took actions that increased costs and expenses.  ROSICKI submitted those costs and expenses for payment, with the understanding that Fannie Mae would reimburse for them. 

The settlement also resolves identical conduct by ROSICKI, ENTERPRISE, and PARAMOUNT pertaining to expenses attendant to evictions that ultimately were paid by the VA.

This case arose from a lawsuit filed by a whistleblower under the False Claims Act.  In March of this year, the United States intervened in the case and took over prosecution of some of the claims that the whistleblower asserted.  In a separate settlement agreement, ROSICKI, ENTERPRISE, and PARAMOUNT agreed to pay the United States an additional $1,518,000 to resolve separate False Claims Act claims pursued by the whistleblower, resulting in a total recovery to the United States of $6,118,000. 

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Mr. Berman thanked the FHFA-OIG and VA-OIG for their efforts and ongoing support and assistance with the case.

The case is being handled by the Office’s Civil Division.  Assistant U.S. Attorneys Cristy Irvin Phillips, Andrew E. Krause, and Joseph N. Cordaro are in charge of the case.

Four individuals have been charged in an indictment unsealed today in the Southern District of New York with wire fraud, tax fraud, money laundering and other offenses in connection with their alleged roles in a decades-long criminal scheme perpetrated by Mossack Fonseca & Co. (“Mossack Fonseca”), a Panamanian-based global law firm, and related entities.

Assistant Attorney General Brian A. Benczkowski of the Justice Department’s Criminal Division, U.S. Attorney Geoffrey S. Berman for the Southern District of New York, Chief Don Fort of IRS Criminal Investigation (IRS-CI), and Special Agent in Charge Angel M. Melendez of U.S. Immigrations and Customs Enforcement’s Homeland Security Investigations (HSI) New York made the announcement today.

Ramses Owens, 50, a Panamanian citizen; Dirk Brauer, 54, a German citizen; Richard Gaffey, 74, a U.S. citizen, of Medfield, Massachusetts; and Harald Joachim Von Der Goltz, 81, a German citizen, have been charged in an 11-count indictment.  Owens, Gaffey and Von Der Goltz are charged with one count of conspiracy to commit tax evasion, one count of wire fraud, and one count of money laundering conspiracy.  Owens and Brauer have been charged with one count of conspiracy to defraud the United States and one count of conspiracy to commit wire fraud.  Gaffey and Von Der Goltz are additionally charged with four counts of willful failure to file an FBAR.  Von Der Goltz has been additionally charged with two counts of making false statements.

Three of the four defendants named in the indictment have been arrested.  Brauer, who worked as an investment manager for Mossfon Asset Management, S.A. (“Mossfon Asset Management”), an asset management company closely affiliated with Mossack Fonseca, was arrested in Paris, France, on Nov. 15.  Von Der Goltz, a former U.S. resident and taxpayer, was arrested in London, United Kingdom, on Dec. 3.  Gaffey, a U.S.-based accountant, was arrested in Boston, Massachusetts earlier today.  Owens, a Panamanian attorney who worked for Mossack Fonseca, remains at large.   

“Law firms, asset managers, and accountants play key roles enabling entry into the global financial system,” said Assistant Attorney General Benczkowski.  “The charges announced today demonstrate our commitment to prosecute professionals who facilitate financial crime across international borders and the tax cheats who utilize their services.” 

"As alleged, these defendants went to extraordinary lengths to circumvent U.S. tax laws in order to maintain their wealth and the wealth of their clients,” said Manhattan U.S. Attorney Berman.  “For decades, the defendants, employees and a client of global law firm Mossack Fonseca allegedly shuffled millions of dollars through offshore accounts and created shell companies to hide fortunes.  In fact, as alleged, they had a playbook to repatriate un-taxed money into the U.S. banking system.  Now, their international tax scheme is over, and these defendants face years in prison for their crimes.”

“The unsealing of this indictment sends a clear message that IRS-CI is actively engaged in international tax enforcement, and more investigations are on the way,” said IRS-CI Chief Don Fort.  “IRS-CI specializes in unraveling these intricate offshore tax schemes and following the money around the globe wherever it may lead.  Cases like this help maintain the public’s confidence in our tax system by letting them know that we investigate and prosecute those who evade their tax obligation.”

“Today we announce the indictment of four individuals who allegedly defrauded the U.S. government through a large scale, intercontinental money laundering and wire fraud scheme, associated with Mossack Fonseca and its affiliates,” said HSI Special Agent-in-Charge Angel M. Melendez.  “HSI’s El Dorado Task Force, together with the IRS, built a case that uncovered an alleged complex trail of offshore shell corporations and bogus foundations used to disguise the beneficial ownership of huge amounts of money.  These efforts reflect the commitment of U.S. law enforcement to follow that trail and apprehend these criminals regardless of where they are in the world.”

According to the indictment, from at least in or about 2000 through in or about 2017, Owens and Brauer conspired with others to help U.S. taxpayer clients of Mossack Fonseca conceal assets and investments, and the income generated by those assets and investments, from the IRS through fraudulent, deceitful, and dishonest means.  To conceal their clients’ assets and income from the IRS, Owens and Brauer allegedly worked to establish and manage opaque offshore trusts and undeclared bank accounts on behalf of U.S. taxpayers who were clients of Mossack Fonseca.  Owens and Brauer allegedly marketed, created, and serviced sham foundations and shell companies formed under the laws of countries such as Panama, Hong Kong, and the British Virgin Islands, to conceal from the IRS and others the ownership by U.S. taxpayers of accounts established at overseas banks, as well as the income generated in those accounts.  As structured by Mossack Fonseca, the sham foundations typically “owned” the shell companies that nominally held the undeclared assets on behalf of the U.S. taxpayer clients of Mossack Fonseca.  The names of Mossack Fonseca’s clients generally did not appear anywhere on the incorporation paperwork for the sham foundations or related shell companies, although the clients in fact beneficially owned, and had complete access to, the assets of those sham entities and accounts.

In furtherance of the scheme, and in exchange for additional fees, Owens and Brauer allegedly provided support to clients who had purchased the sham foundations and related shell companies by providing corporate meeting minutes, resolutions, mail forwarding, and signature services.  Moreover, Owens and Brauer are alleged to have purposefully established the bank accounts in locations with strict bank secrecy laws, which impeded the ability of the United States to obtain bank records for the accounts.  Owens and Brauer also allegedly instructed U.S. taxpayer clients of Mossack Fonseca about how to repatriate funds to the United States from their offshore bank accounts in a manner designed to keep the undeclared bank accounts concealed.  Among other things, Owens and Brauer instructed clients to use debit cards and fictitious sales to repatriate their funds covertly, the indictment alleges.

Von Der Goltz was allegedly one of Mossack Fonseca’s U.S. taxpayer clients.  At all relevant times, Von Der Goltz was a U.S. resident and was subject to U.S. tax laws, which required him to report and pay income tax on worldwide income, including income and capital gains generated in domestic and foreign bank accounts.  U.S. citizens, resident aliens, and permanent legal residents with a foreign financial interest in or signatory authority over a foreign financial account worth more than $10,000 are required to file a Report of Foreign Bank and Financial Accounts, commonly known as an FBAR, disclosing the account.  Von Der Goltz is alleged to have evaded his tax reporting obligations by setting up a series of shell companies and bank accounts, and hiding his beneficial ownership of the shell companies and bank accounts from the IRS.  These shell companies and bank accounts allegedly made investments totaling tens of millions of dollars.  According to the indictment, Von Der Goltz was assisted in this scheme by Owens and by Gaffey, a partner at a U.S.-based accounting firm.  In furtherance of Von Der Goltz’s fraudulent scheme, Von Der Goltz, Gaffey, and Owens are alleged to have falsely claimed that Von Der Goltz’s elderly mother was the sole beneficial owner of the shell companies and bank accounts at issue because, at all relevant times, she was a Guatemalan citizen and resident, and — unlike Von Der Goltz — was not a U.S. taxpayer. 

As alleged in the indictment, Gaffey, in addition to assisting Von Der Goltz evade U.S. income taxes and reporting requirements, also worked closely with Owens to help another U.S. taxpayer client (“Client-1”) of Mossack Fonseca defraud the IRS.  Client-1 allegedly maintained a series of offshore bank accounts, which Mossack Fonseca helped Client-1 conceal from the IRS for years.    The indictment further alleges that, upon the advice of Owens and Gaffey, Client-1 covertly repatriated approximately $3 million of Client-1’s offshore money to the United States by falsely stating on Client-1’s federal tax return that the money represented proceeds from the sale of a company.  After Client-1 repatriated approximately $3 million in this manner, approximately $1 million still remained in Client-1’s offshore account, the existence of which remained hidden from the IRS.  

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

The investigation was conducted by IRS-CI and HSI with significant assistance by the Justice Department’s Tax Division and the FBI.  The Justice Department’s Office of International Affairs and law enforcement partners in France and the United Kingdom secured the arrests of the defendants located overseas.                                                                                                                                                                                                                                                                                                                                                                                                                                                    

This case is being prosecuted by Trial Attorneys Michael Parker and Parker Tobin of the Criminal Division’s Money Laundering and Asset Recovery Section of the Justice Department and Assistant U.S. Attorneys Sarah E. Paul, Nathan Rehn, Kristy Greenberg and Andrew Adams of the Manhattan U.S. Attorney’s Office’s Complex Frauds and Cybercrime Unit and Money Laundering and Transnational Criminal Enterprises Unit, with substantial support from previous co-counsel, Assistant U.S. Attorney Ann Marie Blaylock of the Western District of Kentucky.

Geoffrey S. Berman, the United States Attorney for the Southern District of New York, Brian A. Benczkowski, Assistant Attorney General of the Criminal Division of the U.S. Department of Justice, Don Fort, Chief, Internal Revenue Service-Criminal Investigation (“IRS-CI”), and Angel M. Melendez, the Special Agent-in-Charge of the New York Field Office of U.S. Immigration and Customs Enforcement’s Homeland Security Investigations (“HSI”), announced today the unsealing of an indictment charging RAMSES OWENS, DIRK BRAUER, RICHARD GAFFEY, and HARALD JOACHIM VON DER GOLTZ, with wire fraud, tax fraud, money laundering, and other offenses in connection with their roles in a decades-long criminal scheme perpetrated by Mossack Fonseca & Co. (“Mossack Fonseca”), a Panamanian-based global law firm, and related entities.

Three of the four defendants named in the indictment have been arrested.  BRAUER, who worked as an investment manager for Mossfon Asset Management, S.A., an asset management company closely affiliated with Mossack Fonseca, was arrested in Paris, France, on November 15, 2018.  VON DER GOLTZ, a former U.S. resident and taxpayer, was arrested in London, United Kingdom, on December 3, 2018.  GAFFEY, a U.S.-based accountant, was arrested in Medfield, Massachusetts, this morning.  OWENS, a Panamanian attorney who worked for Mossack Fonseca, remains at large.    

Manhattan U.S. Attorney Geoffrey S. Berman said:  “As alleged, these defendants went to extraordinary lengths to circumvent U.S. tax laws in order to maintain their wealth and the wealth of their clients.  For decades, the defendants, employees and a client of global law firm Mossack Fonseca, allegedly shuffled millions of dollars through off-shore accounts and created shell companies to hide fortunes.  In fact, as alleged, they had a playbook to repatriate un-taxed money into the U.S. banking system.  Now, their international tax scheme is over, and these defendants face years in prison for their crimes.”

AAG Brian A. Benczkowski said:  “Law firms, asset managers, and accountants play key roles enabling entry into the global financial system.  The charges announced today demonstrate our commitment to prosecute professionals who facilitate financial crimes across international borders and the tax cheats who utilize their services.”

IRS-CI Chief Don Fort said:  “The unsealing of this indictment sends a clear message that IRS-CI is actively engaged in international tax enforcement, and more investigations are on the way.  IRS-CI specializes in unraveling these intricate offshore tax schemes and following the money around the globe wherever it may lead.  Cases like this help maintain the public’s confidence in our tax system by letting them know that we investigate and prosecute those who evade their tax obligation.”

HSI Special Agent-in-Charge Angel M. Melendez said: “Today we announce the indictment of four individuals who allegedly defrauded the U.S. government through a large scale, intercontinental money laundering and wire fraud scheme, associated with Mossack Fonseca and its affiliates.  HSI’s El Dorado Task Force, together with the IRS, built a case that uncovered an alleged complex trail of offshore shell corporations and bogus foundations used to disguise the beneficial ownership of huge amounts of money.  These efforts reflect the commitment of U.S. law enforcement to follow that trail and apprehend these criminal regardless where they are in the world.”

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

From 2000 through 2017, OWENS and BRAUER conspired with others to help U.S. taxpayer clients of Mossack Fonseca conceal assets and investments, and the income generated by those assets and investments, from the IRS through fraudulent, deceitful, and dishonest means.  To conceal their clients’ assets and income from the IRS, OWENS and BRAUER worked to establish and manage opaque offshore trusts and undeclared bank accounts on behalf of U.S. taxpayers who were clients of Mossack Fonseca.  OWENS and BRAUER marketed, created, and serviced sham foundations and shell companies formed under the laws of countries such as Panama, Hong Kong, and the British Virgin Islands, to conceal from the IRS and others the ownership by U.S. taxpayers of accounts established at overseas banks, as well as the income generated in those accounts.  As structured by Mossack Fonseca, the sham foundations typically “owned” the shell companies that nominally held the undeclared assets on behalf of the U.S. taxpayer clients of Mossack Fonseca.  The names of Mossack Fonseca’s clients generally did not appear anywhere on the incorporation paperwork for the sham foundations or related shell companies, although the clients in fact beneficially owned, and had complete access to, the assets of those sham entities and accounts.

In furtherance of the scheme, and in exchange for additional fees, OWENS and BRAUER provided support to clients who had purchased the sham foundations and related shell companies by providing corporate meeting minutes, resolutions, mail forwarding, and signature services.  Moreover, OWENS and BRAUER purposefully established the bank accounts in locations with strict bank secrecy laws, which impeded the ability of the United States to obtain bank records for the accounts.  OWENS and BRAUER also instructed U.S. taxpayer clients of Mossack Fonseca about how to repatriate funds to the United States from their offshore bank accounts in a manner designed to keep the undeclared bank accounts concealed.  Among other things, OWENS and BRAUER instructed clients to use debit cards and fictitious sales to repatriate their funds covertly.

VON DER GOLTZ was one of Mossack Fonseca’s U.S. taxpayer clients.  At all relevant times, VON DER GOLTZ was a U.S. resident and was subject to U.S. tax laws, which required him to report and pay income tax on worldwide income, including income and capital gains generated in domestic and foreign bank accounts.  VON DER GOLTZ evaded his tax reporting obligations by setting up a series of shell companies and bank accounts, and hiding his beneficial ownership of the shell companies and bank accounts from the IRS.  These shell companies and bank accounts made investments totaling tens of millions of dollars.  VON DER GOLTZ was assisted in this scheme by OWENS and by GAFFEY, a partner at a U.S.-based accounting firm.  In furtherance of VON DER GOLTZ’s fraudulent scheme, VON DER GOLTZ, GAFFEY, and OWENS falsely claimed that VON DER GOLTZ’s elderly mother was the sole beneficial owner of the shell companies and bank accounts at issue because, at all relevant times, she was a Guatemalan citizen and resident, and – unlike VON DER GOLTZ – was not a U.S. taxpayer. 

GAFFEY, in addition to assisting VON DER GOLTZ evade U.S. income taxes and reporting requirements, also worked closely with OWENS to help another U.S. taxpayer client (“Client-1”) of Mossack Fonseca defraud the IRS.  Client-1 maintained a series of offshore bank accounts, which Mossack Fonseca helped Client-1 conceal from the IRS for years.  The indictment further alleges that upon the advice of OWENS and GAFFEY, Client-1 covertly repatriated approximately $3 million of Client-1’s offshore money to the United States by falsely stating on Client-1’s federal tax return that the money represented proceeds from the sale of a company.  After Client-1 repatriated approximately $3 million in this manner, approximately $1 million still remained in Client-1’s offshore account, the existence of which remained hidden from the IRS.   

*                *                *

A chart outlining the charges against each defendant is below.  The maximum potential sentences in this case are prescribed by Congress and are provided here for informational purposes only, as any sentencings of the defendants will be determined by the judge.  The charges in the Indictment are merely accusations, and the defendants are presumed innocent unless and until proven guilty.

COUNT

DEFENDANT

AGE & CITIZENSHIP

MAXIMUM SENTENCE

Count One: Conspiracy to Defraud the United States

18 U.S.C. § 371

RAMSES OWENS

DIRK BRAUER

50, Panamanian Citizen

54, German Citizen

Five years in prison

Count Two: Conspiracy to Commit Wire Fraud

18 U.S.C. § 1349

RAMSES OWENS

DIRK BRAUER

50, Panamanian Citizen

54, German Citizen

20 years in prison

Count Three: Conspiracy to Commit Tax Evasion

18 U.S.C. § 371

RAMSES OWENS

RICHARD GAFFEY

HARALD JOACHIM VON DER GOLTZ

50, Panamanian Citizen

74, U.S. Citizen

81, German Citizen

Five years in prison

Count Four: Wire Fraud

18 U.S.C. § 1343

RAMSES OWENS

RICHARD GAFFEY

HARALD JOACHIM VON DER GOLTZ

50, Panamanian Citizen

74, U.S. Citizen

81, German Citizen

20 years in prison

Count Five: Money Laundering Conspiracy

18 U.S.C. § 1956

RAMSES OWENS

RICHARD GAFFEY

HARALD JOACHIM VON DER GOLTZ

50, Panamanian Citizen

74, U.S. Citizen

81, German Citizen

20 years in prison

Counts Six-Nine: Willful Failure to File an FBAR

31 U.S.C. §§ 5314 & 5322(a)

RICHARD GAFFEY

HARALD JOACHIM VON DER GOLTZ

74, U.S. Citizen

81, German Citizen

10 years in prison for each count

Counts Ten-Eleven: False Statements

18 U.S.C. § 1001

HARALD JOACHIM VON DER GOLTZ

81, German Citizen

Five years in prison for each count

Mr. Berman praised the outstanding investigative work of IRS-CI and HSI, and thanked the Justice Department’s Tax Division and the Federal Bureau of Investigation for their significant assistance in the investigation.  Mr. Berman also thanked the U.S. Justice Department’s Office of International Affairs and law enforcement partners in France and the United Kingdom for their assistance in securing the arrests of the defendants located overseas.

This case is being handled by the Office’s Complex Frauds and Cybercrime Unit and Money Laundering and Transnational Criminal Enterprises Unit, working in partnership with the Money Laundering and Asset Recovery Section of the Criminal Division.  Assistant United States Attorneys Sarah E. Paul, Thane Rehn, Kristy Greenberg, and Andrew Adams, along with Trial Attorneys Michael Parker and Parker Tobin of the Money Laundering and Asset Recovery Section, are in charge of the prosecution.

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

Geoffrey S. Berman, the United States Attorney for the Southern District of New York, announced that CLINT EDWARDS was sentenced on November 30, 2018, to 20 years in prison for enticing a child to engage in illegal sexual activity.  EDWARDS pled guilty on July 2, 2018, before United States District Judge Cathy Seibel, who also imposed the sentence.

According to the Superseding Information, Complaint, and other documents filed in the case to which EDWARDS pled, as well as statements made during the plea proceeding:

In May and June of 2017, EDWARDS used social media and texting applications on his iPhone to entice a 14-year-old minor (the “Victim”) to engage in sexual activity with him.  During their text message conversations, EDWARDS solicited sexually explicit photos and videos from the Victim, and sent the Victim a video of himself engaged in sexual activity.  Despite knowing that the Victim was 14 years old, EDWARDS arranged to meet the Victim in order to have sex.

On June 6, 2017, EDWARDS met the Victim at her apartment building and engaged in sexual activity with her in the building’s basement.  EDWARDS used his iPhone to film a portion of his sexual activity with the Victim.  The basement’s surveillance cameras captured EDWARDS’s sexual conduct with the Victim, as well as his use of a smartphone to film a portion of that conduct.  EDWARDS later traveled with the Victim to his residence in New Windsor, New York, where EDWARDS continued to engage in sexual conduct with the Victim over the course of several days.

On June 13, 2017, law enforcement recovered the Victim from EDWARDS’s residence.  EDWARDS had entered a backyard area of his home shortly before law enforcement arrived, and he fled upon observing law enforcement’s presence.  EDWARDS was arrested on June 16, 2017.

*                *                *

Mr. Berman praised the outstanding investigative work of the Federal Bureau of Investigation.  He thanked the Portchester Police Department and the New Windsor Police Department for their assistance throughout the investigation.

Any individuals who believe they have information concerning the exploitation of children may contact the Federal Bureau of Investigation at 1-212-384-1000 or https://tips.fbi.gov/.

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

Geoffrey S. Berman, the United States Attorney for the Southern District of New York, and Scott Lampert, Special Agent in Charge of the U.S. Department of Health and Human Services, Office of Inspector General’s (“HHS-OIG”) New York Region, announced today that  FENG QIN, M.D. (“QIN”), a vascular surgeon with practices in Lower Manhattan and Far Rockaway, Queens, has been indicted for healthcare fraud and that the United States has filed a civil fraud complaint against him and his medical practice, QIN MEDICAL P.C., under the False Claims Act.  Specifically, the Indictment and Civil Complaint charge QIN with fraudulently billing Medicare for performing vascular surgery procedures on patients that were not medically reasonable and necessary or covered under Medicare rules.  QIN will be presented before U.S. Magistrate Judge Ona T. Wang this afternoon.  QIN’s case is assigned to U.S. District Judge Ronnie Abrams. 

In 2015, this Office filed and simultaneously settled a civil fraud lawsuit against QIN and his previous employer for engaging in fraudulent billing practices during the time period 2010 through 2012.  As part of that settlement, QIN paid $150,000 and admitted that he was familiar with the applicable Medicare rules and that he had regularly performed vascular surgeries on patients who had not exhibited symptoms justifying the procedures.  As charged in the Indictment and Civil Complaint, QIN later opened his own surgical practice and continued to engage in the same fraudulent conduct.

Manhattan U.S. Attorney Geoffrey S. Berman said:  “As alleged, Feng Qin clearly did not learn his lesson from the previous civil suit this Office filed against him for healthcare fraud – that he must follow Medicare rules and stop billing for surgical procedures that are not clinically justified.  He is now being charged criminally for his alleged failure to do so.”

HHS-OIG Special Agent in Charge Scott Lampert said:  “Performing medically unnecessary services for the purposes of financial gain will not be tolerated.  HHS-OIG is committed to holding providers accountable and protecting the integrity of our nation’s federal healthcare programs.”

According to the Indictment[1] and the Civil Complaint:

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

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

*                      *                      *

FENG QIN, 54, of New York, New York, is charged with one count of healthcare fraud, and faces a maximum sentence of 10 years.  The charge contained in the Indictment against QIN is merely an accusation, and the defendant is presumed innocent unless and until proven guilty.

The allegations of fraud stated in the Civil Complaint were first brought to the attention of federal law enforcement by a whistle-blower who filed a lawsuit under the False Claims Act.

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

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

Geoffrey S. Berman, the United States Attorney for the Southern District of New York, announced today that TOM SHIN pled guilty to charges of aiding the preparation of a false tax return and wire fraud.  SHIN pled guilty before U.S. District Judge Valerie E. Caproni.

U.S. Attorney Geoffrey S. Berman said:  “Tom Shin admitted today that he violated his clients’ trust by filing false tax returns on their behalf in a scheme to defraud his clients of more than $1.3 million that was intended to pay taxes owed to the federal and state governments.  Shin will now have to answer for his actions.”

According to the allegations in the Complaint and Indictment to which SHIN pled guilty:

SHIN was hired to prepare joint federal and state tax returns for two individuals (the “Clients”) for tax year 2017.  SHIN showed the Clients completed tax return forms indicating that the Clients owed approximately $1.3 million in taxes.  However, SHIN actually filed false returns on behalf of the Clients without their knowledge, which concealed the Clients’ tax liability.  SHIN then, in connection with applications for extensions of time to file his personal tax returns, directed tax authorities to withdraw approximately $1.3 million from the Clients’ bank account, and then filed personal tax returns seeking an approximately $1.3 million refund.  The net result of the alleged scheme would have been a transfer of approximately $1.3 million from the Clients’ bank account to SHIN.

*                *                *

SHIN, 36, of Staten Island, New York, pled guilty to one count of aiding the preparation of a false tax return, which carries a maximum penalty of three years in prison, and one count of wire fraud, which carries a maximum penalty of 20 years in prison.  As a condition of his plea, SHIN also agreed to forfeit $335,894. 

SHIN is scheduled to be sentenced by Judge Caproni on March 4, 2019, at 12:00 p.m.

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

Mr. Berman thanked the Internal Revenue Service and the New York State Department of Taxation and Finance for their outstanding work.

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

Geoffrey S. Berman, the United States Attorney for the Southern District of New York, Assistant Attorney General Brian A. Benczkowski of the Justice Department’s Criminal Division, and William F. Sweeney Jr., the Assistant Director-in-Charge of the New York Field Division of the Federal Bureau of Investigation (“FBI”), announced today that the Madoff Victim Fund established by the Department of Justice began the distribution of $695.4 million in funds forfeited to the United States Government in connection with the Bernard L. Madoff Investment Securities LLC (“BLMIS”) fraud scheme. These funds will be sent to more than 27,000 victims worldwide, the third in a series of payments from the Madoff Victim Fund to victims of the BLMIS fraud that will ultimately total more than $4 billion.  Another $5 billion in assets recovered by the U.S. Attorney’s Office are being separately paid to Madoff victims through the BLMIS Customer Fund administered by the Securities Investor Protection Act Trustee.

Manhattan U.S. Attorney Geoffrey S. Berman said:  “Bernie Madoff committed history’s largest Ponzi scheme.  This Office prosecuted Madoff and others who helped perpetrate his fraud, and we assisted in recovering billions of dollars in proceeds from the fraud.  Today’s payment of more than $690 million is this Office’s third installment in a series of distributions that represent our ongoing commitment to find relief for victims of Madoff’s heinous crimes.”

Assistant Attorney General Brian A. Benczkowski said:  “Bernie Madoff’s scheme devastated retirement and pension funds, charitable organizations, and thousands of individual investors spread across 49 States, the District of Columbia, and 121 other countries.  The payments announced today could not have happened without the prosecutors’ relentless pursuit of proceeds of Madoff’s fraud through civil forfeiture – and, as a result of their efforts and those of the Criminal Division’s Money Laundering and Asset Recovery Section, victims who would not have seen a dime in other compensation programs will now recover more than half of their losses.”

FBI Assistant Director William F. Sweeney Jr. said:  “While today’s distribution of funds is indeed significant in scope, we understand no amount of money could ever restore the damage done by Madoff as a result of his selfish behavior and unforgivable financial crimes.  To all of his many victims and their families, we realize this gesture may not provide the consolation necessary to remove the pain and suffering you have been brought to bear, but we are hopeful it provides some sense of relief, and we remain committed to achieve justice for all victims of inexcusable financial crimes.”

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

The Madoff Victim Fund is funded through recoveries by the U.S. Attorney’s Office in various criminal and civil forfeiture actions, and is overseen by Richard Breeden, the former Chairman of the United States Securities and Exchange Commission, in his capacity as Special Master appointed by the Department of Justice to assist in connection with the victim remission proceedings.  The two prior distributions from the Madoff Victim Fund have already returned nearly $1.3 billion to Madoff victims, and this third distribution will increase that total to almost $2 billion.

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

Mr. Berman praised the work of the FBI and the Madoff Victim Fund, and thanked the Money Laundering and Asset Recovery Section of the Department of Justice’s Criminal Division for their assistance.

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

The case is being handled by the Office’s Money Laundering and Transnational Criminal Enterprises Unit.  Assistant United States Attorney Louis A. Pellegrino is in charge of the case.          

Geoffrey S. Berman, the United States Attorney for the Southern District of New York, Lesley Brovner, Acting Commissioner of the New York City Department of Investigation (“DOI”), and James D. Robnett, the Special Agent-in-Charge of the New York Field Office of the Internal Revenue Service, Criminal Investigation (“IRS-CI”), announced today that ELIANA BAUTA, GERALDINE PEREZ, and ERIC GONZALES were charged in Manhattan federal court with six counts related to their theft of over $300,000 in funds from the New York City Human Resources Administration (“HRA”).  BAUTA perpetrated the offenses in her capacity as an HRA employee.  PEREZ is also charged with a separate fraudulent scheme involving over $90,000 of stolen or fraudulently issued Treasury checks.  BAUTA was arrested by the U.S. Marshals in Florida, and was presented in the United States District Court for the Middle District of Florida this afternoon.  PEREZ and GONZALEZ will appear tomorrow for presentment in the Southern District of New York before Magistrate Judge Gabriel W. Gorenstein. 

Manhattan U.S. Attorney Geoffrey S. Berman said:  “As an HRA employee, Eliana Bauta was supposed to help New Yorkers in need.  Instead, she and her co-defendants allegedly helped themselves, stealing hundreds of thousands in emergency benefits funds.  As today’s arrests make clear, we will not tolerate alleged abuses of trust in City agencies, and we remain committed to ensuring that federal and local funds go to the intended recipients, not the pockets of unscrupulous employees and their families and friends.”

IRS-CI Special Agent-in-Charge Robnett said:  “When stolen identities are used to file fraudulent tax returns, it robs all of us.  IRS-CI will investigate these alleged crimes and protect this country’s tax administration.”

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

HRA is an agency of the City of New York responsible for administering the majority of the City’s public assistance programs.  Among other things, HRA provides temporary, emergency cash assistance to individuals and families with social service and economic needs to assist them in reaching self-sufficiency.  The emergency assistance is funded by the federal government as well as by New York State and City. 

Since in or about 2015, DOI has been investigating two related schemes in which an HRA employee – ELIANA BAUTA – defrauded HRA and the City of New York by using her position to commit public assistance fraud.  BAUTA worked as a Job Opportunity Specialist for HRA from approximately January 2008 to on or about May 23, 2018.  As a Job Opportunity Specialist, BAUTA was at various points responsible for interviewing benefits applicants, compiling and submitting applicants’ paperwork, and disbursing applicants’ benefits. 

In the first of the two schemes, BAUTA is alleged to have caused the fraudulent issuance of emergency benefits funds to relatives and acquaintances, including GERALDINE PEREZ and ERIC GONZALES, among others, who in truth and in fact did not qualify for those funds.  For example, BAUTA altered a police report submitted by an actual HRA client by changing the name of the victim to a family member’s name, and then entered the doctored report into HRA systems in support of a request for benefits to be issued to that family member.  On another occasion, BAUTA submitted a request for emergency benefits to be issued to an individual after an alleged disaster, but no such disaster had occurred, and the payments were intended to repay that individual for putting a supernatural curse on BAUTA’s ex-boyfriend.  Both PEREZ and GONZALEZ were knowing recipients of such fraudulently issued funds and shared the proceeds with BAUTA.

In the second scheme, BAUTA is alleged to have obtained access to and misappropriated emergency benefits checks issued to actual HRA clients.  Instead of providing the checks to the legitimate clients in need of emergency funding, BAUTA gave them to PEREZ and GONZALES, among other of BAUTA’s relatives and associates, who deposited the checks in their own bank accounts and withdrew the funds, and then shared the proceeds with BAUTA.  In total, the two schemes resulted in losses to HRA of at least $309,000 in public funds.

In addition to obtaining stolen HRA checks into her bank account and the bank accounts of family members, PEREZ is also alleged to have deposited or caused to be deposited into these same accounts improperly obtained United States Treasury checks that were issued to other individuals as tax refunds.  In total, 23 such checks worth over $91,000 were deposited into bank accounts of PEREZ and her family members and associates.  PEREZ then split the proceeds with a tax preparer who assisted in the scheme.

*                *                *

ELIANA BAUTA, 35, GERALDINE PEREZ, 60, and ERIC GONZALES, 26, all of the Bronx, New York, are each charged with one count of conspiracy to commit federal program theft, which carries a maximum sentence of five years in prison; two counts of federal program theft, each of which carries a maximum sentence of 10 years in prison; one count of conspiracy to commit wire fraud, which carries a maximum sentence of 20 years in prison; and one count of conspiracy to commit bank fraud, which carries a maximum sentence of 30 years in prison.  BAUTA is also charged with one count of aggravated identity theft, which carries a mandatory consecutive sentence of two years in prison.  PEREZ is also charged with one count of receiving stolen government money or property, which carries a maximum sentence of 10 years in prison.  The statutory maximum sentences are prescribed by Congress and are provided here for informational purposes only, as any sentencings of the defendants would be determined by the judge.

Mr. Berman praised the investigative work of DOI and the IRS, and noted that the investigation is continuing.  

This case is being handled by the Office’s Public Corruption Unit.  Assistant United States Attorneys Paul Monteleoni and Catherine Ghosh are in charge of the prosecution.

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

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

Geoffrey S. Berman, the United States Attorney for the Southern District of New York, announced that JOSE SANTIAGO-ORTIZ was sentenced today to three consecutive life sentences for murder, participating in a narcotics conspiracy, and firearms offenses.  SANTIAGO-ORTIZ was convicted on May 15, 2018, following a one-week jury trial before U.S. District Judge Lewis A. Kaplan, who also imposed today’s sentence.

U.S. Attorney Geoffrey S. Berman said:  “Over eight years ago, in service of a violent drug crew, Jose Santiago-Ortiz brutally and senselessly murdered Jerry Tide.  Now, thanks to the extraordinary work of the FBI, Santiago-Ortiz stands convicted of that murder and other crimes, and will spend the rest of his life in prison.”

According to the Complaint, the Indictment, other filings in Manhattan federal court, evidence at trial, and statements made in court proceedings:

On September 11, 2010, SANTIAGO-ORTIZ shot and killed Jerry Tide in the vicinity of Jerome Avenue and 182nd Street in the Bronx.  Between 2010 and November 2015, SANTIAGO-ORTIZ was the leader of a violent heroin trafficking enterprise (the “Flow Heroin Enterprise”) that trafficked kilogram quantities of heroin, stamped “Flow,” in the Bronx and to Rutland, Vermont.  SANTIAGO-ORTIZ killed Jerry Tide in part to increase his position within the Flow Heroin Enterprise.  Following his arrest on state charges in March 2014, SANTIAGO-ORTIZ continued to direct narcotics trafficking and acts of violence from prison.  In addition, in 2015, members of the Flow Heroin Enterprise engaged in several shootings with rival drug dealers in the Bronx.

*                *                *

In addition to the prison term, SANTIAGO-ORTIZ, 27, was sentenced to five years of supervised release.

Mr. Berman thanked the Federal Bureau of Investigation’s New York Field Division for their work on the investigation.

The case is being prosecuted by the Office’s Violent and Organized Crime Unit.  Assistant U.S. Attorneys Shawn G. Crowley, Lauren B. Schorr, and George D. Turner are in charge of the prosecution. 

Geoffrey S. Berman, the United States Attorney for the Southern District of New York, Ashan M. Benedict, the Special Agent-in-Charge of the New York Field Division of the Bureau of Alcohol, Tobacco, Firearms, and Explosives (“ATF”), and James P. O’Neill, the Commissioner of the New York City Police Department (“NYPD”), announced the unsealing of a Superseding Indictment, charging three additional individuals, JOWAYNE TOMLISON, SEAN KNOTT, and ELIZABETH MCCASKILL, with trafficking in firearms, including the trafficking of firearms from South Carolina to the New York City area.  A fourth defendant, Dayvon Chestnut, was previously arrested and indicted on the same charges.  TOMLISON and KNOTT were arrested today and will be presented today at the United States Courthouse in Manhattan.  MCCASKILL was arrested this afternoon in the District of South Carolina. 

U.S. Attorney Geoffrey S. Berman said:  “The defendants conspired to put illegal firearms on the streets of New York, increasing the risk of gun violence.  Today, thanks to our partners at the ATF and the NYPD, they face federal charges for their crimes.”

ATF Special Agent-in-Charge Ashan M. Benedict said:  “Protecting Americans from gun violence is central to the ATF mission.  The defendants are alleged to have been part of a ring responsible for numerous illegal firearms out on our city streets.  The ATF/ NYPD Joint Firearms Task Force is committed to disrupting and dismantling trafficking rings and bringing those responsible to justice.  I would like to thank the United States Attorney’s Office for prosecuting this case.”                         

According to the allegations and information in the public record, including the allegations in the Superseding Indictment[1]:

From 2016 to 2018, Chestnut was unlawfully purchasing firearms in South Carolina for resale, and directing others, such as MCCASKILL, to do the same.  In April and May 2018, Chestnut traveled to the New York City area on at least four occasions to distribute those firearms.  TOMLISON and KNOTT obtained firearms from Chestnut for further resale to other individuals.    

*                *                *

All four defendants – Chestnut, 25, of Bishopville, South Carolina, TOMLISON, 28, of Brooklyn, New York, KNOTT, 52, of Queens, New York, and MCCASKILL, 29, of Bishopville, South Carolina, are charged with conspiracy to traffic in firearms and firearms trafficking, each of which carries a maximum statutory penalty of five years in prison.            

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

Mr. Berman praised the efforts of the ATF and NYPD in this case.

This case is being handled by the Office’s Violent and Organized Crime Unit.  Assistant United States Attorney Sarah Krissoff in charge of the prosecution.

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

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

Geoffrey S. Berman, the United States Attorney for the Southern District of New York, announced that KEVIN PINNOCK, a/k/a “Kev Savage,” a/k/a “Sav,” was sentenced yesterday to 12 years and three months in prison for using the internet to facilitate sex trafficking, possessing crack cocaine with intent to distribute, possessing a firearm in furtherance of drug trafficking, and possessing stolen identification documents.  PINNOCK previously pled guilty before United States District Judge Deborah A. Batts, who also imposed yesterday’s sentence.

U.S. Attorney Geoffrey S. Berman said:  “Kevin Pinnock used violence and coercion to force women to engage in commercial sex for his own profit.  He will now serve a substantial prison sentence for his crimes.  The prosecution of Kevin Pinnock is part of our determined effort to deliver justice to victims of sex trafficking and other forms of commercial exploitation, and to deter others from engaging in this predatory criminal conduct.”

In sentencing PINNOCK, Judge Batts said:  “The nature of the crimes in which the defendant was convicted” were “unspeakable, violent, gratuitous crimes he arrogantly committed on young women for his financial gain,” and that his theft of others’ identities “show[s] a shocking disregard on the part of the defendant for the havoc his crimes create for innocent victims in terms of their ruined credit and long-term ramifications on their financial lives.”

According to the Complaint, Indictment, Superseding Indictment, and other documents filed in the case, as well as statements made during court proceedings:

In 2015 and 2016, PINNOCK posted online advertisements to solicit customers to engage in commercial sex with women PINNOCK forced into prostitution by violence, abuse, and coercion.  PINNOCK retained virtually all of the profits from his sex trafficking business. 

Since at least November 2016, PINNOCK sold crack cocaine and possessed a loaded firearm, which had been stolen, in order to protect his drug dealing business.  He also possessed dozens of stolen identification cards – including driver’s licenses and Social Security cards – which he sold to other individuals who were engaged in identity theft and fraud.  Many of the identification cards had been obtained through the commission of robberies.

*                      *                      *

In addition to his prison term, PINNOCK, 22, of the Bronx, New York, was sentenced to three years of supervised release, a forfeiture money judgment in the amount of $15,000, and restitution in the amount of $100,000.

Mr. Berman praised the outstanding investigative work of the Bureau of Alcohol, Tobacco, Firearms, and Explosives and United States Immigration and Customs Enforcement’s Homeland Security Investigations, and thanked the United States Secret Service, the Social Security Administration’s Office of the Inspector General, the New York City Police Department, and the Bronx County District Attorney’s Office for their assistance.

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

Geoffrey S. Berman, the United States Attorney for the Southern District of New York, announced that MICHAEL LUCIANO and PHILIP LUCIANO, a father and son, were sentenced today to five years in prison for selling fentanyl and oxycodone over the “dark web,” including on the dark web marketplace AlphaBay.  The LUCIANOS also sold fentanyl that substantially contributed to a victim’s non-fatal overdose in 2015.  Today’s sentences were imposed by U.S. District Judge Lewis A. Kaplan.

Manhattan U.S. Attorney Geoffrey S. Berman said:  “The defendants’ dangerous fentanyl distribution contributed to a victim’s overdose.  Fortunately, the victim survived.  After this overdose, the defendants continued to deal drugs, using the dark web – a place where some criminals think they can hide – to sell fentanyl and oxycodone, two highly addictive and potentially lethal opioids.  For their criminal conduct, this father-son duo has now been sentenced to federal prison.”

According to the allegations in the Complaint and the Indictment to which the LUCIANOS pled guilty, as well as statements made in court:

From at least in or about January 2015 through July 2017, MICHAEL LUCIANO and PHILIP LUCIANO conspired to distribute fentanyl, butyryl fentanyl (a fentanyl analogue), and oxycodone.  They sold narcotics both in person and – from at least February 2016 through July 2017 – over the dark web.  In March 2015, the LUCIANOS sold fentanyl to a repeat customer who overdosed, was administered naloxone, taken to the hospital, and survived.  The overdose victim sent text messages to PHILIP LUCIANO from the hospital, stating, “I called you / Your dad at the house and saw him / I got back home and shot some. I thought it might have been too much, especially considering my last dose of sub was Saturday. I became unresponsive and my friend called an ambulance. They gave me narcan and I’m at the hospital now / Can I settle up and get 60 more tomorrow?”  PHILIP LUCIANO replied, “Give me a call when u can.” 

Despite this overdose in 2015, the LUCIANOS continued to sell drugs, including over the dark web in 2016 and 2017.  On AlphaBay, they sold narcotics using the vendor name “Zane61.”  AlphaBay customers repeatedly provided positive feedback for fentanyl and oxycodone they purchased from Zane61.  One of the LUCIANOS’ AlphaBay customers wrote, for example:  “Great stealth, fast shipping, legit product. Perfect 10/10.”  In July 2017, MICHAEL LUCIANO gave a confession to agents from the U.S. Department of Homeland Security – Homeland Security Investigations (“HSI”).  He admitted, among other things, that PHILIP LUCIANO had handled the technological aspects of their drug transactions over the dark web, PHILIP had reported to MICHAEL drug orders they had received online, and MICHAEL had shipped the narcotics, via the United States Postal Service, to the LUCIANOS’ customers.

*                *                *

In addition to their prison terms, MICHAEL LUCIANO, 59, and PHILIP LUCIANO, 30, both of Staten Island, were each sentenced to four years of supervised release and forfeiture money judgments of $15,953 along with certain property, such as more than 2.5 Bitcoin.

Mr. Berman praised HSI for its outstanding investigative work.  Mr. Berman also thanked the U.S. Postal Inspection Service, U.S. Customs and Border Protection, and the New York City Police Department for their valuable assistance.

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

Geoffrey S. Berman, the United States Attorney for the Southern District of New York, announced that STEVEN BROWN was sentenced today to 63 months in prison for defrauding victims of over $12.5 million by participating in a fraudulent scheme to solicit investments in feature-length films and documentaries based on misrepresentations and fraudulent documents.  BROWN previously pled guilty before U.S. Magistrate Judge Henry B. Pitman, and was sentenced today by U.S. District Judge Kimba M. Wood. 

Manhattan U.S. Attorney Geoffrey S. Berman said:  “Steven Brown perpetrated a multimillion-dollar fraud by convincing victims to invest in Hollywood films and documentaries with false promises and fraudulent documents.  He continued the scheme even after he was arrested, luring another investor with the same lies.  Now Brown has been sentenced for his crimes.”       

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

From at least 2009 through 2017, STEVEN BROWN participated in a scheme in which BROWN, along with co-conspirators, solicited investments in the marketing and production of feature-length films and documentaries from investors, including by furnishing them with fraudulent documents and by promising guaranteed returns, which never materialized.

In order to solicit these investments, BROWN and others made material misrepresentations about, among other things, their own investments in the films for which they were soliciting money, as well as investments that they claimed to have received from other investors.  To support their claims, BROWN and his co-conspirators at times sent the victims falsified financial records that reflected investments in the films that had never actually been made.  BROWN and his co-conspirators also told certain victims that their investments would be guaranteed by a fictitious entity, and provided falsified documents in support of these purported guarantees.  On one occasion, Brown sent an email to a victim attaching what purported to be a current bank statement for an account held by the fictitious entity, as well as an email from an executive at the fictitious entity guaranteeing the victim’s investment.  In fact, neither the account nor the executive actually existed.

BROWN continued to solicit investments in film projects based on misrepresentations even after being arrested on the criminal charges brought in this case.  In 2017, BROWN solicited an investment from a victim of the scheme in a film production and distribution company with which BROWN was purportedly involved by promising the victim a 50 percent return on the investment.  The victim’s funds were never returned and were, in part, used to pay expenses unrelated to any film projects.    

In total, BROWN and his co-conspirators solicited millions of dollars from their victims, allegedly to be used for either marketing or production costs associated with the various films.  In reality, however, the money that was received from these investors was primarily used to fund other projects, to pay back previously defrauded investors, and to pay the personal expenses of BROWN and his co-conspirators, including, among other things, the purchase of a condominium for BROWN.

*                *                *

In addition to the prison sentence, BROWN, 48, of Los Angeles, California, was sentenced to three years of supervised release and ordered to forfeit his ownership interest in a California property and $673,028.93 in criminal proceeds. Judge Wood will impose restitution at a later date.

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

This case is being handled by the Office’s Complex Frauds and Cybercrime Unit.  Assistant United States Attorneys Katherine Reilly, Noah Solowiejczyk, and Ryan Finkel are in charge of the prosecution.

Geoffrey S. Berman, the United States Attorney for the Southern District of New York, and William F. Sweeney Jr., the Assistant Director-in-Charge of the New York Field Division of the Federal Bureau of Investigation (“FBI”), announced that MARK IRIZARRY was sentenced yesterday in Manhattan federal court to 20 years in prison for attempted enticement of a minor to engage in sexual activity and possession and distribution of child pornography.  IRIZARRY pled guilty to these charges on June 15, 2018.  United States District Court Judge Valerie E. Caproni imposed yesterday’s sentence.     

Manhattan U.S. Attorney Geoffrey S. Berman said:  “Mark Irizarry admitted to the unconscionable crime of attempting to entice a nine-year-old child to have sex with him.  He will now serve 20 years in prison, where he will be unable to harm children.”

FBI Assistant Director William F. Sweeney Jr. said:  “Child predators like Mark Irizarry are among our society’s most heinous offenders, and the conduct in which he attempted to engage almost defies comprehension.  Irizzary’s sentence insures he will be locked away in a place where he will be unable to harm children.  The FBI, though our Child Exploitation and Human Trafficking Task Force, will continue to work tirelessly to protect our nation’s children.”

According to the Indictment and other filings in Manhattan federal court:

Between November 2017 and December 2017, IRIZARRY used an online social media application to send undercover law enforcement officers more than 80 unique image and video files known to contain child pornography.  The child pornography sent by IRIZARRY included depictions of prepubescent children, including infants and toddlers, engaged in sexual activity with other children or adults.  During these conversations with one of the undercover officers, IRIZARRY stated that he wanted to have sex with the undercover officer’s nine-year-old child and that he wanted to film the act on his cellphone.  IRIZARRY and the undercover officer planned a meeting time and location to carry out IRIZARRY’s plan; IRIZARRY was arrested on the date and at the location that he said he would meet the undercover law officer.  When he was arrested, IRIZARRY possessed several bags of candy and condoms.  After his arrest, law enforcement officers recovered approximately 18,000 uniquely named image files and 2,700 uniquely named video files, mostly consistent with child pornography, on remote computing platform accounts that IRIZARRY created.

*                      *                      *

In addition to his prison term, IRIZARRY, 28, of the Bronx, New York, was sentenced to 10 years of supervised release and restitution in amount to be determined by the Court at a later date.

Mr. Berman praised the outstanding investigative work of the Federal Bureau of Investigation, and thanked the New York City Police Department for their assistance.

This case is being prosecuted by the Office’s General Crimes Unit.  Assistant U.S. Attorney Nicholas W. Chiuchiolo is in charge of the prosecution. 

Geoffrey S. Berman, the United States Attorney for the Southern District of New York, and Raymond Donovan, the Special Agent in Charge of the Special Operations Division of the U.S. Drug Enforcement Administration (“DEA”), announced today that former Honduran congressman Juan Antonio Hernandez Alvarado, a/k/a “Tony Hernandez,” (“HERNANDEZ”) was charged in Manhattan federal court with conspiring to import cocaine into the United States, related weapons offenses involving the use and possession of machineguns and destructive devices, and making false statements to federal agents.  HERNANDEZ is the brother of the current president of Honduras, Juan Orlando Hernandez.  The case is assigned to U.S. District Judge P. Kevin Castel.  HERNANDEZ was arrested on November 23, 2018, in Miami, Florida, and will appear this afternoon in Miami federal court before United States Magistrate Judge Jonathan Goodman. 

Manhattan U.S. Attorney Geoffrey S. Berman said:  “As alleged, former Honduran congressman Tony Hernandez was involved in all stages of the trafficking through Honduras of multi-ton loads of cocaine that were destined for the U.S.  Hernandez allegedly arranged machinegun-toting security for cocaine shipments, bribed law enforcement officials for sensitive information to protect drug shipments, and solicited large bribes from major drug traffickers.  Thanks to the ongoing work of the DEA, Hernandez is now in custody on U.S. soil and facing justice in the U.S. courts.”

Special Agent in Charge Raymond Donovan said:  “Drug trafficking and corruption around the world threatens the rule of law, fuels violence and instability, and harms innocent families and communities.  Hernandez and his criminal associates allegedly conspired with some of the world’s most deadly and dangerous transnational criminal networks in Mexico and Colombia to flood American streets with deadly drugs.  DEA looks forward to Hernandez facing American justice and answering for his alleged crimes.”

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

From at least in or about 2004, up to and including in or about 2016, multiple drug-trafficking organizations in Honduras and elsewhere worked together, and with support from certain prominent public and private individuals, including Honduran politicians and law enforcement officials, to receive multi-ton loads of cocaine sent to Honduras from, among other places, Colombia via air and maritime routes, and to transport the drugs westward in Honduras toward the border with Guatemala and eventually to the United States.  For protection from official interference, and in order to facilitate the safe passage through Honduras of multi-hundred-kilogram loads of cocaine, drug traffickers paid bribes to public officials, including certain members of the National Congress of Honduras.

HERNANDEZ is a former member of the National Congress of Honduras, the brother of the current president of Honduras, and a large-scale drug trafficker who worked with other drug traffickers in, among other places, Colombia, Honduras, and Mexico, to import cocaine into the United States.  From at least in or about 2004, up to and including in or about 2016, HERNANDEZ was involved in processing, receiving, transporting, and distributing multi-ton loads of cocaine that arrived in Honduras via planes, go-fast vessels, and, on at least one occasion, a submarine.  HERNANDEZ had access to cocaine laboratories in Honduras and Colombia, at which some of the cocaine was stamped with the symbol “TH,” i.e., “Tony Hernandez.”  HERNANDEZ also coordinated and, at times, participated in providing heavily armed security for cocaine shipments transported within Honduras, including by members of the Honduran National Police and drug traffickers armed with, among other weapons, machineguns. 

As part of his drug-trafficking activities, HERNANDEZ and his co-conspirators bribed law enforcement officials for sensitive information to protect drug shipments and solicited large bribes from major drug traffickers for HERNANDEZ. 

In or about February 2014 in Honduras, HERNANDEZ met with Devis Leonel Rivera Maradiaga, the former leader of a violent Honduran drug-trafficking organization known as the Cachiros, for a meeting arranged by, among others, a former member of the Honduran National Police.  During a video- and audio-recorded portion of that meeting, HERNANDEZ agreed to help Rivera Maradiaga by causing Honduran government entities to pay money owed to one or more Cachiros money-laundering front companies in exchange for kickback payments from Rivera Maradiaga.  Rivera Maradiaga paid HERNANDEZ approximately $50,000 during the meeting.  

*                *                *

The Superseding Indictment charges HERNANDEZ, 40, with four counts:  (1) conspiring to import cocaine into the United States, (2) using and carrying machine guns and destructive devices during, and possessing machine guns and destructive devices in furtherance of, the cocaine-importation conspiracy, (3) conspiring to use and carry machine guns and destructive devices during, and to possess machine guns and destructive devices in furtherance of, the cocaine-importation conspiracy, and (4) making false statements to federal agents.  If convicted, HERNANDEZ faces a mandatory minimum sentence of 10 years in prison and a maximum term of life in prison on Count One, a mandatory minimum sentence of 30 years in prison and a maximum term of life in prison on Count Two, a maximum term of life in prison on Count Three, and a maximum term of five years in prison on Count Four.  The potential mandatory minimum and maximum sentences in this case are prescribed by Congress and provided here for informational purposes only, as any sentencing of the defendant will be determined by the judge.

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

This case is being handled by the Office’s Terrorism and International Narcotics Unit.  Assistant U.S. Attorneys Emil J. Bove III and Mathew J. Laroche are in charge of the prosecution.

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

Geoffrey S. Berman, the United States Attorney for the Southern District of New York, announced that CHRISTIAN TORO and TYLER TORO pled guilty to manufacturing and possessing a destructive device, and conspiring to do so, in connection with their stockpiling of explosive materials and manufacture of a destructive device.  Both defendants pled guilty today in Manhattan federal court before U.S. District Judge Richard M. Berman.  They are scheduled to be sentenced on March 26, 2019, CHRISTIAN TORO at 11:00 a.m. and TYLER TORO at 2:00 p.m.

Manhattan U.S. Attorney Geoffrey S. Berman said:  “As admitted in court today, Christian Toro and Tyler Toro sought to build a destructive device that could have caused great damage.  Christian Toro used a minor student to assist him in this endeavor.  Thanks to the excellent work of the FBI and the NYPD, no one was injured as a result of this grave conduct, and the defendants now await sentencing for their crimes.”

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

Between approximately October 2017 and February 2018, CHRISTIAN TORO and TYLER TORO conspired to build and possess a destructive device at their residence in the Bronx, New York (the “Residence”).  CHRISTIAN TORO, a former teacher at a high school in Harlem, New York (the “School”), paid students from the School for their assistance in manufacturing the destructive device, doling out approximately $50 per hour in return for the students’ work dismantling fireworks and storing the explosive powder contained within those fireworks in containers.  CHRISTIAN TORO also had on his School laptop a copy of a book that provided instructions for, among other things, manufacturing explosive devices.

On February 15, 2018, law enforcement agents searched the Residence pursuant to a judicially authorized search warrant.  In a bedroom shared by CHRISTIAN TORO and TYLER TORO, law enforcement agents recovered numerous components for use in building a destructive device and other dangerous substances, including: (i) a glass jar containing low explosive powder; (ii) a strip of magnesium metal; (iii) approximately twenty pounds of iron oxide; (iv) approximately five pounds of aluminum powder; (v) a mixture of iron oxide and aluminum powder, the key ingredients for thermite; (vi) approximately five pounds of potassium nitrate; (vii) a cardboard box containing firecrackers; and (viii) metal spheres, which can be used as fragmentation for a bomb.

Also in the Residence, law enforcement agents found a handwritten diary labeled with TYLER TORO’s name, which stated, among other things, “WE ARE TWIN TOROS STRIKE US NOW, WE WILL RETURN WITH NANO THERMITE” and “I AM HERE 100%, LIVING, BUYING WEAPONS.  WHATEVER WE NEED.”  Agents also recovered a page inside a notebook found in the Residence labeled “Operation Flash,” with a ledger appearing to delineate the hours worked and payment owed to one of the School’s students.

*                *                *

CHRISTIAN TORO, 28, and TYLER TORO, 28, both of the Bronx, New York, each pled guilty to one count of conspiracy to manufacture and unlawfully possess a destructive device, which carries a maximum sentence of five years in prison; one count of unlawfully manufacturing a destructive device, which carries a maximum sentence of 10 years in prison; and one count of unlawfully possessing a destructive device, which carries a maximum sentence of 10 years in prison.  The maximum potential sentences in this case are prescribed by Congress and are provided here for informational purposes only, as the defendants’ sentences will be determined by Judge Berman. 

U.S. Attorney Berman praised the outstanding investigative work of the Federal Bureau of Investigation’s (“FBI”) New York Joint Terrorism Task Force, which principally consists of agents from the FBI and detectives from the New York City Police Department.

This prosecution is being handled by the Office’s Terrorism and International Narcotics Unit.  Assistant United States Attorney Elizabeth A. Hanft is in charge of the prosecution.

Geoffrey S. Berman, the United States Attorney for the Southern District of New York, announced today that DEAN JONES, a/k/a “Kurupt,” was sentenced today in Manhattan federal court to 26 years in prison for robbing a restaurant in 2012, during which JONES shot an innocent customer, as well as for JONES’s participation in a wide-ranging conspiracy to distribute crack cocaine, heroin, and other drugs.  JONES was convicted of robbery-related and narcotics-related offenses at separate jury trials in April and December 2017 before United States District Judge Vernon S. Broderick.

U.S. Attorney Geoffrey S. Berman said:  “While robbing a restaurant, Dean Jones shot and badly injured an innocent civilian.  What is more, Jones committed this robbery during the same time that he was selling large amounts of crack, heroin, and other drugs.  Thanks to the exceptional work of the ATF, Jones will now spend decades in prison.  Today’s sentence sends a strong message that this kind of violent and destructive behavior will not be tolerated.”

*                      *                      *

In addition to the prison term, JONES, 37, of Bronx, New York, was sentenced to five years of supervised release.  Of the 10 defendants charged in connection to this case, all 10 have pled guilty or been convicted at trial.

Mr. Berman thanked and praised the Bureau of Alcohol, Tobacco, Firearms, and Explosives for its outstanding work in this investigation.  

The case is being prosecuted by the Office’s Violent and Organized Crime Unit.  Assistant U.S. Attorneys Christopher Clore, Jessica Feinstein, Thomas McKay, and Hagan Scotten are in charge of the prosecution.

Geoffrey S. Berman, the United States Attorney for the Southern District of New York, announced that RAHEEM J. BRENNERMAN, a/k/a “Jefferson R. Brennerman,” a/k/a “Ayodeji Soetan,” was sentenced yesterday in Manhattan federal court to 12 years in prison for operating a wide-ranging scheme to fraudulently obtain tens of millions of dollars in bank financing.  BRENNERMAN was convicted by a jury on December 6, 2017, of conspiracy to commit bank and wire fraud, bank fraud, wire fraud, and visa fraud after a two-week trial before United States Circuit Judge Richard J. Sullivan, who also imposed yesterday’s sentence.

Manhattan U.S. Attorney Geoffrey S. Berman said:  “For years, Raheem J. Brennerman conned financial institutions and investors into extending loans to his phony businesses.  Instead of using that money for his sham business, Brennerman took elaborate steps to disguise his fraud and lined his own pockets with millions of dollars in the process.  He will now serve a substantial prison sentence for his crimes.” 

In sentencing BRENNERMAN, Judge Sullivan told him:  “You’re an inveterate con man.  You’re a crook.”  Judge Sullivan also told BRENNERMAN, “You’re someone for whom the truth has no value.  You’re a liar.  Shame on you.”

According to the allegations in the Indictment, other filings in Manhattan federal court, and the evidence presented at trial: 

BRENNERMAN, from 2011 until 2017, orchestrated a scheme to defraud financial institutions through his operation of a purported oil and gas company called The Blacksands Pacific Group, Inc. (“Blacksands Pacific”), as well as several subsidiaries and associated corporate entities.  BRENNERMAN sought financing for purported business deals by falsely representing that Blacksands Pacific had significant worldwide involvement in the exploration and development of oil and gas reserves, produced over 10,000 barrels of oil per day, had over $1 billion in long-term assets and over 100 million barrels of proved oil reserves, and employed approximately 100 employees, when, in fact, BRENNERMAN knew that Blacksands Pacific lacked any long-term assets, and had, at most, a few employees and minimal involvement in the oil and gas industry.  As part of the fraudulent scheme, BRENNERMAN also lied about his name, place of birth, citizenship, and finances, and invented fake employees.  Once BRENNERMAN received financing from victims based on his false statements, BRENNERMAN used significant amounts of the money to pay his own personal expenses, including the lease of a luxury condominium in Las Vegas, Nevada, and stays at expensive hotels (including thousands of dollars’ worth of in-room dining service), as well as the purchase of international flights to Europe, chartered car services, fine jewelry, high-end designer clothing, and spa treatments.  In total, BRENNERMAN attempted to defraud financial institutions of tens of millions of dollars. 

*                      *                     *

In addition to his prison term, BRENNERMAN, 40, of Las Vegas, Nevada, was sentenced to three years of supervised release, a forfeiture money judgment in the amount of $4,400,000, and restitution in an amount to be determined by the Court at a later date.

Mr. Berman praised the outstanding investigative work of the Special Agents for the United States Attorney’s Office for the Southern District of New York.  He also thanked the United States Department of State’s Diplomatic Security Service, United States Immigration and Customs Enforcement’s Homeland Security Investigations, and the United States Postal Inspection Service for their assistance. 

On September 12, 2017, BRENNERMAN and Blacksands Pacific were convicted by a jury of criminal contempt of court after a one-week trial before United States District Judge Lewis A. Kaplan.  On May 21, 2018, Judge Kaplan sentenced BRENNERMAN to two years in prison and a $10,000 fine.  The sentence imposed by Judge Sullivan will run consecutively to the sentence imposed by Judge Kaplan.  On September 17, 2018, Judge Kaplan sentenced Blacksands Pacific to five years of probation and a $1,000,000 fine.

*                      *                     *           

This case is being handled by the Office’s General Crimes Unit.  Assistant United States Attorneys Nicolas Roos, Danielle R. Sassoon, Robert B. Sobelman, and Emil J. Bove III are in charge of the prosecution.

Geoffrey S. Berman, United States Attorney for the Southern District of New York, announced today that IVAN NIEVES has been charged with vandalism and disorderly conduct. NIEVES was arrested this morning and will be presented before United States Magistrate Judge Henry Pitman in Manhattan later this afternoon.

U.S. Attorney Geoffrey S. Berman said:  “The protections of the First Amendment allow all Americans to express their opinions without fear of retaliation, censorship, or legal sanction. However, those protections do not apply when you deface federal property in the name of hate. Today’s arrest of Ivan Nieves for allegedly defacing the African Burial Ground National Monument aptly demonstrates the sanctity of those protections; and that those who do not follow the law while expressing their freedom of speech will be charged with federal crimes.”

As alleged in the Information,[1] on or about November 1, 2018, NIEVES defaced a sign on the grounds of the African Burial Ground National Monument by writing a threatening racial slur on it. 

*                *                *

NIEVES, 57, of the Bronx, New York, is charged with one count of vandalism and one count of disorderly conduct.  Each charge carries a maximum penalty of six months in prison.  The maximum potential sentences in this case are prescribed by Congress and are provided here for informational purposes only, as any sentencing of the defendant will be determined by the judge.

Mr. Berman praised the outstanding investigative work of the New York Regional Office of the Federal Protective Service, the New York Field Office of the United States Park Police, and the New York City Police Department.

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

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

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

Geoffrey S. Berman, the United States Attorney for the Southern District of New York, Angel M. Melendez, Special Agent-in-Charge of the New York Field Office of U.S. Immigration and Customs Enforcement’s Homeland Security Investigations (“HSI”), Ashan M. Benedict, the Special Agent-in-Charge of the New York Field Division of the Bureau of Alcohol, Tobacco, Firearms, and Explosives (“ATF”), and James P. O’Neill, the Commissioner of the New York City Police Department (“NYPD”), announced the unsealing today of an Indictment charging six members and associates of the Nine Trey Gangsta Bloods, also known as “Nine Trey,” with racketeering conspiracy and firearms offenses.   

Five defendants were taken into custody last night and today; they will be presented and arraigned before U.S. Magistrate Judge Henry B. Pitman later today.  A sixth defendant is in state custody and will be transferred to federal custody.  The case is assigned to U.S. District Judge Paul A. Engelmayer.  

U.S. Attorney Geoffrey S. Berman said:   “As alleged in the indictment, this gang, which included platinum-selling rap artist Tekashi 6ix 9ine, wreaked havoc on New York City, engaging in brazen acts of violence.  Showing reckless indifference to others’ safety, members of the gang were allegedly involved in robberies and shootings, including a shooting inside the crowded Barclay’s Center, and a shooting in which an innocent bystander was hit.  Thanks to the extraordinary work of HSI, ATF, and the NYPD, the defendants will now face justice in federal court.” 

HSI Special Agent in Charge Angel M. Melendez said: “Members of Nine Trey, who wielded firearms and pushed highly addictive drugs onto New York City streets, allegedly showed an unprecedented level of violence this year, and for that they are now facing multiple charges, including an incident in which an innocent bystander was shot. This criminal enterprise has no business in our city, and we will continue to work with our partners to ensure that Nine Trey crew members, including the more well-known ‘Tekashi 6ix 9ine,’ are in a place where they cannot inflict further violence on our communities.”

ATF Special Agent in Charge Ashan M. Benedict said:  “ATF stands firmly at the frontline in the fight against violent crime. The individuals charged today with racketeering conspiracy and firearms offenses are members and associates of the Nine Trey Gangsta Bloods, also known as ‘Nine Trey.’ The members and associates of this street gang engaged in violent robberies, assaults, and shootings.  The ATF/ NYPD Joint Firearms Task Force, with members from HSI, Federal Probation, NYS Parole and NYC Department of Correction, work tirelessly alongside their other law enforcement partners to rid the streets of individuals that spread violence and endanger their fellow citizens. I would like to thank the United States Attorney’s Office for their work in prosecuting in the case.”

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

Nine Trey was a criminal enterprise involved in committing numerous acts of violence, including shootings, robberies, and assaults in and around Manhattan and Brooklyn.  Members and associates of Nine Trey engaged in violence to retaliate against rival gangs, to promote the standing and reputation of Nine Trey, and to protect the gang’s narcotics business.  Members and associates of Nine Trey enriched themselves by committing robberies and selling drugs, such as heroin, fentanyl, furanly fentanyl, MDMA, dibutylone, and marijuana. 

The Indictment charges JAMEL JONES, a/k/a “Mel Murda,” KIFANO JORDAN, a/k/a “Shotti,” JENSEL BUTLER, a/k/a “Ish,” DANIEL HERNANDEZ, a/k/a “Tekashi 6ix 9ine,” FUGUAN LOVICK, a/k/a “Fu Banga,” and FAHEEM WALTER, a/k/a “Crippy,” with racketeering and firearms offenses.  Count One of the Indictment charges JONES, JORDAN, BUTLER, HERNANDEZ, and WALTER with participating in a racketeering conspiracy for their criminal involvement in Nine Trey.  Count Two charges JONES, JORDAN, BUTLER, HERNANDEZ, and WALTER with using and carrying firearms, which were brandished and discharged, in connection with the racketeering conspiracy.  Counts Three through Five charge JONES, JORDAN, BUTLER, HERNANDEZ, and WALTER with participating in a gunpoint robbery in the vicinity of West 40th Street and 8th Avenue in Manhattan on or about April 3, 2018.  Counts Six and Seven charge LOVICK with shooting at rivals of Nine Trey in the Barclays Center in Brooklyn on or about April 21, 2018.  Count Eight charges JORDAN, BUTLER, HERNANDEZ, and WALTER with agreeing to shoot an individual who had shown disrespect to Nine Trey, resulting in an innocent bystander being shot, in the vicinity of Fulton Street and Utica Avenue in Brooklyn on or about July 16, 2018. 

*                      *                     *

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

Mr. Berman praised the outstanding investigative work of HSI, ATF, and the NYPD.  He also thanked the Brooklyn District Attorney’s Office and the New York City Department of Correction’s Intelligence Bureau for their assistance in the investigation.

This case is being handled by the Office’s Violent and Organized Crime Unit.  Assistant United States Attorneys Michael Longyear, Jacob Warren, Jonathan Rebold, and Sebastian Swett are in charge of the prosecution.

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

                                                                                                                                        ###

COUNT

CHARGE

DEFENDANTS

MAX. PENALTIES

1

Racketeering conspiracy

18 U.S.C. § 1962(d)

JAMEL JONES (age 38)

KIFANO JORDAN (age 36)

JENSEL BUTLER (age 36)

DANIEL HERNANDEZ (age 22)

FAHEEM WALTER (age 29)

20 years in prison

2

Using or carrying a firearm during and in relation to, or possessing a firearm in furtherance of, a crime of violence, which was discharged

18 U.S.C. § 924(c)

JAMEL JONES

KIFANO JORDAN

JENSEL BUTLER

DANIEL HERNANDEZ

FAHEEM WALTER

Life in prison

Mandatory minimum of 10 years in prison as to JONES; mandatory minimum of 25 years in prison as to the other defendants

3

Violent crime in aid of racketeering (April 3, 2018)

18 U.S.C. § 1959

KIFANO JORDAN

JENSEL BUTLER

DANIEL HERNANDEZ

FAHEEM WALTER

20 years in prison

4

Violent crime in aid of racketeering (April 3, 2018)

18 U.S.C. § 1959

KIFANO JORDAN

JENSEL BUTLER

DANIEL HERNANDEZ

FAHEEM WALTER

3 years in prison

5

Using or carrying a firearm during and in relation to, or possessing a firearm in furtherance of, a crime of violence, which was brandished

18 U.S.C. § 924(c)

KIFANO JORDAN

JENSEL BUTLER

DANIEL HERNANDEZ

FAHEEM WALTER

Life in prison

Mandatory minimum of 7 years in prison

6

Violent crime in aid of racketeering (April 21, 2018)

18 U.S.C. § 1959

FUGUAN LOVICK (age 40)

20 years in prison

7

Using or carrying a firearm during and in relation to, or possessing a firearm in furtherance of, a crime of violence, which was discharged

18 U.S.C. § 924(c )

FUGUAN LOVICK

Life in prison

Mandatory minimum of 10 years in prison

8

Violent crime in aid of racketeering (July 16, 2018)

KIFANO JORDAN

JENSEL BUTLER

DANIEL HERNANDEZ

FAHEEM WALTER

3 years in prison

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

Geoffrey S. Berman, the United States Attorney for the Southern District of New York, announced that ANDREEA DUMITRU, a/k/a “Andreea Dumitru Parcalaboiu,” an immigration attorney based in Queens, New York, was found guilty today in Manhattan federal court of asylum fraud, making false statements to immigration authorities, and aggravated identity theft following a two-week trial before United States District Judge Lewis A. Kaplan. 

Manhattan U.S. Attorney Geoffrey S. Berman said:  “Andreea Dumitru, an immigration attorney, scammed the asylum program, which was designed to provide safe harbor for the world’s most vulnerable people.  She will now serve time in prison for her crimes.”

According to the Superseding Indictment, other filings in Manhattan federal court, and the evidence presented at trial:

Between March 27, 2013, and 2017, DUMITRU operated a scheme to submit fraudulent I-589 Forms in connection with applications for asylum.  Specifically, DUMITRU submitted over 100 applications in which she knowingly made false statements and representations about, among other things, the applicants’ personal narratives of alleged persecution, criminal histories, and travel histories.  DUMITRU deliberately fabricated detailed personal stories of purported mistreatment of her clients, forged her clients’ signatures, and falsely notarized affidavits. 

*                      *                      *

DUMITRU, 43, of Queens, NY, was convicted of one count of asylum fraud, which carries a maximum sentence of 10 years in prison, one count of making false statements, which carries a maximum sentence of five years in prison, and one count of aggravated identity theft, which carries a mandatory consecutive sentence of two years in prison.  The maximum potential sentences are prescribed by Congress and are provided here for informational purposes only, as any sentencing of the defendant will be determined by the judge.

Mr. Berman praised the outstanding investigative work of Homeland Security Investigations and United States Citizenship and Immigration Services, and thanked the Federal Bureau of Investigation and the United States Department of Justice’s Executive Office for Immigration Review for their assistance.

This case is being prosecuted by the Office’s General Crimes Unit.  Assistant U.S. Attorneys Nicholas W. Chiuchiolo, Alison G. Moe, and Robert B. Sobelman are in charge of the prosecution. 

Geoffrey S. Berman, the United States Attorney for the Southern District of New York, James D. Robnett, the Special Agent in Charge of the New York Field Office of the Internal Revenue Service, Criminal Investigation (“IRS-CI”), and Mark Bialek, Inspector General, Board of Governors of the Federal Reserve System and the Consumer Financial Protection Bureau (“IG-FRB/CFPB”), announced criminal charges against Société Générale S.A. (“SG” or the “Bank”) consisting of a one-count felony information charging SG with conspiring to violate the Trading with the Enemy Act (“TWEA”) and the Cuban Asset Control Regulations promulgated thereunder (the “Cuban Regulations”) for SG’s role in processing billions of dollars of U.S. dollar transactions using the U.S. financial system, in connection with credit facilities involving Cuba (the “Cuban Credit Facilities”).  The case is assigned to United States District Judge P. Kevin Castel. 

Mr. Berman also announced an agreement (the “Agreement”) under which SG agreed to accept responsibility for its conduct by stipulating to the accuracy of an extensive Statement of Facts, pay penalties totaling $1,340,165,000 to federal and state prosecutors and regulators, refrain from all future criminal conduct, and implement remedial measures as required by its regulators.  Assuming SG’s continued compliance with the Agreement, the Government has agreed to defer prosecution for a period of three years, after which time the Government will seek to dismiss the charges.  The $1.34 billion in penalties represents the second largest penalty ever imposed on a financial institution for violations of U.S. economic sanctions.

The penalty shall be collected, in part, through SG’s forfeiture to the United States of $717,200,000 in a civil forfeiture action also filed today.  Of that amount, one-half shall be transferred to the United States Victims of State Sponsored Terrorism Fund, pursuant to the Justice for United States Victims of State Sponsored Terrorism Act.  In addition, SG has reached separate agreements with the  New York County District Attorney’s Office (“DANY”), United States Department of the Treasury, Office of Foreign Assets Control (“OFAC”), the Federal Reserve Board of Governors and the Federal Reserve Bank of New York (collectively the “Federal Reserve”), and the New York State Department of Financial Services (“DFS”), under which it shall pay additional penalties of $622,965,000 as follows: $162,800,000 to DANY; $53,900,000 to OFAC; $81,265,000 to the Federal Reserve; and $325,000,000 to DFS. 

The Government entered into this resolution due, in part, to SG’s acceptance and acknowledgement of responsibility under the laws of the United States for its conduct, as exhibited by its undertaking of a thorough internal investigation, collecting and producing voluminous evidence located in other countries to the full extent permitted under applicable laws and regulations, and its enhancement of its compliance program and sanctions-related internal controls both before and after it became the subject of a U.S. law enforcement investigation.  These factors and SG’s willingness to enter into the commitments set forth in the  Agreement, along with all other relevant factors and considerations, collectively weighed in favor of deferral of prosecution, and outweighed in this particular case SG’s failure to self-report all of its violations of United States sanctions laws in a timely manner, as described below.

U.S. Attorney Geoffrey S. Berman said:  “Today, Société Générale has admitted its willful violations of U.S. sanctions laws – and longtime concealment of those violations – which resulted in billions of dollars of illicit funds flowing through the U.S. financial system.  With today’s resolution, the Bank has accepted responsibility for its criminal conduct and demonstrated its commitment to remedying these failures and enhancing its compliance programs and internal controls.  Other banks should take heed:  Enforcement of U.S. sanctions laws is, and will continue to be, a top priority of this Office and our partner agencies.”

IRS-CI Special Agent in Charge James D. Robnett said:  “Today, Société Générale is being held accountable for illegal transactions made through the U.S. financial system on behalf of entities subject to U.S. economic sanctions.  Sanctions enforcement is of vital importance to our national security and the integrity of our financial system.  IRS-CI will continue to work closely with partner law enforcement agencies, federal regulators and prosecutors to ensure compliance with federal banking laws to promote integrity across financial institutions worldwide.”

FRB/CFPB Inspector General Mark Bialek said:  “As today’s agreement makes clear, Société Générale’s knowing and willful violation of U.S. economic sanctions through structuring and concealment has resulted in an agreement to pay over $1.3 billion in monetary penalties.  I commend our agents in New York and their law enforcement partners for their hard work, along with the coordination of the Federal Reserve Bank of New York and the Federal Reserve Board, which resulted in this outcome.”

According to the documents filed today in Manhattan federal court:

SG’s Operation of U.S. Dollar Credit Facilities to Finance Cuban Business

From approximately 2004 through 2010, SG, in contravention of U.S. sanctions laws, operated 21 credit facilities that provided significant money flow to Cuban banks, entities controlled by Cuba, and Cuban and foreign corporations for business conducted in Cuba; those facilities (the “Cuban Credit Facilities”) involved substantial U.S.-cleared payments through U.S. financial institutions, in violation of TWEA and the Cuban Regulations.  In total, during this time period, SG engaged in more than 2,500 sanctions-violating transactions through U.S. financial institutions, causing those U.S. financial institutions to process close to $13 billion in transactions that otherwise should have been rejected, blocked, or stopped for investigation pursuant to regulations promulgated by OFAC.  The majority of these transactions and most of the total value involved a U.S. dollar credit facility designed to finance oil transactions between a Dutch commodities trading firm and a Cuban corporation with a state monopoly on the production and refining of crude oil in Cuba.

SG avoided detection, in part, by making inaccurate or incomplete notations on payment messages that accompanied these sanctions-violating transactions.  Indeed, the SG department that managed many of the Cuban Credit Facilities engaged in a deliberate practice of concealing the Cuban nexus of U.S. dollar payments that were made in connection with those facilities.  For example, SG routed approximately 500 U.S. dollar-denominated payments through a particular Spanish bank in order to disguise the fact that the transactions violated U.S. sanctions, and employees were instructed to omit any references to Cuba or Cuban entities from the messages that accompanied the fund transfers. 

In late 2004, SG began to reconsider its Cuba business in light of U.S. enforcement actions, and began to shift away from U.S. dollar transactions involving Cuba to avoid U.S. scrutiny and possible penalties.  In a December 1, 2004, email, a senior leader of SG’s global Group Compliance Department expressed concern to a top executive in the SG group responsible for liaising with SG’s regulators that (1) “any discovery of breach” regarding Cuba “attracts the most stringent punishment,” and (2) U.S. authorities, including “criminal authorities,” were focusing on U.S. dollar payments that had been sent through U.S. banks.  Several days later, the same senior leader of Group Compliance, after being alerted to a U.S. dollar transaction between SG Canada and an exporter of goods to Cuba in connection with which “[n]o reference to Cuba is made to [the Canadian bank],” emailed several members of SG’s senior management, noting that “we have lived with the OFAC list for some time and have developed various methods of avoiding it,” and asked whether “given the new regulatory scrutiny in the US on USD payments do we remain satisfied with those methods?”  

In mid- to late-December 2004, as a result of these concerns, SG’s top management determined that U.S. dollar transactions in connection with the Cuban Credit Facilities should be eliminated as quickly as possible, but still permitted continued U.S. dollar transactions in the interim.  Despite the decision in 2004 to wind down U.S. dollar transactions for the Cuban Credit Facilities, as well as the Bank’s overall Cuban exposure, SG continued to engage in such transactions for almost six more years, until October 2010.  The conduct continued despite the ongoing awareness of SG’s Group Compliance, and despite awareness by the participants of ongoing U.S. sanctions enforcement actions.  In October 2010, as the last of the Cuban Credit Facilities was being replaced with a non-U.S. dollar facility at the insistence of a senior leader of SG’s Group Sanctions Compliance function, SG sent payment instructions directing that the final $600,000 arrangement fee be paid in U.S. dollars, but “not to mention any reference to [Cuban Corporation] within the references of this settlement.”  From 2005 to 2010, SG conducted a total of 1,921 U.S. dollar transactions that violated TWEA and the Cuban Regulations, with a total value of approximately $10.3 billion.

SG’s Failure to Disclose Its Wrongdoing in a Timely Manner

Despite the awareness of both SG’s senior management and Group Compliance that SG had engaged in this unlawful conduct, SG did not disclose its conduct to OFAC or any other U.S. regulator or law enforcement agency until well after the commencement of the Government’s investigation. 

This investigation was triggered by the blocking by other U.S. financial institutions, in March 2012, of two transactions that SG processed on behalf of a Sudanese sanctioned entity, and a subsequent February 2013 voluntary disclosure by SG regarding $22.8 million in transactions with the Sudanese entity and a small number of transactions with other sanctioned entities that violated U.S. sanctions.  The Bank did not, however, disclose the existence of the Cuban Credit Facilities at that time, but rather did so only in October 2014, after SG performed a detailed forensic analysis based on the scope of investigation required by the Government and the other investigating agencies. 

*                      *                     *

Mr. Berman praised the outstanding investigative work of the Internal Revenue Service-Criminal Investigations and The Office of Inspector General of the Board of Governors of the Federal Reserve System and Consumer Financial Protection Bureau.  He also thanked the Board of Governors of the Federal Reserve, the Federal Reserve Bank of New York, the New York State Department of Financial Services, and the Treasury Department’s Office of Foreign Assets Control for their assistance with this matter.  The New York County District Attorney’s Office also conducted its own investigation alongside the United States Attorney’s Office for the Southern District of New York on this investigation.

The prosecution is being handled by the Office’s Money Laundering and Transnational Criminal Enterprises Unit.  Assistant U.S. Attorneys Alexander Wilson and Benet J. Kearney are in charge of the prosecution. 

Geoffrey S. Berman, United States Attorney for the Southern District of New York, announced today that KAM WONG, the former chief executive officer (“CEO”) and president of the oldest New York credit union (the “Credit Union”), a non-profit financial institution, pled guilty in Manhattan federal court today to embezzling millions of dollars from the Credit Union.  WONG pled guilty before U.S. District Judge John G. Koeltl.

U.S. Attorney Geoffrey S. Berman said:  “As he admitted in court today, Kam Wong, the former CEO and president of New York’s oldest credit union, abused his position of trust as a guardian of municipal, state, and federal workers’ financial accounts to enrich himself.  In so doing, Wong stole money from the credit union that could have gone to the credit union’s members, and tried to cover up what he had done by making false statements to federal investigators and creating false and misleading documents.  I commend the Special Agents of the U.S. Attorney’s Office, and our law enforcement partners, for their tireless efforts in this ongoing investigation.”

According to the Complaint, the Information, statements made in court and publicly available documents:

WONG was the CEO and president of the Credit Union, a non-profit financial institution headquartered in New York, New York, which is federally insured by the National Credit Union Administration Board.  The Credit Union is the oldest credit union in New York State and one of the oldest and largest in the country, providing banking services to more than 425,000 members, including municipal, state, and federal workers in New York City.  The Credit Union’s earnings are intended to be directed back to its members in the form of more favorable rates and fewer and lower fees for products and services.

From 2013 through January 2018, WONG engaged in a long-running multi-faceted scheme to obtain money from the Credit Union to which he knew he was not entitled, and took steps to seek to conceal what he had done.  Among other things, WONG embezzled from and defrauded the Credit Union by submitting sham invoices for dental work never performed on him or paid by him, and, as a result, fraudulently obtained reimbursement for hundreds of thousands of dollars of such nonexistent dental work.  In addition, WONG fraudulently caused the Credit Union to pay him additional monies that he knew he was not entitled to receive, including millions of dollars of payments in lieu of purported long-term disability insurance, and for purported taxes owed on these and other employment benefits.

WONG also misapplied money and other things of value from the Credit Union, with respect to, among other things, reimbursement payments for repairs to luxury vehicles the Credit Union leased to WONG, which repair work was already covered by the Credit Union’s insurance; cash advances to which he was not entitled; educational, housing, and living expenses for two of WONG’s friend’s relatives; payments for his leave days that did not comply with and exceeded what was provided for under his employment contract; the purchase of a Mercedes-Benz automobile that was not provided for under his employment contract; the leasing of multiple luxury vehicles at the same time; electronic devices (including, iPhones, iPads, and laptops) for personal use by WONG and others; and reimbursement, as business expenses, of personal expenses, including hotel stays.  In addition, WONG obtained controlled substances, for personal use, from a former Credit Union Supervisory Committee member.

In January 2018, after WONG learned about the investigation, WONG sought to obstruct justice by making false statements to federal investigators and creating false and misleading documents to try, after the fact, to explain and justify some of these payments. 

*                *                *

WONG, 62, of Valley Stream, Long Island, pled guilty to one count of embezzlement from a federally insured credit union, which carries a maximum penalty of 30 years in prison.  As a condition of his plea, WONG also agreed to forfeit at least $9,890,375 and to pay at least $9,890,375 in restitution to the Credit Union.

WONG is scheduled to be sentenced by Judge Koeltl on April 5, 2019, at 10:00 a.m.

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

U.S. Attorney Berman praised the outstanding work of the Special Agents of the United States Attorney’s Office.  Mr. Berman also thanked the New York County District Attorney’s Office, the New York State Department of Financial Services, and the National Credit Union Administration. 

The case is being prosecuted by the Office’s Public Corruption Unit.  Assistant U.S. Attorneys Eli J. Mark and Daniel C. Richenthal are in charge of the prosecution, with assistance from Special Assistant U.S. Attorney Alona Katz from the New York County District Attorney’s Office.

Geoffrey S. Berman, United States Attorney for the Southern District of New York, William F. Sweeney Jr., the Assistant Director-in-Charge of the New York Field Office of the Federal Bureau of Investigation (“FBI”), and James P. O’Neill, Commissioner of the New York City Police Department (“NYPD”), announced the return of a superseding indictment charging ALEXANDER MELENDEZ, a/k/a “Kiki,” with the murder of Shaquille Malcolm.  MELENDEZ, who is already in federal custody on other charges, will be arraigned on the superseding indictment on December 29, 2018, before United States District Judge Lewis A. Kaplan. 

U.S. Attorney Geoffrey S. Berman said:  “As alleged, the defendant murdered 20-year-old Shaquille Malcolm in the Bronx in 2014.  Now, thanks to the outstanding work of the FBI and NYPD, the defendant has been charged with this terrible crime.  We will continue to work with our partners in law enforcement to hold violent criminals responsible for their actions.”

FBI Assistant Director-in-Charge William F. Sweeney Jr. stated:  “As demonstrated by the addition of murder charges to Melendez’s alleged crimes, the illegal drug trade often leads to additional violent criminal activity that threatens the safety and security of our communities.  This individual believed himself to be above the law, and now he will face justice for his alleged crimes.  The FBI and our law enforcement partners will continue to root out these violent criminals and ensure they are held accountable to the fullest extent of the law.”

According to the Superseding Indictment[1]: 

In early 2014, MELENDEZ was a member of a conspiracy to distribute crack cocaine in the Allerton section of the Bronx, New York.  On January 2, 2014, as part of this conspiracy, MELENDEZ and others shot Shaquille Malcolm multiple times in the stairwell of an apartment building located at 2818 Bronx Park East in the Bronx.  Malcolm died at the scene.

*                      *                     *

MELENDEZ, 23,  is charged with one count of conspiring to distribute 280 grams and more of crack cocaine, which carries a mandatory minimum of 10 years in prison and maximum of life in prison; one count of using, carrying, and possessing firearms during and in relation, and in furtherance of, a drug trafficking crime and aiding and abetting the same, which carries a mandatory consecutive 10 year sentence in prison and a maximum sentence of life in prison; one count of use of a firearm to commit murder in furtherance of a drug trafficking crime and aiding and abetting the same, which carries a maximum sentence of life in prison or death; and one count of murder while engaged in a conspiracy to distribute 280 grams and more of crack cocaine and aiding and abetting the same, which carries a maximum sentence of life in prison or death.  The statutory maximum penalties are prescribed by Congress and are provided here for informational purposes only, as any sentencing of the defendant would be determined by the judge.

Mr. Berman praised the outstanding investigative work of the FBI and NYPD.

This case is being handled by the Office’s Violent and Organized Crime Unit.  Assistant United States Attorneys Jessica K. Fender, Michael K. Krouse, and Danielle R. Sassoon 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 descriptions of the Indictment constitute only allegations, and every fact described should be treated as an allegation.

Manhattan U.S. Attorney Geoffrey S. Berman said:  “We are reviewing the decision of the Court and will respond within the time frame set forth by Judge Pauley.  The well-being of the over 400,000 NYCHA residents continues to be our paramount concern.”