Southern District of New York

Geoffrey S. Berman, the United States Attorney for the Southern District of New York, and Brian Michael, Special Agent in Charge of the Newark, New Jersey Field Office of the Department of Homeland Security, Homeland Security Investigations (“HSI”), announced that CODY MANN pled guilty to enticing a child to engage in illegal sexual activity.  MANN faces a mandatory minimum sentence of 10 years in prison and a maximum term of life in prison.  MANN pled guilty today before United States District Judge Nelson S. Román.      

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

Between in or about 2014 and in or about 2016, MANN used a cellphone repeatedly to direct the parent of a four-year-old child to engage in illegal sexual activity with the child.  MANN further directed the parent to produce and send him images depicting child pornography featuring the child.  MANN received the child pornography on his cellphone.

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MANN, 23, of Bloomingburg, New York, pled guilty to one count of enticing a child to engage in illegal sexual activity.  MANN faces a mandatory minimum sentence of 10 years in prison and a maximum term of life 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 work of HSI in this investigation.

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, announced that ALLANMON MAVUMKAL pled guilty today to four counts of Hobbs Act robbery in connection with a spree in which he threatened livery cab drivers and robbed the drivers of cash, personal items, and their cabs.  MAVUMKAL pled guilty today in Manhattan federal court before U.S. Magistrate Judge Katharine H. Parker.

Manhattan U.S. Attorney Geoffrey S. Berman said:  “As he admitted today, Allanmon Mavumkal terrorized four livery cab drivers with a knife, robbing them of their money and cars.  Now Mavumkal is facing significant prison time for his violent acts.” 

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

On September 21, 2017, MAVUMKAL hailed a livery cab in the Bronx, and directed the driver to a particular destination.  After arriving at the drop-off location, MAVUMKAL threatened the driver with a large knife, which was captured on video footage from the cab, ordered the driver out of the cab, and then drove away in the cab.  The day before, on September 20, 2017, MAVUMKAL robbed three other livery cab drivers in the Bronx and Mt. Vernon in a similar fashion.

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MAVUMKAL, 30, of Mount Vernon, New York, pled guilty to four counts of Hobbs Act robbery, each of 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.

Mr. Berman praised the efforts of the Bureau of Alcohol, Tobacco, Firearms, and Explosives and the New York City Police Department in this case.

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

Geoffrey S. Berman, the United States Attorney for the Southern District of New York, announced that WILLIAM McFARLAND pled guilty today to one count of wire fraud in connection with a scheme to defraud investors in a company controlled by McFARLAND, Fyre Media Inc. (“Fyre Media”), as well as its subsidiary (“Fyre Festival LLC”), which was formed to hold a music festival called the “Fyre Festival” (the “Festival”) over two weekends in the Bahamas.  McFarland also pled guilty to a second count of wire fraud in connection with a scheme to defraud a ticket vendor for the Festival.  McFARLAND pled guilty before U.S. District Judge Naomi Reice Buchwald. 

U.S. Attorney Geoffrey S. Berman said:  “As he admitted today, William McFarland tendered fake documents to induce investors and a ticket vendor to put more than $26 million into his company and the disastrous Fyre Festival.  He now awaits sentencing for his admitted swindle.”

According to the complaint and Superseding Information to which McFARLAND pled, as well as statements made in court:

McFARLAND was the founder and chief executive officer of Fyre Media.  In 2016, McFARLAND started Fyre Media to build a digital application that would allow individuals organizing commercial events, such as concerts, to bid for artist and celebrity bookings at such events.  From at least in or about 2016, up to and including in or about May 2017, McFARLAND conducted a scheme to defraud individuals by inducing them to invest millions of dollars in Fyre Media.  Through this scheme, McFARLAND caused losses to at least 80 victim-investors, totaling more than $24 million dollars.  McFARLAND orchestrated this scheme through several means and methods.

McFARLAND repeatedly made materially false statements to investors about Fyre Media’s revenue and income, and manipulated Fyre Media’s financial statements and supporting documentation to hide Fyre Media’s true financial condition.  McFARLAND represented to investors that Fyre Media had earned millions of dollars of revenue solely from talent bookings; a review of Fyre Media’s records shows that those numbers were significantly overstated.  McFARLAND also provided falsified income statements to investors that purported to show that from approximately April 2016 to February 2017, Fyre Media had earned millions of dollars in income from talent bookings.  In reality, Fyre Media’s income from talent bookings from approximately May 2016 to April 2017 was only $57,443.  In addition, McFARLAND provided falsified documents to investors showing over 2,500 confirmed talent bookings in a single month when, in fact, there were only 60 confirmed talent bookings in the entire year.   

McFARLAND repeatedly made misrepresentations to investors designed to overstate Fyre Media’s financial condition and stability.  For example, McFARLAND told investors that a reputable venture capital firm (the “VC Firm”) had completed its due diligence process and had decided to invest in Fyre Media.  To the contrary, a VC Firm employee communicated to McFARLAND that the VC Firm would not invest in Fyre Media without first completing its due diligence, which the VC Firm had not done due to McFARLAND’s failure to provide many of the requested Fyre Media documents. 

In late 2016, McFARLAND established a subsidiary, Fyre Festival LLC, to hold a music festival called the “Fyre Festival” over two weekends in the Bahamas.  McFARLAND made repeated misrepresentations to investors with respect to their investments in Fyre Festival LLC. McFARLAND overstated the Festival’s receivables that he used as collateral for numerous investments to cover Festival expenses.  McFARLAND also secured numerous investments in Fyre Festival LLC by claiming that investors would have the rights to payouts from Festival event cancellation insurance policies when, in reality, no event cancellation insurance policies had been executed for the Festival.  Ultimately, the Festival was canceled and widely deemed to have been a failure.

McFARLAND also repeatedly made materially false statements to investors about his own financial condition.  For example, in order to induce several investors to make an investment in Fyre Media, McFARLAND provided an altered stock ownership statement to inflate the number of shares he purportedly owned in a publicly traded company, so that it would appear that McFARLAND could personally guarantee the investment.  In addition, despite the fact that McFARLAND’s applications to two banks (“Bank-1” and “Bank-2”) for millions in personal loans had not been approved, McFARLAND misrepresented to investors that the monies from those bank loans could serve as collateral for their investments.  On one occasion, McFARLAND sent an investor a snapshot of an email purporting to be from a Bank-1 banker (“Banker-1”) to McFARLAND approving a $3 million dollar loan.  Not only had Banker-1 not sent that email, Bank-1 had not approved McFARLAND’s loan application.

McFarland also made materially false statements to certain of Fyre Media’s investors about Magnises, a credit card and private club for millennials that was founded and run by McFARLAND as chief executive officer.  McFARLAND told certain of Fyre Media’s investors that he had sold Magnises for approximately $40 million and made a profit of several million dollars personally from the sale, when in reality, McFARLAND had not sold Magnises.  McFARLAND also falsely stated to certain of Fyre Media’s investors that specific individuals were the acquirers of Magnises, when in fact, they were not.  McFarland also falsely stated to certain of Fyre Media’s investors that a group of acquiring partners were forming a new company to purchase Magnises, when in fact, no such group existed.

In addition, in or about April 2017, McFARLAND defrauded a ticket vendor (“Vendor-1”) by inducing Vendor-1 to pay $2 million for a block of advance tickets for future Festivals over the next three years.  McFARLAND also provided Vendor-1 with a fraudulent income statement for Fyre Media that grossly inflated the Company’s revenue and income.

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McFARLAND, 26, of New York, New York, pled guilty to two counts of wire fraud, each of which carries a maximum sentence of 20 years in prison, and consented to a forfeiture order in the amount of $26,040,099.48.

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 investigative work of the Federal Bureau of Investigation’s New York Field Office, and thanked the Securities and Exchange Commission for its assistance. 

The case is being prosecuted by the Office’s Complex Frauds and Cybercrime Unit.  Assistant United States Attorneys Kristy J. Greenberg and Dina McLeod 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 Office of the Federal Bureau of Investigation (“FBI”), announced that JOEL ROSQUETTE, a/k/a “Rick,” was arrested today for attempting to hire a hitman to murder three intended victims.  ROSQUETTE was presented today in Manhattan federal court before U.S. Magistrate Judge Katharine H. Parker.

Manhattan U.S. Attorney Geoffrey S. Berman said:  “As alleged, Joel Rosquette attempted to hire a hitman to murder two of his neighbors in Manhattan and the owner of a gas station in Staten Island.  Now, thanks to the dedicated work of our partners at the FBI, Rosquette’s plan has been foiled, he is in federal custody, and his intended victims are safe.”

FBI Assistant Director William F. Sweeney Jr. said:  “As alleged, Rosquette commissioned a hitman to carry out three murders on his behalf.  In the end, he was fooled by the merits of his own plan. Today, we foiled this murder-for-hire scheme, sparing three innocent lives a most unfortunate fate.”

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

ROSQUETTE hired an individual he thought was a hitman to murder two of his neighbors in Manhattan.  Because ROSQUETTE was short on cash, he arranged for the hitman to murder another person first – the owner of a gas station in Staten Island – and rob the gas station’s safe.  ROSQUETTE’s plan was to have the proceeds of the gas station robbery pay for the murder of his two neighbors.  What ROSQUETTE did not know was that the person he thought was a hitman was actually an undercover FBI agent.  This morning, ROSQUETTE was arrested and his plan to commission three murders was foiled.

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ROSQUETTE, 50, of Manhattan, New York, is charged with three counts of murder-for-hire, each of which carries a maximum sentence of 10 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.

U.S. Attorney Berman praised the outstanding work of the FBI.  

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

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

 

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

 

Geoffrey S. Berman, the United States Attorney for the Southern District of New York  announced that MAQUAN MOORE, a 9/11 Memorial security guard, pled guilty to firearms trafficking in connection with his trafficking of more than 25 firearms from locations outside of New York into Manhattan.  MOORE pled guilty today to an Information in Manhattan federal court before U.S. Magistrate Judge Katharine H. Parker.

U.S. Attorney Geoffrey S. Berman said:  “Maquan Moore was in the business of peddling illegal firearms in busy downtown New York.  When individuals attempt to bypass the critically important system of licensing for lawful ownership, the result is a less safe society for all of us. One shudders to think the harm these weapons could have caused in the wrong hands.”

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

Beginning in December 2017, a joint task force of the Bureau of Alcohol, Tobacco, Firearms, and Explosives (“ATF”) and the New York City Police Department (“NYPD”) made multiple undercover purchases of firearms from MOORE, who at the time was working as a security guard at the 9/11 Memorial.  These firearms included several assault-style weapons, such as a MAC-10 machine pistol, and various other handguns and rifles.  On the evening of February 1, 2018, an undercover officer purchased from MOORE additional firearms, many of which had been brought by MOORE’s co-conspirator, Morris Wilson, from Florida to New York.  In connection with MOORE and Wilson’s arrest, the ATF/NYPD Task Force seized 21 additional firearms.

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MOORE, 29, of Manhattan, pled guilty to one count of firearms trafficking, which carries a maximum sentence of five years in prison.  The maximum potential sentence in this case is prescribed by Congress and is provided here for informational purposes only, as any sentencing of the defendant will be determined by the judge.

Wilson is charged in a Criminal Complaint with conspiracy to traffic in firearms, firearms trafficking, and interstate transportation and receipt of firearms. The allegations contained in the Criminal Complaint as to Wilson are merely accusations, and he is presumed innocent unless and until proven guilty.

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

This case is being handled by the Office’s General Crimes Unit.  Assistant United States Attorneys Jacob Warren and Dominic Gentile are in charge of the prosecution.

Geoffrey S. Berman, the United States Attorney for the Southern District of New York, announced that DAVID BERGSTEIN, a film producer and entrepreneur, was convicted yesterday of defrauding investors of more than $26 million.  BERGSTEIN will be sentenced on June 8, 2018, by U.S. District Judge P. Kevin Castel, who presided over the four-week trial. 

Co-defendant Keith Wellner had previously pled guilty and has been cooperating with the Government.

Manhattan U.S. Attorney Geoffrey S. Berman said:  “As a unanimous jury swiftly found, David Bergstein defrauded investors out of more than $26 million.  He withheld material information, transferred funds without disclosing conflicts of interest, and misappropriated funds for his own use.  He now stands convicted of serious federal crimes.”

According to the Indictment and evidence presented at trial:

From 2011 through 2012, BERGSTEIN engaged in a scheme to defraud investors in Weston Capital Asset Management (“WCAM”), a New York-based registered investment adviser, by (i) concealing material information from Weston investors about financial transactions involving their money; (ii) transferring funds from one pool of Weston’s investors to make payments to, provide a security interest for, or otherwise benefit, another pool of Weston’s investors, without the required disclosures to investors concerning conflicts of interest; and (iii) misappropriating a portion of funds transferred from investor accounts for their own and others’ benefit.  BERGSTEIN orchestrated this scheme in part through two transactions involving Weston investors’ assets: first, a loan from a Weston fund called the Partners 2 (or “P2”) Fund, and, second, a swap agreement with a Weston fund called the Wimbledon TT Portfolio (the “TT Portfolio”). 

The Partners 2 Loan Scheme

In 2010, Weston agreed to a transaction with an entity named Gerova Financial Corporation (“Gerova”), an international reinsurance company, in which Weston sent assets from one of its hedge funds (the Wimbledon Financing Fund, or “WFF”) to Gerova in exchange for restricted shares of Gerova stock.  This exchange was intended to replace illiquid hedge fund assets with stock, which could be bought and sold more easily.  In 2011, however, Gerova’s stock price plummeted.  Weston subsequently sought to unwind the transaction, and Weston’s president was introduced to BERGSTEIN for this purpose.  BERGSTEIN and Weston’s principals subsequently formulated the outlines of a structure in which Weston would return its Gerova stock, receive its assets back from Gerova, and place those assets into another entity called Arius Libra Inc. (“Arius Libra”) as part of an investment in a separate business.  Certain payments would be made along the way to facilitate the transfers.  

In order to complete this transaction, BERGSTEIN and Weston’s principals agreed to loan money from the P2 Fund, another Fund operated and managed by Weston, to Arius Libra.  The purpose of this loan (the “P2 Loan”) was purportedly (i) to pay certain debts associated with Gerova, and (ii) to fund Arius Libra’s purported medical billing businesses.  BERGSTEIN arranged for the P2 Loan to be secured by certain of the assets of WFF.  Thus, in the event the P2 Loan was not repaid, the P2 Fund had the ability to liquidate WFF assets to make P2 investors whole, to the detriment of investors in WFF.  In total, approximately $9 million in investor money was disbursed from the P2 Fund pursuant to the P2 Loan. 

As BERGSTEIN well knew, however, P2 Fund investors were neither informed of the existence of the P2 Loan nor given any information about Arius Libra.  And no disclosures were made to inform either P2 Fund or WFF investors of the conflict of interest arising from the P2 Fund’s security interest in WFF assets, as BERGSTEIN also knew.  And although BERGSTEIN had represented to Weston that disbursements made pursuant to the P2 Loan would be used both to pay off Gerova creditors and to fund Arius Libra’s medical billing businesses, in fact, BERGSTEIN misappropriated millions of dollars of P2 Loan proceeds and used them to pay for, among other things, his own personal expenses, including credit card bills and attorney’s fees.

The TT Portfolio Swap Agreement Scheme
 

In late 2011, BERGSTEIN and Weston’s principals secretly arranged for Weston’s TT Portfolio to enter into a swap agreement with an entity controlled by BERSTEIN known as Swartz IP Services (“Swartz IP”), a transaction that was not disclosed to TT Portfolio investors.  As part of this swap agreement, BERGSTEIN arranged for approximately $17.7 million from the TT Portfolio to be transferred to to Swartz IP.  In exchange, BERGSTEIN agreed to provide certain investment returns and to meet investor redemption requests.  BERGSTEIN induced this transaction by misrepresenting to Weston’s principals that a wealthy investor had capitalized Swartz IP and guaranteed the transaction.

The TT Portfolio transaction was completed without disclosure to investors, even though, for other swap agreements, Weston had amended the TT Portfolio offering memorandum to reflect the particular swap agreement at issue.  Of the money that was transferred to Swartz IP, moreover, BERGSTEIN directed that approximately $3 million be transferred to the P2 Fund to pay back part of the P2 Loan.  BERGSTEIN thus arranged for money from one set of Weston’s investors (the TT Portfolio investors) to be used to pay back part of a debt owed to another set of Weston’s investors (the P2 Fund investors) – another conflict of interest that was not disclosed to P2 or TT Portfolio investors.

As a further part of the scheme, moreover, BERGSTEIN made false representations about Swartz IP’s assets and ability to meet redemption requests and secretly diverted TT Portfolio investor proceeds to pay BERGSTEIN’s personal expenses, including credit card bills, impressionist artwork, and private jets.

BERGSTEIN also gave a false and misleading investor presentation, made false investment disclosures, and distributed a fake loan note concealing the origin of the P2 Loan in order to attempt to conceal his criminal conduct.

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BERGSTEIN, 55, of Hidden Hills, California, was convicted of the offenses set forth in the chart attached to this release.  He was remanded following the return of the jury’s verdict.  The statutory maximum sentences 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 investigative work of the Federal Bureau of Investigation, Internal Revenue Service-Criminal Investigation, and the Office’s Criminal Investigators.

This case is being handled by the Office’s Securities and Commodities Fraud Task Force. Assistant U.S. Attorneys Edward A. Imperatore, Robert W. Allen, and Elisha Kobre are in charge of the prosecution.

  

COUNT

CHARGE

MAXIMUM PENALTIES

1

Conspiracy to Commit Investment Adviser Fraud and Securities Fraud (18 U.S.C. § 371)

 

Five years in prison and a $250,000 fine or twice the gross gain or loss from the offense

2

Investment Adviser Fraud (15 U.S.C. §§ 80b-6 & 80b-17; 18 U.S.C. § 2)

Five years in prison and a fine of $10,000

3

Investment Adviser Fraud (15 U.S.C. §§ 80b-6 & 80b-17; 18 U.S.C. § 2)

Five years in prison and a fine of $10,000

4

Securities Fraud (15 U.S.C. §§ 78j(b) & 78ff; 17 C.F.R. § 240.10b-5; 18 U.S.C. § 2)

20 years in prison and a $5,000,000 fine or twice the gross gain or loss from the offense

5

Securities Fraud (15 U.S.C. §§ 78j(b) & 78ff; 17 C.F.R. § 240.10b-5; 18 U.S.C. § 2)

20 years in prison and a $5,000,000 fine or twice the gross gain or loss from the offense

6

Wire Fraud (18 U.S.C.      §§ 1343 and 2)

20 years in prison and a $250,000 fine or twice the gross gain or loss from the offense

7

Conspiracy to Commit Wire Fraud (18 U.S.C. § 1349)

20 years in prison and a $250,000 fine or twice the gross gain or loss from the offense

 

Geoffrey S. Berman, the United States Attorney for the Southern District of New York, announced the conviction in White Plains federal court of former Orange County attorney JOSEPH G. SCALI for mail fraud, structuring cash transactions, making false statements to the IRS, obstructing the IRS, tax evasion, obstruction of justice, and perjury.  The jury convicted SCALI yesterday on all 10 counts of the Indictment following a four-week trial before Judge Nelson S. Román.

U.S. Attorney Geoffrey S. Berman said:  “Joseph Scali, a disbarred attorney, abused the law to commit the serious crimes of which he now stands convicted.  Scali stole money from a client’s attorney escrow account, chronically abused the tax laws to obstruct the IRS and hide income, and defrauded a client into paying him legal fees after he had been suspended from practicing law in New York.  We thank the IRS and U.S. Postal Inspection Service for their substantial work in helping to secure this conviction.”

According to the Indictment, other court filings, and evidence presented at trial:

From January 2011 through August 2012, SCALI, who represented the seller of land and mineral rights in Pennsylvania, schemed to defraud the prospective purchaser of that property of the $850,000 the latter had given to SCALI to hold in escrow by misappropriating those funds from his Attorney Trust Account.  SCALI also engaged in tax evasion for the 2011 and 2012 years by, among other things, deliberately withholding from the IRS his Attorney Trust Account records, which would reveal the funds he had misappropriated.

In addition, between 2006 and November 2013, SCALI corruptly endeavored to obstruct the IRS by (a) providing materially false, incomplete, and misleading information to an IRS Revenue Officer about his filing history and income; (b) commingling client funds and personal funds in his Attorney Trust Account; (c) paying for personal items directly out of his Attorney Trust Account; (d) structuring $32,400 in cash deposits into his Attorney Trust Account.  In addition, SCALI failed to timely file U.S. Individual Income Tax Returns, Forms 1040, for the years 2006 through 2012, as well as U.S. Corporate Income Tax Returns, Forms 1120, for his law firm, Joseph G. Scali, P.C., for the years 2007 through 2012, notwithstanding that he was required by law to file a return for each year.  SCALI was separately convicted of making false statements to the IRS and structuring cash deposits.  

SCALI also committed obstruction of justice and perjury when, in seeking to set aside his disbarment by the United States District Court for the Southern District of New York, he lied under oath to that court about why, in 2013, he had been suspended from practicing law in New York by the Second Department of the Appellate Division of the New York State Supreme Court.  SCALI was disbarred by the Appellate Division on July 6, 2016.

In 2014 and 2015, SCALI committed mail fraud by fraudulently undertaking a legal representation of a client for a fee without disclosing his 2013 suspension from the practice of law in New York State. 

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SCALI, 68, of West Hartford, Connecticut, is convicted of two counts of mail fraud, which carry a maximum sentence of 20 years in prison; one count of structuring cash transactions, which carries a maximum sentence of five years in prison; two counts of making false statements to the IRS, which carry a maximum sentence of five years in prison; one count of obstructing the IRS, which carries a maximum sentence of three years in prison; two counts of tax evasion, which carry a maximum sentence of five years in prison; one count of obstruction of justice, which carries a maximum sentence of 10 years in prison; and one count of perjury, which carries a maximum sentence of five years in prison. 

SCALI is scheduled to be sentenced by Judge Román on June 1, 2018.

The statutory maximum and minimum penalties 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 work of the IRS and the U.S. Postal Inspection Service in this investigation.  Mr. Berman also thanked the Orange County District Attorney’s Office, the New York State Department of Taxation and Finance, and the New York State Police for their assistance.  Mr. Berman also thanked the Counsel for the Grievance Committee for the Ninth Judicial District of New York State, the Counsel for the Committee on Grievances for the U.S. District Court for the Southern District of New York, and the Counsel for the IOLA Fund of New York for their cooperation in the investigation.

This case is being handled out of the White Plains Division.  Assistant United States Attorneys Olga Zverovich, Vladislav Vainberg, and Daniel Noble are in charge of the prosecution.

Geoffrey S. Berman, the United States Attorney for the Southern District of New York, announced today the guilty plea of MICHAEL HARRINGTON for misapplying police resources while serving in the New York City Police Department (“NYPD”) as, among other things, a Deputy Chief and former Executive Officer for the Chief of Department’s Office.  Specifically, HARRINGTON diverted those resources – including dispatching police officers and diverting land, sea, and air vehicles intended for the NYPD’s public service usage – for the personal benefit of Jeremy Reichberg, a private citizen, his friends, and their associates.  HARRINGTON pled guilty before U.S. District Judge Gregory H. Woods to misapplication and conversion of property belonging to a program or organization receiving federal funds.    

Manhattan U.S. Attorney Geoffrey S. Berman said:  “Michael Harrington, a former high-ranking officer in the NYPD, occupied powerful positions within the department, from which he controlled officers and resources meant to keep New York safe.  But as he admitted today, Harrington allowed those resources to be used for the benefit of well-connected private citizens.  We will continue to work with our law enforcement partners to fight this type of corruption.”

Reichberg and an additional co-defendant, former NYPD Deputy Inspector James Grant, continue to face honest services fraud, bribery, and conspiracy charges related to an alleged scheme in which Reichberg and another individual provided luxurious benefits to high-ranking members of the NYPD, including Grant, so as to be able to call upon those members for police-related assistance for themselves and their associates as opportunities arose.  Reichberg and Grant are scheduled to go to trial before Judge Woods on April 30, 2018.

According to the Superseding Information, Indictment, and Complaint filed in this case, and statements made during the plea proceeding: 

HARRINGTON was previously an Inspector in Brooklyn North and, beginning around November 2013, the Executive Officer in the NYPD’s Chief of Department’s Office, which is responsible for overseeing all of the Department’s uniformed operations.  After November 2014, HARRINGTON was a Deputy Chief assigned to the NYPD’s Housing Bureau.  Between 2011 and June 2016, HARRINGTON diverted police resources for the benefit of Reichberg and his associates, including another individual, Jona Rechnitz, who has pled guilty and is now cooperating with the Government.  Among other things, HARRINGTON helped Reichberg and his associates get police escorts for non-police purposes, use a helicopter for a flyover at a private event, sent officers to resolve private, civil disputes, and secured the use of a police boat for private boat rides at another private event.

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HARRINGTON, 52, of Staten Island, New York, pled guilty to one count of misapplication concerning a program receiving federal funds.  The charge carries a maximum term of 10 years in prison.  HARRINGTON is scheduled to be sentenced by Judge Woods on June 11, 2018.  The maximum potential penalty 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 Federal Bureau of Investigation and the New York City Police Department, Internal Affairs Division.  

This case is being handled by the Office’s Public Corruption Unit.  Assistant United States Attorneys Martin S. Bell, Jessica Lonergan, and Kimberly J. Ravener are in charge of the prosecution.

Geoffrey S. Berman, the United States Attorney for the Southern District of New York, announced that Dr. EMMANUEL LAMBRAKIS, a state licensed doctor, pled guilty today to writing medically unnecessary prescriptions for oxycodone.  LAMBRAKIS pled guilty earlier today before U.S. Magistrate Judge Gabriel W. Gorenstein, and will be sentenced before U.S. District Court Judge William H. Pauley III at a later date.

U.S. Attorney Geoffrey S. Berman said:  “Dr. Emmanuel Lambrakis took a solemn oath to ‘first do no harm.’  Instead, as he admitted in federal court today, Lambrakis chose to write prescriptions for unnecessary, addictive, and possibly fatal opiates for his ‘patients.’  Today, this doctor who used his position as cover for what amounted to no more than a common drug dealing operation, faces serious prison time for his actions.”

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

Oxycodone is a highly addictive, narcotic opioid that is used to treat severe and chronic pain conditions.  Oxycodone prescriptions are in high demand and have significant cash value to drug dealers.  In fact, oxycodone tablets can be resold on the street for thousands of dollars.  For example, 30-milligram oxycodone tablets have a current street value of approximately $20 to $30 per tablet in New York City, with street prices even higher in other parts of the country.  A single prescription for 120 30-milligram tablets of oxycodone can net an illicit distributor $2,400 in cash or more.

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

Between January 2011 and the present, LAMBRAKIS wrote thousands of oxycodone prescriptions, resulting in the distribution of more than a million oxycodone tablets, which have a street value in the tens of millions of dollars.  On numerous occasions, LAMBRAKIS wrote 30 or more prescriptions for 30-milligram oxycodone pills in a single day.  As a result of LAMBRAKIS’s actions, it is estimated that LAMBRAKIS collected more than $2 million in fees from his “patients.”

*               *               *

LAMBRAKIS, 70, of Manhattan, pled guilty to one count of conspiring to distribute and possess with intent to distribute oxycodone.  This offense carries a maximum sentence of 20 years in prison.  The maximum potential sentence is prescribed by Congress and is provided here for informational purposes only, as any sentencing of the defendant will be determined by the judge.

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

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

 

Geoffrey S. Berman, the United States Attorney for the Southern District of New York, announced today that VICTOR R. RIVAS was sentenced to seven years in prison for his role in operating a retail heroin-selling organization out of a storefront at 427 Broadway in Newburgh.  VICTOR R. RIVAS pled guilty on July 26, 2017, and was sentenced today by U.S. District Court Judge Kenneth M. Karas.   

U.S. Attorney Geoffrey S. Berman said:  “Victor M. Rivas, together with his sons Julio A. Davila and Victor R. Rivas, and their employees, maintained a shop on a main thoroughfare in Newburgh, within a stone’s throw of a bakery, a church, and a post office, that was open on a daily basis for the sole purpose of selling heroin.  The serious sentences these defendants received prove that those who endanger the community through their distribution of illegal drugs will be brought to justice.”

According to the Complaint, the Indictment, other filings in White Plains federal court, evidence at a hearing, and statements made in court proceedings:

In 2016, Victor M. Rivas, with the assistance of Julio A. Davila, VICTOR R. RIVAS, Ronald L. Matias, a/k/a “Ronald Luis,” and Edward Cardona, ran an organization engaged in the distribution of heroin in Newburgh, New York, from a storefront location at 427 Broadway, alternately held out as a barbershop or soccer shop (the “Soccer Shop”).  The Soccer Shop was open for more than 12 hours a day, seven days a week, for the sole purpose of selling heroin.  Constant foot traffic in and out of the Soccer Shop reflected the volume of heroin the defendants were selling:  Over the course of a year, the organization distributed well over three kilograms of heroin out of the Soccer Shop.

The defendants also maintained a nearby storage unit that they used for, among other things, storing the proceeds of their illegal drug distribution activity.  Law enforcement seized more than $260,000 in cash from the storage unit on the day the defendants were arrested.  Additionally, about $44,000 was seized from VICTOR R. RIVAS and about $5,300 was seized from Davila during the course of the investigation. 

*          *          *

In addition to the prison term, VICTOR R. RIVAS, 29, of Newburgh, was sentenced to five years of supervised release.

Victor M. Rivas, 52, of Newburgh, the leader of the organization, was previously sentenced to 15 years in prison and five years of supervised release; Davila, 28, of Newburgh, was previously sentenced to six-and-a-half years in prison and four years of supervised release; and Matias, 36, of Newburgh, was previously sentenced to five years in prison and four years of supervised release.  Cardona, 35, of Newburgh, is expected to be sentenced in April.

Mr. Berman praised the work of the Department of Homeland Security, Homeland Security Investigations, and the New York State Police, and thanked the Drug Enforcement Administration and the City of Newburgh Police Department for their assistance with this investigation.

This case is being handled by the Office’s White Plains Division.  Assistant United States Attorneys Jacqueline C. Kelly and Allison Nichols are in charge of the prosecution.

Geoffrey S. Berman, the United States Attorney for the Southern District of New York, announced today that RUBEN PIZZARO, a/k/a “Chulo,” was sentenced to 75 years in prison for murder, participating in a narcotics conspiracy, and firearms charges. PIZZARO was convicted on June 13, 2017, following a one-week jury trial before U.S. District Judge Gregory H. Woods, who also imposed today’s sentence.

U.S. Attorney Geoffrey S. Berman said:  “In November of 2015, Ruben Pizzaro murdered a rival drug dealer in broad daylight close to a nearby daycare center. Pizzaro’s actions are another example of the wanton violence that often accompanies the sale of drugs. Ruben Pizzaro will now serve 75 years in federal prison for his brazen crimes.” 

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

Between August 2015 and January 2016, PIZZARO was a member of a street gang that sold cocaine and crack cocaine in the vicinity of 180th Street and Arthur Avenue in the Bronx, New York.  PIZZARO and his crew of drug dealers were in competition with a neighboring drug crew on Hughes Avenue in the Bronx.  That competition played out in several violent shootings in late 2015.  For example, on at least three occasions in October and November 2015, PIZZARO and his drug crew fired at members of the Hughes Avenue drug crew.  Individuals were shot during two of those three incidents, and the third occurred in the vicinity of a Bronx middle school. 

On November 24, 2015, PIZZARO shot and killed rival drug dealer David Rivera in broad daylight in front of a daycare center in the vicinity of 175th Street and Crotona Avenue in the Bronx.

*                *                *

In addition to the prison term, PIZZARO, 26, was sentenced to 4 years of supervised release.

Mr. Berman thanked the Federal Bureau of Investigation and the New York City Police Department 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 Crowley, Max Nicholas, and Robert Allen are in charge of the prosecution. 

Geoffrey H. Berman, the United States Attorney for the Southern District of New York, announced today that WALTER C. LITTLE, a/k/a “Chet,” a former partner at an international law firm (the “Firm”), was sentenced today to 27 months in prison for conspiring to commit insider trading from at least February 2015 through May 2016.  LITTLE pled guilty on November 9, 2017, before U.S. District Judge Katherine Polk Failla, who also imposed today’s sentence.

U.S. Attorney Geoffrey H. Berman said:  “Walter Little, a law firm partner with access to sensitive nonpublic client information, selfishly chose to exploit it for personal gain rather than safeguard it.  Today’s sentence underscores the seriousness of insider trading, as Little will now serve serious time in prison.”

According to allegations in a Complaint and Indictment filed in Manhattan federal court, as well as previous court filings and statements made in public court proceedings:

LITTLE began working for the Firm as an associate in 2005 and eventually became a partner.  The Firm provided legal services in connection with financial transactions and regulatory issues to a wide variety of clients.  Those clients entrusted the Firm with nonpublic information when using its services.  Contrary to Firm policies requiring that this information be kept secret and be used only for business purposes, LITTLE improperly accessed sensitive information on the Firm’s servers and used it to make profitable securities trades.  LITTLE viewed numerous documents that contained material nonpublic information about, among other things, an anticipated delisting from the NASDAQ stock exchange, unannounced mergers and acquisitions, anticipated earnings releases, and a planned securities offering.  All of these events had predictable impacts on the associated stocks’ prices, and, between February 2015 and May 2016, LITTLE made hundreds of thousands of dollars trading stocks and options based on the information contained in these documents.

In addition to trading on the information himself, LITTLE also provided the information to Andrew Berke, his business associate and friend, who also traded on it and made hundreds of thousands of dollars in illegal gains as well.  At LITTLE’s request, Berke subsequently kicked back portions of his own profits to LITTLE through the use of fake legal invoices.  Berke pled guilty on December 28, 2017, to his role in the scheme and is scheduled to be sentenced on April 17, 2018.  

*                      *                      *

In addition to the prison sentence, LITTLE, 44, was sentenced to three years of supervised release.  The Court further ordered LITTLE to forfeit a sum of $452,998.           

Mr. Berman praised the work of the Federal Bureau of Investigation, and thanked the Securities and Exchange Commission for its assistance. 

This case is being handled by the Office’s Securities and Commodities Fraud Task Force.  Assistant United States Attorneys Robert Allen and Samson Enzer 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., Assistant Director-in-Charge of the New York Field Office of the Federal Bureau of Investigation (“FBI”), announced that LAWRENCE H. WOLF, a/k/a “Larry,” was arrested yesterday for defrauding banks and financial institutions around the country.  WOLF was presented today in the U.S. District Court for the Southern District of Texas, before U.S. Magistrate Judge Dena Hanovice Palermo.

Manhattan U.S. Attorney Geoffrey S. Berman said:  “As alleged, Lawrence Wolf swindled and attempted to swindle banks around the country out of millions of dollars while masquerading as an oil and gas tycoon.  Now, thanks to the dedicated work of our partners at the FBI, Wolf’s alleged scheme has finally run dry.”

FBI Assistant Director-in-Charge William F. Sweeney Jr. said:  “In lieu of actual collateral, Wolf, as alleged, offered lies in exchange for multimillion-dollar loans and credit opportunities that served to advance his own interests. At the expense of the victim firms, Wolf made lavish purchases with this illicitly obtained money, ultimately owing one firm more than $13 million. Wolf’s arrest brings us one step closer to restoring assets to the victims of this fraud.”

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

LAWRENCE H. WOLF defrauded, and attempted to defraud, financial institutions and an investment firm by engaging in a scheme (the “Oil Scheme”) to solicit multimillion-dollar loans and credit facilities by pledging oil and gas assets as collateral.  The assets WOLF typically pledged included interests in eight particular wells drilled into a subsurface oil and gas formation in Natrona and Fremont Counties in Wyoming (the “Wyoming Wells”).  Specifically, WOLF would pledge royalty interests in income from the extraction of oil and gas from the Wyoming Wells (the “Wyoming Wells Royalty Interests”). 

In truth, however, a family partnership (the “Family Partnership” or “Partnership”), not WOLF, owned the Wyoming Wells Royalty Interests.  WOLF did not have any interest in, or have legal association or business affiliation with, the Family Partnership.  

In investigating the Oil Scheme, the FBI has identified at least five different banking or investment firms (Victim Firms 1 through 5, collectively, the “Victim Firms”) that WOLF deceived as part of his scheme.  In connection with negotiations with the Victim Firms, WOLF repeatedly made false representations about his wealth or assets, and repeatedly transmitted to Victim Firms false and forged documents – ranging from bank account balance statements to tax filings to deed assignments – in furtherance of the Oil Scheme.  WOLF sought to avoid detection of the Oil Scheme by obtaining new funds to cover old liabilities.  Typically, as one loan approached maturity, WOLF approached another lender, expressed interest in moving his oil and gas business to a new bank, and negotiated another credit facility.

The Oil Scheme succeeded for years.  On or about June 5, 2008, WOLF executed a promissory note with Victim Firm-1 establishing an approximately $3.5 million credit facility. On or about March 27, 2014, WOLF executed a promissory note with Victim Firm-2 establishing an approximately $40 million line of credit.  On or about July 9, 2014, WOLF executed a credit agreement with Victim Firm-3 establishing an approximately $7 million credit facility.  On or about July 31, 2015, WOLF and Victim Firm-3 executed a revised credit agreement expanding the loan facility to $13 million.

In or about October 2016, WOLF attempted to continue the scheme by seeking a loan from Victim Firm-4.  After Victim Firm-4 caught WOLF misrepresenting his relationship to the Family Partnership, WOLF tried obtain credit financing from Victim Firm-5, a global investment firm headquartered in New York.  When Victim Firm-5 discovered WOLF’s reliance on forged documents, Victim Firm-5 contacted law enforcement.

WOLF utilized fraudulently obtained funds, in part, to spend on lavish personal expenses, including an approximately $63,000 purchase at an art gallery on August 3, 2015, an approximately $66,000 purchase on November 12, 2015, through a “VIP Concierge” service, an approximately $17,500 purchase on December 28, 2015, at Cartier, and numerous purchases of private jet services.

As of February 7, 2018, WOLF owed Victim Firm-3 more than approximately $13 million.

*                      *                      *

WOLF, 57, of Hawaii, is charged with one count of wire fraud affecting financial institutions and one count of aggravated identity theft.  The wire fraud count carries a maximum penalty of 30 years in prison.  The aggravated identity theft count 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.

Mr. Berman praised the outstanding work of the FBI.

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

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

 

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

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 Field Office of the Federal Bureau of Investigation (“FBI”), announced that JON E. MONTROLL, a/k/a “Ukyo” was taken into federal custody today for giving false sworn testimony and false documentation to the staff of the New York Regional Office of the Securities Exchange Commission (“SEC”).  The defendant is expected to be presented this afternoon in U.S. District Court for the Northern District of Texas, before U.S. Magistrate Judge Jeffrey L. Cureton.

Manhattan U.S. Attorney Geoffrey S. Berman said:  “SEC investigations rely on learning the full and accurate facts concerning financial markets and products.  As alleged, the defendant repeatedly lied during sworn testimony and misled SEC staff to avoid taking personal responsibility for the loss of thousands of his customers’ bitcoins.  These charges signify that we will use the full force of the federal criminal law to protect the integrity of the SEC’s investigative process.”

FBI Assistant Director-in-Charge William F. Sweeney Jr. said:  “As alleged, Montroll committed a serious crime when he lied to the SEC during sworn testimony.  In an attempt to cover up the results of a hack that exploited weaknesses in the programming code of his company, he allegedly went to great lengths to prove the balance of bitcoins available to BitFunder users in the WeExchange Wallet was sufficient to cover the money owed to investors.  It’s said that honesty is always the best policy – this is yet another case in which this virtue holds true.”

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

JON E. MONTROLL operated two online bitcoin services: WeExchange Australia, Pty. Ltd. (“WeExchange”) and BitFunder.com (“BitFunder”).  WeExchange functioned as a bitcoin depository and currency exchange service.  BitFunder facilitated the purchase and trading of virtual shares of business entities that listed their virtual shares on the BitFunder platform.

During the summer of 2013, one or more individuals (the “Hackers”) exploited a weakness in the BitFunder programming code to cause BitFunder to credit the Hackers with profits they did not, in fact, earn (the “Exploit”).  As a result, the Hackers were able to wrongfully withdraw from WeExchange approximately 6,000 bitcoins, with the majority of those coins being wrongfully withdrawn between July 28, 2013, and July 31, 2013.  In today’s value, the wrongfully withdrawn bitcoin were worth more than $60 million.  As a result of the Exploit, BitFunder and WeExchange lacked the bitcoins necessary to cover what MONTROLL owed to users.

In November 2013, MONTROLL provided sworn testimony to the SEC’s New York Regional Office in connection with their investigation into the Exploit and BitFunder’s activities. In that testimony, MONTROLL denied that the Exploit had been successful, testifying that, “When [the Hackers] went to withdraw, the system stopped them because the amount was obviously causing issues with the system.”  MONTROLL later added that the software issue “was corrected immediately, whenever the system started having the problems, and I caught on to what was happening I’d say within a few hours.”

MONTROLL also produced to the SEC a screenshot purportedly documenting, among other things, the total number of bitcoins available to BitFunder users in the WeExchange Wallet as of October 13, 2013 (the “Balance Statement”).  The Balance Statement reflected “6,679.78 BTC” on hand as of that date.  In discussing the Balance Statement in his sworn testimony, MONTROLL explained that it represented “the collective pool of funds held for users on BitFunder. The collective pool of BTC held for users on BitFunder – users who transfer bitcoins to BitFunder, this is the total amount that’s being held by BitFunder of those users.”

Contemporaneous digital evidence, including chat logs and transaction data, revealed that the Balance Statement was a misleading fabrication.  Three days into the Exploit, MONTROLL had participated in an internet relay chat with another person (“Person-1”) in which he sought help in tracking down “Stolen coins.”  When that did not work, MONTROLL transferred some of his own bitcoin holdings into WeExchange to conceal the losses.  The Exploit, however, continued.  By the time of the Balance Statement, WeExchange actually held thousands of bitcoins less than MONTROLL had asserted through the false Balance Statement.

When confronted with that evidence during subsequent testimony, MONTROLL lied to SEC staff again.  While MONTROLL admitted that the Balance Statement was the product of his manual intervention in the WeExchange system, he claimed to have discovered the success of the Exploit only after the SEC had asked him about it during his first day of testimony and to have no knowledge of the chat with Person-1.

*                      *                      *

MONTROLL, 37, of Saginaw, Texas, is charged with two counts of perjury and one count of obstruction of justice. The perjury counts each carry a maximum penalty of five years in prison.  The obstruction of justice count carries a maximum penalty of 20 years in prison.  The maximum potential sentences in this case are prescribed by Congress and are provided here for informational purposes only, as any sentencing of the defendant will be determined by the judge.

Mr. Berman praised the outstanding work of the FBI.  He also thanked the SEC, which has filed civil charges against MONTROLL in a separate action.

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

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. 

Sajmir Alimehmeti, aka, Abdul Qawii, 24, of the Bronx, New York, pleaded guilty today to attempting to provide material support to the Islamic State of Iraq and al-Sham (ISIS), a designated foreign terrorist organization, and to committing passport fraud in order to facilitate an act of international terrorism.  Alimehmeti pleaded guilty today to a Superseding Indictment in Manhattan federal court before U.S. District Judge Paul A. Engelmayer.   

Acting Assistant Attorney General for National Security Edward C. O’Callaghan and U.S. Attorney Geoffrey S. Berman for the Southern District of New York made the announcement.

According to the allegations in the Superseding Indictment and the Complaint filed in this case, statements made during the plea proceeding, and other documents filed in the public record:

In October 2014, Alimehmeti attempted to enter the United Kingdom but was denied entry after U.K. authorities found camouflage clothing and nunchucks in his luggage.  About two months later, in December 2014, Alimehmeti was again denied entry into the United Kingdom, this time after U.K. authorities found that his cellphone contained images of ISIS flags.  Further forensic examination of the contents of the cellphone and Alimehmeti’s laptop computer showed numerous indicia of Alimehmeti’s support for ISIS, including a photograph of Alimehmeti with an ISIS flag in the background, images of ISIS fighters in the Middle East, a photograph of Alimehmeti making a gesture of support for ISIS, various files relating to jihad and martyrdom, and electronic communications in which Alimehmeti assisted another ISIS supporter in efforts to travel to Syria to join ISIS by providing contact information for an ISIS affiliate who could facilitate the travel.

After returning to the United States, Alimehmeti continued to support ISIS.  Among other things, Alimehmeti displayed an ISIS flag in his apartment in the Bronx and, in the course of recorded meetings with undercover law enforcement employees, Alimehmeti played multiple pro-ISIS propaganda videos on his computer and cellphone, including videos of ISIS fighters decapitating prisoners, and also indicated that he was interested in radicalizing other individuals in the Bronx area.  Alimehmeti also made repeated purchases of combat knives and other military-type equipment, including masks, handcuffs, a pocket chainsaw, a wire pocket saw and a rucksack designed for tactical combat, which he stockpiled at his apartment in the Bronx.

In October 2015, Alimehmeti applied for a U.S. passport, falsely claiming in the application that his previous passport had been lost.  Alimehmeti later told an undercover law enforcement employee that his prior passport – which Alimehmeti showed to the undercover law enforcement officer – had not been lost and, instead, that he was applying for a new passport because he believed the rejection stamps in his existing passport resulting from his attempted entries into the United Kingdom would make it difficult to travel.  Alimehmeti further conveyed to undercover law enforcement personnel that he was seeking the new passport, without rejection stamps, to facilitate his travel overseas to join and fight for ISIS.

In May 2016, Alimehmeti attempted to assist an individual who was purportedly traveling from New York to Syria to train and fight with ISIS but who was actually an undercover law enforcement employee (UC).  On May 17, 2016, Alimehmeti met with the UC in Manhattan.  The UC had purportedly arrived in New York earlier that day on a bus and was en route to John F. Kennedy International Airport (JFK Airport) to take an overseas flight later that night. 

Alimehmeti agreed to help the UC with several tasks prior to the UC’s purported travel.  Alimehmeti assisted the UC by locating stores so the UC could purchase supplies to use while traveling to, and fighting with, ISIS, including a cellphone, boots, a compass, a bag, and a flashlight, among other items.  Alimehmeti also gave the UC advice on which items to purchase and on the use of different kinds of encrypted communications services, including the service that Alimehmeti stated was currently being used by fellow ISIS supporters, whom Alimehmeti referred to as “the brothers.”  Alimehmeti also downloaded three encrypted communications applications on the UC’s newly purchased cellphone for use by the UC.   

Further, Alimehmeti assisted the UC in traveling from Manhattan to a hotel in Queens, so the UC could purportedly meet with an individual who was preparing travel documents that the UC would use to travel to Syria to join ISIS.  Alimehmeti gave the UC a piece of paper with his name and contact information, so the UC could provide that information to the purported document facilitator.  Alimehmeti explained that he also wanted to travel to Syria and join ISIS, stating “I’m ready to . . . go with you man . . . you know I would.  I’m done with this place.”  After leaving the hotel in Queens, Alimehmeti brought the UC to JFK Airport, via public transportation, so the UC could begin the purported journey to ISIS.  Within days of seeking to facilitate the UC’s travel to join ISIS, Alimehmeti indicated during a call to his brother in Albania that that he had learned of a new way to obtain a passport for his own travel (referring to the UC’s purported document facilitator), and that a “friend of mine” (referring to the UC) had “just [done] it two days ago.”

Following Alimehmeti’s arrest on the charges in this case in May 2016, the FBI executed a search of Alimehmeti’s Bronx apartment pursuant to a judicially authorized search warrant.  The FBI’s search of Alimehmeti’s apartment resulted in the seizure of, among other evidence, the following: (i) a laptop computer and a cellphone belonging to Alimehmeti that contain an array of materials further demonstrating his allegiance to ISIS and terrorist ideology, including images of the ISIS flag, photographs of Alimehmeti with an ISIS flag and making gestures supportive of ISIS, images of ISIS fighters overseas, and propaganda videos promoting and glorifying ISIS, including videos depicting ISIS fighters engaging in combat and beheading prisoners; (ii) a collection of combat knives and other military-type equipment that Alimehmeti had purchased and stored at his apartment, as discussed above; and (iii) an ISIS flag that was displayed on a wall in the apartment.

Alimehmeti faces a maximum sentenced of 20 years in prison for attempting to provide material support or resources to a designated foreign terrorist organization, and a maximum sentence of 25 years in prison for making a false statement in an application for a U.S. passport with the intent to induce the issuance of a passport to facilitate an act of international terrorism.  The maximum potential sentences are prescribed by Congress and are provided here for informational purposes only, as any sentencing of the defendant will be determined by a judge.  Sentencing is scheduled for June 7, before Judge Engelmayer.   

Mr. O’Callaghan and Mr. Berman praised the outstanding efforts of the FBI’s New York Joint Terrorism Task Force, which principally consists of agents from the FBI and detectives from the NYPD, and the NYPD’s Intelligence Division.  Substantial assistance was also provided by the Department of Justice’s Office of International Affairs, the Albania State Police, and the Metropolitan Police Service's Counter Terrorism Command of London, United Kingdom.

Assistant U.S. Attorneys Emil J. Bove III, George D. Turner and Brendan F. Quigley of the Southern District of New York are in charge of the prosecution, with assistance from Trial Attorneys Joseph Attias and Kiersten Korczynski of the National Security Division’s Counterterrorism Section.

An indictment returned by a federal grand jury sitting in Manhattan was unsealed today, charging a New York-licensed attorney and partner at a New York law firm, with conspiring to defraud the United States, corruptly endeavoring to impede the internal revenue laws and tax evasion, announced Principal Deputy Assistant Attorney General Richard E. Zuckerman of the Justice Department’s Tax Division and U.S. Attorney Geoffrey S. Berman for the Southern District of New York.

 

According to the indictment, Steven M. Etkind, 57, was the head of a New York law firm’s tax, trusts and estates group and a Certified Public Accountant.  The indictment alleges that Etkind performed legal work for a successful entrepreneur client, who passed away in 2008, naming Etkind as the co-executor of his $35 million estate.

 

The indictment further alleges that the client’s will directed the creation of charitable trusts,  funded with assets from the client’s estate, for the sole purpose of donating to charitable organizations, including those aimed at assisting Jewish sponsored organizations.  Etkind was allegedly named co-trustee of these trusts. 

 

The indictment charges that Etkind and his co-conspirator set up a phony charitable organization and used it to steal more than $3.5 million from these charitable trusts – by first directing donations from the trusts to legitimate Jewish charitable organizations, then redirecting the funds to the phony charity accounts that Etkind and his co-conspirator controlled.  Etkind is alleged to have used part of the money he stole to purchase a 6,300 sq. ft. home with a swimming pool, in Southampton, New York, titling it in a nominee name. 

 

The indictment further alleges that to conceal his theft, Etkind filed, and caused to be filed, fraudulent personal, corporate and charitable trust returns with the Internal Revenue Service (IRS) and made several false and misleading statements to the IRS during the course of an audit and examination. 

 

If convicted, Etkind faces a statutory maximum sentence of five years in prison on the conspiracy charge and each of the tax evasion charges, as well as three years in prison for obstructing the internal revenue laws.  He also faces a period of supervised release, restitution and monetary penalties.  An indictment is an accusation.  A defendant is presumed innocent unless and until proven guilty.

 

Principal Deputy Assistant Attorney General Zuckerman and U.S. Attorney Berman praised the outstanding efforts by special agents of IRS Criminal Investigation, who conducted the investigation, and Trial Attorneys Jorge Almonte and Jack A. Morgan of the Tax Division, who are prosecuting the case.

 

Additional information about the Tax Division and its enforcement efforts may be found on the division’s website.

Geoffrey S. Berman, the United States Attorney for the Southern District of New York, Richard E. Zuckerman, Principal Deputy Assistant Attorney General of the Tax Division, and James D. Robnett, Special Agent in Charge of the Internal Revenue Service, Criminal Investigation, New York Field Office (“IRS”), announced the arrest of STEVEN M. ETKIND, a New York-licensed attorney and partner at a New York law firm, for conspiring to defraud the United States, corruptly endeavoring to impede the internal revenue laws, and tax evasion.

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

ETKIND was the head of a New York law firm’s tax, trusts, and estates group and a Certified Public Accountant.  The indictment alleges that ETKIND performed legal work for a successful entrepreneur client, who died in 2008, naming ETKIND as the co-executor of his $35 million estate.

The client’s will directed the creation of charitable trusts, funded with assets from the client’s estate, for the sole purpose of donating to charitable organizations, including those aimed at assisting Jewish sponsored organizations.  ETKIND was named co-trustee of these trusts. 

The indictment charges that ETKIND and his co-conspirator set up a phony charitable organization and used it to steal more than $3.5 million from these charitable trusts – by first directing donations from the trusts to legitimate Jewish charitable organizations, then redirecting the funds to the phony charity accounts that ETKIND and his co-conspirator controlled.  ETKIND used part of the money he stole to purchase a 6,300-square-foot home with a swimming pool in Southampton, New York, titling it in a nominee name. 

To conceal his theft, ETKIND filed, and caused to be filed, fraudulent personal, corporate and charitable trust returns with the IRS and made several false and misleading statements to the IRS during the course of an audit and examination of the phony charity. 

If convicted, ETKIND, 57, faces a statutory maximum sentence of five years in prison on the conspiracy charge, five years on each of the tax evasion charges, and three years for obstructing the internal revenue laws.  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 and Mr. Zuckerman praised the outstanding efforts by special agents of IRS Criminal Investigation. 

Mr. Berman also thanked the U.S. Department of Justice’s Tax Division for their significant assistance in the investigation. 

The case is being handled by the Office’s Complex Frauds Unit.  Special Assistant United States Attorneys Jorge Almonte and Jack A. Morgan (of the Tax Division) 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.

Additional information about the Tax Division and its enforcement efforts may be found on the division’s website.

 

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[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.

Geoffrey S. Berman, the United States Attorney for the Southern District of New York, and Edward C. O’Callaghan, Acting Assistant Attorney General for National Security, announced that SAJMIR ALIMEHMETI, a/k/a “Abdul Qawii,” pled guilty to attempting to provide material support to the Islamic State of Iraq and al-Sham (“ISIS”), and to committing passport fraud in order to facilitate an act of international terrorism.  ALIMEHMETI pled guilty today to a Superseding Indictment in Manhattan federal court before U.S. District Judge Paul A. Engelmayer.   

Manhattan U.S. Attorney Geoffrey S. Berman said:  “As he admitted in court today, Sajmir Alimehmeti took steps to travel overseas to support ISIS’s terror campaign.  He also bought military-type weapons and assisted another to get travel documents, equipment, and encryption technology to fight with ISIS in Syria.  Thanks to the FBI-NYPD Joint Terrorism Task Force, Alimehmeti now awaits sentencing for his admitted crimes in support of a terrorist organization.”

According to the allegations in the Superseding Indictment and the Complaint filed in this case, statements made during the plea proceeding, and other documents filed in the public record:

In October 2014, ALIMEHMETI attempted to enter the United Kingdom but was denied entry after U.K. authorities found camouflage clothing and nunchucks in his luggage.  About two months later, in December 2014, ALIMEHMETI was again denied entry into the United Kingdom, this time after U.K. authorities found that his cellphone contained images of ISIS flags.  Further forensic examination of the contents of the cellphone and ALIMEHMETI’s laptop computer showed numerous indicia of ALIMEHMETI’s support for ISIS, including a photograph of ALIMEHMETI with an ISIS flag in the background, images of ISIS fighters in the Middle East, a photograph of ALIMEHMETI making a gesture of support for ISIS, various files relating to jihad and martyrdom, and electronic communications in which ALIMEHMETI assisted another ISIS supporter in efforts to travel to Syria to join ISIS by providing contact information for an ISIS affiliate who could facilitate the travel.

After returning to the United States, ALIMEHMETI continued to support ISIS.  Among other things, ALIMEHMETI displayed an ISIS flag in his apartment in the Bronx and, in the course of recorded meetings with undercover law enforcement employees, ALIMEHMETI played multiple pro-ISIS propaganda videos on his computer and cellphone, including videos of ISIS fighters decapitating prisoners, and also indicated that he was interested in radicalizing other individuals in the Bronx area.  ALIMEHMETI also made repeated purchases of combat knives and other military-type equipment, including masks, handcuffs, a pocket chainsaw, a wire pocket saw, and a rucksack designed for tactical combat, which he stockpiled at his apartment in the Bronx.

In October 2015, ALIMEHMETI applied for a U.S. passport, falsely claiming in the application that his previous passport had been lost.  ALIMEHMETI later told an undercover law enforcement employee that his prior passport – which ALIMEHMETI showed to the undercover law enforcement officer – had not been lost and, instead, that he was applying for a new passport because he believed the rejection stamps in his existing passport resulting from his attempted entries into the United Kingdom would make it difficult to travel.  ALIMEHMETI further conveyed to undercover law enforcement personnel that he was seeking the new passport, without rejection stamps, to facilitate his travel overseas to join and fight for ISIS.

In May 2016, ALIMEHMETI attempted to assist an individual who was purportedly traveling from New York to Syria to train and fight with ISIS but who was actually an undercover law enforcement employee (the “UC”).  On May 17, 2016, ALIMEHMETI met with the UC in Manhattan.  The UC had purportedly arrived in New York earlier that day on a bus and was en route to John F. Kennedy International Airport (“JFK Airport”) to take an overseas flight later that night. 

ALIMEHMETI agreed to help the UC with several tasks prior to the UC’s purported travel.  ALIMEHMETI assisted the UC by locating stores so the UC could purchase supplies to use while traveling to, and fighting with, ISIS, including a cellphone, boots, a compass, a bag, and a flashlight, among other items.  ALIMEHMETI also gave the UC advice on which items to purchase and on the use of different kinds of encrypted communications services, including the service that ALIMEHMETI stated was currently being used by fellow ISIS supporters, whom ALIMEHMETI referred to as “the brothers.”  ALIMEHMETI also downloaded three encrypted communications applications on the UC’s newly purchased cellphone for use by the UC.   

Further, ALIMEHMETI assisted the UC in traveling from Manhattan to a hotel in Queens, so the UC could purportedly meet with an individual who was preparing travel documents that the UC would use to travel to Syria to join ISIS.  ALIMEHMETI gave the UC a piece of paper with his name and contact information, so the UC could provide that information to the purported document facilitator.  ALIMEHETI explained that he also wanted to travel to Syria and join ISIS, stating “I’m ready to . . . go with you man . . . you know I would.  I’m done with this place.”  After leaving the hotel in Queens, ALIMEHETI brought the UC to JFK Airport, via public transportation, so the UC could begin the purported journey to ISIS.  Within days of seeking to facilitate the UC’s travel to join ISIS, ALIMEHMETI indicated during a call to his brother in Albania that that he had learned of a new way to obtain a passport for his own travel (referring to the UC’s purported document facilitator), and that a “friend of mine” (referring to the UC) had “just [done] it two days ago.”

Following ALIMEHMETI’s arrest on the charges in this case in May 2016, the FBI executed a search of ALIMEHMETI’s Bronx apartment pursuant to a judicially authorized search warrant.  The FBI’s search of ALIMEHMETI’s apartment resulted in the seizure of, among other evidence, the following: (i) a laptop computer and a cellphone belonging to ALIMEHMETI that contain an array of materials further demonstrating his allegiance to ISIS and terrorist ideology, including images of the ISIS flag, photographs of ALIMEHMETI with an ISIS flag and making gestures supportive of ISIS, images of ISIS fighters overseas, and propaganda videos promoting and glorifying ISIS, including videos depicting ISIS fighters engaging in combat and beheading prisoners; (ii) a collection of combat knives and other military-type equipment that ALIMEHMETI had purchased and stored at his apartment, as discussed above; and (iii) an ISIS flag that was displayed on a wall in the apartment.

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ALIMEHMETI, 24, of the Bronx, pled guilty to one count of attempting to provide material support or resources to a designated foreign terrorist organization, namely, ISIS, which carries a maximum sentence of 20 years in prison, and one count of making a false statement in an application for a U.S. passport with the intent to induce the issuance of a passport to facilitate an act of international terrorism, namely, traveling abroad to join, train with, and fight for ISIS, which carries a maximum sentence of 25 years in prison.  The maximum potential sentences in this case are prescribed by Congress and are provided here for informational purposes only, as any sentencing of the defendant will be determined by a judge.  Sentencing is scheduled for June 7, 2018, before Judge Engelmayer.   

Mr. Berman and Mr. O’Callaghan praised the outstanding efforts of the FBI’s New York Joint Terrorism Task Force, which principally consists of agents from the FBI and detectives from the NYPD, and the NYPD’s Intelligence Division.  Mr. Berman also thanked the Counterterrorism Section of the Department of Justice’s National Security Division, the Department of Justice’s Office of International Affairs, the Albania State Police, and the Metropolitan Police Service’s Counter Terrorism Command of London, United Kingdom.

This prosecution is being handled by the Office’s Terrorism and International Narcotics Unit.  Assistant U.S. Attorneys Emil J. Bove III, George D. Turner, and Brendan F. Quigley are in charge of the prosecution, with assistance from Trial Attorneys Joseph Attias and Kiersten Korczynski of the National Security Division’s Counterterrorism Section.          

Geoffrey S. Berman, the United States Attorney for the Southern District of New York, announced that DWAINE COLLYMORE, a/k/a “Twin,” pled guilty yesterday to murdering Carlos Vargas, and shooting at a second man, during an attempted robbery on April 28, 2016, inside 2466 Marion Avenue in the Bronx, New York.  COLLYMORE faces a maximum term of life in prison, and will be sentenced before Chief United States District Judge Colleen McMahon.

U.S. Attorney Geoffrey S. Berman said:  “Dwaine Collymore has admitted to murdering Carlos Vargas during a botched robbery.  We will continue to work with our law enforcement partners to ensure that murderers are held to account for their crimes.”

According to the Indictment and other documents filed in the case, as well as statements made during the plea proceeding, on April 28, 2016, COLLYMORE and another man attempted to rob the occupants of an apartment located at 2466 Marion Avenue in the Bronx, where Carlos Vargas and others were engaged in selling small quantities of marijuana.  The victims resisted, and in the ensuing struggle COLLYMORE stunned Vargas and knocked him to the ground.   COLLYMORE then fired a shot at a second victim (“Victim-2”).  Victim-2 was not struck, but fell to the ground and played dead.  Believing he had already killed Victim-2, COLLYMORE then leaned over Vargas and fired a single shot into Vargas’s head at close range, killing him.

*                      *                     *

Mr. Berman praised the outstanding work of the investigators of the United States Attorney’s Office for the Southern District of New York, the New York City Police Department’s 46th Precinct Detective Squad, and the United States Marshals Service.  

This case is being handled by the Office’s Violent and Organized Crime Unit.  Assistant United States Attorneys Jared Lenow and Hagan Scotten are in charge of the prosecution.

Geoffrey S. Berman, the United States Attorney for the Southern District of New York, announced criminal charges against U.S. Bancorp (“USB”) consisting of two felony violations of the Bank Secrecy Act (“BSA”) by its subsidiary, U.S. Bank National Association (the “Bank”), the fifth largest bank in the United States, for willfully failing to have an adequate anti-money laundering program (“AML”) and willfully failing to file a suspicious activity report (“SAR”). The case is assigned to United States District Judge Lewis A. Kaplan. 

Mr. Berman also announced an agreement (the “Agreement”) under which USB agreed to accept responsibility for its conduct by stipulating to the accuracy of an extensive Statement of Facts, pay a $528 million penalty, and continue reforms of its BSA/AML compliance program. Assuming USB’s continued compliance with the Agreement, the Government has agreed to defer prosecution for a period of two years, after which time the Government will seek to dismiss the charges.  The Agreement is pending review by the Court.  The penalty shall be collected through the Bank’s forfeiture to the United States of $453 million in a civil forfeiture action also filed today, with the remaining $75 million satisfied by the Bank’s payment of a civil money penalty assessed by the Office of the Comptroller of the Currency (the “OCC”).

U.S. Attorney Geoffrey S. Berman stated:  “U.S. Bank’s AML program was highly inadequate.  The Bank operated the program ‘on the cheap’ by restricting headcount and other compliance resources, and then imposed hard caps on the number of transactions subject to AML review in order to create the appearance that the program was operating properly.  The Bank also concealed its wrongful approach from the OCC.  As a result, U.S Bank failed to detect and investigate large numbers of suspicious transactions.  With today’s resolution, the Bank has accepted responsibility for its criminal conduct and committed to completing the reform of its AML program.”

The OCC, the Financial Crimes Enforcement Network (“FinCEN”), and the Board of Governors of the Federal Reserve System (”FRB”) have also reached agreements with the Bank to resolve related regulatory actions.  For purposes of its action, which was also filed today, FinCEN is represented by this Office’s Civil Division.  FinCEN’s agreement with the Bank requires the Bank to pay an additional $70 million for civil violations of the BSA, and it includes further admissions by the Bank, including that the Bank filed more than 5,000 currency transaction reports with incomplete and inaccurate information, which impeded law enforcement’s ability to identify and track potentially unlawful behavior.  FinCEN’s agreement with the Bank is pending review by the Court.

According to the documents filed today in Manhattan federal court:

USB’s Failure to Maintain an Adequate AML Program

From 2009 and continuing until 2014, USB willfully failed to establish, implement, and maintain an adequate AML program.  Among other things, USB capped the number of alerts generated by its transaction monitoring systems, basing the number of such alerts on staffing levels and resources, rather than setting thresholds for such alerts that corresponded to a transaction’s level of risk.  The Bank deliberately concealed this from the OCC, the Bank’s primary regulator. 

USB was well aware that these practices were improper, were resulting in the Bank missing substantial numbers of suspicious transactions, and were placing the Bank at risk of regulatory action.  Bank documentation from as early as 2005 acknowledged that alert limits were based on staffing levels and, as a result, a risk item for the bank.  For example, in a December 1, 2009,F memo from the Bank’s then AML Officer (the “AMLO”) to the then Chief Compliance Officer (the “CCO), the AMLO explained that while the Bank was experiencing significant increases in SAR volumes, the Bank’s staff was “stretched dangerously thin” and warned that a “regulator could very easily argue that this testing should lead to an increase in the number of queries worked.”  The Bank conducted below-threshold testing (“BTT”), which consisted of investigating a limited number of transactions that fell outside alert limits to see if thresholds should be adjusted so that more alerts would be investigated.  The Bank’s BTT regularly found that SARs should have been filed on more than 25 percent, and as much as 80 percent, of the tested transactions.  Rather than increase resources and lower thresholds to detect such suspicious activity, as repeatedly requested by the responsible AML employees, the Bank instead decided to stop conducting BTT altogether.

An OCC examiner assigned to the Bank repeatedly warned USB officials, including the AMLO, of the impropriety of managing the Bank’s monitoring programs based on the size of its staff and other resources.  Knowing that the OCC would find USB’s resource-driven alert limits to be improper, Bank officials, including the CCO, deliberately concealed these practices from the OCC.  For example, a Bank employee deliberately excluded references to resource limitations from the minutes of an internal Bank meeting for fear that the OCC would disapprove of the Bank’s practices, and in order to protect himself and his supervisor from adverse consequences.  Indeed, the AMLO described USB’s AML program to another senior manager as an effort to use “smoke and mirrors” to “pull the wool over the eyes” of the OCC.

USB also failed to monitor Western Union (“WU”) transactions involving non-customers of the Bank that took place at Bank branches.  The Bank processed WU transactions involving non-customers even though they would not be subject to the Bank’s transaction monitoring systems.  Even when Bank employees flagged specific non-customer transactions raising AML-related concerns, the transactions went uninvestigated.  It was not until July 1, 2014, that the Bank implemented a new policy that prohibited WU transactions by non-customers.

In the course of this investigation, the Bank analyzed the impact of its deficient monitoring practices.  For just the six months prior to taking steps to remedy the practices, the Bank’s analysis resulted in the generation of an additional 24,179 alerts and the filing of 2,121 SARs.

USB’s Failure to Timely File Suspicious Activity Reports Relating to Scott Tucker

From October 2011 through November 2013, the Bank willfully failed to timely report suspicious banking activities of Scott Tucker, its longtime customer, despite being on notice that Tucker had been using the Bank to launder proceeds from an illegal and fraudulent payday lending scheme using a series of sham bank accounts opened under the name of companies nominally owned by various Native American tribes (the “Tribal Companies”).  From 2008 through 2012, Tucker’s companies extended approximately five million loans to customers across the country, while generating more than $2 billion in revenues and hundreds of millions of dollars in profits.  Most of this money flowed through accounts that Tucker maintained at the Bank.

USB employees responsible for servicing Tucker’s ongoing account activity disregarded numerous red flags that Tucker was using the tribes to conceal his ownership of the accounts.  For example, Tucker spent large sums of monies from accounts in the names of Tribal Companies on personal items, including tens of millions of dollars on a vacation home in Aspen and on Tucker’s professional Ferrari racing team.  USB also received subpoenas from regulators investigating Tucker’s businesses.  In September 2011, after news organizations published reports examining Tucker’s history and questionable business practices, the Bank reviewed Tucker’s accounts, and an AML investigator reported to supervisors, among other things, that “it looks as though Mr. Tucker is quite the slippery individual” who “really does hide behind a bunch of shell companies.”  Based on its findings, the Bank closed the accounts in the names of the Tribal Companies but failed to file a SAR.

The Bank also left open Tucker’s non-tribal accounts and opened new ones, allowing over $176 million more from his illegal payday business to flow into the Bank.  Despite also learning of an April 2012 Federal Trade Commission lawsuit against Tucker and the Tribal Companies, the Bank did not file a SAR regarding Tucker until served with a subpoena by this Office in November 2013.

On October 13, 2017, Tucker was convicted in the United States District Court for the Southern District of New York of various offenses arising from his payday lending scheme.  The Government intends to recommend that the amounts forfeited by USB be distributed to victims of Tucker’s scheme, consistent with the applicable Department of Justice regulations, through the ongoing remission process.

*                      *                     *

Mr. Berman praised the outstanding investigative work of the Special Agents at the United States Attorney’s Office and thanked the OCC for its assistance with the investigation.  Mr. Berman also thanked FinCEN for its partnership with this Office.

The prosecution is being handled by the Office’s Money Laundering and Asset Forfeiture Unit.  Assistant U.S. Attorneys Niketh Velamoor and Jonathan Cohen are in charge of the prosecution.  The Office’s Civil Frauds Unit is handling the regulatory action on behalf of FinCEN.  Assistant U.S. Attorneys Christopher Harwood and Caleb Hayes-Deats are in charge of the matter.

Geoffrey S. Berman, the United States Attorney for the Southern District of New York, and James P. O’Neill, the Commissioner of the New York City Police Department (“NYPD”), announced the arrest and the filing of federal charges yesterday against JEFFREY WEBER.  The Complaint charges that WEBER communicated with an individual he believed to be a 13-year-old girl via email and text messages, and made plans to meet the girl at a diner in Manhattan and then go to her apartment to engage in sexual activity.  WEBER was arrested yesterday when he arrived at the designated meeting place to meet the girl, and was presented before United States Magistrate Judge Debra Freeman in Manhattan federal court.

U.S. Attorney Geoffrey S. Berman said:  “As alleged, Jeffrey Weber, a home-school tutor who has constant interaction with children, made arrangements through text messaging and emails to meet with what he thought was a 13-year-old girl to engage in sexual activity.  Thankfully he was corresponding with an undercover law enforcement officer and not a young girl, but his alleged intentions are no less insidious.  This Office, along with our partners at the NYPD, remain committed to keeping child predators off the streets.”

NYPD Commissioner James P. O’Neill said:  “The suspect in this case—a 59-year-old Long Island man—is accused of sending sexually-explicit texts and emails to an investigator posing as a 13-year-old girl.  But this crime wasn't confined to cyberspace.  The man was arrested yesterday at a diner in Manhattan, where his plan was to meet the underage girl and take her elsewhere for sex.  I want to thank the members of the Internet Crimes Against Children Task Force, whose expertise identified and put an end to this predator’s activities.”

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

Between January 30, 2018, and February 14, 2018, WEBER, using email and text messages, engaged in sexually explicit communications with a law enforcement agent who was acting in an undercover capacity and posing as a 13-year-old girl.  During these communications, WEBER discussed various sexual acts he wished to perform on the girl and made a plan to meet the girl at a diner in Manhattan and to then go to the girl’s nearby apartment for the purpose of engaging in sexual activity.  On February 14, 2018, Weber was arrested at the diner where he planned to meet the girl.  In an email with who he thought was the 13-year-old girl, WEBER said that he was employed as a tutor, working in the homes of at-risk youth.

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WEBER, 59, of the Seaford, New York, is charged with one count of attempted enticement, which carries a maximum sentence of life 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 NYPD’s Computer Crime Squad, which is part of the Internet Crimes Against Children (ICAC) Task Force, for their outstanding investigative work.

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

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

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

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 Office of the Federal Bureau of Investigation (“FBI”), and James P. O’Neill, Police Commissioner of the City of New York, (“NYPD”), announced that CHRISTIAN TORO and TYLER TORO have been charged in U.S. District Court for the Southern District of New York in connection with their stockpiling of explosive materials and manufacture of destructive devices at their residence in the Bronx.  Both defendants were presented before U.S. Magistrate Judge Debra Freeman in Manhattan federal court this afternoon and detained. 

As alleged in the Complaint[1]:

On or about December 4, 2017, a bomb threat was called into a high school in Harlem, New York (the “School”).  Shortly after a student was arrested in connection with that incident, CHRISTIAN TORO, who was a teacher at the School, resigned.  After CHRISTIAN TORO’s resignation, TYLER TORO returned to the School a laptop computer (the “Laptop”) that the School had provided to CHRISTIAN TORO for use in connection with his employment.  A School employee found, on the Laptop, a copy of a book that provides instructions for, among other things, manufacturing explosive devices.

Law enforcement agents subsequently interviewed multiple students at the School, who indicated that at least two students at the School had visited CHRISTIAN TORO’s residence (the “Residence”), where CHRISTIAN TORO would pay them approximately $50 per hour to break apart fireworks and store the powder that came out of the fireworks in containers.

On February 15, 2018, law enforcement agents conducted a search of the Residence pursuant to a judicially authorized search warrant.  In a bedroom identified as shared by CHRISTIAN TORO and TYLER TORO, law enforcement agents recovered, among other items, (i) approximately 20 pounds of iron oxide; (ii) approximately five pounds of aluminum powder; (iii) a substance appearing to be thermite, mixed from iron oxide and aluminum powder; (iv) approximately five pounds of potassium nitrate; (v) a glass jar containing explosive powder; and (vi) a cardboard box containing firecrackers.  In addition, 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.”  Law enforcement agents also recovered a backpack, identified as belonging to CHRISTIAN TORO, containing an index card with handwriting reading “UNDER THE FULL MOON THE SMALL ONES WILL KNOW TERROR.”

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CHRISTIAN TORO, 27, of the Bronx, New York, is charged in the Complaint with one count of unlawfully manufacturing a destructive device, in violation of 26 U.S.C. §§ 5822, 5861(f), and 5871 and 18 U.S.C. § 2, which carries a maximum sentence of 10 years in prison, and one count of distribution of explosive materials to a minor, in violation of 18 U.S.C. § 842(d)(1), which carries a maximum sentence of 10 years in prison.  TYLER TORO, also 27 and of the Bronx, New York, is charged with one count of unlawfully manufacturing a destructive device, in violation of 26 U.S.C. §§ 5822, 5861(f), and 5871 and 18 U.S.C. § 2, 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 any sentencing of the defendants will be determined by the judge.

Mr. Berman praised the outstanding investigative work of the FBI’s New York Joint Terrorism Task Force, which consists principally of agents of the FBI and detectives of the NYPD.

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

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

 

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

Geoffrey S. Berman, the United States Attorney for the Southern District of New York, announced today that JOHN C. GALLAGHER JR., the former head of Buildings and Grounds at the City of New Rochelle School District, was sentenced to 37 months in prison for his role in a scheme to solicit bribes from an outside contractor to channel school district business to the contractor’s company for bribery.  GALLAGHER pled guilty on October 10, 2017, before U.S. District Judge Kenneth M. Karas, who imposed today’s sentence.

U.S. Attorney Geoffrey S. Berman said:  “John C. Gallagher Jr. was in a position of trust while working for the City of New Rochelle School District.  But instead of ensuring that the City’s schools and grounds were safe and sound to educate children, he used his position to demand – and receive – more than $125,000 in kickbacks from a contractor for the school district.  Thanks to our law enforcement partners, Gallagher’s scheme is over, and he has been sentenced for his crimes.”

According to the allegations contained in the Indictment, as well as statements made in related court filings and proceedings:

The City School District of New Rochelle, which receives federal benefits significantly in excess of $10,000 each year, has a Buildings and Grounds Department.  It is responsible for, among other things, maintenance and repair of facilities used by the School District to educate children.  To do certain maintenance and repair work, the School District uses outside contractors. 

Among the outside contractors used by the School District are companies with specialties – in, for example, masonry, electrical work, plumbing, and carpentry – sometimes referred to as “bid vendors” or “time and materials” contractors.  These contractors bid annually, using set rates, and if awarded contracts, are paid by the School District to handle any projects within the contractors’ specialties that do not exceed a certain threshold cost.  (As of 2009, that amount, per New York State law, was $35,000.)  A more costly project that exceeds the threshold is offered for bid and awarded to the lowest responsible bidder, unless the project is deemed a health and safety emergency (i.e., a major plumbing leak during the school year), in which case, the time and materials vendor may be asked to do the job, regardless of the cost.

GALLAGHER, the defendant, was the School District’s Director of Environmental Services, overseeing the School District’s buildings and grounds.  To fill this position, the School District contracted with a company that provided, among other things, management services (“Company-1”).  GALLAGHER, as an employee of Company-1, was thereby made the School District’s Director of Environmental Services, and worked full-time in the School District, as its agent, with authority to act on its behalf.  GALLAGHER, as Director of Environmental Services, had influence over which contractors were awarded work by the School District, and over whether, when, and how contractors were assigned work and paid for work. 

Mauro Zonzini owned and wholly controlled a construction company in Westchester County (the “Company”).  The Company contracted with the School District to do masonry work, and was hired each year by the School District as its time and materials contractor for masonry work.

From 2009 through 2013, GALLAGHER engaged in a corrupt, criminal scheme in which he solicited, demanded, and accepted bribes in the form of cash payments intending to be influenced and rewarded in connection with the School District’s business and transactions with the Company.  The bribe payments that GALLAGHER solicited, demanded, and accepted were paid by Zonzini.  Routinely, after the School District paid the Company for work performed, GALLAGHER met in person with Zonzini in a parking lot, where Zonzini provided GALLAGHER with a kickback in the amount of 10 percent of the payment the Company had received from the School District.  In this way, GALLAGHER received dozens of cash bribe payments from Zonzini, over the course of at least approximately four years, which together amounted to approximately $125,000.  GALLAGHER solicited, demanded, and accepted the bribe payments intending to be influenced in and rewarded for the School District’s decisions to award the Company contracts for masonry work, to assign masonry projects to the Company, and to make timely payment to the Company.

To avoid detection of his corrupt scheme, GALLAGHER concealed the cash bribe payments he received from Zonzini.  GALLAGHER did so, as he admitted during a secretly recorded conversation, by keeping the payments “in my car or in my trunk.”  In some instances he used the cash to make payments directly toward living expenses, without depositing it in his bank account.  For example, during the corrupt scheme, GALLAGHER used the bribe money to make credit card payments, car payments, and, as he admitted during the secretly recorded conversation, “I paid for some college.”

*                *                *

In addition to the prison term, GALLAGHER, 53, of Harrisburg, Pennsylvania, was sentenced to two years of supervised release, ordered to forfeit $125,000, and pay restitution in the same amount. 

Zonzini, 52, of South Carolina, pled guilty on May 9, 2017, to one count of bribing a public official, which carries a maximum sentence of 10 years in prison, and one count of tax evasion, which carries a maximum sentence of five years in prison.  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.  Zonzini will be sentenced on February 16, 2018.  His case is assigned to U.S. District Judge Nelson S. Román.

Mr. Berman praised the outstanding investigative efforts of the United States Postal Inspection Service, the Internal Revenue Service, Criminal Investigation, and the U.S. Attorney’s Office’s Special Agents.  He also thanked the U.S. Department of Education’s Office of Inspector General for its assistance. 

The case is being handled by the Office’s White Plains Division.  Assistant U.S. Attorneys Kathryn Martin and Benjamin Allee are in charge of the prosecution.

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 Field Office of the Federal Bureau of Investigation (“FBI”), and James P. O’Neill, Commissioner of the New York City Police Department (“NYPD”), announced today that MICHAEL BONANNO was arrested and charged in Manhattan federal court with bank fraud, conspiracy to commit bank fraud, and aggravated identity theft, in connection with a scheme to use stolen bank account numbers to make payments on BONANNO’s credit card and home mortgage accounts.  BONANNO was arrested at his home this morning and will be presented today before Magistrate Judge Debra Freeman. 

U.S. Attorney Geoffrey S. Berman said:  “As alleged, Michael Bonanno, who was at the time a detective in the NYPD’s Crime Stoppers unit, and his co-conspirator used victims’ bank account numbers in a scheme to steal hundreds of thousands of dollars from New Yorkers.  In so doing, Bonanno betrayed the public that he swore to protect.  I commend the FBI and the Internal Affairs Bureau of the NYPD for their outstanding work in this investigation.”  

FBI Assistant Director William F. Sweeney Jr. said:  “Plain and simple, Michael Bonanno allegedly used other people’s money to pay off his debts while simultaneously serving as a police officer, charged with investigating criminal wrongdoing.  We don’t allow the general public to get away with these types of crimes, and we won’t allow members of the law enforcement community to get away with them either.” 

NYPD Commissioner James P. O’Neill said:  “I want to commend the dedicated investigators in the NYPD Internal Affairs Bureau and the FBI as well as the prosecutors in the Southern District whose tireless efforts on this corruption case exposed the criminal activity alleged in this arrest.”    

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

BONANNO is a NYPD detective and was a member of the NYPD Crime Stoppers unit, which receives and investigates anonymous tips about criminal activity from members of the community.

From November 2016 to March 2017, BONANNO and a co-conspirator stole and attempted to steal money from the bank accounts of multiple New York residents by making unauthorized wire transfers from victims’ bank accounts to accounts controlled by BONANNO, and by cashing fraudulent checks written from victims’ accounts into an account controlled by BONANNO.

In total, BONANNO and his co-conspirator attempted approximately $1,457,642 in fraudulent wire transfers from victims’ accounts to BONANNO’s accounts, and deposited approximately $68,900 worth of forged checks into BONANNO’s accounts.

*                      *                     *

BONANNO, 44, of Staten Island, New York, has been charged with one count of bank fraud and one count of conspiracy to commit bank fraud, each of which carries a sentence of 30 years in prison, and one count of aggravated identity theft, which carries a mandatory 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 investigative work of the FBI and NYPD Internal Affairs Bureau in this investigation.

This case is being handled by the Office’s Public Corruption Unit.  Assistant U.S. Attorneys Nicolas Roos and Danielle R. Sassoon 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.

 

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

Ahmad Khan Rahimi, aka, Ahmad Rahami, 30, of Elizabeth, New Jersey, was sentenced to life in prison for his execution and attempted execution of bombings in New York City on Sept. 17, 2016. 

Acting Assistant Attorney General for National Security Edward C. O’Callaghan, U.S. Attorney Geoffrey S. Berman for the Southern District of New York, Assistant Director in Charge William F. Sweeney Jr. of the FBI’s New York Field Office and Commissioner James P. O’Neill of the NYPD made the announcement.

“Today our legal system delivered on its promise to provide swift and resolute justice to those who would target innocent victims by perpetrating terrorist attacks against our homeland,” said Acting Assistant Attorney General O’Callaghan.  “I commend all of the agents, analysts and prosecutors whose commitment and dedication made this result possible.”

“Inspired by ISIS and al Qaeda, Ahmad Khan Rahimi planted and detonated bombs on the streets of Chelsea, and in New Jersey, intending to kill and maim as many innocent people as possible,” said U.S. Attorney Berman.  “Less than a year-and-a-half after his attacks, Rahimi has now been tried, convicted, and sentenced to life in prison.  Rahimi’s conviction and sentencing are victories for New York City and our nation in the fight against terror.”

“Today’s sentencing assures us that Ahmad Khan Rahimi will spend the rest of his life behind bars.  Once again, the lesson learned is clear: if you plot to cause catastrophic damage against this city and our citizens, you will be held accountable,” said Assistant Director Sweeney.  “I would like to thank the FBI Joint Terrorism Task Forces here in New York and New Jersey, along with many other law enforcement partners, who moved with speed in this investigation and who work every day to protect Americans from acts of terror.  I would also like to express my gratitude to the public who remained engaged throughout this investigation.  That partnership and the public's continued cooperation are crucial to ensuring we stay ahead of threats, and enhance law enforcement's response following attacks like this.”

“Rahimi attempted to wreak havoc in the Chelsea neighborhood of New York City.  He failed,” said Commissioner O’Neill.  “Committing terrorism may seem, from the darkest places of the internet and espoused in propaganda, as a higher calling.  It is not. Today’s sentencing — of life in prison — should be the strongest deterrent to future acts of terror.  My thanks to the police officers from the 13th precinct, NYPD detectives, investigators on the Joint Terrorism Task Force, and prosecutors here in Manhattan for making today’s sentencing possible.”

Rahimi was convicted on Oct. 16, 2017, following a two-week jury trial before U.S. District Judge Richard M. Berman, who also imposed today’s sentence.

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

On Sept. 17, 2016, Rahimi transported two improvised explosive devices from New Jersey to New York, New York.  Rahimi placed one of the devices in the vicinity of 135 West 23rd Street in the Chelsea neighborhood of New York, New York (the 23rd Street Bomb) and the other in the vicinity of 131 West 27th Street in the Chelsea neighborhood of New York, New York (the 27th Street Bomb). 

At approximately 8:30 p.m., the 23rd Street Bomb – containing a high explosive main charge and thousands of ball bearings – detonated, causing injuries to over 30 people and hundreds of thousands of dollars in property damage across a 650-foot crime scene.  The injuries included, among other things, lacerations to the face, abdomen, legs, and arms caused by flying glass; metal shrapnel and fragmentation embedded in skin and bone; and various head injuries.  The explosive components appear to have been placed inside a pressure cooker and left near a dumpster.  The explosion propelled a more-than-100-pound dumpster – which was introduced as an exhibit at trial – more than 120 feet.  The blast shattered windows as far as approximately 400 feet from the blast site and, vertically, more than three stories high.  

Shortly after the 23rd Street Bomb detonated, a civilian identified the 27th Street Bomb and promptly called 911, which recorded call was introduced in evidence and played at trial.  The 27th Street Bomb, which was rendered safe prior to detonation, consisted of, among other things, a pressure cooker connected with wires to a cellular telephone (likely to function as a timer) and packaged with an explosive main charge, ball bearings, and steel nuts. 

Earlier that day, at approximately 9:35 a.m. on Sept. 17, 2016, another improvised explosive device, which had been planted by Rahimi in the early morning hours, detonated in the vicinity of Seaside Park, New Jersey, along the route for the Seaside Semper Five Marine Corps Charity 5K race.  The start of the race – which was scheduled to begin at 9:00 a.m. – was delayed.  Had the race started on time, the bomb would have detonated as runners were passing by where Rahimi had planted it. 

On Sept. 18, 2016, at approximately 8:40 p.m., six additional improvised explosive devices that Rahimi also planted were found inside a backpack located at the entrance to the New Jersey Transit station in Elizabeth, New Jersey.  One of these devices detonated as law enforcement used a robot to defuse it.

On September 19, 2016, at approximately 9:30 a.m., Rahimi was arrested by police in Linden, New Jersey.  Rahimi fired multiple shots at police, striking and injuring multiple police officers before he was himself shot, subdued, and placed under arrest.  In the course of Rahimi’s arrest, a handwritten journal was recovered from Rahimi’s person.  Written in the journal were, among other things, mentions of explosive devices (including “The sounds of bombs will be heard in the streets” and “Bombs set off in the streets they plan to run a mile”),  and laudatory references to Usama Bin Laden, the former leader of al Qaeda, Anwar al-Awlaki, a former senior leader of al Qaeda in the Arabian Peninsula, Mohammed al-Adnani, a former senior leader of the Islamic State in Iraq and al Sham, and Nidal Hasan, who shot and killed 13 people in Foot Hood, Texas.

*                *                *

In addition to the prison term, Rahimi was sentenced to five years of supervised release and ordered to pay $562,803 in restitution.

In addition to the charges for which he was sentenced in Manhattan federal court, Rahimi also has been charged in a Complaint in the District of New Jersey with offenses in connection with his alleged efforts to detonate explosives in Seaside Park, New Jersey, and Elizabeth, New Jersey.

Mr. O’Callaghan and Mr. Berman praised the outstanding efforts of the FBI’s New York Joint Terrorism Task Force, which principally consists of agents from the FBI and detectives from the New York City Police Department.

Assistant U.S. Attorneys Emil J. Bove III, Andrew J. DeFilippis, and Shawn G. Crowley are in charge of the prosecution, with assistance from Trial Attorney Brian Morgan of the National Security Division’s Counterterrorism Section.

Geoffrey S. Berman, the United States Attorney for the Southern District of New York, Edward C. O’Callaghan, the Acting Assistant Attorney General for National Security, William F. Sweeney Jr., Assistant Director-in-Charge of the Federal Bureau of Investigation, New York Field Office (“FBI”), and James P. O’Neill, Commissioner of the Police Department for the City of New York (“NYPD”), announced today that AHMAD KHAN RAHIMI, a/k/a “Ahmad Rahami,” was sentenced to life in prison for his execution and attempted execution of bombings in New York City on September 17, 2016.  RAHIMI was convicted on October 16, 2017, following a two-week jury trial before U.S. District Judge Richard M. Berman, who also imposed today’s sentence.

Manhattan U.S. Attorney Geoffrey S. Berman said:  “Inspired by ISIS and al Qaeda, Ahmad Khan Rahimi planted and detonated bombs on the streets of Chelsea, and in New Jersey, intending to kill and maim as many innocent people as possible.  Less than a year-and-a-half after his attacks, Rahimi has now been tried, convicted, and sentenced to life in prison.  Rahimi’s conviction and sentencing are victories for New York City and our nation in the fight against terror.”

Acting Assistant Attorney General Edward C. O’Callaghan said:  “Today our legal system delivered on its promise to provide swift and resolute justice to those who would target innocent victims by perpetrating terrorist attacks against our homeland.  I commend all of the agents, analysts, and prosecutors whose commitment and dedication made this result possible.”

FBI Assistant Director William F. Sweeney Jr. said:  “Today’s sentencing assures us that Ahmad Khan Rahimi will spend the rest of his life behind bars.  Once again, the lesson learned is clear: if you plot to cause catastrophic damage against this city and our citizens, you will be held accountable.  I would like to thank the FBI Joint Terrorism Task Forces here in New York and New Jersey, along with many other law enforcement partners, who moved with speed in this investigation and who work every day to protect Americans from acts of terror.  I would also like to express my gratitude to the public who remained engaged throughout this investigation.  That partnership and the public's continued cooperation are crucial to ensuring we stay ahead of threats, and enhance law enforcement's response following attacks like this.”

Police Commissioner James P. O’Neill said:  “Ahmed Kahn Rahimi placed two ticking bombs in a crowded Manhattan neighborhood on a warm Saturday night.  He then walked away.  It was the most cowardly of all crimes.  His clear intention was to take as many lives as possible.  Rahimi had other bombs and likely other plans.  I want to thank the NYPD officers who responded that night, the agents and NYPD detectives of the JTTF, the NYPD Intelligence Bureau, Detective Bureau, Bomb Squad, ATF Agents, and the officers of the Linden New Jersey Police Department who all had important contributions in the investigation and arrest.  I also want to thank the prosecutors of the US Attorney for the Southern District of New York, the most experienced terrorism prosecutors in the nation for bringing New Yorkers justice.”

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

On September 17, 2016, RAHIMI transported two improvised explosive devices from New Jersey to New York, New York.  RAHIMI placed one of the devices in the vicinity of 135 West 23rd Street in the Chelsea neighborhood of New York, New York (the “23rd Street Bomb”) and the other in the vicinity of 131 West 27th Street in the Chelsea neighborhood of New York, New York (the “27th Street Bomb”). 

At approximately 8:30 p.m., the 23rd Street Bomb – containing a high explosive main charge and thousands of ball bearings – detonated, causing injuries to over 30 people and hundreds of thousands of dollars in property damage across a 650-foot crime scene.  The injuries included, among other things, lacerations to the face, abdomen, legs, and arms caused by flying glass; metal shrapnel and fragmentation embedded in skin and bone; and various head injuries.  The explosive components appear to have been placed inside a pressure cooker and left near a dumpster.  The explosion propelled a more-than-100-pound dumpster – which was introduced as an exhibit at trial – more than 120 feet.  The blast shattered windows as far as approximately 400 feet from the blast site and, vertically, more than three stories high.  

Shortly after the 23rd Street Bomb detonated, a civilian identified the 27th Street Bomb and promptly called 911, which recorded call was introduced in evidence and played at trial.  The 27th Street Bomb, which was rendered safe prior to detonation, consisted of, among other things, a pressure cooker connected with wires to a cellular telephone (likely to function as a timer) and packaged with an explosive main charge, ball bearings, and steel nuts. 

Earlier that day, at approximately 9:35 a.m. on September 17, 2016, another improvised explosive device, which had been planted by RAHIMI in the early morning hours, detonated in the vicinity of Seaside Park, New Jersey, along the route for the Seaside Semper Five Marine Corps Charity 5K race.  The start of the race – which was scheduled to begin at 9:00 a.m. – was delayed.  Had the race started on time, the bomb would have detonated as runners were passing by where RAHIMI had planted it. 

On September 18, 2016, at approximately 8:40 p.m., six additional improvised explosive devices that RAHIMI also planted were found inside a backpack located at the entrance to the New Jersey Transit station in Elizabeth, New Jersey.  One of these devices detonated as law enforcement used a robot to defuse it.

On September 19, 2016, at approximately 9:30 a.m., RAHIMI was arrested by police in Linden, New Jersey.  RAHIMI fired multiple shots at police, striking and injuring multiple police officers before he was himself shot, subdued, and placed under arrest.  In the course of RAHIMI’s arrest, a handwritten journal was recovered from RAHIMI’s person.  Written in the journal were, among other things, mentions of explosive devices (including “The sounds of bombs will be heard in the streets” and “Bombs set off in the streets they plan to run a mile”),  and laudatory references to Usama Bin Laden, the former leader of al Qaeda, Anwar al-Awlaki, a former senior leader of al Qaeda in the Arabian Peninsula, Mohammed al-Adnani, a former senior leader of the Islamic State in Iraq and al Sham, and Nidal Hasan, who shot and killed 13 people in Foot Hood, Texas.

*                *                *

In addition to the prison term, RAHIMI, 30, was sentenced to five years of supervised release and ordered to pay $562,803 in restitution.

In addition to the charges for which he was sentenced in Manhattan federal court, RAHIMI also has been charged in a Complaint in the District of New Jersey with offenses in connection with his alleged efforts to detonate explosives in Seaside Park, New Jersey, and Elizabeth, New Jersey.

Mr. Berman praised the outstanding efforts of the Federal Bureau of Investigation’s New York Joint Terrorism Task Force, which principally consists of agents from the FBI and detectives from the New York City Police Department, and the 13th Precinct of the NYPD.  Mr. Berman also thanked the Counterterrorism Section of the Department of Justice’s National Security Division for its assistance.

The prosecution of this case is being handled by the Office’s Terrorism and International Narcotics Unit.  Assistant U.S. Attorneys Emil J. Bove III, Andrew J. DeFilippis, and Shawn G. Crowley are in charge of the prosecution, with assistance from Trial Attorney Brian Morgan of the National Security Division’s Counterterrorism Section.

Geoffrey S. Berman, the United States Attorney for the Southern District of New York, and James P. O’Neill, the Commissioner of the New York City Police Department (“NYPD”), announced the arrest today of LANCELOT PAUL LUTCHMAN for possession and distribution of child pornography.  LUTCHMAN will be presented before United States Magistrate Judge Debra Freeman in Manhattan. 

U.S. Attorney Geoffrey S. Berman said:  “As alleged, the defendant possessed and distributed hundreds of files containing child pornography.  Trafficking in child pornography fuels demand for such vile images, which means that in a very real sense, every time an image is shared, a child is victimized.  Working with partners like the NYPD, our mission is to protect children and prosecute child predators.”           

Police Commissioner James P. O’Neill said:  “The defendant in this case is a Bronx man who is charged with possessing and distributing child pornography – hundreds and hundreds of video files.  I want to thank the investigators and prosecutors on this case for their work to hold those who allegedly victimize and exploit children accountable for their crimes.”

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

Between January 31, 2016 and January 21, 2017, LUTCHMAN used a peer-to-peer file sharing network to share approximately 845 unique video files known to contain child pornography.  The child pornography included depictions of prepubescent children engaged in sexual activity with other children or adults.  On January 26, 2017, law enforcement officers executed a search warrant for LUTCHMAN’s apartment and recovered his laptop computer, which contained numerous files of child pornography.  As officers were entering the apartment, LUTCHMAN hid the laptop in his oven. 

*                *                *

LUTCHMAN, 44, of the Bronx, New York, is charged with one count of distribution and receipt of child pornography, which carries a mandatory minimum sentence of five years in prison and a maximum sentence of 20 years in prison, and one count of possession of child pornography, 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 New York City Police Department for its outstanding investigative work.  Mr. Berman also thanked the Bronx District Attorney’s Office for its invaluable assistance with this matter. 

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

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

 

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

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 Office of the Federal Bureau of Investigation (“FBI”), and James P. O’Neill, the Commissioner of the New York City Police Department (“NYPD”), announced the arrests of LAVELLEOUS PURCELL, a/k/a “King Casino,” a/k/a “Mike Hill,” and GLORIA PALMER, a/k/a “Gloria Hearn.” PURCELL is charged with sex trafficking and related offenses.  PALMER is charged with conspiracy to use interstate commerce to promote PURCELL’s illegal sex trafficking activity.  PURCELL was presented Friday in Manhattan federal court before United States Magistrate Judge Stewart D. Aaron and detained.  PALMER was presented Friday in federal court in Rochester and released on bail.  The case has been assigned to United States District Judge Denise L. Cote. 

Manhattan U.S. Attorney Geoffrey S. Berman said:  “As alleged, Lavelleous Purcell’s conduct was exploitive, forcing women to engage in sex for money, and keeping the money for himself.  Thanks to the FBI and NYPD, Purcell and his alleged accomplice, Gloria Palmer, are in custody.”

FBI Assistant Director-in-Charge William F. Sweeney Jr. said:  “The subject in this case allegedly forced women to have sex for money.  Our FBI agents and law enforcement partner detectives won’t ever stop pursuing pimps who profit from using women not as human beings, but as objects and as a way to make money.  However, the practice isn’t going to ever go away unless the demand goes away.  We ask anyone with information about this case, or any other situation they suspect may be human trafficking, to call us.”

According to the Indictment unsealed today in Manhattan federal court,[1] and statements made in court during the defendants’ presentments:

For the past several years, PURCELL has worked as a sex trafficker and pimp under the alias “King Casino.”  From 2012 to 2016, PURCELL trafficked women, forcing them to engage in commercial sex, for which he was paid.  Since at least 2015, PURCELL has recruited women to travel in interstate commerce to engage in prostitution and has transported women across state lines to engage in prostitution.  PALMER used the facilities of interstate commerce to promote the prostitution business by booking hotel rooms for PURCELL and the women.

To date, law enforcement agents have identified over 50 women who appear to have engaged in commercial sex at PURCELL’s direction.

PALMER assisted in PURCELL’s sex trafficking business by, among other things, booking hotel rooms for PURCELL and the women he trafficked, for which PURCELL paid PALMER a monthly fee.

*                *                *

The charges in the Indictment against LAVELLEOUS PURCELL, 39, of Hempstead, New York, and GLORIA PALMER, 26, of Rochester, New York, are included in the chart 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.

Any individuals who believe they have information that may be relevant to the investigation should contact the FBI at 1-212-384-1000 or https://tips.fbi.gov/.

Mr. Berman thanked the FBI and NYPD for their outstanding investigative work in this matter.  Mr. Berman also thanked the New York County District Attorney’s Office for its assistance with this investigation. 

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

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

 

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[1] As the introductory phrase signifies, the entirety of the text of the Indictment and the description of the Indictment set forth below 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, William F. Sweeney Jr., Assistant Director-in-Charge of the New York Division of the Federal Bureau of Investigation (“FBI”), and Raymond McCullagh, Chief of the Clarkstown Police Department, announced today the filing of a complaint charging three defendants with robbing a KeyBank branch located in New City, New York, on February 9, 2018.  Two of the defendants were also charged with brandishing a firearm during the robbery.  All three defendants were taken into custody on February 9, 2018, shortly after the robbery, and were presented in White Plains federal court the following morning before United States Magistrate Judge Lisa M. Smith.

U.S. Attorney Geoffrey S. Berman said:  “As alleged, Jason Parris and Demetrice Young, wearing masks, robbed a bank while brandishing a gun.  Then after threatening the bank employees, they made their way to Iyibia Brown, who was driving the getaway car.  They didn’t make it far, however, before law enforcement arrested all three.” 

FBI Assistant Director-in-Charge William F. Sweeney Jr. said:  “This case is the perfect example of great police work.  The alleged robbers put customers’ and employees’ lives in danger by flashing a gun, and vaulting the counter during the robbery, but they didn’t get far.  The FBI Westchester Safe Streets Gang Task Force wants to thank our law enforcement partners at the Clarkstown Police Department and the fast action they took to get armed criminals off the streets.”

Clarkstown Police Chief Raymond McCullagh said:  “This arrest was a direct result of the entire law enforcement community working together to ensure the public's safety and to bring these suspects to justice.”

As alleged in the complaint filed on February 10, 2018, in White Plains federal court[1]:

On February 9, 2018, JASON PARRIS, DEMETRICE YOUNG, and IYIBIA BROWN conspired to rob, and did rob, a branch of KeyBank, located at 270 Little Tor Road, New City, New York.  PARRIS and YOUNG entered the bank in masks and, using a firearm, threatened numerous bank employees.  PARRIS and YOUNG then fled the bank on foot with cash taken from the bank, meeting up with BROWN, who then drove PARRIS and YOUNG away from the scene of the robbery.  PARRIS, YOUNG, and BROWN were apprehended by law enforcement shortly thereafter.  Money from the bank was found on PARRIS and in the car, and a firearm was found in the car, as well.

*          *          *

PARRIS, 34, of Nyack, New York, YOUNG, 27, of Spring Valley, New York, and BROWN, 24, of Monsey, New York, are each charged with one count of bank robbery conspiracy, which carries a maximum sentence of 20 years in prison, and one count of bank robbery, which carries a maximum sentence of 20 years in prison.  In addition, PARRIS and YOUNG are each charged with one count of brandishing a firearm during the robbery, which carries a maximum sentence of life in prison and a mandatory minimum sentence of seven years in prison.  The statutory maximum penalties 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 outstanding, coordinated investigative work of the FBI, the Clarkstown Police Department, the Ramapo Police Department, the Rockland County Sheriff’s Department, and the New York State Police.

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.

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

 

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[1] As the introductory phrase signifies, the entirety of the text of the Indictments and the descriptions of the Indictments 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, and Peter Nozka, the Acting Special Agent-in-Charge of the New York Regional Office of the U.S. Department of Labor, Office of Inspector General (“DOL-OIG”), announced today that ERRON STRACHAN, a former foreman on a federally funded residential housing construction project in Harlem, was arrested this morning and charged in Manhattan federal court with soliciting and receiving kickbacks from workers on the project.  STRACHAN was arrested this morning and will be presented this afternoon in Manhattan federal court.    

U.S. Attorney Geoffrey S. Berman said:  “As alleged, a foreman on a federally funded construction project abused his position by demanding kickbacks from workers who were legally entitled to a prevailing wage.  Allegedly, when workers spoke up, he fired them.  Together with our partners at the Department of Labor, Office of Inspector General, we will pursue those who deliberately and criminally take advantage of hard-working New Yorkers.”

DOL-OIG Acting Special Agent-in-Charge Peter Nozka said:  “An important mission of the Office of Inspector General is to investigate allegations regarding employees being forced to kickback portions of their wages. We will continue to work with our law enforcement partners to investigate these types of allegations.

According to the allegations contained in the Complaint[1] unsealed today in Manhattan federal court and publicly available documents:

From at least November 2014 to December 2015, ERRON STRACHAN was a foreman for a construction company (“Contractor-1”) that provided construction services at the Randolph Houses, a public housing project located in the Harlem neighborhood of Manhattan (the “Construction Project”).  STRACHAN’s responsibilities on the Construction Project included supervising the workers on site, hiring and firing employees, and disbursing checks to workers.  Because the Construction Project received funding from the U.S. Department of Housing and Urban Development, pursuant to the Davis-Bacon and Related Acts, Contractor-1 was required to pay its laborers a prevailing wage.   

STRACHAN demanded and received kickbacks from numerous employees of Contractor-1 who worked on the Construction Project, thus denying these employees the prevailing wage to which they were entitled.  STRACHAN would instruct employees to negotiate their paychecks and then return with cash, sometimes up to almost a third of an employee’s weekly paycheck, for himself.  STRACHAN brazenly attempted to justify the kickback requests to employees by suggesting that the prevailing wage salary was “too much” money and falsely stating that he provided the kickbacks to Contractor-1 in order to offset the financial burden on Contractor-1 of having to pay prevailing wages on the Construction Project.  When workers refused to pay kickbacks, STRACHAN reduced their work schedules and fired them.

*                *                *

STRACHAN, 53, of Brooklyn, New York, is charged with one count of violating the Copeland Anti-Kickback Act, which carries a maximum penalty of five years in prison.

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

Mr. Berman praised the investigative work of the DOL-OIG and the Special Agents of the United States Attorney’s Office for the Southern District of New York. 

The case is being prosecuted by the Office’s Public Corruption Unit.  Assistant U.S. Attorney Eli J. Mark is in charge of the prosecution.

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

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[1] As the introductory phrase signifies, the entirety of the text of the Complaint and the description of the Complaint set forth below constitutes 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, James P. O’Neill, the Commissioner of the Police Department for the City of New York (“NYPD”), Angel M. Melendez, the Special Agent-in-Charge of the New York Field Office of the 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 & Explosives (“ATF”), and James J. Hunt, the Special Agent-in-Charge of the New York Field Division of the Drug Enforcement Administration (“DEA”), announced charges today against 25 members and associates of the “Hooly Gang,” a crew operating primarily in the vicinity of Fox Street and Leggett Avenue in the Bronx, New York.  The defendants are charged with narcotics conspiracy in Superseding Indictment S1 17 Cr. 449 (KPF).

Manhattan U.S. Attorney Geoffrey S. Berman said:  “The defendants are charged with narcotics conspiracy.  What they allegedly did was annex a residential neighborhood, including two playgrounds, and make it a virtual open-air bazaar for dangerous and potentially lethal drugs.  We commend our partners at the NYPD, HSI, ATF, and DEA for working together to restore our neighborhoods to the law-abiding people who deserve to live without fear of gangs and the violence they often bring.”

NYPD Commissioner James P. O’Neill said:  “As alleged, the defendants in this case plied their poison, including heroin and oxycodone, across two Bronx playgrounds, endangering the lives of many in the neighborhood.  Our focus on crime—and violence—is unwavering.  And it is exhibited clearly in today’s action.  I am thankful for the efforts of detectives, agents, and prosecutors whose work resulted in the arrest of dozens this morning and the unsealing of this superseding indictment.”

HSI Special Agent-in-Charge Angel M. Melendez said:  “The individuals arrested during this operation are alleged to sell crack and heroin around playgrounds.  They have a clear disregard for law enforcement and clearly no regard for the communities in which they live.  HSI and its law enforcement partners will continue to arrest and remove gang members, like those today, off our city streets.”

ATF Special-Agent-in-Charge Ashan M. Benedict said:  “The Hooly Gang and its members, as alleged, turned playgrounds into open air drug markets where narcotics were more common than the sights and sounds of children laughing and playing.  Thank you to all of the federal, state and local partners that helped create a force multiplier effect to help rid the streets of violent narcotics traffickers thus sending a message to the community that the rule of law runs the streets. I would like to extend my gratitude to the United States Attorney’s Office for their work in prosecuting the case.” 

DEA Special Agent-in-Charge James J. Hunt said:  “Allegedly, the Hooly Gang was a feared drug supplier in the Longwood section of the Bronx.  Their products - ranging from crack, heroin, marijuana, and oxycodone - invited gang wars into the surrounding communities and enabled drug addiction.  This unique law enforcement partnership, targeting gang violence in our city, led to today’s arrests.” 

According to the Superseding Indictment[1] unsealed today in Manhattan federal court and other publicly filed documents:

The Superseding Indictment arises from a joint investigation, beginning in 2017, by the NYPD, HSI, DEA, and ATF into a crew operating in the vicinity of Fox Street and Leggett Avenue in the Bronx called the “Hooly Gang.”  Members and associates of the Hooly Gang operated an open-air drug market in this residential neighborhood – including within and around two playgrounds – and sold, among other things, crack, heroin, oxycodone, and marijuana.  In order to protect its drug turf and advance its aims, members and associates of the Hooly Gang also committed acts of violence, including shootings.

*                   *                  *

Defendants arrested in New York yesterday and early this morning will be presented later this afternoon in Manhattan federal court.  Defendant MELVIN ALSTON is presently in custody on state charges and will be transferred to federal custody.  Defendants ANTHONY RODRIGUEZ, a/k/a “Ant,” ROBERTO JORGE, and GIOVANNI TORRES are already in federal custody on related charges.

Each defendant is charged with one count of narcotics conspiracy, which carries a mandatory minimum sentence of 10 years in prison and a maximum sentence of life imprisonment.  The statutory maximum penalties are prescribed by Congress and are provided here for informational purposes only, as any sentencings of the defendants would be determined by the judge.

The case is assigned to U.S. District Judge Katherine Polk Failla. 

Mr. Berman praised the outstanding investigative work of the NYPD’s Bronx Gang Squad, HSI’s Violent Gang Unit, ATF’s Joint Firearms Task Force, and the New York Field Division of the DEA, as well as the United States Marshals’ Service and the New York State Division of Parole for their assistance in today’s arrests.  He also thanked the Bronx County District Attorney’s Office and the New York City Department of Investigation for their support in the investigation of this matter.

The Office’s Violent and Organized Crime Unit is overseeing the case.  Assistant U.S. Attorneys Rachel Maimin, Jessica Feinstein, and Danielle Sassoon 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.

 

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[1] As the introductory phrase 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, today announced the selection of Audrey Strauss as Senior Counsel to the US Attorney.

Ms. Strauss will return to the Office where she was an Assistant US Attorney for seven years, from 1976 to 1983, and tried more than twenty cases, eventually being promoted to the Chief of Appeals in the Criminal Division and later as Chief of the Securities and Commodities Fraud Unit.  Ms. Strauss also served on the staff for the Independent Counsel for the Iran Contra matter. Following her public service, Ms. Strauss practiced at the firms of Fried Frank Harris & Jacobson, where she was a Litigation Partner from 1990 to 2012, and Mudge Rose Guthrie & Alexander, where she became a partner in 1986. Most recently, Ms. Strauss served as Vice President and Chief Legal Officer for Alcoa Inc. Ms. Strauss earned her Juris Doctor degree at Columbia Law School, where she was a Harlan Fiske Stone Scholar and a Kent Scholar.  She received her Bachelor of Arts degree cum laude from Barnard College.

In making the appointment, Manhattan US Attorney Geoffrey S. Berman said:  “I’m delighted to announce that Audrey Strauss will be (re)-joining us today in her new role as Senior Counsel to the US Attorney.  Audrey’s career has been notable for her commitment to the legal profession and the rule of law: she served as an Officer and Trustee of the Federal Bar Council, as a former President of the New York Council of Defense Lawyers, and as a board member of the Office of Appellate Defender. Most recently Audrey has served as a board member of the Innocence Project, a position she just left in order to come back to serve the Office.  She has also served as a Fellow of the American College of Trial Lawyers. It is an illustrious record of service, and I am so happy that she has decided to return to the Office.”

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 arrest of MAQUAN MOORE, a 9/11 Memorial security guard, and MORRIS WILSON, for the trafficking of more than 25 firearms from locations outside of New York into Manhattan.  MOORE and WILSON were arrested last night by the ATF and NYPD, and presented today on separate complaints before U.S. Magistrate Judge Kevin Nathaniel Fox in Manhattan federal court.

U.S. Attorney Geoffrey S. Berman said:  “As alleged, Maquan Moore and Morris Wilson are responsible for illegally introducing into Manhattan scores of illegal firearms – including assault-style weapons capable of inflicting mass casualties – and knowingly doing so in the neighborhood of a nearby school.  Their alleged disregard for public safety could have had catastrophic consequences.  The danger of selling unlicensed firearms cannot be overstated.  I commend our NYPD and ATF partners for keeping these guns out of the hands of unlicensed owners.”

ATF Special Agent-in-Charge Ashan M. Benedict said:  “ATF is committed to making the streets safe by ridding neighborhoods of individuals that seek to distribute illegal firearms. Maquan Moore and Morris Wilson are alleged to have trafficked numerous firearms into New York City endangering the lives of its citizens. Thanks to the efforts of the Special Agents and Detectives assigned to the ATF/NYPD Joint Firearms Task Force, this interstate firearms trafficking network will be disbanded and all of its tentacles prosecuted to the full extent of the law. I would like to extend my gratitude to the United States Attorney’s Office for their work in prosecuting the case.”

NYPD Commissioner James P. O’Neill said:  “As charged, these defendants engaged in several transactions involving the sale of multiple illegal firearms on the streets of New York City.  Their actions could have jeopardized the lives of an untold number of citizens as we have seen far too often. It was only through the well-coordinated efforts of the Joint Firearms Task Force that this gun-trafficking operation was successfully curtailed.”

According to the allegations in the Complaints[1]:

Beginning in December 2017, an ATF/NYPD Task Force made multiple undercover purchases of firearms from MOORE, who at the time was working as a security guard at the 9/11 Memorial.  These firearms included several assault-styled weapons, such as a MAC-10 machine pistol, and various other handguns and rifles.  On the evening of February 1, 2018, an undercover officer purchased from MOORE additional firearms, many of which had been brought by WILSON from Florida to New York.  In connection with MOORE and WILSON’s arrest, the ATF/NYPD Task Force seized 21 additional firearms.

*                *                *

MOORE, 29, of Manhattan, is charged with conspiracy to traffic in firearms, firearms trafficking, interstate transportation and receipt of firearms, and possession of a firearm near a school zone, each of which carries a maximum statutory penalty of five years in prison; and receiving a firearm with intent to commit an offense, which carries a maximum statutory penalty of 10 years in prison. 

WILSON, 32, of Orlando, Florida, is charged with conspiracy to traffic firearms, firearms trafficking, and interstate transportation and receipt of firearms, 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 General Crimes Unit.  Assistant United States Attorneys Jacob Warren and Dominic Gentile are in charge of the prosecution.

The charges contained in the Complaints are merely an accusation, and the defendant is presumed innocent unless and until proven guilty.

 

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[1] As the introductory phrase signifies, the entirety of the text of the Complaints and the description of the Complaints 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, Ashan M. Benedict, the Special Agent-in-Charge of the New York Field Division of the Bureau of Alcohol, Tobacco, Firearms, and Explosives (“ATF”), James P. O’Neill, the Commissioner of the New York City Police Department (“NYPD”), and Daniel A. Nigro, the Commissioner of the New York City Fire Department (“FDNY”), announced today the arrest of LUIS SAQUICILI in connection with an arson in New York, which occurred on the evening on January 31, 2018.  It is alleged that SAQUICILI threw a glass bottle with ignitable liquid and a lit wick, commonly known as a “Molotov cocktail,” into a bar in East Harlem.  SAQUICILI was arrested this morning, and presented today in Manhattan federal court before the Honorable Kevin N. Fox.

Manhattan U.S. Geoffrey S. Berman said:  “As alleged, Luis Saquicili put the public at grave risk when he threw an incendiary device into a bar that was open for business.  Thanks to the Strategic Explosive and Arson Response Task Force, shortly after this incident, Saquicili was located and arrested.”

ATF Special Agent-in-Charge Ashan M. Benedict said:  “The alleged actions of Luis Saquicili could have resulted in damage, destruction and death for many innocent people.  Thanks to the efforts of the Agents, Detectives and Fire Marshals assigned to the ATF/ NYPD/FDNY Strategic Explosive and Arson Response Task Force, Mr. Saquicili was quickly apprehended and brought to justice. I would also like to extend my gratitude to the United States Attorney’s Office for their work in prosecuting this case.”  

Police Commissioner James P. O’Neill said: "This defendant is accused to hurling a Molotov cocktail into an East Harlem bar that was open for business. He put the lives of civilians and first responders at risk, so I want to thank those who responded to and investigated this act of arson for their hard work to bring this dangerous individual to justice."

Fire Commissioner Daniel A. Nigro said:  “Without question, this fire could have resulted in many lives lost.  I applaud our Fire Marshals and the members of the NYPD and ATF for their quick work and collaboration to apprehend this suspect.”

Accordingly to allegations in the Complaint filed in Manhattan federal court.[1] 

On January 31, 2018, at approximately 8:00 p.m., SAQUICILI entered a bar in New York, where he had been a patron for over one year.  He was refused entry by the owner of the bar because he was heavily intoxicated.  At approximately 10:45 p.m., SAQUICILI returned to the bar and threw a glass bottle that contained an ignitable fluid and lit wick onto the floor of the bar.  The bottle broke causing a fire and charring the floor of the bar.   

Mr. Berman praised the outstanding work of the Strategic Explosive and Arson Response Task Force of the ATF, the NYPD, and the FDNY.

*                *                *

SAQUICILI, 46, of New York, New York, is charged with one count of arson, which carries a mandatory minimum of five years in prison and a maximum 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.

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

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

 

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[1] As the introductory phrase signifies, the entirety of the text of the Complaint and the descriptions 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, and William F. Sweeney Jr., the Assistant Director-in-Charge of the New York Field Office of the Federal Bureau of Investigation (“FBI”), announced the arrest and unsealing of a complaint charging NICHOLAS JOSEPH GENOVESE with securities and wire fraud in connection with a scheme to induce investments in a hedge fund by misrepresenting his qualifications and professional background.  From 2015 through January 2018, GENOVESE fraudulently solicited investments in a hedge fund that he had founded, Willow Creek Investments LP (“Willow Creek”), by claiming that he had impressive credentials and a long history serving in significant roles at major Wall Street financial institutions.  Victims invested at least $4 million with GENOVESE based on these representations.  The claims that GENOVESE made to help secure these investments, however, were false.  GENOVESE did not possess the credentials he claimed and had never worked at the financial institutions he referenced.  In addition, GENOVESE failed to inform his investors that he had multiple felony convictions for grand larceny, forgery, and related offenses.  GENOVESE was arrested today and will be presented in the Southern District of Florida.

In a separate action, the Securities and Exchange Commission (“SEC”) filed civil charges against GENOVESE.  

U.S. Attorney Berman said:  “Nicholas Genovese allegedly touted fictitious credentials when luring victims to invest over $4 million into his hedge fund, Willow Creek, falsely claiming to have an Ivy League MBA and to have held senior roles at Wall Street firms.  In reality, as alleged, Genovese had a criminal history and lost millions in stock trades.  We thank our law enforcement and regulatory partners for their continued efforts to eliminate fraud from our equity markets.” 

Assistant Director-in-Charge Sweeney said:  “Through a series of gross misrepresentations, about himself and his supposed credentials, Genovese solicited millions of dollars from victims who invested in the hedge fund he founded. But he was no master of illusion, as proven by the nearly $8 million he lost throughout the course of this smoke-and-mirrors scheme. While this money may have seemingly vanished into thin air, his intentions have been clearly interpreted. Today we hold him accountable for his crime.”

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

In or about September 2015, GENOVESE began soliciting individuals to invest in the hedge fund that became Willow Creek.  In multiple conversations and later in written offering materials, GENOVESE represented, among other things, that he had graduated from the University of Kentucky and Dartmouth College’s Tuck School of Business, and that he had extensive Wall Street experience.  In particular, GENOVESE claimed that he had been a Goldman Sachs partner and a Bear Sterns portfolio manager before forming Willow Creek.  Based in part on these claims, victims invested at least $4 million with GENOVESE.    

These representations were false.  Records indicate that GENOVESE did not attend the University of Kentucky or the Tuck School of Business and had never worked for Goldman Sachs or Bear Stearns.  GENOVESE also did not tell his investors that he had multiple prior felony convictions. 

When investors began to ask for their money back, GENOVESE put them off.  He told one investor that he would only return that investor’s funds after “the stars have aligned,” or else there would be a risk that almost all the money would be lost as a result of the purported impracticalities of unwinding unspecified trading positions.  Records indicate that GENOVESE lost approximately $8 million trading in TD Ameritrade accounts between January 2015 and December 2017. 

*                      *                      *

GENOVESE, 52, is a resident of New York, New York.  GENOVESE is charged with one count of securities fraud and one count of wire fraud.  Each charge carries a maximum term of 20 years in prison.  The charges also carry a maximum fine of $5 million, or twice the gross gain or loss from the offense.  The maximum potential sentences in this case are prescribed by Congress and are provided here for informational purposes only, as any sentencing of the defendant will be determined by the judge.           

Mr. Berman praised the work of the FBI and thanked the SEC for its assistance. 

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

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

 

[1] As the introductory phrase signifies, the entirety of the text of the Complaint and the description of 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, 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 arrest of SHMUEL ZARZAR on a charge of attempted inducement of a minor to engage in sexual activity.  ZARZAR was arrested yesterday and will be presented today in Manhattan federal court before the Honorable Kevin N. Fox.

U.S. Attorney Geoffrey S. Berman said:  “As alleged, Shmuel Zarzar attempted, through a month-long correspondence, to induce a 12-year-old to have sex with him.  He was arrested yesterday when the meeting he allegedly thought he was having with the child victim turned out to be a meeting with the FBI.” 

FBI Assistant Director-in-Charge William F. Sweeney Jr. said:  “The alleged behavior of the subject is nothing short of outrageous, and we simply won’t tolerate this in our community.  The FBI New York Crimes Against Children Task Force fights each day to protect the most vulnerable among us, and we will aggressively pursue predators who target our children.”

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

Over the course of several weeks in December 2017, ZARZAR exchanged text messages with a 12-year-old whom ZARZAR had met in person in Brooklyn, New York.  ZARZAR repeatedly requested to meet with the victim and, when the victim refused to confirm a date and time, ZARZAR indicated that he had gone to an area near where the victim attended school in order to see her.  After law enforcement officials were notified of these text message exchanges, a law enforcement officer operating in an undercover capacity (UC-1) assumed the victim’s identity and began to communicate with ZARZAR from the victim’s cellphone with the consent of her parents.  During the course of these conversations, throughout January 2018, ZARZAR requested photographs of the victim, including ones in which the victim was nearly naked, and described explicit sexual activity that he intended to engage in with the victim.  During the investigation, law enforcement officials observed ZARZAR standing near the victim’s school for several hours.  On February 1, 2018, after ZARZAR and UC-1, who was acting as the victim, arranged to meet in Manhattan, law enforcement officials observed ZARZAR at the pre-arranged meeting location and apprehended him shortly thereafter.

*                      *                     *

ZARZAR, 30, of Brooklyn, New York, is charged with one count of attempted inducement of a minor under the age of 18 to engage in sexual activity, which carries a mandatory minimum term of 10 years in prison and a maximum of life in prison.  The maximum potential sentences in this case are prescribed by Congress and are provided here for informational purposes only, as any sentencing of the defendant will be determined by the judge.

Mr. Berman praised the outstanding investigative work of the FBI’s Crimes Against Children squad.

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

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

 

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

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 unsealing of a federal indictment charging ROBERT ACOSTA and JOSE DIAZ, a/k/a “Cano,” with the December 22, 1997, murders of Alex Ventura, 25, and Aneudis Almonte, 20.

U.S. Attorney Geoffrey S. Berman said:  “Today’s indictment alleges that more than two decades ago, Robert Acosta orchestrated, and Jose Diaz carried out, the murders of Alex Ventura and Aneudis Almonte.  Now, thanks to the outstanding work of the NYPD and FBI, the long arm of the law has reached back over two decades to charge Acosta and Diaz with those terrible crimes.”

FBI Assistant Director-in-Charge William F. Sweeney Jr. said:  “This case proves why there is no time limit on holding someone responsible for murder; taking a human life is the worst crime a person can commit. Our agents and law enforcement partners work daily, pursuing suspects in crimes that seem unsolvable.  The time and dedication make it worth the effort.”

NYPD Commissioner James P. O’Neill said:  “After more than twenty years on-the-run, NYPD detectives and FBI agents have arrested two defendants for a double homicide in the Bronx. The focus and precision this case embodies is what has enabled this city to become the safest city in America. We will continue rooting out crime and violence wherever we find it, until every neighborhood and block of this city is safe.”

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

In late 1997, ACOSTA agreed with DIAZ and others to pay DIAZ and others to kill persons who had stolen drug money from ACOSTA.  As a result of this agreement, Alex Ventura and Aneudis Almonte were murdered by DIAZ and others on December 22, 1997, in the vicinity of 2769 University Avenue in the Bronx, New York. 

*                      *                     *

ACOSTA, 46, of Yonkers, New York, and DIAZ, 52, of the Bronx, New York, were arrested this morning by the NYPD and the FBI.  The defendants will be presented later today before United States Magistrate Judge Kevin Nathaniel Fox.  The case has been assigned to United States District Judge P. Kevin Castel.

The Indictment charges each of the defendants in six counts: murder while engaged in a conspiracy to distribute five and more kilograms of cocaine and aiding and abetting the same (Counts One and Two); murder-for-hire conspiracy (Count Three); murder-for-hire and aiding and abetting the same (Counts Four and Five); and use of a firearm to commit murder in furtherance of a drug trafficking crime and aiding and abetting the same (Count Six).  ACOSTA and DIAZ each face 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 defendants would be determined by the judge

This case is being handled by the Office’s Violent and Organized Crime Unit.  Assistant United States Attorneys Laurie A. Korenbaum, Michael Kim Krouse, and Nicholas Chiuchiolo are in charge of the prosecution.

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

 

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[1] As the introductory phrase signifies, the entirety of the text of the Indictment and the descriptions of the Indictment 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, David M. Hoovler, the Orange County District Attorney, William F. Sweeney Jr., the Assistant Director-in-Charge of the New York Field Office of the Federal Bureau of Investigation (“FBI”), Ashan M. Benedict, the New York Special Agent in Charge of the Bureau of Alcohol, Tobacco, Firearms, and Explosives (“ATF”), and Aaron Weaver, the Acting Chief of the City of Newburgh Police Department, today announced additional charges against 10 alleged members of a street gang known as “Southside,” in Newburgh, New York.  All 10 defendants are charged with racketeering conspiracy.  Three of the defendants are charged with conspiracy to distribute heroin and crack cocaine, and two of the defendants are charged with conspiracy to distribute heroin.  In connection with the racketeering conspiracy, SKYLAR DAVIS and DAVONTE HAWKINS are charged with the August 2015 murder of Sammy Stubbs, who was shot in Newburgh.  WILLIAM FENNELL and TROY YOUNG are charged with the February 2017 murder of Gevontay Owens-Grant, also shot in Newburgh.  DAVIS, YOUNG, MICHAEL SIMMONS, DEMETRICE MCLEAN, and CALVIN LEMBHARD are charged with the use and discharge of a firearm in connection with and in furtherance of the racketeering conspiracy.  HAWKINS, FENNELL, ARDAE HINES, and DONTE NUGENT are charged with the use and discharge of a firearm in connection with and in furtherance of the racketeering conspiracy and narcotics conspiracy.  DAVANTE NUGENT is charged with being a felon in possession of ammunition.

Nine of the defendants were already in custody in connection with charges contained in a previous indictment related to this prosecution, which led to the arrests of 21 individuals in June 2017.  YOUNG was arrested and presented in White Plains federal court before United States Magistrate Judge Judith C. McCarthy yesterday.  All of the defendants were arraigned this morning in White Plains federal court before United States District Judge Cathy Seibel.

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

From at least 2014 through June 2017, the Southside Gang was a criminal enterprise centered in and around the intersection of South Street and Chambers Street in an area of Newburgh known as the “Southside.”  In order to gain funds for the gang, protect the gang’s territory, and promote the gang’s standing, members of Southside engaged in, among other things, narcotics trafficking, robbery, and acts involving murder.  To that end, Southside members sold heroin, crack cocaine, and marijuana in the gang’s territory, promoted their gang affiliation on social media sites such as Facebook, possessed firearms, and engaged in shootings as part of their gang membership. 

As alleged in the Superseding Indictment, the violence perpetrated by the Southside gang turned deadly on two occasions in 2015 and 2017.  On or about August 13, 20015, SKYLAR DAVIS and DAVONTE HAWKINS, aided and abetted by others, murdered Sammy Stubbs during a botched robbery of a card game in Newburgh.  On or about February 12, 2017, TROY YOUNG and WILLIAM FENNELL, aided and abetted by others, murdered a rival from the other side of Newburgh, Gevontay Owens-Grant, after an altercation broke out at a Valentine’s Day-themed party in Newburgh.  YOUNG and others were also injured during the shooting.

Several members of the Southside gang also participated in conspiracies to distribute narcotics in and around Newburgh.  In particular, FENNELL, DONTE NUGENT, and DAVANTE NUGENT participated in a conspiracy with other individuals to distribute more than one kilogram of heroin and/or more than 280 grams of crack cocaine from at least in or about 2014 up to and including in or about June 2017.  HAWKINS and HINES participated in the same narcotics conspiracy to distribute more than one kilogram of heroin.  HINES also participated in separate a conspiracy to distribute more than 280 grams of crack cocaine from at least in or about 2014 up to and including in or about June 2017.           

Between in or about 2015 and in or about May 2017, DAVIS, HAWKINS, FENNELL, YOUNG, HINES, MCLEAN, SIMMONS, LEMBHARD, and DONTE NUGENT also possessed, used, brandished, and discharged firearms in furtherance of the Southside racketeering conspiracy in which they all participated, the narcotics conspiracy in which HAWKINS, FENNELL, HINES, and DONTE NUGENT participated, and the separate narcotics conspiracy in which HINES participated.  On or about June 14, 2017, after being convicted of a crime punishable by more than one year, DAVANTE NUGENT was found in possession of ammunition.

*                      *                     *

Charts containing the names of the defendants who were charged today, and the charges and maximum penalties they face, are attached.  The statutory maximum penalties 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, ATF, and the City of Newburgh Police Department.  Mr. Berman thanked the Orange County District Attorney’s Office for its invaluable ongoing assistance in the case.  Mr. Berman also thanked the Town of Newburgh Police Department, the New York State Police, the Orange County Sheriff’s Department, the Town of New Windsor Police Department, and the New York Department of Corrections and Community Supervision for their assistance in the case. 

This case is being handled by the Office’s White Plains Division.  Assistant United States Attorneys Maurene Comey, Jacqueline Kelly, and Allison Nichols 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.

 

United States v. Skylar Davis, et al., S1 17 Cr. 364

 

DEFENDANT

AGE

CHARGES

MAXIMUM PENALTIES

SKYLAR DAVIS

20

Racketeering Conspiracy; Assault with a Deadly Weapon and Attempted Murder in Aid of Racketeering; Murder in Aid of Racketeering; Use of a Firearm Resulting in Death; Discharge of a Firearm in Furtherance of Racketeering

Mandatory life in prison or the death penalty

DAVONTE HAWKINS

29

Racketeering Conspiracy; Murder in Aid of Racketeering; Narcotics Conspiracy; Use of a Firearm Resulting in Death; Discharge of a Firearm in Furtherance of Racketeering and Narcotics Conspiracy

Mandatory life in prison or the death penalty

WILLIAM FENNELL

26

Racketeering Conspiracy; Narcotics Conspiracy; Use of a Firearm Resulting in Death; Discharge of a Firearm in Furtherance of Racketeering and Narcotics Conspiracy

Life in prison or the death penalty

TROY YOUNG

23

Racketeering Conspiracy; Use of a Firearm Resulting in Death; Discharge of a Firearm in Furtherance of Racketeering

Life in prison or the death penalty

ARDAE HINES

29

Racketeering Conspiracy; Narcotics Conspiracy (2); Discharge of a Firearm in Furtherance of Racketeering and Narcotics Conspiracy

Life in prison; mandatory minimum 20 years in prison (10 years to run consecutive to any other sentence)

 

MICHAEL SIMMONS

26

Racketeering Conspiracy; Discharge of a Firearm in Furtherance of Racketeering

Life in prison; mandatory minimum 10 years in prison to run consecutive to any other sentence

DEMETRICE MCLEAN

23

Racketeering Conspiracy; Discharge of a Firearm in Furtherance of Racketeering

Life in prison; mandatory minimum 10 years in prison to run consecutive to any other sentence

CALVIN LEMBHARD

25

Racketeering Conspiracy; Discharge of a Firearm in Furtherance of Racketeering

Life in prison; mandatory minimum 10 years in prison to run consecutive to any other sentence

DONTE NUGENT

24

Racketeering Conspiracy; Narcotics Conspiracy; Discharge of a Firearm in Furtherance of Racketeering and Narcotics Conspiracy

Life in prison; mandatory minimum 20 years in prison (10 years to run consecutive to any other sentence)

 

DAVANTE NUGENT

25

Racketeering Conspiracy; Narcotics Conspiracy; Felon in Possession of Ammunition

Life in prison; mandatory minimum 10 years in prison

 

 

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[1] As the introductory phrase 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 today that JOHN ASMODEO, 34, was sentenced to 15 years in prison for engaging in, and videotaping, sexual activity with a minor in the fall of 2003.  ASMODEO pled guilty on October 23, 2017, before U.S. District Judge Vincent Briccetti, who also imposed today’s sentence.

Manhattan U.S. Attorney Geoffrey S. Berman said:  “This case underlines the urgent need for law enforcement to continue its efforts to protect children from those who prey on them. We will continue to use every tool available to law enforcement to prosecute and punish those who sexually exploit children.”                                                                                                         

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

In the fall of 2003, when ASMODEO was 20, he engaged in sexual intercourse with a then 12 year-old girl (“Victim-1”) and he used a camera to record the sexual activity.  He took photographs of Victim-1 as well as videos of the sexual intercourse.  The camera used to create the video files was a Fujifilm Finepix 3800, a camera manufactured in Japan.

Later, ASMODEO copied the video files of Victim-1 onto a compact disk he labeled “Girls.”  He gave that “Girls” disk to a third party in 2005.  In 2016, that third party provided the “Girls” disk to law enforcement.

In or about April 2014, ASMODEO’S residence in Putnam County came to the attention of Homeland Security Investigations because it appeared that an Internet Protocol address connected to that residence was making child pornography available via a peer-to-peer file sharing network.  A search warrant was executed, resulting in the seizure of numerous computers.  The forensic examination of these items revealed thousands of sexually explicit images of prepubescent children. The examination also revealed that, on various dates in 2013, ASMODEO used a hidden camera to videotape a 10-year-old girl undressing in his bathroom.

In announcing the sentence, Judge Briccetti underscored that the defendant’s conduct was “appalling” and “extraordinarily harmful to the victim.”

*                *                *

In addition to the prison term, ASMODEO, 34, of Carmel, New York, was sentenced to 10 years of supervised release.  

Mr. Berman praised the efforts of Homeland Security Investigations, the Carmel Police Department, and the Putnam County District Attorney’s Office in connection with this investigation.

The prosecution is being handled by the Office’s White Plains Division.  Assistant United States Attorneys Marcia S. Cohen and Lauren Schorr are in charge of the prosecution.  

Geoffrey S. Berman, the United States Attorney for the Southern District of New York, announced that CHRISTOPHER ASCH was sentenced yesterday to 15 years in prison for conspiring to kidnap, rape, and murder the wife of a man he had met over the Internet, as well as a female Federal Bureau of Investigation (“FBI”) agent working in an undercover capacity.  ASCH was convicted of two counts of kidnapping conspiracy following a jury trial before U.S. District Judge Paul G. Gardephe, who imposed the sentence.

 

Manhattan U.S. Attorney Geoffrey S. Berman said:  “Christopher Asch, a former New York City public school librarian, received a significant prison term for his involvement in two sadistic kidnapping, rape, and murder conspiracies.  Prosecuting and bringing to justice perpetrators of such depraved and violent crimes is at the core of this Office’s mission.  We thank our law enforcement partners at the FBI for their tireless efforts to bring Asch to justice.”

 

According to the charging document, other documents previously filed in Manhattan federal court, and in statements made during court proceedings:

 

Between the spring of 2011 and January 2013, ASCH, Richard Meltz, and Michael Van Hise engaged in a series of email and instant message communications during which they discussed and planned the kidnapping, torture, and murder of Van Hise’s wife and other members of Van Hise’s family.  Van Hise sent ASCH and Meltz photographs of these family members, and the approximate location of their residence. 

 

In addition, beginning in approximately January 2013, ASCH, Meltz, and an FBI agent working in an undercover capacity (“UC-1”),  began discussions about kidnapping a woman, who unbeknownst to ASCH and his co-conspirators was also an FBI agent working in an undercover capacity.  UC-1 and ASCH met on a number of occasions in Manhattan, and during one meeting ASCH provided UC-1 with a bag of materials to be used during the kidnapping and torture of the intended victim, including, among other things, a ski mask, hypodermic needles, leather ties, chrome forceps, a three-page gun show itinerary, documents relating to a “leg-spreader” and “dental retractor” that ASCH claimed to have purchased, and the liquid form of doxepin hydrochloride, commonly used as a sleep agent.  ASCH also traveled from New York to Pennsylvania to attend a gun show and purchased a high-voltage Taser gun to incapacitate the victim during the planned kidnapping. 

 

*                      *                     *

 

In addition to the prison term, ASCH, 65, of Manhattan, New York, was sentenced to five years of supervised release.

 

Meltz, 67, of Linden, New Jersey, pled guilty in September 2014 before Judge Gardephe and was sentenced to 10 years in prison. Van Hise, 27, of Newark, New Jersey, was convicted in March 2014 following a jury trial before Judge Gardephe and is awaiting sentence.

 

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

 

This case is being handled by the Office’s Violent and Organized Crime Unit.  Assistant U.S. Attorneys Hadassa Waxman and Brooke Cucinella are in charge of the prosecution.

Geoffrey S. Berman, the United States Attorney for the Southern District of New York, announced today that DEREK BROOMES, the former president and chief executive officer (“CEO”) of a nonprofit housing organization based in Harlem, New York (the “Housing Nonprofit”), pled guilty before U.S. Magistrate Judge Kevin Nathanial Fox to abusing his position at the Housing Nonprofit to embezzle hundreds of thousands of dollars in federal funds. 

 

U.S. Attorney Geoffrey S. Berman said:  “Derek Broomes abused his position by selfishly diverting hundreds of thousands of dollars in public funds designed to assist low-income citizens living with HIV/AIDS.  It is hard to imagine a more at-risk, vulnerable tenant population than the one Broomes chose to victimize, and for that reason today’s guilty plea is a deserving one.”

 

According to the allegations contained in the Complaint, the Indictment, and publicly-available documents:

 

The Housing Nonprofit is a faith-based, non-profit organization located in New York, New York that develops and provides low-income housing in Harlem to a variety of constituencies.  In approximately 2002, DEREK BROOMES, the defendant, became the chief financial officer of the Housing Nonprofit.  In approximately 2011, BROOMES became its president and CEO.  Prior to joining the Housing Nonprofit, BROOMES worked briefly as a Deputy Commissioner at the New York City Human Resources Administration (“HRA”) and, for three years at the City’s Department of Investigation (“DOI”) in various capacities, including as an investigator and Deputy Inspector General.

 

Since at least 1999, the Housing Nonprofit has participated in the federally funded Scattered Site Housing Program (“SSHP” or the “Program”), through which the Housing Nonprofit receives federal funds that it uses to subsidize rents for low-income individuals who are living with HIV and/or AIDS.  According to Program rules, SSHP funds are to be maintained in a segregated account and used exclusively for Program costs, including rental payments for residents covered by the Program.  In fiscal years 2014 and 2015, the Housing Nonprofit received more than $3,000,000 in SSHP funds.

 

Beginning in at least 2013, BROOMES abused his position as president and CEO of the Housing Nonprofit, stealing hundreds of thousands of dollars in funds from his employer by charging personal and unauthorized expenses to a corporate credit card issued in his name (the “Corporate Credit Card”).  Using the Corporate Credit Card, BROOMES routinely paid for personal auto repairs, medical bills, electronics, clothing, and gifts.  None of these charges were authorized by the Housing Nonprofit, which ultimately was required to pay the monthly bills on the Corporate Credit Card.  In total, between approximately March 2013, when the Corporate Credit Card was issued, and March 2015, when it was cancelled, BROOMES charged $394,145.65 to the Corporate Credit Card.  Of that, an analysis conducted by the Housing Nonprofit determined that more than $200,000 of those charges were either personal or otherwise unauthorized.

 

To cover those expenditures and other operating expenses at the Housing Nonprofit, BROOMES misappropriated hundreds of thousands of dollars in federal funds that were provided through the SSHP.  Specifically, BROOMES diverted the SSHP funds, which were intended to be used to cover rent payments for residents covered by the Program, to the Housing Nonprofit’s operating account, where they were used to pay for unauthorized expenses, including the monthly Corporate Credit Card bills.  As a result of BROOMES’s diversion of SSHP funds, the Housing Nonprofit was often unable to make rent payments for SSHP apartments on a timely basis.  The Housing Nonprofit thus fell increasingly behind on its rent obligations due to a lack of sufficient SSHP funds in its accounts, and tenants it sponsored in the SSHP began to receive threats of eviction by landlords who were owed months’ worth of back rent by the Housing Nonprofit. 

 

Moreover, to conceal his conduct, BROOMES submitted, and caused others to submit, false and fraudulent reimbursement requests to HRA, which administers the SSHP, in which BROOMES and others acting at his direction certified that the Housing Nonprofit had properly used SSHP funds for program expenses, including rental payments, when, in fact, substantial amounts of those funds had been diverted to cover unauthorized expenses, including the substantial charges incurred by BROOMES’s use of the Corporate Credit Card.  BROOMES personally signed false and fraudulent paperwork submitted to HRA as a part of the Housing Nonprofit’s monthly certifications and reimbursement requests on May 8, 2013, and July 19, 2013, and directed others to sign similarly false monthly certifications and related paperwork throughout the duration of the charged scheme.

 

*                      *                     *

 

BROOMES, 72, pled guilty to one count of embezzlement from a federally funded program, which carries a maximum penalty of 10 years in prison and a maximum fine of $250,000 or twice the gross gain or loss from the offense.  The maximum statutory penalties are prescribed by Congress and are provided here for informational purposes only, as any sentencing of the defendant would be determined by the judge.  As a condition of the plea, BROOMES consented to the entry of a forfeiture order in the amount of $203,408.80 and further agreed to entry of an order of restitution.  BROOMES is scheduled to be sentenced by the Chief Judge Colleen McMahon on April 26th, 2018.

 

The case is being prosecuted by the Office’s Public Corruption Unit.  Assistant U.S. Attorneys Edward B. Diskant and Alison G. Moe are in charge of the prosecution.

Geoffrey S. Berman, the United States Attorney for the Southern District of New York, announced that FRANK JENKINS was sentenced today 24 years in prison for shooting and killing Rashaun Nicholson on December 28, 2014, in furtherance of a narcotics distribution conspiracy.  JENKINS pled guilty on February 14, 2017, before U.S. District Judge John G. Koeltl, who imposed today’s sentence.

 

Manhattan U.S. Attorney Geoffrey S. Berman said:  “Frank Jenkins murdered Rashaun Nicholson while operating a New York-to-Vermont drug trafficking network, and it is fitting that he will be sentenced just a few short blocks from where he committed that terrible crime.  We thank our law enforcement partners, both in New York and in Vermont, for their tireless efforts to bring Jenkins to justice.”

 

As alleged in the charging document, other documents previously filed in Manhattan federal court, and in statements made during court proceedings:

 

On December 28, 2014, in furtherance of a narcotics trafficking conspiracy, JENKINS shot and killed Rashaun Nicholson in the vicinity of 78 Catherine Street, New York, New York.  The conspiracy involved the sale of crack cocaine, heroin, and marijuana.  Specifically, between 2014 and 2015, JENKINS, together with other members of the conspiracy, obtained crack cocaine and heroin from locations in New York City, including Manhattan and the Bronx, and then transported the crack and heroin to Vermont, for distribution in and around Bennington, Vermont.

 

*                      *                     *

 

In addition to the prison term, JENKINS, 24, of Bennington, Vermont, was sentenced to five years of supervised release. 

 

Mr. Berman praised the outstanding investigative work of the Bureau of Alcohol, Tobacco, Firearms and Explosives, the New York City Police Department, the United States Marshals, the Vermont State Police, and the Bennington Police Department.  Mr. Berman also thanked the United States Attorney’s Office for the District of Vermont for its assistance.

 

This case is being handled by the Office’s Violent and Organized Crime Unit.  Assistant U.S. Attorneys Hadassa Waxman, Michael Gerber, Andrew Adams, and Margaret Graham 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 Office of the Federal Bureau of Investigation (“FBI”), announced today that ONYEKACHI EMMANUEL OPARA was extradited from South Africa.  In December 2016, OPARA was arrested in South Africa on the basis of a provisional arrest warrant for participating in fraudulent business email compromise scams that targeted thousands of victims around the world, including the United States.  Collectively, the scams attempted to defraud millions of dollars from victims.  OPARA arrived in the Southern District of New York this morning, and will be presented today in Manhattan federal court before U.S. Magistrate Judge Andrew J. Peck.  Co-defendant David Chukwuneke Adindu was previously sentenced to 41 months in prison for participating in the business email compromise scams.

 

Manhattan U.S. Attorney Geoffrey S. Berman said:  “As alleged, Onyekachi Opara attempted to dupe thousands of victims into transferring money to him and his co-defendant in a phony email scheme.  Today’s extradition shows that defendants who allegedly target American victims from a distance are nonetheless subject to the reach of American justice.”

           

FBI Assistant Director William F. Sweeney Jr. said:   “Technology changes daily, so do the tactics used by scammers to prey on unsuspecting victims.  This case and others we are aggressively investigating every day prove, regardless of these criminals efforts to disguise their illegal activity, we won’t stop pursuing them.  FBI New York Cyber Crime agents and our law enforcement partners will search out suspects in these cases, even reaching internationally, to stop the next victims from losing their money.”

 

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

Between 2014 and 2016, OPARA and Adindu participated in Business Email Compromise scams (“BEC scams”) targeting thousands of victims around the world, including in the United States.  As part of the BEC scams, emails were sent to employees of various companies directing that funds be transferred to specified bank accounts.  The emails purported to be from supervisors at those companies or third party vendors that did business with those companies.  The emails, however, were not legitimate.  Rather, they were either from email accounts with a domain name that was very similar to a legitimate domain name, or the metadata in the emails had been modified so that the emails appeared as if they were from legitimate email addresses.  After victims complied with the fraudulent wiring instructions, the transferred funds were quickly withdrawn or moved into different bank accounts.  In total, the BEC scams attempted to defraud millions of dollars from victims.

 

*                *                *

 

OPARA, 29, of Lagos, Nigeria, is charged in an Indictment with one count of conspiracy to commit wire fraud and one count of wire fraud, each of which carries a maximum sentence of 20 years in prison.

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.  The case is assigned to U.S. District Judge Paul A. Crotty.

Mr. Berman praised the investigative work of the FBI.  Mr. Berman also thanked Oath’s E-Crime Investigations Team, the National Prosecuting Authority for South Africa, the South African Police Service, the United States Marshals Service, and the Department of Justice’s Office of International Affairs, and noted that the investigation is continuing.

           

This case is being handled by the Office’s Complex Frauds and Cybercrime Unit.  Assistant United States Attorneys Andrew K. Chan and Daniel Loss 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 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, William F. Sweeney Jr., Assistant Director-in-Charge of the New York Field Office of the Federal Bureau of Investigation (“FBI”), and James P. O’Neill, Police Commissioner of the City of New York (“NYPD”), announced today the arrest of DAVID MICHAEL HYLTON in connection with a robbery of a bank in the Bronx, during which thousands of dollars were stolen.  HYLTON was arrested yesterday, and presented today in Manhattan federal court before the Honorable Andrew J. Peck.

 

Manhattan U.S. Attorney Geoffrey S. Berman said:  “As alleged, David Michael Hylton robbed a Bronx bank during business hours yesterday, wielding what appeared to be a shotgun.  Thanks to the FBI and the NYPD, shortly after Hylton got $7,000, the Violent Crimes Task Force got Hylton.”

 

FBI Assistant Director William F. Sweeney Jr. said:  “As alleged, Hylton thought he could make a quick getaway after robbing a Bronx bank yesterday, making off with more than $7,000 in cold hard cash.  But thanks to members of the Joint Violent Crimes Task Force, he was caught red-handed and no longer remains a threat.  The FBI and our partners will continue to aggressively investigate bank robbery cases to minimize the threat these alleged criminals pose to our community.”

 

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

On January 25, 2018, at approximately 10:00 a.m., HYLTON entered a bank in the Bronx, gained access to the secure teller area, and approached a bank teller.  HYLTON brandished what appeared to be a shotgun and demanded that the teller give him the money the teller was holding.  HYLTON took from the teller over $7,000 in United States currency.  HYLTON then fled and was later apprehended and arrested. 

 

*                *                *

 

HYLTON, 33, of the Bronx, New York, is charged with one count of bank robbery, 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.

 

Mr. Berman praised the outstanding investigative work of the FBI-NYPD Joint Violent Crimes Task Force.

 

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

 

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

 

---

[1] As the introductory phrase signifies, the entirety of the text of the Complaint and the 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, James J. Hunt, the Special Agent in Charge of the New York Field Division of the Drug Enforcement Administration (“DEA”), and James P. O’Neill, the Commissioner of the New York City Police Department (“NYPD”), announced the unsealing of a federal indictment charging FRANK BRIGHT, a/k/a “Frankie,” and JOHN DUNCAN, a/k/a “Balla,” a/k/a “Moreno,” with the murder of Amaury Paulino.  Paulino was shot and killed on Christmas Eve in 2014 during the course of an armed robbery in the vicinity of St. Nicholas Avenue and West 129th Street.

BRIGHT was arrested today and will be presented in federal court in Philadelphia, Pennsylvania, before U.S. Magistrate Judge Linda K. Caracappa.  DUNCAN is in federal custody on another offense.  The case has been assigned to U.S. District Judge Katherine Polk Failla. 

U.S. Attorney Geoffrey S. Berman said:   “As alleged, Bright and Duncan planned a gunpoint robbery of Amaury Paulino, which resulted in his murder.  The defendants will now face justice for their alleged roles in this violent robbery.  We thank our law enforcement partners for their extraordinary efforts investigating this murder.”

DEA Special Agent in Charge James J. Hunt said:  “A cold case has brought two men before the bar of justice today after efforts by the NYPD, DEA, and U.S. Attorney’s Office to find those allegedly responsible for a 2014 Christmas Eve murder.”

NYPD Commissioner James P. O’Neill said:  “According to the allegations, the two defendants in this case are violent criminals who shot and killed a man during a robbery on Christmas Eve.  I want to thank the members of the NYPD, the DEA and the U.S. Attorney’s Office whose work secured today’s indictments and helps keep New York City safe.”

 

*                      *                     *

 

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

 

On December 24, 2014, BRIGHT and DUNCAN robbed Amaury Paulino in the vicinity of St. Nicholas Avenue and West 129th Street.  During the course of the robbery, Paulino was shot and killed. 

 

FRANK BRIGHT, 31, and JOHN DUNCAN, 32, are charged in the Indictment with one count of robbery conspiracy, one count of robbery, and one count of murder through the use of a firearm and aiding and abetting the same.  A chart containing the charges and maximum penalties is below.  The statutory maximum penalties are prescribed by Congress and are provided here for informational purposes only, as any sentencing of the defendants would be determined by the judge.

 

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

 

This case is being handled by the Office’s Narcotics Unit and Violent and Organized Crime Unit.  Assistant United States Attorneys Gina Castellano, Jordan Estes, and Jason Richman 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

MAX. PENALTIES

1

Robbery conspiracy

 

18 U.S.C. § 1951

20 years in prison

2

Robbery

 

18 U.S.C. § 1951

20 years in prison

3

Murder through use of a firearm

 

18 U.S.C. § 924(j)

Death or life in prison

 

 

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

Geoffrey S. Berman, the United States Attorney for the Southern District of New York, announced that DASHAWN HAWKINS, a/k/a “Jhonny Cash,” of New York, New York, was sentenced yesterday to 21 years in prison by United States District Judge Gregory H. Woods for selling heroin and fentanyl that resulted in the overdose death of Colin Cameron, age 29, of New York, New York, on September 2, 2016. 

 

Manhattan U.S. Attorney Geoffrey S. Berman stated:  “Dashawn Hawkins sold the lethal dose of fentanyl-laced heroin that cut short Colin Cameron’s life.  Now Hawkins has received the lengthy sentence warranted by his serious crime and its grim consequences.”

 

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

 

 

On or about September 1, 2016, DASHAWN HAWKINS, a/k/a “Jhonny Cash,” sold a mixture of heroin and fentanyl to Colin Cameron.  The next morning, New York City Police Department (“NYPD”) officers responded to Cameron’s apartment on the Upper West Side, where they found Cameron dead from a drug overdose.  In the month leading up to Cameron’s death, HAWKINS had sold heroin to Cameron nearly a dozen times, and had previously sold heroin to Cameron on a daily basis for almost two years before Cameron was able to maintain sobriety for several months.  In early August 2016, however, HAWKINS contacted Cameron out of the blue in order to start selling him heroin again.  Cameron told HAWKINS that he was unsure about buying heroin because he was on a medicine designed to block the effects of opioids.  This medicine is commonly prescribed for people going through recovery.  Despite this knowledge, HAWKINS sold heroin to Cameron throughout the month of August until Cameron’s eventual death.

 

 

After identifying HAWKINS as the dealer who sold Cameron the fatal dose of fentanyl-laced heroin, the NYPD arrested HAWKINS on October 20, 2016, and searched his apartment.  During the search, officers found, among other things, additional bags of heroin and substances used to cut heroin, fentanyl packaging, over $14,000 in cash, and a short-barreled rifle with a high-capacity magazine loaded with 34 rounds of ammunition.

 

*                *                *

 

Mr. Berman praised the outstanding investigative work of the New York City Police Department.

 

This prosecution is being handled by the Office’s Narcotics Unit.  Assistant United States Attorneys Jason M. Swergold and Amanda L. Houle are in charge of the prosecution.

Geoffrey S. Berman, the United States Attorney for the Southern District of New York, announced that JONATHAN POWELL was sentenced yesterday to six months in prison for computer fraud in connection with his scheme to obtain unauthorized access to more than 1,000 email accounts maintained by a New York City-area university in order to download sexually explicit photos and videos.  POWELL previously pled guilty to the charge on August 9, 2017, in Manhattan federal court before United States District Judge Alison J. Nathan, who also imposed POWELL’s sentence.

 

U.S. Attorney Geoffrey S. Berman said:  “Jonathan Powell used his computer skills to breach the security of a university to gain access to their students’ personal accounts.  Once Powell had access, he searched the accounts for compromising photos and videos.  No college student should have to fear that personal, private information could be mined by strangers for potentially compromising material.”

 

According to the allegations in the Information to which POWELL pled guilty, a criminal complaint filed against POWELL and other filings made in the case, and statements made during the plea and other proceedings in the case:

 

From October 2015 up to September 2016, POWELL obtained unauthorized access to email accounts hosted by a U.S.-based university, which has its primary campus in New York, New York (“University-1”).  POWELL obtained unauthorized access to these accounts by accessing the password reset utility maintained by the email servers at Univeristy-1, which was designed to allow authorized users to reset forgotten passwords to accounts.  POWELL utilized the password reset utility to change the email account passwords of students and others affiliated with University-1.  Once POWELL gained access to the compromised email accounts (the “Compromised Accounts”), he obtained unauthorized access to other password-protected email, social media, and online accounts to which the Compromised Accounts were registered, including, but not limited to, Apple iCloud, Facebook, Google, LinkedIn, and Yahoo! accounts.

 

Specifically, using the Compromised Accounts, POWELL requested password resets for linked accounts hosted by those websites (the “Linked Accounts”), resulting in password reset emails being sent to the Compromised Accounts, which allowed POWELL to change the passwords for the Linked Accounts.  POWELL then logged into the Linked Accounts and searched within the Linked Accounts, gaining access to private and confidential content stored in the Linked Accounts.  In one instance, POWELL searched a University-1 student’s linked Gmail account for digital photographs and for various lewd terms.  The Government’s investigation ultimately revealed that POWELL accessed the Compromised and Linked Accounts in order to download sexually explicit photographs and videos of college-aged women.

 

An analysis of University-1 password reset utility logs and other data revealed that POWELL accessed the University-1 password reset utility approximately 18,640 different times between October 2015 and September 2016.  During that time, POWELL attempted approximately 18,600 password changes in connection with approximately 2,054 unique University-1 email accounts, and succeeded in making approximately 1,378 password changes in connection with approximately 1,035 unique University-1 email accounts, in some cases compromising the same email account multiple times.

 

Additional investigation revealed that POWELL had also compromised 15 email accounts hosted by a second university located in Pennsylvania.  In a post-arrest statement made to investigating agents, POWELL additionally admitted to compromising email accounts at several other educational institutions located in Arizona, Florida, Ohio, and Texas.

 

*                *                *

 

In addition to the prison term, POWELL, 30, Phoenix, Arizona, was sentenced to two years of supervised release and ordered to pay $278,855 in restitution. 

 

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

 

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

Geoffrey S. Berman, the United States Attorney for the Southern District of New York, announced that MICHAEL S. WRIGHT was sentenced today by U.S. District Judge Paul A. Engelmayer to 21 months in prison for commodities fraud in connection with WRIGHT’s operation of an investment fund, Wright Time Capital Group (“WTCG”).  WRIGHT misrepresented the historical trading performance of WTCG, and misappropriated a large amount of investor funds.  After depleting most of the funds actually invested through losing forex trades, WRIGHT began operating WTCG as a Ponzi scheme by obtaining funds from investors that were then used to make payments to earlier investors who had demanded the return of investments. 

 

U.S. Attorney Geoffrey S. Berman said:  “Michael Wright took advantage of the trust his investors placed in him.  Instead of acting in his investors’ best interests, he lied to them by issuing fraudulent account statements to hide losses and ultimately operating WTCG as Ponzi scheme.  Wright has now been held to account for his fraudulent scheme.” 

 

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

 

WRIGHT started WTCG in January 2011, and ultimately obtained close to $400,000 in investments from victims (the “Victims”).  While WRIGHT did initially execute some forex trades on behalf of the Victims, he then began to steal their money, using investor funds for personal expenses, including hotel stays, travel, and tattoos.  From the outset of WTCG, WRIGHT misrepresented to WTCG’s investors the gains he had achieved.  WRIGHT claimed in statements to Victims that he had achieved double-digit gains through forex trading in WTCG’s first six months of existence.  In reality, WRIGHT earned little to no money through his forex trading.  In fact, after losing Victim funds in bad forex trades, WRIGHT sent them falsified account statements hiding these losses.  Ultimately, WRIGHT operated WTCG as a Ponzi scheme, using Victim funds to make payments to other Victims who were demanding the return of their investments.  

 

*          *          *

 

In addition to the prison term, WRIGHT, 30, of Rockville Centre, New York, was sentenced to three years of supervised release and ordered to pay $358,000 in restitution.  

 

Mr. Berman praised the efforts of the Federal Bureau of Investigation in this case. 

 

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

 

Geoffrey S. Berman, the United States Attorney for the Southern District of New York, James J. Hunt, the Special Agent-in-Charge of the New York Division of the Drug Enforcement Administration (“DEA”), James P. O’Neill, Police Commissioner of the City of New York (“NYPD”), and George P. Beach II, the Superintendent of the New York State Police (“NYSP”), announced today the unsealing of an Indictment charging AMIN HERNANDEZ, a/k/a “Face,” MIGUEL GIL, JORALBI LORA, a/k/a “K,” ISMAEL GARCIA, a/k/a “Swiss,” and FRANCISCO TIBULCIOMERINO, a/k/a “Cousin,” with conspiring to distribute crack cocaine, powder cocaine, heroin, fentanyl, and acetyl fentanyl in Washington Heights.  HERNANDEZ, LORA, and TIBULCIOMERINO were arrested last night, and will be presented today before United States Magistrate Judge Andrew J. Peck.  GIL and GARCIA are already in state custody and will be transferred to federal custody shortly.  The case has been assigned to U.S. District Judge Loretta A. Preska.

Manhattan U.S. Attorney Geoffrey S. Berman said:  “As alleged, this drug crew was responsible for distributing highly addictive drugs, including fentanyl, an extremely lethal drug 50 to 100 times more potent than morphine.  These arrests are part of our continued commitment to stem the opioid epidemic that is plaguing our nation and our City.  We thank our partners in the NYPD and DEA for their outstanding work in this investigation.”

DEA Special Agent-In-Charge James J. Hunt said: “As drug overdose rates rise throughout the country, this drug crew allegedly pushed a toxic medley of drugs onto our streets.  We will continue to investigate traffickers at all levels in an effort to stop the number of overdoses and drug-related fatalities.”

Commissioner James P. O’Neill said:  “This group was allegedly involved in the business of bringing potentially deadly drugs to the streets of Washington Heights.  But now they have learned that our Drug Enforcement Task Force is in the business of bringing them to the halls of justice.”

As alleged in the Indictment unsealed today[1]:

 AMIN HERNANDEZ, a/k/a “Face,” MIGUEL GIL, JORALBI LORA, a/k/a “K,” ISMAEL GARCIA, a/k/a “Swiss,” and FRANCISCO TIBULCIOMERINO, a/k/a “Cousin,” conspired to distribute 280 grams and more of cocaine base, or “crack,” 500 grams and more of powder cocaine, heroin, fentanyl, and acetyl fentanyl.  Each defendant faces a mandatory minimum sentence of ten years in prison, and a maximum sentence of life in prison.  The maximum potential sentences in this case are prescribed by Congress and are provided here for informational purposes only, as any sentencings of the defendants will be determined by the judge. 

*                      *                     *

Mr. Berman praised the outstanding work of the DEA, the NYPD, and the State Police.  This case was done by NYPD and DEA’s REDRUM group in the New York Drug Enforcement Task Force.  The Task Force comprises agents and officers of the DEA, New York City Police Department, and New York State Police. 

 

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

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

 

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

Geoffrey S. Berman, the United States Attorney for the Southern District of New York, announced today that MARCUS STROUD, 20, was sentenced to 13 years in prison by United States District Judge Cathy Seibel for his receipt of files containing sexually explicit images of a minor.  The sentencing today followed STROUD’s guilty plea on June 5, 2017.

 

Manhattan U.S. Attorney Geoffrey S. Berman said:  “Marcus Stroud’s crime is the nightmare of every parent.  Stroud used social media platforms to prey upon and exploit a teenage boy for his own sexual gratification.  As today’s sentencing underscores, we will continue to use every tool available to law enforcement to prosecute and punish those who sexually exploit children.”

                                                                                                           

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

           

In late December 2015, STROUD met Victim-1 at a youth wrestling tournament in Rockland County, New York.  STROUD and Victim-1 connected online on SnapChat and Instagram.  Thereafter, Victim-1 connected with a SnapChat user using the account name “thechsenpug.” (“Pug”).  In fact, unbeknownst to Victim-1, STROUD was Pug.  Purporting to be Pug, STROUD sent Victim-1 nude photos of a female and requested nude photos in return.  After Victim-1 provided several nude photos, STROUD, purporting to be Pug, told Victim-1 that Pug would release the photos on social media unless Victim-1 provided a video of Victim-1 engaging in a sexual act with another person. 

 

In January 2016, STROUD told Victim-1 that he would be willing to help Victim-1 by performing the sexual act with Victim-1 to prevent the photos from being released.  On or about February 20, 2016, STROUD told Victim-1 that he had been notified that nude photos of Victim-1 had been posted on an online web page.  STROUD told Victim-1 that he had been able to delete the photos.  STROUD told Victim-1 that they should just do the sexual act and get it over with.  Later that day, STROUD met with Victim-1 in Rockland County, New York, engaged in sexual activity with Victim-1, and recorded it.  STROUD told Victim-1 that he would send the video to the female who had requested it and would put a virus on the video so that, when she opened it, STROUD would be able to take control of her phone and delete Victim-1’s photos.

 

In sentencing STROUD, Judge Seibel underscored the “predatory” nature of STROUD’s offense.  In addition to the prison term, STROUD, 20, was sentenced to 15 years of supervised release.

  

Mr. Berman praised the efforts of the Federal Bureau of Investigation, the Clarkstown Police Department, and the Rockland County District Attorney’s Office in connection with this investigation.

 

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