Southern District of New York

Joon H. Kim, the Acting United States Attorney for the Southern District of New York, announced that PETER SENESE, the Founding Director of the I CARE Foundation (“I CARE”), a purported non-profit organization allegedly dedicated to preventing child abduction and trafficking, was sentenced in Manhattan federal court today by U.S. District Naomi R. Buchwald to 36 months in prison for wire fraud and conspiracy to commit wire fraud. In connection with the scheme, SENESE defrauded parents of international abduction victims by falsely representing that he could find and return the children to the United States in exchange for payments to fund his purported international rescue operation. SENESE pled guilty September 8, 2016.

Manhattan Acting U.S. Attorney Joon H. Kim said: “In this most cruel and heartbreaking criminal scheme, Peter Senese preyed on the most vulnerable and desperate victims, anguished parents of abducted children. Senese did more than just steal his victims’ money – he robbed them of hope. For seeking personal profit out of others’ pain and tragedy, Senese has been convicted of federal crimes and will now do time in a federal prison. We hope this prosecution provides some measure of justice to those who were so callously victimized by Senese.”

As alleged in the Superseding Indictment and in other documents filed in federal court:

Between November 2013 and February 2015, on his websites (www.stopchildabduction.org and www.petersenese.com) and elsewhere, SENESE claimed falsely that I CARE was “a self-funded not-for-profit 501-C-3 corporation” that successfully “reunited numerous internationally kidnapped children” with their parents “while protecting an exponentially larger number of children from abduction.” SENESE credited I CARE’s success to the “great efforts, financial, legal, and investigative resources” of individuals associated with I CARE, including a team of former members of the U.S. Army component Delta Force. In one instance, SENESE represented to a parent-victim that he could recover her child from India, appearing on a local radio program with the parent-victim, and sending numerous text messages and emails to the parent-victim stating falsely that he was in a “remote location” in India, was communicating with her child, and that the child would be returned to the United States in a matter of hours or days. Though he never traveled overseas or communicated with the child, SENESE collected over $70,000 from the parent-victim.

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In addition to the prison sentence, SENESE, 51, of Brooklyn, New York, was ordered to pay restitution and forfeiture in the amount $85,100.

Mr. Kim praised the outstanding work of the FBI for its investigative efforts and ongoing support and assistance with the case.

The prosecution is being handled by the Office’s General Crimes Unit. Assistant U.S. Attorney Jaimie L. Nawaday is in charge of the case.

Joon H. Kim, the Acting United States Attorney for the Southern District of New York, and William F. Sweeney Jr., the Assistant Director-in-Charge of the New York Field Office of the Federal Bureau of Investigation (“FBI”), announced today the unsealing of an indictment charging MARYSE LIBURDI with defrauding investors out of more than $6 million through a technology company founded and operated by LIBURDI.  The defendant was arrested by Italian authorities in Rome, Italy, in April 2016, and arrived in the Southern District of New York yesterday following her extradition.  LIBURDI was arraigned this afternoon and the case has been assigned to U.S. District Judge Denise Cote.

Acting Manhattan U.S. Attorney Joon H. Kim said:  “As alleged, Maryse Liburdi repeatedly lied to investors in her tech company, telling them the company was profitable when it was in fact generating no revenue.  Rather than using investor money to operate her company, she was allegedly spending it on herself and her family, paying for personal expenses like spas and salons, wine, luxury clothing, and rental fees on a three-bedroom Manhattan apartment.”    

FBI Assistant Director William F. Sweeney Jr. said:  “We see this behavior time and time again--fraudsters intentionally misrepresenting a company's financials to lure investors down a path from which it's particularly hard to return. Today, Maryse Liburdi is charged with allegedly defrauding investors out of more than $6 million over the course of several years, all the while converting much of the money to her own personal and extravagant use. As long as this type of criminal activity continues to go on, we will continue to go after those responsible for it.”

According to the allegations contained in the criminal Complaint and Indictment filed against LIBURDI:[1]

Since at least in or about 2008, LIBURDI perpetrated a multi-year scheme to defraud individuals into investing more than $6 million in a technology company (the “Company”) founded and run by LIBURDI.  LIBURDI repeatedly made misrepresentations to investors about the Company’s revenue and assets, manipulated Company bank accounts to hide the Company’s true financial condition and, contrary to LIBURDI’s express promises to the investors, converted hundreds of thousands of dollars of investor funds to LIBURDI’s own use, including rent for LIBURDI’s Manhattan apartment and to purchase luxury clothing and other personal items.

While LIBURDI repeatedly told investors that the Company had millions of dollars in revenue, a review of the Company’s bank records shows that, from at least 2008 until the Company ceased operating in January 2015, the Company earned little or no revenue.  Moreover, as reflected in the Company’s bank records, LIBURDI misappropriated investor funds, transferring over $1 million to her and her former husband’s bank accounts and to pay LIBURDI’s personal expenses, including luxury clothing.  For example, LIBURDI used funds from one victim investor for, among other things, transfers to a personal bank account in the name of LIBURDI and her former husband; rental payments for LIBURDI’s three-bedroom Manhattan apartment; payments for personal credit cards; and substantial personal expenditures on corporate credit cards, including, among other things, expenditures at various retail clothing, accessories, and cosmetics stores, salons and spas, and wine and liquor stores. 

In order to hide her scheme, LIBURDI manipulated the Company’s bank accounts by, on at least three occasions, writing checks for hundreds of thousands of dollars drawn on accounts with insufficient funds in order to fraudulently inflate the balance of a Company bank account and thereby hide the Company’s true cash balance from the investors.  For example, in October 2013, LIBURDI wrote and deposited into the Company’s bank account a $700,000 check drawn on a different account that had a balance of only about $2,000.  LIBURDI then falsely represented to the victims that the Company’s bank account held approximately $700,000 and showed investors a bank statement for the Company account listing the inflated balance.

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LIBURDI, 45, formerly of Victoria, Minnesota, and New York, New York, is charged with one count of wire fraud, which carries a maximum sentence of 20 years in prison.  The maximum potential sentence in this case is prescribed by Congress and is provided here for informational purposes only, as any sentencing of the defendant will be determined by the judge.

Mr. Kim praised the outstanding investigative work of the FBI.  He also thanked Italian law enforcement authorities, including Interpol Rome, for their assistance in the arrests, as well as the Department of Justice’s Attaché at the U.S. Embassy in Rome and the DOJ Office of International Affairs.

This case is being prosecuted by the Office’s Complex Frauds and Cybercrime Unit.  Assistant U.S. Attorney Elisha J. Kobre is in charge of the prosecution.          

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

Joon H. Kim, the Acting United States Attorney for the Southern District of New York, 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”), and James P. O’Neill, Commissioner of the New York City Police Department (“NYPD”), announced today the arrest of ARASH KETABCHI, a/k/a “Zach Peterson,” ANDREW OWIMRIN, a/k/a “Andrew Owens, a/k/a “Jonathan Stewart,” WILLIAM SINCLAIR, MICHAEL FINOCCHIARO, a/k/a “Michael Foster,” ARIEL PERALTA, and JOSEPH McGOWAN for conspiring to commit wire fraud and money laundering.  KETABCHI, OWIMRIN, SINCLAIR, FINOCCHIARO, PERALTA, and McGOWAN were arrested this morning and will be presented this afternoon before U.S. Magistrate Judge Henry B. Pitman in Manhattan federal court.

Acting Manhattan U.S. Attorney Joon H. Kim said:  “As alleged, these defendants targeted the elderly, convincing them to ‘invest’ in their businesses with promises of financial returns.  In fact, as alleged, these defendants never fulfilled their promises, and instead swindled their victims out of thousands of dollars.  Thanks to the cooperative work of HSI and the NYPD, these defendants will now have to answer for their alleged criminal acts.” 

HSI Special Agent-in-Charge Angel M. Melendez said: “For almost three years, these defendants allegedly targeted some of the most vulnerable in our society, the elderly, by running a fraudulent telemarketing scheme that bilked the victims out of several thousands of dollars.  It is very important that individuals do their due diligence when deciding to invest with companies. If the promise on returns seems too good to be true, then it probably is.”

Police Commissioner James P. O’Neill said:  “As alleged, the defendants targeted the elderly, promising big payoffs.  Instead, ‘investors’ were victim to a purported business development scheme that stole from our most vulnerable. Today, the defendants find themselves under arrest and facing serious charges. Thanks to the detectives, agents, and prosecutors whose work resulted in today’s announcement.”

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

Beginning in October 2013 through September 2016, KETABCHI, OWIMRIN, SINCLAIR, FINOCCHIARO, PERALTA, and McGOWAN operated a group of telemarketing companies (the “Telemarketing Companies”) that engaged in a fraudulent scheme (the “Telemarketing Scheme”), by which they promised to earn victims (the “Victims”) money in exchange for particular Victims making an initial cash “investment” in business development, website design, grant applications, or tax preparation services.  Many Victims, the majority of whom are over 70 years old, “invested” thousands of dollars with the Telemarketing Companies, but did not earn any of the promised returns.  When Victims of the Telemarketing Scheme sought refunds, or fought credit card charges, the Telemarketing Companies provided explanations and documentation to the credit card companies falsely representing that the Victims had received the promised services. 

KETABCHI, OWIMRIN, SINCLAIR, FINOCCHIARO, PERALTA, and McGOWAN participated in the Telemarketing Scheme by, among other things, operating the interrelated Telemarketing Companies as set forth in the chart below:

Telemarketing Company

Defendants

A1 Business Consultants

Element Business Services

Elevated Business Consultants

Arash Ketabchi, a/k/a “Zach Peterson”

Andrew Owimrin, a/k/a “Andrew Owens,” a/k/a “Jonathan Stewart”

Olive Branch Marketing

Paramount Business Solutions

William Sinclair

Michael Finocchiaro,  a/k/a “Michael Foster”

Carlyle Management Group

Ariel Peralta

Vanguard Business Solutions

Joseph McGowan

                    *                      *                      *

KETABCHI, 43, of Wayne, New Jersey, OWIMRIN, 27, of Hackensack, New Jersey, SINCLAIR, 37, of Secaucus, New Jersey, FINOCCHIARO, 34, of East Rutherford, New Jersey, PERALTA, 31, of Cliffside Park, New Jersey, and McGOWAN, 31, of West New York, New Jersey, are each charged with one count of conspiring to commit wire fraud and one count of conspiring to commit money laundering, each of which carries a maximum sentence of 20 years in prison.  The maximum potential sentences in this case are prescribed by Congress and are provided here for informational purposes only, as any sentencing of the defendants will be determined by the judge.  

Mr. Kim praised the outstanding investigative work of HSI and the NYPD.  He added that the investigation is ongoing.

The prosecution is being handled by the Office’s General Crimes Unit.  Assistant United States Attorneys Kiersten A. Fletcher and Robert B. Sobelman 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.

If you have any information regarding KETABCHI, OWIMRIN, SINCLAIR, FINOCCHIARO, PERALTA, or McGOWAN, or victims of the Telemarketing Companies, please report it by phone at 917-480-7167 or by email at christopher.bastos@nypd.org.

[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.

Joon H. Kim, the Acting United States Attorney for the Southern District of New York, announced that MORRIS ZUKERMAN, a Manhattan businessman who owns companies involved in energy investments, was sentenced today to 70 months in prison for engaging in multi-year tax fraud schemes pursuant to which he evaded over $45 million in income taxes and other taxes. ZUKERMAN pled guilty on June 3, 2016, before United States District Judge Analisa Torres, who imposed today’s sentence.

Acting U.S. Attorney Joon H. Kim said:  “While amassing a personal fortune through, among other things, the $130 million sale of his company, Morris Zuckerman cheated on his taxes for years, illegally scheming to evade almost every one of his tax liabilities. Through his criminal schemes, Zukerman deprived the public of over $45 million in taxes he rightfully owed. For brazenly cheating on his tax obligations – a duty that all Americans owe to each other – Zukerman will now spend significant time in a federal prison.”

According to the allegations in the Indictment to which ZUKERMAN pled guilty, other documents filed in Manhattan federal court, and statements made in court proceedings:

ZUKERMAN, the principal of M.E. Zukerman & Co. (“MEZCO”), an investment firm located in Manhattan, schemed to evade taxes based on income received from the January 2008 sale of a petroleum products company (the “Oil Company”) he co-owned (through a MEZCO subsidiary) with a public company. ZUKERMAN schemed to evade the reporting of the sale – which resulted in the receipt by the MEZCO subsidiary of $130 million in gross sales proceeds – by falsely telling his accountants in mid-2008 that he had transferred ownership of the MEZCO subsidiary to a family trust in early 2007. In support of the false story he gave to the accountants, ZUKERMAN created backdated documents such as promissory notes and a board resolution purporting to show the transfer of the subsidiary to his family trust in 2007. The false documents allowed ZUKERMAN to remove the MEZCO subsidiary from the consolidated tax reporting being handled by the accountants for MEZCO and thereby evade the reporting to the IRS of the sale of the Oil Company, as well as the payment of over $33 million in corporate income taxes.

Following the sale of the Oil Company, ZUKERMAN transferred the proceeds of the sale from the MEZCO subsidiary to his family trust, his personal bank accounts, and various corporations he controlled, including a company called Zukerman Investments. Between 2008 and 2013, ZUKERMAN directed that over $50 million of the funds transferred to Zukerman Investments be used to purchase paintings by European artists from the 15th through the 19th centuries (the “Old Master paintings”), which ZUKERMAN used to decorate his Upper East Side apartment and the apartments of two family members – Family Member-1 and Family Member-2.

In connection with the purchase of the Old Master paintings, ZUKERMAN schemed to defraud New York State of over $4.5 million of sales and use taxes by directing that the paintings, which were frequently purchased from galleries located blocks from ZUKERMAN’s Manhattan residence, be shipped by the galleries to ZUKERMAN’s corporate addresses located in Delaware and New Jersey, and transported immediately thereafter (sometimes within minutes), by ZUKERMAN and others, back to ZUKERMAN’s residence in New York – all without the payment to New York State of sales or use taxes.

ZUKERMAN also schemed to evade personal income taxes and to obstruct the IRS by (i) causing various tax return preparers to prepare U.S. Individual Income Tax Returns, Forms 1040, for ZUKERMAN and his wife, and for Family Member-1, Family Member-2, and Family Member-3, that claimed, in the aggregate, millions of dollars of false and fraudulent deductions and expenses, such as phony charitable contributions and investment interest expenses; (ii) diverting, for personal use, corporate assets from MEZCO and other corporate entities ZUKERMAN controlled by directing that hundreds of thousands of dollars of fees be paid between 2007 and 2013 to Family Member-1, Family Member-2, and Family Member-3, for which the family members performed little or no work; (iii) directing that corporate funds be used to pay compensation to, and health care insurance for, a household employee of ZUKERMAN, whom ZUKERMAN also caused to be falsely identified as a MEZCO employee to ZUKERMAN’s corporate health care provider when, in truth and fact, the household employee worked exclusively out of ZUKERMAN’s homes in New York City and Maine as a domestic employee; (iv) falsely under-reporting employment taxes through the payment of hundreds of thousands of dollars of cash and other wages to ZUKERMAN’s domestic employees; and (v) providing false information to the IRS during audits in an attempt to fraudulently convince IRS auditors and other IRS employees that the fraudulent claims made on his previously filed tax returns were accurate when, in truth, they were not.

The False Charitable Contribution Deductions for the 2009 & 2011 Tax Years

ZUKERMAN’s fraudulent charitable contribution deductions – totaling $1 million – arose out of a real estate transaction in 2009 and 2010, pursuant to which ZUKERMAN purchased approximately 240 acres of property on Black Island, a small island located off the coast of Maine, close to ZUKERMAN’s home on a nearby island. ZUKERMAN was enlisted to purchase the Black Island property by the Maine Coast Heritage Trust (“MCHT”), a Maine-based land conservation entity that was seeking to orchestrate the purchase, for conservation purposes. After considering making a charitable contribution to the MCHT to allow MCHT to purchase the property, ZUKERMAN decided instead to purchase the land as the outright owner for the benefit of himself and his family for $1 million through a newly formed limited liability company he solely owned. ZUKERMAN, however, falsely told his tax return preparer that the $1 million he paid for the property should be declared on his personal income tax returns as a charitable contribution to MCHT during the 2008 and 2010 tax years. ZUKERMAN subsequently signed the false 2008 and 2010 tax returns and caused them to be filed with the IRS.

The Audit Fraud

ZUKERMAN sought to defraud the IRS during three separate audits.  In audits of his personal returns and that of a family member, ZUKERMAN provided his accountants with false documents and false information in an attempt to provide support for false items previously placed on individual tax returns by him.  During an IRS audit of one of ZUKERMAN’s companies, ZUKERMAN attempted to obstruct the audit by utilizing two attorneys from a law firm in Washington, D.C., to convey a false factual narrative to an IRS Appeals Officer.

* * *

In imposing ZUKERMAN’S sentence, Judge Torres stated:  “Mr. Zukerman’s crimes were driven by unmitigated greed,” and that ZUKERMAN “thought himself to be above the law.”

In addition to the prison term, ZUKERMAN, 72, of New York, New York, was sentenced to three years of supervised release and ordered to pay a $37,547,951 in restitution to the IRS and New York State Department of taxation and finance.  ZUKERMAN was also fined $10 million.

Mr. Kim praised the outstanding investigative work of the IRS and the U.S. Postal Inspection Service.

The prosecution of this case is being handled by the Office’s Complex Frauds and Cybercrime Unit. Special Assistant United States Attorney Stanley J. Okula, Jr. and Assistant United States Attorney Edward Imperatore are in charge of the prosecution.

Joon H. Kim, the Acting United States Attorney for the Southern District of New York, announced that MARC HENRY JOHNSON pled guilty today before U.S. District Judge Jesse M. Furman to acting as an accessory after the fact to a narcotics offense.  As alleged in the Indictment to which JOHNSON pled guilty and the related criminal Complaint, JOHNSON helped move an unresponsive woman’s body out of a Manhattan apartment where the woman had overdosed on cocaine. 

Acting U.S. Attorney Joon H. Kim said:  “Marc Henry Johnson’s immediate response to seeing a dying overdose victim should have been to summon help.  Instead, Johnson helped his cocaine dealer cover up the drug crime by moving the victim’s body.  In this time of a growing overdose epidemic, today’s guilty plea should serve as a reminder that the proper response to a potential drug overdose is to immediately call 911, not to delay to help cover for the drug dealer.”

According to the allegations contained in the Indictment and the Complaint against JOHNSON and codefendant James Holder:

JOHNSON regularly bought cocaine from Holder, who lived in and sold cocaine from a third-floor apartment in Chelsea.  During the night of October 3, 2015, and the early morning hours of October 4, 2015, JOHNSON met with a 38-year-old woman (“Individual-1”) and others at a bar in Manhattan.  Individual-1 had been using cocaine before JOHNSON arrived.  Later, JOHNSON and Individual-1 left the bar together in a taxi.  They arrived at Holder’s apartment building at approximately 4:25 a.m., and walked upstairs to Holder’s apartment.  Hours later, JOHNSON and Holder dragged Individual-1’s apparently unconscious body into the building’s first-floor vestibule.  Holder then left the building, and JOHNSON called 911 to summon an ambulance.  JOHNSON declined to provide his name to the 911 operator, and he did not identify Individual-1, or describe his relationship to her, or explain what had happened to her and why she needed medical assistance.  Emergency Medical Technicians (“EMTs”) responded and found Individual-1 unresponsive in the Chelsea building’s vestibule.  JOHNSON left the building soon after the EMTs arrived. 

Individual-1 was taken to a hospital and pronounced dead later on October 4, 2015.  Her death was caused by, among other things, cocaine use.

*                *                *

JOHNSON pled guilty to one count of acting as an accessory after the fact to the offense of maintaining a drug-involved premises.  The accessory-after-the-fact offense carries a maximum sentence of 10 years in prison.  JOHNSON is scheduled to be sentenced by Judge Furman on June 26, 2016.

Holder pled guilty before Judge Furman on December 12, 2016, to maintaining a drug-involved premises, which carries a maximum sentence of 20 years in prison.  Holder is scheduled to be sentenced by Judge Furman on May 4, 2017, at 3:00 p.m.

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

Mr. Kim praised the outstanding investigative work of the U.S. Drug Enforcement Administration’s (DEA) New York Organized Crime Drug Enforcement Strike Force, which comprises agents and officers of the DEA, the New York City Police Department, Immigration and Customs Enforcement – Homeland Security Investigations (HSI), the New York State Police, the U. S. Internal Revenue Service Criminal Investigation Division, the Federal Bureau of Investigation, U.S. Secret Service, the U.S. Marshal Service, New York National Guard, the New York Department of Taxation and Finance, the Rockland County Sheriff’s Office, the Clarkstown Police Department, Port Washington Police Department, and New York State Department of Corrections and Community Supervision.  The Strike Force is partially funded by the New York/New Jersey High Intensity Drug Trafficking Area (HIDTA), which is a federally funded crime fighting initiative.

The case is being prosecuted by the Office’s Narcotics Unit.  Assistant U.S. Attorneys Margaret Garnett and David Abramowicz are in charge of the prosecution.

Joon H. Kim, the Acting United States Attorney for the Southern District of New York, announced that WILLIAM COSME, a/k/a “William Cosmo,” was found guilty today in Manhattan federal court in connection with a scheme to defraud a Christian missionary school in South Korea of $5.5 million dollars. The jury convicted COSME on both counts with which he was charged following a one-week trial before U.S. District Judge Loretta A. Preska.

Acting Manhattan U.S. Attorney Joon H. Kim said: “As a unanimous jury swiftly concluded after trial, William Cosme duped and defrauded a South Korean international school out of $5.5 million, money the school needed to carry out its mission of educating children. Cosme then took this stolen money and spent it lavishly on himself, including on a Lamborghini, a Ferrari, and a Cadillac Escalade, not to mention a 110-day gambling spree in Las Vegas. Cosme now faces time in a federal prison for his brazen crimes.”

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

COSME purported to operate a “Privately Held, Global, Private Equity family practice with a concentration on it’s [sic] own Family’s Private Wealth Management, Commercial [real estate], physical gold trade and Business Consulting.” COSME further claimed that the entity through which he did business “manage[d] family assets with a Net Asset Value in excess of USD $11b on a global basis” and that his clientele included royalty and the families of royalty. None of those claims was true.

In about January 2011, COSME, acting through his company Cosmo Dabi International Trading Group Inc. (“Cosmo Dabi”), entered into an agreement with a Christian missionary school located in South Korea (the “International School”) whereby Cosmo Dabi would lend the International School approximately $55 million and the International School would make a deposit of approximately $5.5 million (the “Equity Deposit”), which COSME would invest in order to generate funds to loan the International School. The International School sought to use the proceeds of the loan to expand its operations in South Korea.

In January 2011, the International School sent by wire transfer approximately $5.5 million to an account maintained by COSME at a bank.

Thereafter, COSME transferred the funds that the International School had entrusted to him into other accounts, including accounts in his own name rather than that of his company. From the other accounts, COSME began a run of unauthorized personal spending, including purchasing a Lamborghini costing nearly $314,000 (which itself was meant to secure COSME a preferred spot on a waiting list to purchase an even more expensive Lamborghini); a Ferrari costing nearly $287,000; a Cadillac Escalade; a sport utility vehicle for a family member of COSME’s; a 110-day gambling trip to Las Vegas; gaming losses while on that trip in excess of $200,000; paying for his girlfriend’s rent; and otherwise funding a lavish lifestyle. All the while, COSME failed to invest the $5.5 million as he had promised, and made a series of misrepresentations to the leadership of the International School as to why they had not been issued their promised loan payments. COSME also devised and executed a sham audit process in order to convince the International School that they were in default of their agreement and that COSME could keep the school’s deposit for himself. In connection with his fraud on the International School, COSME also used, without authorization, the identities of two individuals by falsely representing to the International School that these individuals were officers of Cosmo Dabi.

* * *

COSME, 51, resides in Jericho, New York. He faces a minimum sentence of two years in prison for his conviction for aggravated identity theft, and a maximum sentence of 20 years in prison for his wire fraud conviction. COSME also faces a maximum term of three years of supervised release and a fine of the greatest of $250,000, or twice the gross pecuniary gain derived from the offense or twice the gross pecuniary loss to the victim. COSME’s sentencing is set for June 21, 2017, before the Honorable Loretta A. Preska.

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. Kim praised the outstanding efforts of Federal Bureau of Investigation in the investigation.

The case is being prosecuted by the Office’s Complex Frauds and Cybercrime Unit. Assistant U.S. Attorneys Noah D. Solowiejczyk and Martin S. Bell are in charge of the prosecution.

Joon H. Kim, the Acting 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 criminal charges against EVALDAS RIMASAUSKAS for orchestrating a fraudulent business email compromise scheme that induced two U.S.-based internet companies (the “Victim Companies”) to wire a total of over $100 million to bank accounts controlled by RIMASAUSKAS. RIMASAUSKAS was arrested late last week by authorities in Lithuania on the basis of a provisional arrest warrant.  The case has been assigned to U.S. District George B. Daniels. 

Acting U.S. Attorney Joon H. Kim said:  “From half a world away, Evaldas Rimasauskas allegedly targeted multinational internet companies and tricked their agents and employees into wiring over $100 million to overseas bank accounts under his control. This case should serve as a wake-up call to all companies – even the most sophisticated – that they too can be victims of phishing attacks by cyber criminals. And this arrest should serve as a warning to all cyber criminals that we will work to track them down, wherever they are, to hold them accountable. The charges and arrest in this case were made possible thanks to the terrific work of the FBI and the cooperation of the victim companies and their financial institutions. We thank the companies and their banks for acting quickly, coming forward promptly, and cooperating with law enforcement; it led not only to the charges announced today, but also the recovery of much of the stolen funds.”

FBI Assistant Director William F. Sweeney Jr. said:  “As alleged, Evaldas Rimasauskas carried out a business email compromise scheme creatively targeting two very specific victim companies. He was initially successful, acquiring over $100 million in proceeds that he wired to various bank accounts worldwide. But his footprint would eventually lead investigators to the truth, and today we expose his lies. Criminals continue to commit a wide variety of crimes online, and significant cyber data breaches have had a negative impact across a variety of industries. The FBI will continue to work with our domestic and international partners to pursue criminals who engage in this type of activity, wherever they may be hiding.”

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

From at least in or around 2013 through in or about 2015, RIMASAUSKAS orchestrated a fraudulent scheme designed to deceive the Victim Companies, including a multinational technology company and a multinational online social media company, into wiring funds to bank accounts controlled by RIMASAUSKAS.  Specifically, RIMASAUSKAS registered and incorporated a company in Latvia (“Company-2”) which bore the same name as an Asian-based computer hardware manufacturer (“Company-1”), and opened, maintained, and controlled various accounts at banks located in Latvia and Cyprus in the name of Company-2.  Thereafter, fraudulent phishing emails were sent to employees and agents of the Victim Companies, which regularly conducted multimillion-dollar transactions with Company-1, directing that money the Victim Companies owed Company-1 for legitimate goods and services be sent to Company-2’s bank accounts in Latvia and Cyprus, which were controlled by RIMASAUSKAS.  These emails purported to be from employees and agents of Company-1, and were sent from email accounts that were designed to create the false appearance that they were sent by employees and agents of Company-1, but in truth and in fact, were neither sent nor authorized by Company-1.  This scheme succeeded in deceiving the Victim Companies into complying with the fraudulent wiring instructions.

After the Victim Companies wired funds intended for Company-1 to Company-2’s bank accounts in Latvia and Cyprus, RIMASAUSKAS caused the stolen funds to be quickly wired into different bank accounts in various locations throughout the world, including Latvia, Cyprus, Slovakia, Lithuania, Hungary, and Hong Kong.  RIMASAUSKAS also caused forged invoices, contracts, and letters that falsely appeared to have been executed and signed by executives and agents of the Victim Companies, and which bore false corporate stamps embossed with the Victim Companies’ names, to be submitted to banks in support of the large volume of funds that were fraudulently transmitted via wire transfer. 

Through these false and deceptive representations over the course of the scheme, RIMASAUSKAS, the defendant, caused the Victim Companies to transfer a total of over $100,000,000 in U.S. currency from the Victim Companies’ bank accounts to Company-2’s bank accounts.

*                *                *

RIMASAUSKAS, 48, of Vilnius, Lithuania, is charged with one count of wire fraud and three counts of money laundering, each of which carries a maximum sentence of 20 years in prison, and one count of aggravated identity theft, which carries a mandatory minimum 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. Kim praised the outstanding investigative work of the FBI, and thanked the Prosecutor General’s Office of the Republic of Lithuania, the Lithuanian Criminal Police Bureau, the Vilnius District Prosecutor’s Office and the Economic Crime Investigation Board of Vilnius County Police Headquarters for their assistance in the investigation and arrests, as well as the Department of Justice’s Office of International Affairs.

The case is being prosecuted by the Office’s Complex Frauds and Cybercrime Unit.  Assistant U.S. Attorney Eun Young Choi is in charge of the prosecution.  Assistant U.S. Attorney Edward Diskant is handling the forfeiture aspects of the prosecution. 

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

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

Joon H. Kim, the Acting United States Attorney for the Southern District of New York, Phillip R. Bartlett, the Inspector in Charge of the New York Division of the United States Postal Inspection Service (“USPIS”), and Angel M. Melendez, the Special Agent-in-Charge of the New York Field Office of Homeland Security Investigations (“HSI”), announced the arrest of CHUKWUEMEKA OKPARAEKE for conspiracy to distribute large quantities of an analogue of fentanyl. Fentanyl and its analogues are synthetic opioids that are significantly stronger than heroin, and are major contributors to overdose fatalities.

Acting U.S. Attorney Joon H. Kim said: “The defendant’s alleged scheme combined one of the gravest current threats to public health – highly addictive and potentially lethal opioids – with a very modern criminal tool – the darknet. Okparaeke allegedly sold fentanyl-like controlled substances through an online black market to conceal the nature of the transactions and his identity. I want to thank our partners at the U.S. Postal Service for bringing Okparaeke’s alleged criminal exploitation out of the dark.”

USPIS Inspector in Charge Phillip R. Bartlett said: “Opioids such as fentanyl have become a public health crisis robbing many of productive futures and their very lives. Postal Inspectors have always made it their mission to protect the public and the U. S. Postal Service from these alleged drug traffickers, putting an end to their criminal enterprise through their misuse of the U. S. Mail.”

HSI Special Agent in Charge Angel M. Melendez said: “The defendant used an online black marketplace known as the ‘darknet’ to acquire large amounts of fentanyl which is a major factor in the large increase in overdose fatalities in our area. Describing himself as a darknet drug trafficker, this arrest shows that the darknet is no longer a secret place for criminals to conduct illegal activity while evading law enforcement.”

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

Using the United States Postal Service, OKPARAEKE engaged in a conspiracy to receive and traffic kilograms of fentanyl analogues throughout the United States. During the operation of the conspiracy, OKPARAEKE received massive quantities of fentanyl analogues from suppliers abroad, repackaged the analogues into smaller quantities, and shipped them to customers using post offices throughout the New York-New Jersey area. To transact with customers and coordinate his sales, OKPARAEKE used an online black marketplace on the “darknet,” accessible only through a special software program that allows users to mask their identities through a process of encryption and decryption between numerous peer-to-peer connections. He used extensive measures to conceal his identity, including measures to encrypt his internet traffic and communications sent from his cellphone. Under an alter ego, he boasted about his exploits as a darknet drug trafficker online, where he also posted a short story detailing his criminal activities and his success at evading law enforcement.

* * *

OKPARAEKE, 28, is charged with one count of conspiracy to distribute large quantities of an analogue of fentanyl, which carries a maximum sentence of life in prison and a mandatory minimum 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 a judge.

OKPARAEKE was arrested today in Kearny, New Jersey, and will be presented later today before the Honorable Lisa M. Smith in United States District Court in White Plains, New York.

Mr. Kim praised the outstanding investigative work of the USPIS, HSI, the Fairfax County Police Department in Fairfax County, Virginia, the Office of the Attorney General in Virginia, and the Middletown Police Department. Mr. Kim thanked the Fairfax County Police Department for its significant contributions to the investigation and for its assistance in the arrest and apprehension of the defendant.

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

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

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

Joon H. Kim, the Acting 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 the unsealing of criminal charges against RODINY CALYPSO, a New York City Correction Officer, in the assault of an inmate at Rikers Island.  CALYPSO was charged with repeatedly punching and elbowing the inmate in the head and face without physical provocation while the inmate was handcuffed behind his back, in violation of his rights under the United States Constitution, and with filing a false report in order to cover up the incident.  CALYPSO was arrested this afternoon on charges contained in a criminal Complaint and is expected to be presented in federal court later today. 

Acting Manhattan U.S. Attorney Joon H. Kim said:  “Rodiny Calypso allegedly violated a Rikers Island inmate’s constitutional rights by viciously beating him – without physical provocation – while the inmate was restrained in handcuffs.  As we have said before, the protections of our Constitution extend to those in prisons, and this Office will remain vigilant about protecting the rights of all, including those confined within the walls of Rikers Island.”

FBI Assistant Director William F. Sweeney Jr. said:  “Today, Rodiny Calypso, a New York City Correction Officer, is charged with subjecting an inmate to cruel, unnecessary, and inappropriate punishment—behavior that simply won’t be tolerated. The rules that apply to the appropriate use of force are specific and clear, and the vast majority of those within the law enforcement community are quick to adhere to them. Today’s charges not only defend the rights of all prisoners to be afforded proper treatment under the law, but also the reputation of those within the criminal justice system who uphold the rule of law; if you don’t, you’ll swiftly be removed from serving in any official capacity.”

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

Rikers Island is a jail complex, located in the Bronx, New York, maintained by the New York City Department of Correction.  At the time of his assault, the inmate (“Inmate-1”) was housed in pretrial detention in the Otis Bantum Correctional Center (“OBCC”), a facility that houses, among other inmates, inmates in need of maximum security.  Inmate-1 was housed in Dorm 5 North, a dormitory area within the OBCC in which inmates were generally kept in solitary confinement in individual cells for 23 hours per day.  The shower facilities within Dorm 5 North were individual stalls, to be occupied by one inmate at a time, and to which inmates were brought handcuffed, then uncuffed through a port in the shower stall door, and then handcuffed again through the port before being brought out of the stalls by correction officers.

The Assault and Cover-Up
 

Shortly before noon on February 27, 2014, CALYPSO relieved another correction officer at 5 North while Inmate-1 was in the shower.  Inmate-1 and CALYPSO had an extended verbal exchange, during which CALYPSO picked up some personal items Inmate-1 had dropped outside of the door through the port.  At one point, CALYPSO stepped away from the door and spoke to a fellow correction officer one level down within the dorm area.  That person left the dorm area and returned with another officer (“Officer-1”), who looked up at the shower area.

CALYPSO rear-cuffed Inmate-1 for removal and briefly looked down in the direction of the other officer.  CALYPSO then opened the door to the shower stall and immediately punched Inmate-1 several times in the face.  He followed Inmate-1 into the shower area, where he put Inmate-1 into a headlock and punched him several more times in the head.  CALYPSO began to lose his footing at this point, and clung to Inmate-1’s side.  Officer-1 arrived in the stall at this point.  As Officer-1 restrained Inmate-1, CALYPSO regained his footing and elbowed Inmate-1 repeatedly – approximately five times – in the head.  As a result of the assault, Inmate-1 suffered lacerations to his face and the back of his head.  The entire assault was captured on surveillance video and witnessed by multiple inmates whose cells were positioned opposite the shower area.

The New York City Department of Correction issues directives governing the circumstances under which the use of force against inmates is appropriate.  Under these directives, force is to be used as a last resort, when an inmate in restraints is still dangerous to himself and others.  Among other things, the directives prohibit:  the use of more force than is necessary to restrain an inmate, control a situation, or protect oneself or others; the use of force out of proportion to the threat posed by an inmate at the time; the use of blows where a control hold, grasping, or pushing would suffice to restrain the inmate; the direction of blows to the head if the use of such blows is otherwise avoidable; and multiple strikes, punches, or kicks where a single blow would be sufficient to stop an inmate’s attack. 

After the assault, CALYPSO filled out a “Use of Force Report” form on which he was supposed to report the circumstances of that assault.  In that Use of Force Report, CALYPSO attempted to justify his conduct by falsely stating that Inmate-1 had spit on him and attempted to spit on him again.  He also mischaracterized and misstated portions of the assault, omitting the punches he delivered while holding Inmate-1 in a headlock and claiming that he had hit CALYPSO in the “upper torso” area.

*                      *                      *

RODINY CALYPSO, 38, of Springfield Gardens, New York, is charged with one count of deprivation of rights under color of law, which carries a maximum sentence of 10 years in prison, and one count of filing false forms, which carries a maximum sentence of 20 years in prison.  CALYPSO faces a maximum sentence of 30 years in prison.

Mr. Kim praised the investigative work of the FBI.  Mr. Kim also thanked the New York City Department of Investigation, the New York City Department of Correction, Investigative Division, and the Bronx District Attorney’s Office for their assistance in the investigation, which remains ongoing.

This case is being handled by the Office’s Civil Rights and Public Corruption Units.  Assistant U.S. Attorneys Tara M. La Morte and Martin S. Bell are in charge of the prosecution.  

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

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

Joon H. Kim, the Acting United States Attorney for the Southern District of New York, announced that TREVON GROSS, the former Chairman and CEO of Helping Other People Excel Federal Credit Union (“HOPE FCU”), located in Lakewood, New Jersey, and YURI LEBEDEV, a former member of HOPE FCU’s Board of Directors and a former employee of Coin.mx, an internet-based Bitcoin exchange, were found guilty today in Manhattan federal court, in connection with a bribery scheme to take over control of HOPE FCU and a fraud scheme in furtherance of the operations of Coin.mx. The jury convicted GROSS and LEBEDEV on all counts with which they were charged in the controlling indictment following a four-week trial before U.S. District Judge Alison J. Nathan.

Acting Manhattan U.S. Attorney Joon H. Kim said: “As a unanimous jury found today, Yuri Lebedev and others at Coin.mx, an unlawful Bitcoin exchange, tricked banks into processing millions of dollars in transactions by hiding the true nature of their business. When the banks caught on to their scheme, Lebedev and others bribed Trevon Gross so they could have a captive credit union to process those transactions, undermining the credit union’s safety and solvency. Despite elaborate efforts to hide their schemes, the defendants’ conduct was exposed at trial and found for what they were, federal crimes.”

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

The Unlawful Bitcoin Exchange

Between 2013 and July 2015, LEBEDEV helped operate Coin.mx, an unlawful internet-based Bitcoin exchange, along with Anthony Murgio, the founder of Coin.mx. LEBEDEV and his co-conspirators engaged in substantial efforts to evade detection of their unlawful Bitcoin exchange by operating through a phony front company called “Collectables Club.” Coin.mx used the “Collectables Club” to open financial accounts in order to trick financial institutions into believing the unlawful Bitcoin exchange was simply a members-only association of individuals who discussed, bought, and sold collectible items and memorabilia. LEBEDEV and his co-conspirators deceived financial institutions by deliberately misidentifying and miscoding Coin.mx customers’ credit and debit card transactions, in violation of bank and credit card company rules and regulations. Through the illegal Coin.mx scheme, LEBEDEV and his co-conspirators caused more than $10 million in Bitcoin-related transactions to be processed illegally through financial institutions.

The Federal Credit Union Scheme

In 2014, in an effort further to evade scrutiny from financial institutions about the nature of the business engaged in by Coin.mx, LEBEDEV, Murgio, and their co-conspirators gained control of HOPE FCU, a federal credit union in New Jersey with primarily low-income members. After making more than $150,000 in illegal bribes at GROSS’s direction to bank accounts in the name of a church where GROSS served as the pastor, Murgio, LEBEDEV, and their co-conspirators took control of HOPE FCU. With GROSS’s assistance, Murgio installed LEBEDEV and various co-conspirators on HOPE FCU’s Board of Directors and transferred Coin.mx’s banking operations to HOPE FCU. GROSS also ceded operational control of the credit union to the board members installed by Murgio, including LEBEDEV. Thereafter, GROSS, LEBEDEV, and others worked to run tens of millions of dollars of ACH (Automated Clearing House) transactions through the credit union without adequate controls, thus putting its financial condition at risk.

GROSS, LEBEDEV, Murgio, and their co-conspirators also obstructed an examination of HOPE FCU by the National Credit Union Administration (“NCUA”) and made false statements to the NCUA in order to perpetuate LEBEDEV and Murgio’s control of the credit union. These included deliberately failing to disclose the bribe payments; misrepresenting the location of Coin.mx-affiliated businesses, including the “Collectables Club,” so as to claim that they were eligible to be members of the credit union and to serve as Board members; and manipulating the accounting at HOPE FCU so as to hide its true financial condition and the fact that it was processing tens of millions of dollars of transactions without adequate controls. HOPE FCU was operated as a captive bank by MURGIO and his co-conspirators until the end of 2014.

In October 2015, the NCUA placed HOPE FCU into conservatorship, and subsequently liquidation.

* * *

LEBEDEV, 39, of St. John’s, Florida, and GROSS, 52, of Jackson, New Jersey, were found guilty of one count of making corrupt payments to an officer of a financial institution and one count of receipt of corrupt payments by an officer of a financial institution, respectively, each of which carries a maximum sentence of 30 years in prison. LEBEDEV and GROSS also were each found guilty of participation in a conspiracy to make and receive corrupt payments, as well as to obstruct the examination of the NCUA and make false statements to the NCUA, which carries a maximum sentence of five years in prison. LEBEDEV was also found guilty of one count of wire fraud, one count of bank fraud, and one count of conspiracy to commit wire and bank fraud, each of which carries a maximum sentence of 30 years in prison. Their sentencings are set for July 20, 2017, before the Honorable Alison J. Nathan.

All four of LEBEDEV and GROSS’s co-defendants, including Anthony Murgio, have pled guilty and are awaiting sentence.

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

Mr. Kim praised the outstanding investigative work of the FBI and the Secret Service. He also thanked the NCUA for its assistance with the investigation and prosecution.

The case is being prosecuted by the Office’s Complex Frauds and Cybercrime Unit. Assistant U.S. Attorneys Eun Young Choi, Daniel S. Noble, and Won S. Shin are in charge of the prosecution.

Joon H. Kim, the Acting United States Attorney for the Southern District of New York, and William F. Sweeney Jr., Assistant Director-in-Charge of the New York Division of the Federal Bureau of Investigation (“FBI’), announced the unsealing of an Indictment charging six members and associates of the Hells Angels with various racketeering, narcotics, and money laundering offenses, including the assault of a rival gang member with a hammer.

THOMAS SCHMIDT, JOSEPH KAPLAN, JOHN CALVACCHIO, JEFF AMATO, and GARY PAGANELLI were taken into federal custody this morning and were presented before United States Magistrate Judge Judith C. McCarthy. MICHAEL PICCIONE was taken into federal custody this morning near Los Angeles, California, and will be presented later today before a magistrate judge in the Central District of California. The case has been assigned to U.S. District Judge Cathy Seibel.

Acting U.S. Attorney Joon H. Kim said: “As alleged, through the sale of cocaine, oxycodone, and marijuana and their violent conflict with rival gangs, members of the New Roc Hells Angels wreaked havoc on the streets of Westchester, Putnam, and Dutchess counties. Together with our law enforcement partners, we are determined to combat gang and drug violence throughout the Southern District of New York.”

FBI Assistant Director William F. Sweeney Jr. said: “Violent gangs such as the Hells Angels often use violence and intimidation as a means to establish themselves or protect their ‘turf.’ In this case they allegedly used those tactics by attacking a rival gang member with a hammer in the middle of a restaurant and placing innocent people in danger. Regardless of the name these men operate under, the FBI Westchester Safe Streets Gang Task Force works daily to remove these alleged violent members of our society and to create a safer community for everyone.”

As alleged in the Indictment unsealed today in White Plains federal court[1] and in court proceedings:

The New Roc Hells Angels were a criminal enterprise that operated principally in and around Westchester, Putnam, and Dutchess counties, from at least 2008 up to and including August 2014. The New Roc Hells Angels’ objectives included narcotics trafficking, extortion, money laundering, contraband cigarettes, prostitution, and altered motor vehicle parts.

Members and associates of the New Roc Hells Angels engaged in acts of violence against rival gang members. One of these acts was a December 2012 gang assault committed against a rival motorcycle gang – the Diablos – where members and associates of the New Roc Hells Angels beat a member of the Diablos on the head with a hammer at a restaurant in Poughkeepsie, New York, while innocent bystanders were dining. This violent act was to retaliate against the Diablos, who had encroached on the territory controlled by the New Roc Hells Angels, and otherwise to promote the standing and reputation of the New Roc Hells Angels among rival gangs.

Count One of the Indictment charges THOMAS SCHMIDT, the former Vice-President of the New Roc Hells Angels, with participating in a racketeering conspiracy.

Count Two charges SCHMIDT and JOSEPH KAPLAN with assault in aid of racketeering activity in connection with the December 2012 assault of a member of a rival gang.

Count Three charges SCHMIDT, MICHALE PICCIONE, JOHN CALVACCHIO, JEFF AMATO, and GARY PAGANELLI with participating in a narcotics conspiracy, in connection with the distribution of cocaine, oxycodone, and marijuana.

Count Four charges SCHMIDT and PICCIONE with conspiracy to commit money laundering.

Count Five charges PAGANELLI with possessing with intent to distribute and distributing cocaine.

Count Six charges AMATO with possessing with intent to distribute and distributing methamphetamine.

* * *

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

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

This case is being handled by the Office’s White Plains Division. Assistant United States Attorney John P. Collins Jr. 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.

COUNT

CHARGE

DEFENDANTS

MAX. PENALTIES

1

Racketeering conspiracy

18 U.S.C. § 1962(d)

THOMAS SCHMIDT

Life in prison

Mandatory minimum of 10 years in prison

2

Assault in aid of racketeering activity

18 U.S.C. §§ 1959(a)(3)

THOMAS SCHMIDT

JOSEPH KAPLAN

20 years in prison

3

Narcotics conspiracy

21 U.S.C. § 846

THOMAS SCHMIDT

MICHAEL PICCIONE

JOHN CALVACCHIO

JEFF AMATO

GARY PAGANELLI

Life in prison

Mandatory minimum of 10 years in prison

4

Money Laundering

Conspiracy

18 U.S.C. § 1956(h)

THOMAS SCHMIDT

MICHAEL PICCIONE

20 years in prison

5

Possessing with Intent to Distribute and Distributing Cocaine

21 U.S.C. § 841(a)(1) & (b)(1)(C)

GARY PAGANELLI

20 years in prison

6

Possessing with Intent to Distribute and Distributing Methamphetamine

21 U.S.C. § 841(a)(1) & (b)(1)(C)

JEFF AMATO

20 years in prison

DEFENDANT

AGE

RESIDENCE

THOMAS SCHMIDT

52

Staten Island, NY

JOSEPH KAPLAN

30

Valhalla, NY

MICHAEL PICCIONE

33

Arieta, CA

JOHN CALVACCHIO, a/k/a “Uncle”

53

Kent, NY

JEFF AMATO

50

Mamaroneck, NY

GARY PAGANELLI

47

Cortlandt Manor, NY

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

Joon H. Kim, the Acting United States Attorney for the Southern District of New York, James J. Hunt, Special Agent-in-Charge of the New York Field Division of the Drug Enforcement Administration (“DEA”), George P. Beach II, the Superintendent of the New York State Police (“NYSP”), and James P. O’Neill, the Police Commissioner of the City of New York (“NYPD”), announced the arrest of ROBERT PIZARRO and JUAN RIVERA on charges of kidnapping conspiracy, kidnapping resulting in death, robbery conspiracy, robbery, and firearms offenses.  The defendants have been remanded and remain in custody.

Manhattan Acting U.S. Attorney Joon H. Kim said:  “As alleged, Robert Pizarro and Juan Rivera robbed, terrorized, and ultimately killed 36-year-old Robert Bishun.  Today’s arrests mark the end of an exhaustive investigation by the DEA, the NYPD, and the New York State Police, and the beginning of justice for Bishun’s family.”

DEA Special Agent in Charge of the New York Field Division James J. Hunt said:  “This investigation led law enforcement through a violent series of events leading to a murder by strangulation.  The New York Drug Enforcement Task Force’s REDRUM Group and the U.S. Southern District of New York identified the alleged crimes committed by Pizarro and Rivera and worked collaboratively to arrest them today.”

NYSP Superintendent George P. Beach II said:  “I applaud the hard work of our law enforcement partners on the DEA New York Drug Enforcement Task Force. Through solid police work, two suspects have been put behind bars and two dangerous men are off of our streets. These men not only allegedly kidnapped a man from his business, robbing him of hard earned money – but they ultimately took his life. We look forward to continuing our strong partnership with the Task Force, and bringing those who commit these heinous types of crimes, to justice.”

NYPD Commissioner James P. O’Neill said:  “As alleged, the brazen violence carried out by the defendants named in this indictment demonstrates a blatant disregard for both the law and human life.  I commend the prosecutors, investigators, and agents who diligently brought this case to its swift conclusion.”

According to the allegations contained in the Indictment[1] and other documents in the public record, and statements made in court:

On September 20, 2016, PIZARRO and RIVERA robbed Robert Bishun at gunpoint in his auto body shop in the Bronx.  They then kidnapped Bishun, forcing him into his own car, and driving it away.  Bishun’s body was found several hours later in the back seat of his car.  The Office of the Chief Medical Examiner of New York City concluded that the cause of Bishun’s death was strangulation.

On a prior occasion, in January 2015, PIZARRO robbed Robert Bishun at gunpoint at the same auto body shop, taking approximately $10,000 cash from Bishun. 

*              *             *

PIZARRO, 37, of the Bronx, and RIVERA, 39, of the Bronx, are each charged with one count of kidnapping conspiracy, which carries a maximum sentence of life in prison; one count of kidnapping resulting in death, which carries a maximum sentence of death; one count of robbery conspiracy, which carries a maximum sentence of 20 years in prison; and one count of use of a firearm, which carries a maximum sentence of life in prison.  PIZARRO is also charged with one count of robbery related to his January 2015 robbery of Bishun, 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 sentencings of the defendants will be determined by a judge

Mr. Kim praised the investigative efforts of the DEA New York Drug Enforcement Task Force, which comprises agents and officers of the DEA, NYPD, and NYSP. 

The case is being prosecuted by the Office’s Violent and Organized Crime Unit.  Assistant United States Attorneys Margaret Graham, Jessica Fender, and Jared Lenow 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.

[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.

Joon H. Kim, the Acting United States Attorney for the Southern District of New York, announced that ALEX LICHTENSTEIN, a/k/a “Shaya,” was sentenced in Manhattan federal court today to 32 months in prison for bribery and conspiracy to commit bribery in connection with his payment of tens of thousands of dollars in cash bribes to New York City Police Department (“NYPD”) officers in exchange for the officers’ approval and expediting of gun licenses for LICHTENSTEIN’s paying clients. LICHTENSTEIN, who previously pled guilty, was sentenced today by the United States District Judge Sidney H. Stein.

Acting Manhattan U.S. Attorney Joon H. Kim said: “By engaging in an egregious scheme to trade cash for gun licenses, Alex Lichtenstein and his co-defendants in the New York City Police Department corrupted the sensitive process of evaluating gun license applications in New York City. Today’s sentence shows that individuals who so brazenly abuse the public’s trust in law enforcement – whether they are the officers receiving bribes or the citizens paying them – will be held to account for their crimes.”

As alleged in the Superseding Indictment against LICHTENSTEIN and established in connection with LICHTENSTEIN’s sentencing proceedings:

LICHTENSTEIN, who previously served as a leader in the Shomrim, a neighborhood patrol in Borough Park, Brooklyn, started a business in 2013 expediting gun license applications for clients. In return for a fee ranging from $10,000 to $16,000 per application, LICHTENSTEIN purportedly assisted his clients in navigating the gun licensing process within the NYPD. However, rather than provide legitimate services for his exorbitant fees, LICHTENSTEIN instead bribed two officers in the NYPD’s Licensing Division to ensure success for nearly all of his clients’ applications. In particular, LICHTENSTEIN paid co-defendant Sergeant David Villanueva of the Licensing Division between hundreds of dollars and $1,000 per application, and Villanueva in turn provided some of the bribe money to co-defendant Richard Ochetal, another NYPD officer in the Licensing Division who participated in the approval of applications submitted by LICHTENSTEIN’s clients. In exchange for this cash, as well as other perks such as liquor and limousine rides, Villanueva and Ochetal approved the gun license applications sought by LICHTENSTEIN’s clients without conducting the requisite diligence on his clients. As a result, Villanueva and Ochetal approved gun licenses for individuals with criminal histories, including at least one with a previous felony conviction, histories of domestic violence, and other factors that would otherwise have resulted in rejections by the Police Department. Villanueva and Ochetal also approved licenses for individuals to carry concealed guns for business-related reasons, when in fact such individuals had no legitimate basis on which to claim the need for such licenses. In total, LICHTENSTEIN made at least between $150,000 and $250,000 from his clients, a portion of which he remitted to Villanueva and Ochetal as bribes.

In April 2016, after having been banned by the Licensing Division due to rumors regarding his significant fees, LICHTENSTEIN attempted to bribe another police officer to help him get his clients’ applications reviewed by the Licensing Division and approved. In a recorded conversation, LICHTENSTEIN offered the NYPD officer $6,000 per application in exchange for the officer’s assistance with the Licensing Division. Rather than accept LICHTENSTEIN’s proposal, the officer reported this contact to the Police Department, ultimately leading to LICHTENSTEIN’s arrest.

* * *

In addition to the prison term, LICHTENSTEIN, 45, of Pomona, New York, was sentenced to three years of supervised release and was ordered to forfeit $230,000.

Mr. Kim praised the outstanding investigative work of the Federal Bureau of Investigation and the New York City Police Department’s Internal Affairs Bureau.

The prosecution is being handled by the Office’s Public Corruption Unit. Assistant United States Attorneys Russell Capone, Kan M. Nawaday, Lauren B. Schorr, and Martin Bell are in charge of the prosecution.

“In response to allegations of misconduct, this Office, along with the FBI, has been investigating fundraising by and on behalf of Mayor Bill de Blasio for his 2013 election campaign, the Campaign for One New York, and the 2014 State Senate effort. We have conducted a thorough investigation into several circumstances in which Mayor de Blasio and others acting on his behalf solicited donations from individuals who sought official favors from the City, after which the Mayor made or directed inquiries to relevant City agencies on behalf of those donors. In considering whether to charge individuals with serious public corruption crimes, we take into account, among other things, the high burden of proof, the clarity of existing law, any recent changes in the law, and the particular difficulty in proving criminal intent in corruption schemes where there is no evidence of personal profit. After careful deliberation, given the totality of the circumstances here and absent additional evidence, we do not intend to bring federal criminal charges against the Mayor or those acting on his behalf relating to the fundraising efforts in question. Although it is rare that we issue a public statement about the status of an investigation, we believe it appropriate in this case at this time, in order not to unduly influence the upcoming campaign and Mayoral election.”

Joon H. Kim, the Acting United States Attorney for the Southern District of New York, announced that DAVID HOBSON, a former investment adviser, was sentenced to six months in prison for engaging in a scheme to commit insider trading in connection with deals involving a pharmaceutical company (the “Pharma Company”) at which Michael Maciocio, HOBSON’s friend, client and co-conspirator, worked.  HOBSON pled guilty on October 25, 2016, to one count of conspiracy to commit securities fraud and one count of securities fraud before United States District Judge Laura T. Swain, who also imposed today’s sentence. 

Acting U.S. Attorney Joon H. Kim said:  “David Hobson used his relationship with a childhood friend to obtain inside information, and then traded on that information, making hundreds of thousands of dollars in illegal profits. The securities market must be free and fair for all, and our Office’s commitment to investigating and prosecuting insider trading remains firm.”      

According to the allegations contained in the Indictment filed against HOBSON and his co-conspirator and statements made in related court filings and proceedings:

From May 2008 through April 2014, HOBSON and Maciocio participated in a scheme to commit insider trading in advance of, and in connection with, acquisitions and transactions under consideration by the Pharma Company.  HOBSON and Maciocio were childhood friends and HOBSON had served as Maciocio’s investment adviser and broker for many years.

Maciocio learned about the impending transactions through his role as a master planner in the Active Pharmaceutical Ingredient Supply Chain Group at the Pharma Company.  In that role, Maciocio was tasked with evaluating manufacturing demands and capacity within the Pharma Company and was consulted about potential acquisitions to assist in determining whether the Pharma Company would be able to manufacture any new product in-house.  Although Maciocio was not typically provided with the names of the companies targeted for acquisition, he used the inside information he received – including the Pharma Company’s code names for the acquisitions, the drug indications, the dosages, the phases of any clinical trials, and the chemical structure of the drugs – to uncover the true identities of the target companies.  At times, HOBSON assisted Maciocio in determining the identities of these target companies based on the inside information Maciocio had obtained as part of his job.  

Having learned about these impending transactions, Maciocio, in breach of fiduciary duties and other duties of trust and confidence owed to the Pharma Company, traded on his own behalf and tipped HOBSON, so that HOBSON could use the information to trade for both himself and for Maciocio.  HOBSON also used the inside information to trade on behalf of some of his other investment advisory clients. 

HOBSON used the inside information that he received from Maciocio to make profitable trades in, among other securities:  Medivation, Inc., Ardea Biosciences, Inc., and Furiex Pharmaceuticals, Inc.  As a result of the scheme, HOBSON reaped approximately $165,000 in ill-gotten gains for himself, $40,000 for Maciocio, and nearly $150,000 for certain of HOBSON’s other clients.  

* * *

In addition to the term of imprisonment, HOBSON, 48, of Providence, Rhode Island, was sentenced to two years of supervised release and was ordered to forfeit $385,664.39.

Maciocio, 47, pled guilty to one count of conspiracy to commit securities fraud, one count of conspiracy to commit wire fraud, and two counts of securities fraud on May 20, 2016.  His sentencing has not yet been scheduled. 

Mr. Kim praised the work of the Federal Bureau of Investigation, and thanked the U.S. Securities and Exchange Commission.

This case is being handled by the Office’s Securities and Commodities Fraud Task Force.  Assistant U.S. Attorneys Aimee Hector and Rebecca Mermelstein are in charge of the prosecution.

Joon H. Kim, the Acting United States Attorney for the Southern District of New York, Darcel D. Clark, the Bronx County District Attorney, James O’Neill, the Commissioner of the New York City Police Department (“NYPD”), Angel M. Melendez, Special Agent-in-Charge of the New York Field Office of U.S. Immigration and Customs Enforcement’s Homeland Security Investigations (“HSI”), and James J. Hunt, Special Agent-in-Charge of the New York Field Division of the Drug Enforcement Administration (“DEA”), today announced the unsealing of two Indictments charging 49 members of two Bronx-based drug distribution organizations, with various narcotics, robbery, and firearms offenses, including the murder of Jose Morales on December 11, 2016.

Fifteen defendants associated with a drug distribution organization operating primarily on East 175th Street and Monroe Avenue in the Bronx are charged in United States v. James Felton, et al., which has been assigned to U.S. District Judge William H. Pauley.  The defendants taken into federal custody today were presented before Magistrate Judges Barbara C. Moses and Henry B. Pitman.  Three defendants, JAMES FELTON, JAMES DIAZ, and ANDRE FELTON, are currently incarcerated in federal custody on related charges and will be arraigned on the Indictment before Judge Pauley on March 23, 2017.

Thirty-four defendants associated with a drug distribution organization operating primarily on Weeks Avenue and East 176th Street in the Bronx are charged in United States v. Edwin Romero, et al., which has been assigned to U.S. District Judge Loretta A. Preska.  The defendants taken into federal custody today were presented before Magistrate Judges Barbara C. Moses and Henry B. Pitman. 

Manhattan Acting U.S. Attorney Joon H. Kim said:  “Dozens of alleged members of two drug distribution organizations have been charged with peddling potentially lethal drugs.  Many are also charged with committing violent crimes, including four who allegedly murdered Jose Morales in furtherance of their drug business.  All New Yorkers are entitled to the peaceful enjoyment of their homes, free from the devastating effects of drugs and the violence that can accompany drug trafficking.  Together with our law enforcement partners, we will continue to work to return the neighborhoods of the Bronx to the law-abiding people who live in them.”

Bronx District Attorney Darcel D. Clark said:  “This case crystallizes how drug dealing’s attendant violence devastates our neighborhoods.  These two organizations held the Mount Hope area in a vise grip of numerous street shootings, including at least one murder.  In our fight against heroin and other drugs, we must always remain focused on the community residents who are victimized by these vicious traffickers.”

Police Commissioner James P. O’Neill said:  “Today’s arrests are the latest example of drug dealing that led to violence, including armed robberies and a murder in the Bronx, as alleged.  This type of precision policing is leading to further reductions in crime beyond last year’s all-time low. Many thanks to the detectives, agents, and the prosecutors in the Southern District we so often work with and whose diligence resulted in the leveling of these serious drug trafficking charges today.”

HSI Special Agent-in-Charge Angel M. Melendez said:  “Today the law enforcement community in New York struck a serious blow to violent drug distribution organizations that operate in our city.  Two such organizations allegedly flooded the community of Mount Hope in the Bronx with heroin, crack cocaine, fear and death.  This is yet another step in our efforts to bring peace and hope to our communities by removing the alleged leadership and rank-and-file members of these organizations, putting an end to their menacing criminal conduct.”

DEA Special Agent in Charge of the New York Field Division James J. Hunt said: “Guns, violence and turf wars plague neighborhoods that drug dealers have turned into battlefields.  Today, law enforcement has reclaimed the Mount Hope section of the Bronx by arresting dozens of alleged members of two drug trafficking organizations.  DEA Agents working with HSI, NYPD, the Bronx District Attorney’s Office and the SDNY U.S. Attorney’s Office identified and dismantled these crews allegedly responsible for fueling drug addiction and drug-related violence.”                               

The Indictments[1] arise from a joint investigation by HSI, the DEA, and the NYPD into two violent drug trafficking organizations that operated in the 46th Precinct in the Bronx.  Members of these drug trafficking organizations sold crack cocaine, cocaine, heroin, and marijuana, and they possessed and used firearms to further their drug trafficking activities.

Count One of the Indictment in U.S. v. James Felton, et al., unsealed today in Manhattan federal court, charges JAMES FELTON, JAMES DIAZ, ANDRE FELTON, EZEKIEL BURLEY, URIAH BROWN, BRADFORD CANNON, WILLIE REEVES, HAROLD FIELDS, ROBERT BRENT, DASHAUN MCDONALD, MATTHEW TORRES, TYRONE TURNER, KENDRICK MCCRAY, GINGER DIAZ, and JOSE SANDOVAL with conspiring to distribute and possess with intent to distribute crack cocaine, cocaine, heroin, and marijuana.

Counts Two charges JAMES FELTON, DIAZ, ANDRE FELTON, and BURLEY with the murder of Jose Morales, which occurred on December 11, 2016, in the vicinity of East 175th Street and Weeks Avenue, in the course of a narcotics conspiracy.

Count Three charges JAMES FELTON, DIAZ, ANDRE FELTON, and BURLEY with using, carrying, possessing, brandishing, and discharging a firearm during and in relation to a narcotics conspiracy, resulting in the death of Jose Morales on December 11, 2016.

Count Four charges JAMES FELTON, DIAZ, and BURLEY with using, carrying, possessing, brandishing, and discharging a firearm during and in relation to a narcotics conspiracy, on dates other than December 11, 2016.

Count Five charges BROWN, CANNON, REEVES, FIELDS, BRENT, MCDONALD, TORRES, TURNER, MCCRAY, DIAZ, and SANDOVAL with using, carrying, possessing, brandishing, and discharging firearms during and in relation to a narcotics conspiracy.

Count One of the Indictment in U.S. v. Edwin Romero, et al., unsealed today in Manhattan federal court, charges EDWIN ROMERO, RAFAEL ROMERO, FRANCIS PALUZZI, LUIS GONZALEZ, ANIBAL GONZALEZ, CARLOS MOTA, ELIMANUEL DIAZ, PEDRO OLIVO, ADRIAN SANCHEZ, DARYL SIMON, JEFFREY FERNANDEZ, JUAN VALDEZ, WILLIE TUCKER, KASAN NOBLE, DAMIAN SAUNDERS, DANIEL JEFFERSON, DERECK JEFFERSON, WAYNE SCOTT, ERIC RIVERA, MICHAEL MARTINEZ, MAXAMILLION MERCADO, KAREEM SIMMONDS, ALEXANDER PENA, ANTHONY CLASE, CARLOS ACOSTA, CHRISTOPHER RODRIGUEZ, GABRIEL GONZALEZ, JESUS MATA, NANA OWUSU, ROBERTO RAMIREZ, WILPHER RODRIGUEZ, YAWILIS RODRIGUEZ, JESUS ABAD, and ANGEL GUANCE with conspiring to distribute and possess with intent to distribute crack cocaine, cocaine, heroin, and marijuana.

Count Two charges EDWIN ROMERO, SANCHEZ, VALDEZ, TUCKER, and YAWILIS RODRIGUEZ with conspiring to commit robbery.

Count Three charges EDWIN ROMERO, RAFAEL ROMERO, FRANCIS PALUZZI, LUIS GONZALEZ, ANIBAL GONZALEZ, CARLOS MOTA, ELIMANUEL DIAZ, PEDRO OLIVO, ADRIAN SANCHEZ, DARYL SIMON, JEFFREY FERNANDEZ, JUAN VALDEZ, WILLIE TUCKER, KASAN NOBLE, DAMIAN SAUNDERS, DANIEL JEFFERSON, DERECK JEFFERSON, WAYNE SCOTT, ERIC RIVERA, MICHAEL MARTINEZ, KAREEM SIMMONDS, ALEXANDER PENA, ANTHONY CLASE, CARLOS ACOSTA, CHRISTOPHER RODRIGUEZ, GABRIEL GONZALEZ, JESUS MATA, NANA OWUSU, ROBERTO RAMIREZ, WILPHER RODRIGUEZ, YAWILIS RODRIGUEZ, JESUS ABAD, and ANGEL GUANCE with using, carrying, possessing, brandishing, and discharging a firearm during and in relation to a narcotics conspiracy.

Count Four charges EDWIN ROMERO with using, carrying, possessing, brandishing, and discharging a firearm during and in relation to a crime of violence.

*                      *                     *

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

Mr. Kim praised the outstanding investigative work of the NYPD, HSI, and DEA, and expressed gratitude for the coordinated efforts of the NYPD’s Detective Bureau, including the Bronx Violent Crime Squad, the 46th Precinct Detectives Squad, and the Bronx Homicide Task Force.  Mr. Kim also expressed gratitude to the Bronx District Attorney’s Office for its partnership in this investigation. 

This case is being handled by the Office’s Violent and Organized Crime Unit.  Assistant United States Attorneys Frank Balsamello, Matthew Laroche, Anden Chow, and Michael Krouse, and Special Assistant United States Attorney Matthew Hellman (cross-designated from the Bronx District Attorney’s Office) are in charge of the prosecution.

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

United States v. James Felton, et al., S2 17 Cr. 21 (WHP)

COUNT

CHARGE

DEFENDANTS

MAX. PENALTIES

1

Narcotics conspiracy

21 U.S.C. § 846

JAMES FELTON

JAMES DIAZ

ANDRE FELTON

EZEKIEL BURLEY

URIAH BROWN

BRADFORD CANNON

WILLIE REEVES

HAROLD FIELDS

ROBERT BRENT

DASHAUN MCDONALD

MATTHEW TORRES

TYRONE TURNER

KENDRICK MCCRAY

GINGER DIAZ

JOSE SANDOVAL

Life in prison

Mandatory minimum of 10 years in prison

2

Murder while engaged in a narcotics conspiracy

21 U.S.C. § 848(e)(1)(A); 18 U.S.C. § 2

JAMES FELTON

JAMES DIAZ

ANDRE FELTON

EZEKIEL BURLEY

Life in prison or death

Mandatory minimum of 20 years in prison

3

Using, carrying, possessing, brandishing, and discharging firearms, causing death

18 U.S.C. §§ 924(j)(1) and 2

JAMES FELTON

JAMES DIAZ

ANDRE FELTON

EZEKIEL BURLEY

Life in prison or death

4

Using, carrying, possessing, brandishing, and discharging firearms

18 U.S.C.
§§ 924(c)(1)(A)(i), (ii), (iii), 924(c)(1)(C)(i), and 2

JAMES FELTON

JAMES DIAZ

EZEKIEL BURLEY

Life in prison

Mandatory minimum of 10 years in prison for DIAZ and BURLEY

Mandatory minimum of 25 years in prison for JAMES FELTON

5

Using, carrying, possessing, brandishing, and discharging firearms

18 U.S.C.
§§ 924(c)(1)(A)(i), (ii), and (iii), 2

URIAH BROWN

BRADFORD CANNON

WILLIE REEVES

HAROLD FIELDS

ROBERT BRENT

DASHAUN MCDONALD

MATTHEW TORRES

TYRONE TURNER

KENDRICK MCCRAY

GINGER DIAZ

JOSE SANDOVAL

Life in prison

Mandatory minimum of 10 years in prison

DEFENDANT

AGE

RESIDENCE

JAMES FELTON

47

Bronx, New York

JAMES DIAZ,

a/k/a “Chunky”

24

Bronx, New York

ANDRE FELTON,

a/k/a “Dre”

39

Mount Vernon, New York

EZEKIEL BURLEY,

a/k/a “Ezekiel McCall”

a/k/a “Zeke”

a/k/a “Ziggy”

23

Bronx, New York

URIAH BROWN,

a/k/a “Scooter”

42

Bronx, New York

BRADFORD CANNON,

a/k/a “Brad”

46

Bronx, New York

WILLIE REEVES,

a/k/a “Willie Reed”

a/k/a “Willow”

30

Bronx, New York

HAROLD FIELDS,

a/k/a “Howie”

a/k/a “HD”

38

Bronx, New York

ROBERT BRENT,

a/k/a “Ready”

45

Brooklyn, New York

DASHAUN MCDONALD,

a/k/a “Dayday”

27

Bronx, New York

MATTHEW TORRES,

a/k/a “Mac Mittens”

a/k/a “Green Eyes”

33

Bronx, New York

TYRONE TURNER,

a/k/a “Skrap”

32

Bronx, New York

KENDRICK MCCRAY,

a/k/a “Kenny”

43

Bronx, New York

GINGER DIAZ,

a/k/a “George”

30

Bronx, New York

JOSE SANDOVAL,

a/k/a “Shorty”

41

Bronx, New York

United States v. Edwin Romero, et al., S1 17 Cr. 123 (LAP)

COUNT

CHARGE

DEFENDANTS

MAX. PENALTIES

1

Narcotics conspiracy

21 U.S.C. § 846

EDWIN ROMERO

RAFAEL ROMERO

FRANCIS PALUZZI

LUIS GONZALEZ

ANIBAL GONZALEZ

CARLOS MOTA

ELIMANUEL DIAZ

PEDRO OLIVO

ADRIAN SANCHEZ

DARYL SIMON

JEFFREY FERNANDEZ

JUAN VALDEZ

WILLIE TUCKER

KASAN NOBLE

DAMIAN SAUNDERS

DANIEL JEFFERSON

DERECK JEFFERSON

WAYNE SCOTT

ERIC RIVERA

MICHAEL MARTINEZ

MAXAMILLION  MERCADO

KAREEM SIMMONDS

ALEXANDER PENA

ANTHONY CLASE

CARLOS ACOSTA

CHRISTOPHER RODRIGUEZ

GABRIEL GONZALEZ

JESUS MATA

NANA OWUSU

ROBERTO RAMIREZ

WILPHER RODRIGUEZ

YAWILIS RODRIGUEZ

JESUS ABAD

ANGEL GUANCE

Life in prison

Mandatory minimum of 10 years in prison

2

Robbery conspiracy

18 U.S.C. § 1951

EDWIN ROMERO

ADRIAN SANCHEZ

JUAN VALDEZ

WILLIE TUCKER

YAWILIS RODRIGUEZ

20 years in prison

3

Using, carrying, possessing, brandishing, and discharging firearms

18 U.S.C.
§§ 924(c)(1)(A)(i), (ii), and (iii), 2

EDWIN ROMERO

RAFAEL ROMERO

FRANCIS PALUZZI

LUIS GONZALEZ

ANIBAL GONZALEZ

CARLOS MOTA

ELIMANUEL DIAZ

PEDRO OLIVO

ADRIAN SANCHEZ

DARYL SIMON

JEFFREY FERNANDEZ

JUAN VALDEZ

WILLIE TUCKER

KASAN NOBLE

DAMIAN SAUNDERS

DANIEL JEFFERSON

DERECK JEFFERSON

WAYNE SCOTT

ERIC RIVERA

MICHAEL MARTINEZ

KAREEM SIMMONDS

ALEXANDER PENA

ANTHONY CLASE

CARLOS ACOSTA

CHRISTOPHER RODRIGUEZ

GABRIEL GONZALEZ

JESUS MATA

NANA OWUSU

ROBERTO RAMIREZ

WILPHER RODRIGUEZ

YAWILIS RODRIGUEZ

JESUS ABAD

ANGEL GUANCE

Life in prison

Mandatory minimum of 10 years in prison

4

Using, carrying, possessing, brandishing, and discharging firearms

18 U.S.C.
§§ 924(c)(1)(A)(i), (ii), (iii), 924(c)(1)(C)(i), and 2

EDWIN ROMERO

Life in prison

Mandatory minimum of 25 years in prison

DEFENDANT

AGE

RESIDENCE

EDWIN ROMERO,

a/k/a “Yones”

a/k/a “Yoni”

35

Bronx, New York

RAFAEL ROMERO,

a/k/a “Kodi”

34

Bronx, New York

FRANCIS PALUZZI,

a/k/a “Fetty”

27

Bronx, New York

LUIS GONZALEZ,

a/k/a “Tili”

a/k/a “Bori”

39

Bronx, New York

ANIBAL GONZALEZ,

a/k/a “Foli”

34

Bronx, New York

CARLOS MOTA,

a/k/a “Culebra”

a/k/a “Snake”

47

Bronx, New York

ELIMANUEL DIAZ,

a/k/a “Lima”

27

Bronx, New York

PEDRO OLIVO,

a/k/a “Pito”

24

Bronx, New York

ADRIAN SANCHEZ,

a/k/a “Pachi”

23

Bronx, New York

DARYL SIMON,

a/k/a “D-Money”

19

Bronx, New York

JEFFREY FERNANDEZ,

a/k/a “Jefe”

19

Bronx, New York

JUAN VALDEZ,

a/k/a “Sito”

21

Bronx, New York

WILLIE TUCKER,

a/k/a “Big Will”

a/k/a “BJ”

a/k/a “BG”

38

Bronx, New York

KASAN NOBLE,

a/k/a “Kay Kay”

40

Bronx, New York

DAMIAN SAUNDERS,

a/k/a “Floss”

37

Bronx, New York

DANIEL JEFFERSON,

a/k/a “Ace”

30

Bronx, New York

DERECK JEFFERSON,

a/k/a “Bang”

28

Bronx, New York

WAYNE SCOTT,

a/k/a “Punch”

37

Bronx, New York

ERIC RIVERA,

a/k/a “Chucky”

a/k/a “Chuck Dollarz”

24

Bronx, New York

MICHAEL MARTINEZ

26

Bronx, New York

MAXAMILLION MERCADO,

a/k/a “Bully”

24

Bronx, New York

KAREEM SIMMONDS,

a/k/a “Kareem Simmons”

a/k/a “Black”

40

Bronx, New York

ALEXANDER PENA,

a/k/a “Green Eyes”

20

Bronx, New York

ANTHONY CLASE,

a/k/a “Ant”

30

Bronx, New York

CARLOS ACOSTA,

a/k/a “Greg”

23

Bronx, New York

CHRISTOPHER RODRIGUEZ,

a/k/a “Dread”

21

Bronx, New York

GABRIEL GONZALEZ,

a/k/a “Gabi”

a/k/a “Baldy”

40

Bronx, New York

JESUS MATA,

a/k/a “Junior”

a/k/a “Jay”

20

Bronx, New York

NANA OWUSU,

a/k/a “Africa”

19

Bronx, New York

ROBERTO RAMIREZ

29

Bronx, New York

WILPHER RODRIGUEZ

23

Bronx, New York

YAWILIS RODRIGUEZ,

a/k/a “Will”

22

Bronx, New York

JESUS ABAD,

a/k/a “Rojo”

26

Bronx, New York

ANGEL GUANCE,

a/k/a “Chico”

a/k/a “All In”

27

Bronx, New York

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

Joon H. Kim, Acting United States Attorney for the Southern District of New York, and William F. Sweeney Jr., Assistant Director-in-Charge of the New York Division of the Federal Bureau of Investigation (“FBI”), announced the arrest and filing of charges against DAVID OHNMACHT, a 36-year-old registered sexual offender in Westchester, New York. The Amended Complaint filed yesterday in White Plains federal court charges that OHNMACHT persuaded a 14-year-old girl (“Victim-1”) to engage in sexually explicit activity, video it, and transmit it, via Instagram, to OHNMACHT. The Amended Complaint also charges that OHNMCHT engaged in that conduct while being someone required to register as a sexual offender. OHNMACHT was presented yesterday before U.S. Magistrate Judge Judith McCarthy in White Plains federal court and detained without bail.

If convicted, OHNMACHT faces a mandatory minimum sentence of 35 years in prison and a maximum sentence of 50 years in prison.

Acting U.S. Attorney Joon H. Kim said: “David Ohnmacht allegedly convinced a 14-year-old girl to send him sexually explicit videos of herself and threatened to release it to her friends if she did not send more. It is one of law enforcement’s most important missions to protect children from this type of allegedly predatory conduct.”

FBI Assistant Director William F. Sweeney Jr. said: “Our job as law enforcement is to protect people from criminals, but our job gets harder as more predators approach children and take advantage of them. Those alleged predators have more access in this digital age than they’ve ever had before, but as parents we have to be the first line of defense by talking with them and making sure they know the dangers that lurk online. The alleged subject in this case is what parents fear the most, a known sexual predator making contact with their child. Our jobs may get harder, but that won’t stop us from going after and stopping criminals from preying on our children.”

According to the Amended Complaint filed today in White Plains federal court[1]:

From November 2016 through February 2017, OHNMACHT communicated online via Instagram with a 14-year-old girl (“Victim-1”) and convinced Victim-1 to take and transmit sexually explicit videos of Victim-1 to OHNMACHT.

OHNMACHT utilized the screen names “Dannyw290” and “little.kitty.love” during his communications with Victim-1. OHNMACHT told Victim-1 that if she did not make and transmit additional videos, he would expose Victim-1’s prior videos to her friends on Instagram.

OHNMACHT was convicted on August 19, 2003, in Westchester County Court of multiple sexual abuse and sexual assault charges including Sexual Abuse in the Third Degree, Possessing an Obscene Sexual Performance by a Child less than 16 years old, Rape in the First Degree, Use of a Child less than 17 years of age in a sexual performance, Possessing a Sexual Performance by a child less than 16 years of age, Sexual Abuse in the First Degree, Promoting a Sexual Performance by a child less than 17 years of age, and Sodomy, Intercourse, Forcible Compulsion. OHNMACHT was sentenced to a term of imprisonment of 40 months to ten years. He served approximately nine years in prison and was released on or about November 1, 2011. OHNMACHT then began a five-year term of post-release supervision with New York State Parole that ended on or about November 1, 2016.

OHNMACHT’s prior convictions involved four different victims, who ranged in age from 13 to 15. As a result of his convictions, OHNMACHT was required to register with the New York State Sex Offender Registry.

OHNMACHT was arrested yesterday morning in Katonah, New York.

Mr. Kim praised the efforts of the FBI. He also thanked the FBI’s Wilmington, North Carolina, Resident Agency, the New Hanover County Sheriff’s Office in Wilmington, North Carolina, and the Bedford, New York, Police Department in connection with this investigation.

Mr. Kim stated that the investigation is ongoing. Any individuals with relevant information concerning DAVID OHNMACHT and any individuals who may have encountered someone using the user names “Dannyw290” or “little.kitty.love” should contact the FBI at (914) 925-3700.

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.

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

“Today, I was fired from my position as U.S. Attorney for the Southern District of New York. Serving my country as U.S. Attorney here for the past seven years will forever be the greatest honor of my professional life, no matter what else I do or how long I live. One hallmark of justice is absolute independence, and that was my touchstone every day that I served. I want to thank the amazing people of the Southern District of New York, the greatest public servants in the world, for everything they do each day in pursuit of justice. They will continue to do the great work of the Office under the leadership of Joon H. Kim, the current Deputy U.S. Attorney, who will serve as Acting U.S. Attorney.”

“Today, I was fired from my position as U.S. Attorney for the Southern District of New York. Serving my country as U.S. Attorney here for the past seven years will forever be the greatest honor of my professional life, no matter what else I do or how long I live. One hallmark of justice is absolute independence, and that was my touchstone every day that I served. I want to thank the amazing people of the Southern District of New York, the greatest public servants in the world, for everything they do each day in pursuit of justice. They will continue to do the great work of the Office under the leadership of Joon H. Kim, the current Deputy U.S. Attorney, who will serve as Acting U.S. Attorney.”

Preet Bharara, the United States Attorney for the Southern District of New York, William F. Sweeney Jr., the Assistant Director-in-Charge of the New York Field Division of the Federal Bureau of Investigation (“FBI”), Christy Goldsmith Romero, Special Inspector General for the Troubled Asset Relief Program (“SIGTARP”), and Maria T. Vullo, Financial Services Superintendent for the New York State Department of Financial Services (“DFS”), announced today the extradition from Ukraine of HERZEL MEIRI, who was indicted on March 16, 2016, on fraud and money laundering charges in connection with a scheme to fraudulently induce distressed homeowners to sell their homes to a company he owned and controlled. MEIRI, who arrived in the District yesterday, had been arrested by Ukrainian authorities on October 27, 2016. He will be arraigned in front of Magistrate Judge Ronald L. Ellis today. The case is assigned to United States District Judge Edgardo Ramos. MEIRI was the seventh defendant to be indicted in connection with the scheme.

U.S. Attorney Preet Bharara said: “Herzel Meiri allegedly concocted a callous scheme to swindle desperate homeowners out of their homes. As alleged, Meiri lied to his victims, who thought that they were getting the financial help they needed but instead were being tricked into signing over their homes. Thanks to our law enforcement partners – the FBI, SIGTARP, and DFS – Meiri is now in U.S. custody and will have to answer for his alleged crimes.”

Assistant Director-in-Charge William F. Sweeney Jr. said: “When desperate homeowners fall prey to false relief schemes, their vulnerabilities are often exploited by those who seek to benefit from their misfortune. As alleged, Meiri’s behavior caused serious damage to struggling families who unknowingly funded his extravagant scheme. The FBI continues to support partnerships within the financial industry and law enforcement as we work together to combat this serious crime.”

Special Inspector General for TARP Christy Goldsmith Romero said: “Herzel Meiri is charged with preying on struggling homeowners trying to avoid foreclosure. Meiri and his co-conspirators allegedly promised victims mortgage modifications when in fact they were swindling them out of their homes. SIGTARP thanks U.S. Attorney Bharara, Superintendent Vullo, and the FBI for their commitment to protecting taxpayers from TARP-related crime.”

DFS Financial Services Superintendent Maria T. Vullo said: “These allegations paint the portrait of a con artist who cold-heartedly preyed on financially distressed homeowners – some of whom are among our most vulnerable – to satisfy his selfish greed. The Department of Financial Services is proud to have worked with our fellow law enforcement partners in helping to bring this defendant to justice.”

According to the allegations in the Fourth Superseding Indictment, which was unsealed in November 2016, as well as the Complaints previously filed in this action[1]:

Since at least 2013, MEIRI and his co-defendants have defrauded distressed homeowners throughout the Bronx, Brooklyn, and Queens. MEIRI and others falsely represented to these homeowners – some of whom were elderly or in poor health – that they could assist them with a loan modification or similar relief from foreclosure that would allow the homeowners to save their homes. But rather than actually assisting these homeowners, the defendants deceived them into selling their homes to Launch Development LLC (“Launch Development”), a for-profit real estate company owned and controlled by MEIRI.

MEIRI and others lured victims through Homeowners Assistance Service of New York (“HASNY”), which purported to provide assistance to homeowners who were seeking to avoid foreclosure of their homes. As part of the scheme, MEIRI directed employees of Launch Development to solicit owners of distressed properties and invite them to meet with HASNY representatives so that they could learn more about avoiding foreclosure and saving their homes.

When a homeowner arrived at the HASNY office, he or she met with a co-conspirator, who typically advised the homeowner that HASNY could assist him or her with a loan modification. In other cases, the homeowner was advised that a loan modification could not be completed, but that the homeowner could engage in a type of short sale in which the homeowner would sell the property to a third party, Launch Development, and then within approximately 90 days arrange for a relative of the homeowner to repurchase the property from Launch Development. Homeowners were typically advised that they could remain in their homes throughout the entire process. At the closing that followed, a homeowner who had been led to believe that he or she was about to receive a loan modification or transfer the property to a trusted relative was encouraged to sign documents presented by another co-conspirator, which in some cases were blank. Unbeknownst to the homeowners, by signing the documents, they were selling to Launch Development the homes they had hoped to save. Homeowners often were then forced to vacate their homes soon thereafter, and Launch Development re-sold many of the homes, which were purchased at fraudulently deflated prices, for an enormous profit.

In addition, MEIRI and a co-conspirator transferred the proceeds of the home sales from Launch Development to other companies MEIRI owned and controlled, falsely describing the transfers as, among other things, rent payments. The proceeds were ultimately transferred back to Launch Development or spent on luxury items for MEIRI.

MEIRI is charged with one count of conspiracy to commit wire fraud and bank fraud and one count of conspiracy to commit bank fraud, each of which carries a maximum term of 30 years in prison. In addition, MEIRI is charged with two counts of money laundering, one of which carries a maximum term of 20 years in prison and one of which carries a maximum term of 10 years in prison, and one count of conspiracy to commit money laundering, which carries a maximum term 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. Bharara praised the outstanding work of the FBI, SIGTARP, and DFS for their investigative efforts and ongoing support and assistance with the case.

The prosecution of this case is being overseen by the Office’s General Crimes Unit. Assistant U.S. Attorneys Jaimie L. Nawaday and Andrew Thomas are in charge of the case.

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

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

Preet Bharara, the United States Attorney for the Southern District of New York, Angel M. Melendez, Special Agent-in-Charge of the New York Field Office of U.S. Immigration and Customs Enforcement’s Homeland Security Investigations (“HSI”), James J. Hunt, 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”), today announced the unsealing of an Indictment charging eight members of a Bronx-based street gang, the Beach Avenue Crew, with various racketeering, firearms, and narcotics offenses, including the attempted murders of a rival gang member and rival drug trafficker.

Five of the eight defendants, JEAN BAPTISTE LESSAGE, DAVID BUCKHANON, JAMMAL LINDO, JALEEL BARON, and KYLE MULLINGS, were taken into federal custody yesterday or this morning and will be presented and arraigned before United States Magistrate Judge Ronald L. Ellis today.  ALI HAMILTON, is currently incarcerated in federal custody on related charges, and was arraigned today before Judge Ellis.  NORMAN EDWARDS was taken into federal custody this morning in Allentown, Pennsylvania, and will be presented later today before a magistrate judge in the Eastern District of Pennsylvania.  MAURICE SIMMONS remains at large.  The case has been assigned to U.S. District Judge Laura Taylor Swain.             

Manhattan U.S. Attorney Preet Bharara said: “As alleged, through the sale of crack cocaine and their violent conflict with rival crews, the Beach Avenue Crew wreaked havoc on the streets of the Bronx.  We and our law enforcement partners are determined to combat alleged gang and drug violence in the Bronx through charges like those brought today.”

HSI Special Agent-in-Charge Angel M. Melendez said:  “The Beach Avenue Crew has allegedly tormented our city streets for nearly a decade.  These arrests mean there are fewer alleged gang bangers wreaking havoc, dealing drugs and committing crimes in our communities.  HSI is committed to working closely with its law enforcement partners to keep violent street gangs at bay and our neighborhoods safe.”

DEA Special Agent in Charge James J. Hunt said:  “Shootings, turf wars and murders are means to an end for drug crews controlling their distribution strongholds.  Allegedly, the Beach Avenue Crew were the bullies of the neighborhood selling crack and imposing domineering threats on rival drug gangs and innocent neighbors in the Bronx.  These arrests have taken more violent criminals off the streets in order to make our communities safe from drug and gun violence.”                                         

Police Commissioner James P. O’Neill said:  “The defendants attempted to control their drug turf through gun violence allegedly carried out across the Bronx, endangering the lives of everyone around them, as alleged in the indictment.  We will be relentless in pursuing those who carry out violence.  I commend the detectives, agents and prosecutors whose work resulted in these arrests and the unsealing of this indictment.”

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

The Beach Avenue Crew was a criminal enterprise that operated principally in and around the Bronx, New York, from at least 2009 up to and including February 2017.  One of the Beach Avenue Crew’s principal objectives was to sell cocaine base, commonly known as “crack cocaine,” primarily in and around Beach Avenue in the Bronx.  The Beach Avenue Crew controlled crack cocaine sales within this area by prohibiting and preventing non-members, outsiders, and rival narcotics dealers from distributing crack cocaine in the area controlled by the Enterprise.

Members and associates of the Beach Avenue Crew engaged in acts of violence against rival gang members from nearby crews, and rival drug dealers who encroached on the Beach Avenue Crew’s territory.  These acts of violence included assaults and attempted murder, and were committed to protect the Beach Avenue Crew’s drug territory, to retaliate against members of rival gangs who had encroached on the territory controlled by the Beach Avenue Crew, and to otherwise promote the standing and reputation of the Beach Avenue Crew amongst rival gangs.

The violence perpetrated by the Beach Avenue Crew included at least two attempted murders.  On or about August 2, 2016, JAMMAL LINDO, JEAN BAPTISTE LESSAGE, and JALEEL BARON shot at a rival drug trafficker and another individual (“Victim-1”), resulting in bodily injury to Victim-1.  On or about May 5, 2015, ALI HAMILTON shot at a member of a rival crew on Leland Avenue in the Bronx, causing bodily injury to another individual standing nearby. 

Count One of the Indictment charges ALI HAMILTON, JEAN BAPTISTE LESSAGE, DAVID BUCKHANON, JAMMAL LINDO, MAURICE SIMMONS, NORMAN EDWARDS, JALEEL BARON, and KYLE MULLINGS with participating in a racketeering conspiracy.

Counts Two charges HAMILTON with assault and attempted murder in aid of racketeering activity in connection with the May 2015 shooting at a member of a rival crew.

Count Three charges LINDO, LESSAGE, and BARON with assault and attempted murder in aid of racketeering activity in connection with the August 2016 shooting at a rival drug trafficker.

Count Four charges HAMILTON, LESSAGE, BUCKHANON, LINDO, SIMMONS, EDWARDS, BARON, and MULLINGS with participating in a narcotics conspiracy, in connection with their distribution of crack cocaine in and around Beach Avenue.

Count Five charges HAMILTON, LESSAGE, BUCKHANON, LINDO, SIMMONS, EDWARDS, BARON, and MULLINGS with a firearms offense in connection with the racketeering conspiracy charged in Count One and the narcotics conspiracy charged in Count Four.

Count Six charges HAMILTON with being a convicted felon in possession of a firearm.

*                      *                     *

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

Mr. Bharara praised the outstanding investigative work of HSI, the DEA, and the NYPD. 

This case is being handled by the Office’s Violent and Organized Crime Unit.  Assistant United States Attorneys Jessica Lonergan, Scott Hartman, and Jason Swergold are in charge of the prosecution.

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

COUNT

CHARGE

DEFENDANTS

MAX. PENALTIES

1

Racketeering conspiracy

18 U.S.C. § 1962(d)

ALI HAMILTON

JEAN BAPTISTE LESSAGE

DAVID BUCKHANON

JAMMAL LINDO

MAURICE SIMMONS

NORMAN EDWARDS

JALEEL BARON

KYLE MULLINGS

20 years in prison

2

Assault and attempted murder in aid of racketeering activity

18 U.S.C. §§ 1959(a)(3) and 1959 (a)(5)

ALI HAMILTON

20 years in prison

3

Assault and attempted murder in aid of racketeering activity

18 U.S.C. §§ 1959(a)(3) and 1959 (a)(5)

JAMMAL LINDO

JEAN BPATISTE LESSAGE

JALEEL BARON

20 years in prison

4

Narcotics conspiracy

21 U.S.C. § 846

ALI HAMILTON

JEAN BAPTISTE LESSAGE

DAVID BUCKHANON

JAMMAL LINDO

MAURICE SIMMONS

NORMAN EDWARDS

JALEEL BARON

KYLE MULLINGS

Life in prison

Mandatory minimum of 10 years in prison

5

Using or carrying a firearm during and in relation to, or possessing a firearm in furtherance of, a crime of violence or drug trafficking crime

924(c)(1)(A)(iii)

ALI HAMILTON

JEAN BAPTISTE LESSAGE

DAVID BUCKHANON

JAMMAL LINDO

MAURICE SIMMONS

NORMAN EDWARDS

JALEEL BARON

KYLE MULLINGS

Life in prison

Mandatory minimum of 10 years in prison

6

Felon in possession of a firearm

18 U.S.C. § 922(g)(1)

ALI HAMILTON

10 years in prison

DEFENDANT

AGE

RESIDENCE

ALI HAMILTON

a/k/a “Smiley”

24

Bronx, NY

JEAN BAPTISTE LESSAGE

a/k/a “Usher”

35

Bronx, NY

DAVID BUCKHANON

a/k/a “Mase”

30

Bronx, NY

JAMMAL LINDO

a/k/a “Poppy,” a/k/a “Ghost”

23

Bronx, NY

MAURICE SIMMONS

a/k/a “Momoneybagz”

24

Bronx, NY

NORMAN EDWARDS

a/k/a “Hollywood”

25

Lehigh County, PA

JALEEL BARON

a/k/a “Jah,” a/k/a “Youngin”

24

Westchester County, NY

KYLE MULLINGS

a/k/a “Kase”

22

Bronx, NY

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

Preet Bharara, the United States Attorney for the Southern District of New York, and Kathy Enstrom, Acting Special Agent-in-Charge of the New York Field Office of the Internal Revenue Service, Criminal Investigation (“IRS-CI”), announced today that HERBERT LINDENBAUM, a Manhattan personal injury and medical malpractice attorney, voluntarily surrendered today in Manhattan federal court. LINDENBAUM is charged in a six-count Indictment with engaging in a nearly two-decade-long tax evasion scheme that involved his failure to pay more than $3.3 million in back taxes, penalties, fees, and interest to the IRS.

Mr. Bharara said: “As an attorney, Herbert Lindenbaum should have known better. But as alleged, rather than abide by the law, Lindenbaum engaged in a nearly two-decade scheme to divert and evade millions of dollar in taxes.”

IRS-CI Acting Special Agent-in-Charge Kathy Enstrom said: “As alleged in the indictment, Mr. Lindenbaum intentionally evaded his tax obligations for well over a decade, failing to pay millions he owed in taxes. Fulfilling individual tax obligations is a legal requirement and those who willfully evade that responsibility will be prosecuted.”

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

From 1999 through the present, HERBERT LINDENBAUM has been a personal injury and medical malpractice lawyer in New York, New York. For tax years 1999 through 2013, LINDENBAUM reported to the IRS that he owed taxes of more than $2.5 million, but voluntarily paid to the IRS only $85,000. Including penalties, fees, and interest, LINDENBAUM currently owes the IRS more than $3.3 million.

To evade paying the IRS, LINDENBAUM engaged in at least five tactics to conceal the extent of his and his law firms’ income from the IRS. First, LINDENBAUM caused business checks for his legal work to be deposited directly into his wife’s personal bank accounts.

Second, LINDENBAUM used his law firms’ bank accounts like his own personal coffers by paying his personal expenses directly from those accounts. He paid approximately $85,000 in alimony, $75,000 in personal loan repayments, $425,000 in apartment rental and utility payments, $25,000 in luxury car payments and parking expenses, $50,000 in tuition and other expenses for his children, and $10,000 in medical expenses directly from his business bank accounts. Some of these business bank accounts were Interest on Lawyer, or “IOLA,” accounts. New York law requires that IOLA accounts hold only client funds. Still, LINDENBAUM used at least two IOLA accounts to pay his personal expenses.

Third, LINDENBAUM paid his son and his wife nearly $150,000 for work for his law firms that they did not actually perform. Fourth, LINDENBAUM cashed checks totaling more than $325,000 made payable to himself from his business accounts.

Finally, in September 2010, the IRS levied two of LINDENBAUM’s business bank accounts, which permitted the IRS to take involuntary payments of LINDENBAUM’s tax liabilities from those accounts. To avoid this levy, LINDENBAUM opened at least two personal bank accounts and deposited more than $160,000 of business receipts into those accounts.

LINDENBAUM’s actions over the course of nearly 20 years have prevented the IRS from collecting the more than $3.3 million that he owed the IRS.

* * *

LINDENBAUM, 78, of New York, New York, was arraigned in Manhattan federal court today before Magistrate Judge Ronald L. Ellis. The case is assigned to United States District Judge Paul A. Crotty.

LINDENBAUM, who was charged with one count each of obstructing the IRS and tax evasion, and four counts of failure to pay the IRS, faces the following penalties if convicted:

Statute Violated

Counts

Description

Maximum Sentence

26 U.S.C. § 7201

1

Tax Evasion

Five years in prison

18 U.S.C. § 7203

2 to 5

Failure to pay taxes – 2010 to 2013 tax years

One year in prison on each count

26 U.S.C. § 7212(a)

6

Corruptly endeavoring to obstruct and impede the due administration of the Internal Revenue Laws

Three 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 will be determined by the Court.

Mr. Bharara praised the outstanding investigative work of the IRS.

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

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

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

Preet Bharara, the United States Attorney for the Southern District of New York, announced that JOSEPH CICCARELLA was sentenced last Friday to 18 months in prison for evading taxes on over $1.6 million that he siphoned from construction-related companies he owned to use for personal purposes. Through the scheme, CICCARELLA evaded over $280,000 in personal income taxes owed to the Internal Revenue Service (“IRS”). CICCARELLA pled guilty on November 3, 2016, before United States District Judge Alvin K. Hellerstein, who imposed today’s sentence.

Manhattan U.S. Attorney Preet Bharara said: “Joseph Ciccarella used his companies and third party vendors as a means to funnel over $1.6 million for his own use without paying his proper share of taxes on that money. Ciccarella would issue checks from his companies claiming they were corporate expenses when in fact they were sham checks that would simply be cashed and be returned to him for his use. For his tax fraud scheme, Ciccrealla will now face 18 months in federal prison. We thank the IRS Criminal Investigation for the terrific work on this case.”

According to the allegations in the Information to which CICCARELLA pled guilty, other documents filed in Manhattan federal court, and statements made in court proceedings:

CICCARELLA was the owner of two New York companies involved in the heating, ventilation, and air conditioning business – BSI Consulting (“BSI”) and KMS Mechanical (“KMS”). During the period 2009-2012, CICCARELLA drew numerous checks on the bank accounts of BSI and KMS and made them payable to third party corporate entities, even though those third party companies performed no services for, and provided no goods to, CICCARELLA’s companies. Instead, CICCARELLA had entered into a corrupt arrangement with the owners of the payee companies that the checks he drew on the accounts of BSI and KMS would be cashed at check cashers in the New York metropolitan area and the cash returned to CICCARELLA, less a fee CICCARELLA paid to the third parties for cashing the checks.

Between 2009 and 2012, CICCARELLA siphoned over $1.6 million from BSI and KMS in this fashion, which monies he caused to be falsely listed on the books and tax returns of those companies as “cost of goods sold.” CICCARELLA did not pay taxes on the funds he siphoned from his companies even though he used those funds for personal purposes, such as to provide funding for a separate set of companies he owned, as well as to pay for personal expenses.

* * *

In addition to his prison term, CICCARELLA, 54, of Glen Head, New York, was sentenced to three years of supervised release and ordered to pay a $100,000 fine. CICCARELLA had previously paid the $284,000 in restitution that was due the IRS.

Mr. Bharara praised the investigative work of the IRS, Criminal Investigations.

This case is being handled by the Office’s Complex Frauds and Cybercrime Unit. Special Assistant United States Attorney Stanley J. Okula Jr. is in charge of prosecution.

Preet Bharara, the United States Attorney for the Southern District of New York, announced that MICHAEL KLEIN, the former treasurer of the Mahopac Volunteer Fire Department (“MVFD”), pled guilty today to wire fraud, subscription to false tax returns, obstruction of the grand jury, and false statement charges before U.S. District Judge Cathy Seibel.

U.S. Attorney Preet Bharara stated: “Michael Klein admitted today what we alleged – for over a decade, he violated the trust of his fellow volunteer fire fighters and used the Mahopac Volunteer Fire Department funds as his own slush fund.  Klein took advantage of his position as the fire department’s treasurer and spent department money on himself, including paying for a yacht, a Florida home, jewelry, and an antique fire truck.”  

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

MICHAEL KLEIN was first elected treasurer of the MVFD in 2001.  From January 2002 to September 2015, KLEIN embezzled MVFD funds under his control by writing checks to the two businesses he owned, Abbie Graphic Services, Ltd. (“Abbie Graphic”), and Buckshollow Emergency Equipment Corp. (“BEEC”).  KLEIN then deposited the checks to bank accounts held by Abbie Graphic or BEEC.  He entered these checks into the MVFD’s books as having been made payable to various vendors, other than Abbie Graphic or BEEC, that sold firefighting equipment or services used by fire departments. 

KLEIN embezzled more than $5.6 million by writing approximately 275 checks over a period of more than 13 years.  He used the money to purchase, among other things, a 55’ Neptunus motor yacht named “K’Bam,” a second residence in Palm City, Florida, an antique fire truck, and jewelry.  He also used the money to support Abbie Graphic and BEEC.  KLEIN also failed to report most of this income on his personal tax returns for the period from 2009 through 2014, thereby subscribing to false tax returns for each of those years.    

Following law enforcement’s discovery of KLEIN’s embezzlement in September 2015, KLEIN obstructed the grand jury’s investigation of his conduct by making false statements regarding his finances and by concealing and dissipating assets.  For example, KLEIN sold K’Bam for $138,868 even though he had purchased it for $260,000, listed it for sale for $229,000, and rejected an offer he received for $175,000.  KLEIN also gave the United States Attorney a financial statement in which he falsely claimed, among other things, that BEEC had a delinquent loan of $275,000, and that, as a result of that loan, a lien was filed against KLEIN’s Florida property.  KLEIN also concealed the proceeds he received from the sale of a Corvette by giving the money to a relative for deposit to her bank account and then arranging for the relative to pay his household bills.  KLEIN also concealed an antique fire truck to prevent law enforcement from seizing it. 

KLEIN, 48, of Mahopac, New York, and Palm City, Florida, pled guilty to one count of wire fraud, which carries a maximum sentence of 20 years in prison; six counts of subscribing to false tax returns, each of which carries a maximum sentence of three years in prison; one count of obstructing the grand jury’s investigation, which carries a maximum sentence of 20 years in prison; and one count of making false statements to the United States Attorney, which carries a maximum sentence of five years in prison.  The maximum potential sentences are prescribed by Congress and are provided here for informational purposes only, as the sentence will be determined by the court.

In pleading guilty, KLEIN agreed to forfeit to the United States a sum of $5,675,360.49, his residence in Palm City, Florida, his equity in his yacht club in Palm City, Florida, cash held in various bank accounts, a 1931 American LaFrance antique fire engine, proceeds of a life insurance policy, a 2000 13' Nautica vessel with an outboard motor, and a 2005 Eliminator trailer.

Klein is scheduled to be sentenced by Judge Cathy Seibel on June 21, 2017, at 2:30 p.m.         

Mr. Bharara praised the outstanding investigative work of the Internal Revenue Service, Criminal Investigations, the Federal Bureau of Investigation, the New York State Comptroller, and the New York State Police.  He thanked the Putnam County District Attorney’s Office for its assistance in the investigation.

This case is being handled by the Office’s White Plains Division.  Assistant United States Attorneys Andrew Dember, Maurene Comey, Michael Maimin, James McMahon, Lauren Schorr, and Olga Zverovich are in charge of the prosecution.

Preet Bharara, the United States Attorney for the Southern District of New York, announced that N. AARON TROODLER, the former Executive Director of the Ramapo Local Development Corporation (“RLDC”), pled guilty today before U.S. District Judge Cathy Seibel to conspiring with Ramapo Town Supervisor Christopher St. Lawrence to commit securities fraud as a result of a scheme to defraud investors in municipal bonds issued by the RLDC and the Town of Ramapo (the “Town”). This case is believed to be the first conviction for federal securities fraud in connection with municipal bond issuances.

U.S. Attorney Preet Bharara said: “As we said at the time of his arrest, N. Aaron Troodler defrauded both the citizens of Ramapo and thousands of investors around the country, helping to sell over $150 million of municipal bonds on fabricated financials. Today, Troodler has admitted to committing securities fraud. This guilty plea, in what we believe to be the first municipal bond-related criminal securities fraud prosecution, is a big step in policing and bringing accountability to the $3.7 trillion municipal bond market.”

According to the allegations contained in the Superseding Information to which TROODLER pled guilty today and the related Indictment of TROODLER’s co-conspirator, Town Supervisor Christopher St. Lawrence:

As of August 2015, the Town had more than $128 million in outstanding bonds that had been issued for various municipal purposes, while the RLDC, a corporation created and owned by the Town under state law, had issued $25 million in bonds to pay for the construction of Provident Bank Park (now Palisades Credit Union Park), a minor league baseball stadium in Ramapo.

The Indictment and Superseding Information charge that St. Lawrence and TROODLER lied to investors in the Town’s and RLDC’s bonds in order to conceal the deteriorating state of the Town’s finances and the inability of the RLDC to make scheduled payments of principal and interest to holders of its bonds from its own money.

While the fraud predated the construction of the stadium, the Town’s financial problems were caused largely by the $58 million total cost of the stadium. The Town paid more than half of that cost, despite the rejection of the Town’s guarantee of bonds to pay for construction of the stadium in a Town-wide referendum in 2010 and St. Lawrence’s public statements that no public money would be used to pay for the stadium.

The defendants lied to investors primarily by making up false assets in the Town’s General Fund. The General Fund is the Town’s primary operating fund. The accumulated difference over time between how much money the Town receives in taxes and fees and how much it spends in a year is the fund’s balance. The fund balance is a cushion that can be spent during difficult financial times. The size of the fund balance relative to the amount of the fund’s revenue and trends in a town’s General Fund balance over time are the primary indicators of the town’s financial health.

The Indictment alleges that St. Lawrence lied to the RLDC’s bond rating service in January 2013 when he told them in a telephone call that the 2012 fund balance would remain unchanged from the 2011 balance. Immediately after that call ended, St. Lawrence told Town employees “to do [an upcoming] refinancing of the short term debt as fast as possible because . . . we’re going to have to all be magicians to get to some of those numbers.”

The Indictment and the Superseding Information also allege that St. Lawrence and TROODLER told investors in the Town’s and RLDC’s bonds that the RLDC was making the payments on its bonds from its operating revenue, meaning money it was making from its ordinary business of running the baseball stadium and selling condominiums at a development it had built. That was important to investors because it led them to believe that the Town would not have to pay off the RLDC’s $25 million bonds. It also made the RLDC’s bonds look less risky. The RLDC actually made those payments from money TROODLER borrowed from the bank or money TROODLER obtained from the Town at St. Lawrence’s direction.

When the RLDC issued $25 million in bonds to build the stadium building itself in 2011, St. Lawrence inflated the size of the Town’s General Fund by including a false $3.6 million receivable in the General Fund. The Town’s financial condition was important to investors in the RLDC’s bonds because the Town guaranteed the payments of principal and interest on the bonds. Without that fake asset, the General Fund’s balance would have been negative in that year.

In addition, St. Lawrence inflated the General Fund with another fake receivable for $3.08 million from 2010 through 2015. It first went on the Town’s books when the RLDC agreed to buy property known as The Hamlets from the Town for $3.08 million. That sale never closed because the land turned out to be a habitat for rattlesnakes. Rather than take the receivable off the Town’s books – and reduce the size of the General Fund balance by $3.08 million, thereby creating a negative balance – St. Lawrence claimed the receivable had to do with the RLDC’s purchase of another property from the Town that had already taken place. To keep it on the books, St. Lawrence then caused the Town Attorney to tell the Town’s auditors over a period of years that the receivable would be paid back within a year, which was required if the receivable was going to stay in the General Fund. Without this fake receivable alone, the Town’s General Fund balance would have been negative for years.

In May 2013, the Federal Bureau of Investigation (“FBI”) searched Town Hall in connection with this investigation. Less than 10 days later, St. Lawrence inflated another receivable in the General Fund – this one for money from the Federal Emergency Management Agency (“FEMA”) to reimburse the Town for expenses from Hurricanes Irene and Sandy. St. Lawrence claimed that the Town was going to receive $3.145 million from FEMA when the Town hadn’t even submitted those claims to FEMA yet. Without St. Lawrence’s inflation of this receivable alone, the projected General Fund balance for 2012 would have been negative when the Town sold bonds in May 2013.

Finally, the Indictment alleges that St. Lawrence also inflated the General Fund balance by making more than $12 million in transfers from the Town’s Ambulance Fund to the General Fund from 2009 to 2014. The group of properties in Ramapo that pays into the Ambulance Fund is different from the group of properties that pays into the General Fund. Under state law, transfers between funds with different tax bases can only be loans. St. Lawrence told the auditors that the two funds had the same tax base to justify the transfers.

* * *

TROODLER, 42, of Bala Cynwyd, Pennsylvania, pled guilty to one count of securities fraud, which carries a maximum sentence of 20 years in prison, and one count of conspiracy, which carries a maximum sentence of five years in prison.

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

TROODLER is scheduled to be sentenced by Judge Seibel on September 18, 2017, at 3:30 p.m.

The charges against Christopher St. Lawrence contained in the Indictment are merely accusations, and he is presumed innocent unless and until proven guilty.

Mr. Bharara praised the investigative work of the FBI and the Rockland County District Attorney’s Office. He also thanked the U.S. Securities and Exchange Commission for their assistance in the investigation.

This case is being prosecuted by the Office’s White Plains Division. Assistant U.S. Attorneys James McMahon, Daniel Loss, and Stephen J. Ritchin are in charge of the prosecution.

Preet Bharara, the United States Attorney for the Southern District of New York, William F. Sweeney Jr., the Assistant Director-in-Charge of the New York Field Division of the Federal Bureau of Investigation (“FBI”) and James P. O’Neill, the Commissioner of the New York City Police Department (“NYPD”), announced the unsealing of a complaint charging JUAN THOMPSON with cyberstalking a particular woman (“Victim-1”), by, among other things, communicating threats to Jewish Community Centers (“JCCs”) in Victim-1’s name. THOMPSON was arrested in St. Louis, Missouri, this morning and is expected to be presented there later today.

U.S. Attorney Preet Bharara said: “Everyone deserves to be free from fear and discrimination based on religion, race, or ethnicity; that is fundamental to who we are as a nation. Together with the FBI and the NYPD, we have been investigating the recent threats made on Jewish Community Centers in New York and around the country. Today, we have charged Juan Thompson with allegedly stalking a former romantic interest by, among other things, making bomb threats in her name to Jewish Community Centers and to the Anti-Defamation League. Threats of violence targeting people and places based on religion or race – whatever the motivation – are unacceptable, un-American, and criminal. We are committed to pursuing and prosecuting those who foment fear and hate through such criminal threats.”

FBI Assistant Director-in-Charge William F. Sweeney Jr. said: “Thompson’s alleged pattern of harassment not only involved the defamation of his female victim, but his threats intimidated an entire community. The FBI and our partners take these crimes seriously. I would also like to thank the NYPD and the New York State Police, who continue to work shoulder to shoulder with us as we investigate and track down every single threat and work together to achieve justice for our communities that have been victimized by these threats.”

Police Commissioner James P. O’Neill said: “We will continue to pursue those who peddle fear, making false claims about serious crimes. As alleged, the defendant caused havoc, expending hundreds of hours of police and law enforcement resources to respond to and investigate these threats. I’m grateful for the collaboration between the NYPD detectives, FBI agents, and prosecutors whose cross-country investigation led to this morning’s arrest.”

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

In recent months, the FBI and this Office have been investigating a series of threats across the country principally targeting JCCs, schools, and other organizations that provide service to and on behalf of the Jewish community (the “JCC Threats”). Based on the investigation, THOMPSON appears to have made at least eight of the JCC Threats as part of a sustained campaign to harass and intimidate Victim-1. THOMPSON’s harassment of Victim-1 appears to have begun shortly after their romantic relationship ended and to have included, among other things, defamatory emails and faxes to Victim-1’s employer, false reports of criminal activity by Victim-1, and JCC Threats in Victim-1’s name.

In July 2016, an email was sent to Victim-1’s employer that made false allegations about Victim-1, including that she had broken the law, using an internet protocol (“IP”) address that THOMPSON had previously used to access his social media account. On October 15, 2016, an IP address that traced back to THOMPSON’s residence was used to report falsely that Victim-1 possessed child pornography. When confronted by law enforcement on November 22, 2016, THOMPSON claimed that his email account had been hacked a few weeks earlier.

In January and February 2017, THOMPSON appears to have made at least eight JCC Threats as part of his campaign of harassment against Victim-1. For instance, on or about February 21, 2017, the Anti-Defamation League (“ADL”) received an emailed threat at their midtown Manhattan office, which indicated that “[Victim-1’s name and birthdate] is behind the bomb threats against jews. She lives in nyc and is making more bomb threats tomorrow.” The next day, the ADL received a phone call claiming that explosive material had been placed in the ADL’s midtown Manhattan office.

Some of THOMPSON’s JCC Threats appear to have been made in his own name, as part of an effort to claim that Victim-1 was trying to frame THOMPSON for a crime. For instance, on or about February 7, 2017, a JCC in Manhattan received an emailed bomb threat from an anonymous email account, which stated: “Juan Thompson [THOMPSON’s birthday] put two bombs in the office of the Jewish center today. He wants to create Jewish newtown tomorrow.” The email’s use of the phrase “Jewish newtown” appeared to refer to a December 2012 school shooting in Newtown, Connecticut, in which a gunman murdered 26 victims, including 20 children.

In February 2017, a Twitter account that appears to be used by THOMPSON (the “Thompson Twitter Account”) was used to accuse Victim-1 of responsibility for the JCC Threats and claim that Victim-1 was trying to frame THOMPSON for her crimes. For instance, on February 24, 2017, the Thompson Twitter Account posted: “[s]he [Victim-1], though I can’t prove it, even sent a bomb threat in my name to a Jewish center, which was odd given her antisemitic statements. I got a visit from the FBI. So now I’m battling the racist FBI and this vile, evil, racist white woman.” On February 26, 2017, the Thompson Twitter Account posted “The hatred of Jews goes across all demos. Ask NYC’s [Victim-1’s employer]. They employ a filthy anti-Semite in [Victim-1]. These ppl are evil.”

* * *

THOMPSON, 31, of Saint Louis, Missouri, is charged with one count of cyberstalking, 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.

Mr. Bharara praised the outstanding investigative work of the FBI and the New York City Police Department, as well as the United States Secret Service, the St. Louis Police Department, the U.S. Attorney’s Office for the Eastern District of Missouri, and the Computer Crime and Intellectual Property Section of the United States Department of Justice for their ongoing investigative assistance. This investigation, as well as investigations into the other threats made to the Jewish community organizations in New York City are ongoing.

The prosecution is being handled by the Office’s Terrorism & International Narcotics Unit and the General Crimes Unit. Assistant U.S. Attorney Jacob Warren is in charge of the prosecution.

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

Preet Bharara, the United States Attorney for the Southern District of New York, announced that ORANE NELSON, a/k/a “Amaze,” 28, was convicted today of murdering Jennifer Rivera and Jason Rivera on January 16, 2013, in the Bronx, in connection with a dispute over a drug debt, as well as narcotics conspiracy and firearms possession charges.  At the time of their murders, Jennifer Rivera was 20 and Jason Rivera was 30.  The jury convicted NELSON on all four counts in the controlling indictment following a two-week trial before U.S. District Judge Denise L. Cote.   

U.S. Attorney Preet Bharara stated: “Orane Nelson executed two people in cold blood over a drug debt.  He killed Jason Rivera over a drug debt, and Jennifer Rivera – a 20-year-old college student who had nothing to do with that drug debt – just because she was there.  Today’s unanimous jury verdict finding Nelson guilty on all counts ensures Nelson will be held to account for his violent and callous crimes.”

According to court papers and evidence admitted at trial:

From 2011 to 2013, ORANE NELSON, a/k/a “Amaze,” was a crack dealer in the Bronx who also carried guns to protect his drug business.  In January 2013, NELSON had a dispute with Jason Rivera over a drug debt owed by NELSON.  Following the dispute, NELSON decided to murder Jason Rivera, and lured Jason Rivera out to a location in the Bronx with the promise of money to be paid for the debt owed.  Jason Rivera brought along his 20-year-old cousin, Jennifer Rivera, who was not involved in any drug trafficking activities, to pick up the money promised by NELSON.  Shortly after midnight, NELSON and an accomplice entered Jason Rivera’s vehicle, and minutes later executed both Jason Rivera and Jennifer Rivera by shooting them each in the head at close range.  Jennifer was killed because she was a witness to the murder of Jason Rivera.

For these activities, NELSON was convicted of one count of conspiracy to distribute narcotics, which carries a mandatory minimum sentence of 10 years in prison and a maximum of life, one count of possession of firearms in furtherance of a narcotics conspiracy, which carries a mandatory minimum sentence of five years in prison and a maximum of life, to be served consecutively, and two counts of causing the death of another through use of a firearm, each of which carries a mandatory minimum sentence of 25 years in prison and a maximum of  life, to be served consecutively.  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.

NELSON is scheduled to be sentenced on June 23, 2017, before Judge Cote.

U.S. Attorney Bharara praised the FBI and the NYPD for their outstanding work in this investigation.

The case is being prosecuted by the Office’s Violent and Organized Crime Unit.  Assistant U.S. Attorneys Jared Lenow and Jessica Feinstein are in charge of the prosecution.

Preet Bharara, 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 that LAWRENCE OBRACANIK pled guilty today before U.S. District Judge Ronnie Abrams to one count of wire fraud for his theft of more than $5 million from the bank at which he worked (“Bank-1”) through fraudulent wire transfers. 

U.S. Attorney Preet Bharara said:  “As Lawrence Obracanik admitted in court today, for nearly two years he stole in excess of $5 million from his employer to line his own pockets and pay off his debts.  In the end, however, Obracanik’s fraud has led to a federal criminal conviction.”

FBI Assistant Director-in-Charge William F. Sweeney Jr. said: “As he admitted, Obracanik, a bank employee, cashed in on a deal to pay his debts and leave his employer with millions of dollars in losses. But the endgame left him with few options, and he’s admitted to his crime today.”

According to the Complaint, the Information, and statements made during today’s guilty plea:     

Between July 2014 and February 2016, OBRACANIK was an Operations Manager for Bank-1’s Broker Dealer Services.  During that time, OBRACANIK was responsible for a series of fraudulent and unauthorized wire transfers from Bank-1 to an individual account at another bank (the “Bank-2 Account”) totaling more than $5 million.  The wire transfers were made either directly or through book transfers using an intermediate company (“Company-1”).  OBRACANIK reported to Company-1 personnel that the book transfers were accidental and the money should be wired to the Bank-2 Account.  OBRACANIK later admitted that the transfers were intentional and had, in fact, been intended to pay OBRACANIK’s personal debts. 

*                      *                     *

OBRACANIK, 42, of Fort Worth, Texas, pled guilty to one count of wire fraud affecting a financial institution, which carries a maximum sentence of 30 years in prison and a maximum fine of $1 million, or twice the gross gain or loss from the offense.  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.  

OBRACANIK will be sentenced by Judge Abrams on July 7, 2017, at 11 a.m.                  

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

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

Preet Bharara, the United States Attorney for the Southern District of New York, announced that MANUEL GEOVANNY RODRIGUEZ-PEREZ, a/k/a “Shorty,” was sentenced today by U.S. District Judge Laura Taylor Swain to spend the remainder of his life in prison for his role as a leader of a massive and violent racketeering organization (the “Rodriguez Enterprise”) whose members sold large quantities of marijuana, murdered and attempted to murder nearly 20 people, transported and laundered millions of dollars, obstructed justice and committed perjury, and engaged in firearms offenses. 

RODRIGUEZ-PEREZ was previously charged in connection with “Operation Green Venom,” a coordinated multi-agency investigation that was led by U.S. Immigration and Customs Enforcement’s Homeland Security Investigations (“ICE HSI”), and first announced in October 2010.  On June 7, 2016, RODRIGUEZ-PEREZ pled guilty before Judge Swain to one count of racketeering conspiracy, and accepted responsibility for dozens of illegal acts associated with that conspiracy, including nine murders and 10 attempted murders in the United States and the Dominican Republic.  

Manhattan U.S. Attorney Preet Bharara said:  “By his own admission, Manuel Geovanny Rodriguez-Perez is a cold-blooded murderer who was responsible for the executions of nine people and attempts on the lives of 10 more.  He ruled over his drug enterprise with an iron fist and ruthlessly protected his turf.  Today Rodriguez-Perez received a sentence that will ensure he poses no further danger to the people of New York – life behind bars.”

According to the allegations contained in the criminal Indictment and Information, other documents in the public record, and statements made in court:  RODRIGUEZ-PEREZ was the highest ranking leader of a narcotics organization involved in a wide range of criminal activity, including the murders of the following victims: 

• Francisco Perez, a/k/a “Francie,” on October 26, 1997:  Perez was murdered at RODRIGUEZ-PEREZ’s direction and under his watch after RODRIGUEZ-PEREZ decided that Perez was a rival with whom RODRIGUEZ-PEREZ no longer wished to compete.  Perez was shot and killed outside a nightclub in upper Manhattan.  Rodriguez watched this murder from the safety of a nearby pool hall and later informed a cooperating witness that he had “given himself” this murder as a “birthday present.” 
• Antonio Kasse, a/k/a “Toasty,” on December 13, 1998:  RODRIGUEZ-PEREZ murdered Kasse because RODRIGUEZ-PEREZ suspected Kasse in the theft of a relatively small amount of marijuana from one of RODRIGUEZ-PEREZ’s stash houses.  In the shooting that resulted in Kasse’s death, the hitmen hired by RODRIGUEZ-PEREZ also struck an innocent bystander, permanently paralyzing that victim.
• FNU LNU, a/k/a “Carlos Valentin,” a/k/a “Campi,” in or about 2000:  Campi – whose true identity remains unknown – was strangled to death by RODRIGUEZ-PEREZ and his underlings in a public park in the Bronx.  Campi was a low-level employee of RODRIGUEZ-PEREZ’s drug business whom RODRIGUEZ-PEREZ suspected of having stolen a small amount of marijuana.  RODRIGUEZ-PEREZ buried Campi in a pre-dug grave, and later returned in an unsuccessful effort to locate, exhume, and destroy his victim’s remains.
• Noel Herrera, on December 29, 2001:  Herrera was a rival drug dealer murdered by RODRIGUEZ-PEREZ in order to increase the Rodriguez Organization’s profits.  He was murdered in the Dominican Republic at RODRIGUEZ-PEREZ’s direction by a team of paid assassins.
• Kelly Perez, a/k/a “Red” on September 16, 2002:  RODRIGUEZ-PEREZ ordered the murder of this low-level employee of his business because he believed Perez to have stolen a small amount of marijuana and money, with which he had purchased a particular firearm.  Before attempting multiple times to murder Perez, RODRIGUEZ-PEREZ forced Perez to return that firearm and, in spite, ensured that Perez died from a shot fired by the same weapon.   
• Marino Molina, on January 11, 2003, and Wilfredo Molina, a/k/a “Willie,” on May 3, 2004:  The Molina brothers were rivals of the Rodriguez Organization and associates of RODRIGUEZ-PEREZ’s first victim, Francisco Perez.  Marino was murdered by a team of hitmen in the Dominican Republic while attending a baseball game, and Wilfredo was murdered in the drive-way of his family home in the presence of his young son.
• Manuel Rivas, a/k/a “Tony el Mono,” on October 29, 2005:  Rivas was a former employee of the Rodriguez Organization whom RODRIGUEZ-PEREZ believed to be cooperating with law enforcement in the investigation of his drug empire.  Rivas was murdered in the Dominican Republic by hitmen hired by RODRIGUEZ-PEREZ. 
• Richard Cabrera, a/k/a “Bori,” on January 16, 2006:  The murder of Richard Cabrera demonstrates RODRIGUEZ-PEREZ’s ruthlessness in support of his narcotics business.  Cabrera had been a hitman for RODRIGUEZ-PEREZ in the murder of Francisco Perez, described above, and RODRIGUEZ-PEREZ murdered Cabrera in order to safeguard against the possibility of Cabrera revealing RODRIGUEZ-PEREZ’s role in that earlier murder.

Noel Herrera, Marino Molina, and Manuel Rivas were each murdered by or at the command of RODRIGUEZ-PEREZ in the Dominican Republic.  Wilfredo Molina was murdered at the command of RODRIGUEZ-PEREZ in New Jersey, and the remaining victims were murdered in New York City.  

Additionally, RODRIGUEZ-PEREZ was ordered to pay $25 million as a forfeiture penalty, which is the approximate amount of gross proceeds received by RODRIGUEZ-PEREZ derived from racketeering activities, properties in New York, Florida, and the Dominican Republic, and cash and jewelry seized by law enforcement officers.

RODRIGUEZ-PEREZ, age 43, has been in federal custody since October 15, 2010, when he was arrested during a takedown of more than 50 members of a massive marijuana trafficking ring that transported ton-quantities of marijuana from Florida and California for distribution in the greater New York area from the early 1990’s to 2010.  

In sentencing RODRIGUEZ-PEREZ, Judge Swain said a life sentence was warranted because of the “breadth and violence” of his criminal conduct, which showed an “immense willingness and capacity to exact vengeance and violence.”  Judge Swain described the “collateral damage caused” by RODRIGUEZ-PEREZ’s crimes as “catastrophic and immeasurable.”

Mr. Bharara praised the outstanding investigative work of ICE HSI, the New York City Police Department, and the U.S. Drug Enforcement Administration.  He also thanked the U.S. Marshals Service, the Bergen County, New Jersey, Prosecutor’s Office, the Englewood, New Jersey, Police Department, the U.S. Department of Housing and Urban Development, and the New York City Department of Investigation for their assistance, and added that the investigation is continuing.

The investigation and prosecution of the cases arising from “Operation Green Venom” has been overseen by the Office’s Violent and Organized Crimes Unit.  Assistant U.S. Attorney Andrew C. Adams is responsible for the prosecution.

Preet Bharara, the United States Attorney for the Southern District of New York, announced that DAVON DAVIS pled guilty today to wire fraud charges in connection with a scheme to defraud prospective car buyers over the Internet.  DAVIS pled before U.S. Magistrate Judge Lisa M. Smith in White Plains federal court.

DAVIS is charged with one count of conspiracy to commit wire fraud.

Manhattan U.S. Attorney Bharara stated:  “Davon Davis brazenly defrauded individuals who thought they were purchasing cars with their hard-earned money, but in fact there were no cars to be sold.  Davis has now admitted his crime and will face the consequences of his actions.”

According to the Information filed in White Plains federal court and public information: 

From late 2013 through early 2015, DAVIS and others defrauded individuals who sought to purchase cars over the Internet from businesses they believed were located in White Plains, New York, and other locations.  In reality, the address in White Plains and the businesses did not exist, and DAVIS and his co-conspirators did not own or legally possess any of the cars that were supposedly for sale on the Internet.  DAVIS and his co-conspirators stole close to $200,000 from car buyers located all over the United States.

*                *                *

DAVIS faces a maximum sentence of 20 years in prison on the charge in the Information.  The statutory maximum penalty is prescribed by Congress and is provided here for informational purposes only, as any sentencing of the defendant would be determined by the judge.

DAVIS will be sentenced by U.S. District Judge Kenneth M. Karas on a date to be determined.

Mr. Bharara praised the outstanding efforts of the Federal Bureau of Investigation, the Westchester County District Attorney’s Office, and the White Plains Police Department.

This case is being handled by the Office’s White Plains Division.  Assistant U.S. Attorney John P. Collins Jr. and Special Assistant United States Attorney Lauren Abinanti of the Westchester County District Attorney’s Office are in charge of the prosecution.

Preet Bharara, the United States Attorney for the Southern District of New York, announced today that the United States has filed a lawsuit against BEDFORD DEVELOPMENT LLC (“BEDFORD”), CARNEGIE CONSTRUCTION CORP. (“CARNEGIE”), JOBCO INC. (“JOBCO”), ROBERT PASCUCCI (“PASCUCCI”), the sole shareholder of BEDFORD and CARNEGIE and the president of JOBCO, and WARSHAUER MELLUSI WARSHAUER ARCHITECTS, P.C. (“WMW ARCHITECTS”), for violating the Fair Housing Act. The Government alleges that these defendants discriminated against disabled residents of the Sutton Manor condominium in Mount Kisco, New York, by failing to design and construct Sutton Manor so as to be accessible to persons with disabilities.

Manhattan U.S. Attorney Preet Bharara said: “The Fair Housing Act mandates accessibility in design and construction. Through this lawsuit – like the many other similar suits brought by this Office – we intend to hold these defendants accountable for their failure to adhere to the laws that ensure equal access to housing for New Yorkers with disabilities.”

As alleged in the Complaint filed in White Plains federal court:

The Fair Housing Act’s accessible design and construction provisions require new multifamily housing complexes constructed after January 1993 to have basic features accessible to persons with disabilities.

Sutton Manor is a residential condominium building located in Mount Kisco, New York, that was built and advertised as a “55+ Adult Community” and as being “[Americans with Disabilities Act] compliant.” But the building, a three-story elevator building with 47 units, a community room, and underground and outdoor parking, was designed and constructed with numerous inaccessible features, including insufficient clear opening width at, and excessive force required to operate, the doors to the elevator lobbies, excessively high thresholds at the entrances to the patios or balconies from within individual units and from the community room, insufficient clear opening width of each panel of the double-leaf doors leading to the patio or balcony in individual units, excessively high thresholds at the entrances to showers, and insufficient clear floor space in the hallways and kitchens for maneuvering by persons who use wheelchairs.

Michael and Linda Tracey, Mark and Gloria Koller, and Ina Grober (“Complainants”) each purchased and moved into units at Sutton Manor in 2007. One of the reasons the Kollers, Traceys, and Ms. Grober purchased units at Sutton Manor was because the defendants advertised Sutton Manor as being accessible to persons with disabilities. Ms. Tracey, Ms. Koller, and Ms. Grober each has a disability that limits her mobility. Ms. Tracey uses an electric wheelchair and Ms. Koller and Ms. Grober each use a walker. Between August 2007 and April 2010, the Traceys, Kollers, and Ms. Grober, along with several other unit owners, repeatedly notified the defendants about numerous inaccessible features in the common areas and individual units at Sutton Manor and requested that the accessibility problems be remedied. Despite direct complaints from the residents, demands for a response to their complaints made by Westchester Residential Opportunities, Inc., and a lawsuit filed against the defendants by the Westchester County Human Rights Commission, the defendants failed to adequately correct many of the inaccessible features.

The Traceys, Kollers, and Ms. Grober initially filed an administrative complaint with the Department of Housing and Urban Development (“HUD”). Upon investigation, HUD determined that there was reasonable cause to believe that the Fair Housing Act had been violated by BEDFORD, CARNEGIE, and WMW ARCHITECTS. Thereafter, the Traceys, Kollers, and Ms. Grober elected, pursuant to the Fair Housing Act, to have HUD’s determination resolved in federal court.

In these circumstances, the Fair Housing Act authorizes the Department of Justice to commence an action in United States District Court on behalf Complainants. The United States may also assert other claims as warranted. The Complaint is brought on behalf of the Traceys, Kollers, and Ms. Grober against BEDFORD, CARNEGIE, and WMW ARCHITECTS, and on behalf of the United States against BEDFORD, CARNEGIE, WMW ARCHITECTS, JOBCO, and PASCUCCI, and seeks declaratory and injunctive relief and monetary damages for Complainants and other individuals injured by the defendants’ discriminatory conduct.

Mr. Bharara thanked HUD for its efforts in the investigation.

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

Preet Bharara, the United States Attorney for the Southern District of New York, announced that LYLE KAMLET, a former teacher at a school in Mamaroneck, was sentenced yesterday by the Honorable Kenneth M. Karas to 39 months in prison for possessing child pornography.

Manhattan U.S. Attorney Preet Bharara stated: “Child pornography victimizes the most innocent and vulnerable in our communities. And when a former teacher like Lyle Kamlet possesses child pornography, it is doubly dangerous and disturbing. Thanks to the efforts of the United States Postal Inspection Service, Kamlet’s illicit conduct was brought to light, and he will now face time in prison for his crime.”

KAMLET previously pled guilty to one count of possessing child pornography.

According to the Information previously filed in White Plains federal court and public information:

From in or about 2008 through 2010, on a number of occasions, KAMLET ordered child pornography videos – some of which he directed to be mailed to the school where he was then employed. During a search of his residence, law enforcement seized those videos and also found home movies that he had created that contained images of naked children.

* * *

Mr. Bharara praised the outstanding investigative work of the United States Postal Inspection Service.

The prosecution is being overseen by the Office’s White Plains Unit. Assistant United States Attorney John P. Collins Jr. is in charge of the prosecution.

Preet Bharara, the United States Attorney for the Southern District of New York, and Philip R. Bartlett, Inspector-in-Charge of the New York Office of the U.S. Postal Inspection Service (“USPIS”), today announced the unsealing of an Indictment charging a total of eight defendants with engaging in mail theft and bank fraud conspiracies in the Bronx, New York. Five defendants were arrested today, and two defendants remain at large; the eighth will voluntarily appear later this week for arraignment. The five defendants who are in custody will be presented and arraigned before U.S. Magistrate Judge Sarah Netburn later today. The case is assigned to U.S. District Judge Gregory H. Woods.

Manhattan U.S. Attorney Preet Bharara said: “These eight defendants allegedly hatched a scheme to steal mail from Bronx residents, specifically targeting mail they thought would contain checks or money orders, then depositing stolen funds into their own and others’ accounts. Now, thanks to the work of the U.S. Postal Inspection Service, these alleged mail fraudsters have been delivered to the criminal justice system.”

USPIS Inspector-in-Charge Philip R. Bartlett said: “When I think of the brazenness of these individuals to allegedly steal U.S. Mail coupled with their total disregard for the financial well-being of the communities impacted by their crimes, it takes the word insolent to new heights. Let today’s arrests serve as an example to those who believe they can steal from the US Postal Service and get away with it. Postal Inspectors and their law enforcement partners will find you, arrest you and bring you to justice for your crimes against the US Postal Service and their customers. That is something you can take to the bank.”

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

Since 2015, USPIS and other local and federal agencies, including the New York City Police Department (“NYPD”), Homeland Security Investigations, and the Bureau of Alcohol, Tobacco, Firearms and Explosives, have been investigating mail theft from mailboxes in the Bronx, New York. The investigation has revealed that individuals steal mail by either illicitly obtaining mail box keys or by “fishing.” Fishing involves inserting homemade mail theft devices into mailboxes located on street corners or other publicly accessible places. After gaining access to the mail in the mailbox, a thief typically will remove any mail that appears to contain checks or money orders. During the beginning and end of the month when many people mail checks for rent and bills, a thief can steal checks worth tens of thousands of dollars in a single night.

After perpetrators fish checks and money orders out of mailboxes, they sell the checks and money orders to others, remove the payees’ names by “washing” the checks and money orders, or simply deposit the checks and money orders into a bank account. In various iterations of the scheme, those bank accounts have belonged to the mail thieves, to complicit accountholders, or to unsuspecting third parties whose debits cards or personal identifying information has been stolen.

Since late 2015, USPIS and NYPD enforcement operations have resulted in over 50 state arrests of individuals in an area of the Bronx in the vicinity of Claremont Park for theft of mail, and over $750,000 in checks and money orders has been traced to these mail theft schemes. Between May 2015 and at least January 2017, BRIAN MARTE, a/k/a “Trini Rabiia,” ERICKSON BATISTA, a/k/a “Niike Batista,” JUNIOR TAVERAS, a/k/a “Tuh Relambio,” ANGEL ARISTY, a/k/a “Frekiitho Lindo Colon,” LUIS ROSADO, a/k/a “El Menolsito Tejada,” EOSCATERYS POLANCO, BRAYAN RODRIGUEZ, a/k/a “New Black El Paisano,” and RONARDO BAEZ, a/k/a “Tuchokoo Baez,” the defendants, each participated in these related schemes to steal mail and deposit stolen checks and money orders using other individuals’ debit cards.

* * *

Each of the defendants is charged with one count of conspiracy to commit bank fraud, which carries a maximum sentence of 30 years in prison; one count of conspiracy to commit mail theft, which carries a maximum sentence of five years in prison; and one count of aggravated identity theft, which carries a mandatory consecutive sentence of two years in prison. MARTE is also charged with one count of mail theft, which carries a maximum sentence of five years in prison. The charges also carry a maximum fine of $1 million, or twice the gross gain or loss from the offense. The statutory maximum sentences are prescribed by Congress and are provided here for informational purposes only, as any sentencings of the defendants would be determined by the judge.

A chart containing the names, ages, and residences of the defendants is below.

Mr. Bharara praised the outstanding investigative work of the United States Postal Inspection Service, Homeland Security Investigations, the New York City Police Department, and the Bureau of Alcohol, Tobacco, Firearms and Explosives.

These cases are being handled by the Office’s General Crimes Unit. Assistant United States Attorneys Catherine Geddes and Stephanie Lake 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.

###

NAME

AGE

RESIDENCE

Brian Marte

20

Bronx, NY

Erickson Batista

24

Bronx, NY

Junior Taveras

19

Bronx, NY

Angel Aristy

18

Bronx, NY

Luis Rosado

19

Bronx, NY

Eoscaterys Polanco

23

Bronx, NY

Brayan Rodriguez

23

Bronx, NY

Ronardo Baez

20

Bronx, NY

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

Preet Bharara, 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”), Scott J. Lampert, Special Agent-in-Charge of the New York Regional Office of the United States Department of Health and Human Services Office of the Inspector General (“HHS-OIG”), and James P. O’Neill, the Commissioner of the New York City Police Department (“NYPD”),  announced today criminal and civil actions relating to a 12-year scheme to defraud Medicaid, Medicare, and other private health insurance companies out of more than $50 million.  Today’s actions include the unsealing of an Indictment charging ASIM HAMEEDI, FAWAD HAMEEDI, MICHELLE LANDOY, DESIREE SCOTT, EMAD SOLIMAN, and ARIF HAMEEDI with, among other things, health care fraud, identity theft, and making false statements, and the filing of a civil fraud lawsuit against CITY MEDICAL ASSOCIATES, P.C., and ASIM HAMEEDI, among others, seeking treble damages and civil penalties under the False Claims Act for the fraudulent claims for reimbursement submitted by CITY MEDICAL ASSOCIATES to Medicare and Medicaid between 2003 and November 2015.

 ASIM HAMEEDI was arrested this morning in Manhattan.  FAWAD HAMEEDI was arrested this morning on Long Island.  LANDOY and SCOTT were each arrested this morning in Queens, New York.  SOLIMAN was arrested this morning in Westchester County.  ARIF HAMEEDI is outside the United States and has not yet been arrested.  All of the defendants in custody will be presented later today in Manhattan federal court before Magistrate Judge Sarah Netburn.

Manhattan U.S. Attorney Preet Bharara said:  “As alleged, these defendants that included a cardiologist and neurologist ran a medical practice that for years bilked public health care programs and private insurance companies of more than $50 million.  Thanks to the hard work of federal and state investigators, this fraud has been revealed and the alleged perpetrators forced to face the consequences of their actions.” 

FBI Assistant Director-in-Charge William F. Sweeney Jr. stated: “Public health insurance programs, like Medicare and Medicaid, are not a personal pocketbook for criminals seeking to exploit a program designed to help those who need these programs the most. As alleged, the six defendants carried out a massive health care fraud scheme against these programs and private insurance companies for over twelve years and submitted more than $50 million in fraudulent claims. The FBI is committed to working with our law enforcement partners to bring to justice those who defraud taxpayer funded programs.”

HHS-OIG Special Agent-in-Charge Scott J. Lampert said:  “Health care fraud schemes like the one alleged here loot government health programs, compromise patient well-being, and undermine the public’s trust in the health profession.  You can bet our agents will continue to thoroughly investigate such allegations and hold fraudsters accountable for their crimes.”

NYPD Commissioner James P. O’Neill said: “As alleged, this investigation revealed numerous calculated actions that occurred for more than a decade which resulted in more than $50 million in fraudulent claims.  I commend the NYPD investigators and FBI agents who uncovered these criminal activities and whose efforts resulted in a thorough investigation and arrests related to this ill-fated scheme.”

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

ASIM HAMEEDI, a board-certified interventional cardiologist who was the president and owner of City Medical Associates, a cardiology and neurology clinic based in Bayside, New York (“CMA””), together with others employed by CMA, conducted a massive health care fraud scheme spanning 12 years and involving more than $50 million in fraudulent claims.  ASIM HAMEEDI conducted this scheme with others employed at or associated with CMA, including ASIM HAMEEDI’s nephew, FAWAD HAMEEDI, ASIM HAMEEDI’s brother, ARIF HAMEEDI, MICHELLE LANDOY, and DESIREE SCOTT, who were also employees of CMA, and EMAD SOLIMAN, a board-certified neurologist with his own practice in Westchester, New York.

The multi-faceted scheme included, among other things: (1) making false representations to insurance providers, including providers paid through Medicaid and Medicare, about the medical condition of patients in order to obtain preauthorization for medical tests and procedures; (2) submitting false claims to insurance providers for tests and procedures that were not performed and/or medically unnecessary, as well as for drug items not used or provided; (3) paying exorbitant kickbacks to local primary care medical offices in exchange for lucrative referrals from these offices; (4) and accessing, without authorization, electronic health records of patients at a particular hospital based on Long Island, New York (“Hospital-1”), in violation of the Health Insurance Portability and Accountability Act of 1996 (“HIPAA”) in order to identify patients to be recruited to CMA.

In furtherance of the scheme, and to hide from the insurance providers the huge volume of claims, including fraudulent claims, being submitted by CMA, ASIM HAMEEDI, FAWAD HAMEEDI, ARIF HAMEEDI, MICHELLE LANDOY, and DESIREE SCOTT submitted claims to the insurance providers falsely representing that medical tests had been ordered or performed by doctors who did not work at CMA and who had not ordered or performed the tests.  These doctors included EMAD SOLIMAN, who knowingly participated in the scheme to allow CMA to submit false claims to the insurance providers in his name, as well as two other doctors who did not know that their identities were being used to further the fraud (“Doctor-1” and “Doctor-2”). 

In addition, ASIM HAMEEDI and FAWAD HAMEEDI, with the assistance of ARIF HAMEEDI, used various unlawful means to obtain and maintain a high volume of patients for use in the fraudulent scheme, including, among other things, paying exorbitant kickbacks to local primary care offices and practitioners in exchange for referrals of patients by those offices and practitioners to CMA.  Moreover, ASIM HAMEEDI and FAWAD HAMEEDI repeatedly, and without authorization, accessed information in electronic health records of patients of Hospital-1 to identify and recruit patients to the practice of ASIM HAMEEDI and CMA.

* * *

The charges against the defendants alleged in the Indictment, and the maximum penalties for those charges, are set forth in a chart below.  Also set forth below is a chart with the defendants’ names, ages, and residences. 

The Civil Complaint joins a civil fraud lawsuit previously filed under seal by a whistleblower under the False Claims Act.  The civil case is pending before Judge Paul G. Gardephe.

Mr. Bharara praised the outstanding investigative work of the FBI, HHS-OIG, the NYPD, and the New York State Department of Financial Services.

The criminal case is being handled by the Complex Frauds and Cybercrime Unit, and Assistant U.S. Attorney Elisha J. Kobre is in charge of the prosecution.  The civil case is being handled by Assistant U.S. Attorney Jacob M. Bergman of the Office’s Civil Frauds Unit.

CHARGE

DEFENDANTS

MAXIMUM PENALTIES

Count One

Conspiracy to Commit Health Care Fraud and Wire Fraud in violation of 18 U.S.C. § 1349

ASIM HAMEEDI,

FAWAD HAMEEDI,

MICHELLE LANDOY,

DESIREE SCOTT,

EMAD SOLIMAN, and

ARIF HAMEEDI

20 years in prison

Count Two

Health Care Fraud, in violation of 18 U.S.C. §§ 1347 and 2

ASIM HAMEEDI,

FAWAD HAMEEDI,

MICHELLE LANDOY,

DESIREE SCOTT,

EMAD SOLIMAN, and

ARIF HAMEEDI

10 years in prison

Count Three

Wire Fraud, in violation of 18 U.S.C. §§ 1343 and 2

ASIM HAMEEDI,

FAWAD HAMEEDI,

MICHELLE LANDOY,

DESIREE SCOTT,

EMAD SOLIMAN, and

ARIF HAMEEDI

20 years in prison

Count Four

False Statements Relating to Health Care Matters, in violation of 18 U.S.C. §§ 1035 and 2

ASIM HAMEEDI,

FAWAD HAMEEDI,

MICHELLE LANDOY,

DESIREE SCOTT,

EMAD SOLIMAN, and

ARIF HAMEEDI

5 years in prison

Count Five

Conspiracy to Violate the Anti-Kickback Statute, in violation of 18 U.S.C. § 371

ASIM HAMEEDI,

FAWAD HAMEEDI, and

ARIF HAMEEDI

5 years in prison

Count Six

Conspiracy to Wrongfully Obtain and Disclose Individually Identifiable Health Information, in violation of 18 U.S.C. § 371

ASIM HAMEEDI and

FAWAD HAMEEDI

5 years in prison

Count Seven

Conspiracy to Commit Fraud in Connection

with Identification Information, in violation of 18 U.S.C. § 1028(f)

ASIM HAMEEDI,

FAWAD HAMEEDI,

MICHELLE LANDOY,

DESIREE SCOTT, and

EMAD SOLIMAN

15 years in prison

Count Eight

Conspiracy to Commit Money Laundering, in violation of 18 U.S.C. § 1956(h)

ASIM HAMEEDI,

FAWAD HAMEEDI, and

ARIF HAMEEDI

20 years in prison

Count Nine

Aggravated Identity Theft, in violation of 18 U.S.C. § 1028A

ASIM HAMEEDI,

FAWAD HAMEEDI,

MICHELLE LANDOY, and

DESIREE SCOTT

Mandatory minimum of 2 years in prison

 Count Ten

False Statements to a Federal Agent, in violation of 18 U.S.C. § 1001

EMAD SOLIMAN

5 years in prison

DEFENDANT

AGE

RESIDENCE

ASIM HAMEEDI

46

Manhattan, New York and

FAWAD HAMEEDI

31

Long Island, New York

MICHELLE LANDOY

35

Queens, New York

DESIREE SCOTT

37

Queens, New York

EMAD SOLIMAN

47

Westchester County, New York

ARIF HAMEEDI

56

Queens, New York

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

Preet Bharara, the United States Attorney for the Southern District of New York, announced today that the United States has simultaneously filed and settled a civil rights lawsuit against Friedman Residence, LLC, Breaking Ground, and The Actors Fund of America, for violating the Fair Housing Act. Specifically, the lawsuit alleges that Friedman Residence, LLC, Breaking Ground, and The Actors Fund of America discriminated against a tenant (the “Tenant”) of the Dorothy Ross Friedman Residence (the “Friedman Residence”), by failing to permit a reasonable accommodation of the Tenant’s psychiatric disability. The consent decree was approved on February 24, 2017, by U.S. District Court Judge P. Kevin Castel.

U.S. Attorney Preet Bharara said: “This is yet another lawsuit brought to enforce the rights of tenants with disabilities to live with assistance animals. Through this settlement, Friedman Residence, LLC, Breaking Ground, and The Actors Fund of America will improve housing accessibility for all residents of the Dorothy Ross Friedman Residence.”

As alleged in the Complaint filed in federal court:

Friedman Residence, LLC, Breaking Ground, and The Actors Fund of America are the owner, manager, and sponsor of the Friedman Residence, which provides supportive housing in shared and single-occupancy apartments to special low-income groups, including seniors, working professionals, and persons living with HIV/AIDS. The Friedman Residence has a “no pet” policy.

The Tenant shared an apartment at the Friedman Residence, and has a psychiatric disability. In February 2013, the Tenant asked that the Friedman Residence grant him a reasonable accommodation to live with an emotional support dog that alleviates the symptoms of his disability. The Tenant provided a letter from his long-time therapist explaining that the emotional support dog was a “necessary form of support” for him. Despite the Tenant’s request for a reasonable accommodation, the Friedman Residence served him with a Notice of Termination and a petition seeking a final judgment of eviction.

Under the consent decree approved on February 24, 2017, Friedman Residence, LLC, Breaking Ground, and The Actors Fund of America will adopt a new reasonable accommodation policy regarding assistance animals that is incorporated into the consent decree. Friedman Residence, LLC, Breaking Ground, and The Actors Fund of America have further agreed to comply with certain notice, training, and recordkeeping requirements to ensure that their employees are knowledgeable about and comply with the requirements of the Fair Housing Act, and to allow the United States to monitor compliance with the consent decree. In addition, Friedman Residence, LLC, Breaking Ground, and The Actors Fund of America have agreed to pay the Tenant $20,000 in compensatory damages and to place the Tenant on the waitlist for a single-occupancy apartment at the Friedman Residence.

Mr. Bharara thanked HUD for its efforts in the investigation.

The case is being handled by the Office’s Civil Rights Unit. Assistant United States Attorney Talia Kraemer is in charge of the case.

Preet Bharara, 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 unsealing of a complaint charging AVINOAM LUZON with selling fentanyl that resulted in the death of an Upper West Side man.

The complaint alleges that, on or about October 22, 2016, LUZON distributed fentanyl that resulted in the death of Gabriel Tramiel, age 32, of Manhattan. LUZON was arrested this morning and will be presented today before United States Magistrate Judge Sarah Netburn.

Manhattan U.S. Attorney Preet Bharara said: “As a medical doctor and graduate student in public health, Avinoam Luzon was supposed to help the sick get healthy, but instead he allegedly helped fuel the nation’s most serious health crisis, the opioid abuse epidemic. As an alleged drug dealer with a medical degree, Luzon sold fentanyl to Gabriel Tramiel, a 32-year-old New Yorker, and it allegedly killed him.”

NYPD Commissioner James P. O’Neill said: “We will continue to investigate every single overdose across this city and to make arrests like this. Our goal: to protect life and deter those who peddle these deadly opioids.”

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

Gabriel Tramiel was found dead by his wife in the early morning hours of October 23, 2016. Tramiel was transported to the hospital and was examined by a medical examiner from the New York City Office of the Chief Medical Examiner who determined that a fentanyl overdose was the cause of Tramiel’s death. Text messages recovered from Tramiel’s phone show a conversation with LUZON the evening of October 22, 2016, in which LUZON requested payment from Tramiel for narcotics and the two arranged a meeting to exchange narcotics for payment. Surveillance video recovered from the apartment building where Tramiel died shows Tramiel inhaling the contents of a nasal spray bottle in the building elevator several hours before he was found dead.

* * *

LUZON, 32, of New York, New York, has been charged with one count of narcotics distribution resulting in the death of another, which carries a maximum sentence of life in prison, and a mandatory minimum 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 sentence for the defendant will be determined by the judge.

Mr. Bharara praised the outstanding work of the NYPD for its investigative efforts and ongoing support and assistance with the case. He also thanked the New York State Department of Health’s Bureau of Narcotics Enforcement for their assistance with this investigation.

The prosecution of this case is being overseen by the Office’s Narcotics Unit. Assistant U.S. Attorney Karin Portlock 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 descriptions of the Complaint set forth below constitute only allegations, and every fact described should be treated as an allegation.

Preet Bharara, the United States Attorney for the Southern District of New York, announced that VICTOR LIPKIN, a former owner of a health care clinic in Brooklyn, New York, was sentenced to five years in prison for his role in a massive health care fraud scheme through which three medical clinics in Brooklyn and Queens submitted over $70 million in fraudulent claims to Medicaid and Medicare. On August 3, 2016, LIPKIN pled guilty to conspiracy to commit wire fraud, mail fraud, and health care fraud. LIPKIN was sentenced last Friday, February 24, in Manhattan federal court by the Honorable Ronnie Abrams.

Manhattan U.S. Attorney Preet Bharara said: “Victor Lipkin spearheaded a scheme that involved recruiting disadvantaged and homeless people to undergo expensive and unnecessary medical tests. Lipkin and his co-defendants submitted over $70 million in bogus claims to Medicare and Medicaid, burdening those programs while enriching themselves.”

According to the Superseding Indictment to which LIPKIN pled guilty, and other publicly filed information in this case:

The Heath Care Fraud Scheme

From 2005 to November 2014, LIPKIN, Vadim Zubkov, Eduard Zavalunov, Nikoloz Chochiev, Anatoliy Fatkhov, Mariana Swaffar, Jacqueline Pinez, Jonathan Oliver, Jason Brissett, Gilbert Trotman, and Giorgi Buleishvili engaged in a scheme to operate three medical clinics in Brooklyn and Queens, through which they recruited financially disadvantaged and homeless people insured by Medicare and/or Medicaid (the “Phony Patients”) to undergo unnecessary medical tests, typically performed by unlicensed personnel, at the clinics in exchange for cash, and then billed the insurers for administering those unnecessary tests. Beginning in or about 2005, LIPKIN and Zubkov recruited and paid a particular licensed physician (the “Doctor”) to act as the nominal owner and/or physician under whose name three purported medical clinics would bill Medicare, Medicaid, and private insurance providers (the “Insurance Providers”) for unnecessary services and tests – including sleep tests and stress tests – performed at the clinics. The clinics were located on Avenue V in Brooklyn, New York – the clinic owned and operated by LIPKIN – and on Hillside Avenue and Elmhurst Avenue, respectively, in Queens, New York. LIPKIN and Zubkov were, in fact, the beneficial owners of the clinics, but they concealed their ownership through the Doctor’s nominal affiliation with the clinics, and by laundering the proceeds of the clinics’ operation through shell companies that they owned and controlled. LIPKIN, Zubkov, Zavalunov, and Buleishvili operated and controlled the clinics, and ran the clinics’ day-to-day operations, despite the fact that they were not licensed physicians, as required by New York law.

At the direction of LIPKIN, Zubkov, Zavalunov, and Buleishvili, other members of the scheme, including Oliver, Brissett, and Trotman (the “Runners”), as well as Chochiev, recruited financially disadvantaged individuals with Medicaid and/or Medicare insurance to act as Phony Patients and undergo unnecessary medical tests at the clinics in exchange for cash payments. The Runners often recruited such individuals from soup kitchens and local welfare offices, and coached them on what to say on various medical forms in order to make it falsely appear that the medical tests to which the defendants intended to subject them were medically necessary. In furtherance of the scheme, Chochiev also made threats of physical violence to individuals who Chochiev believed owed money to the scheme members.

Also in furtherance of the scheme, before the medically unnecessary tests were performed on the Phony Patients, Swaffar and Pinez obtained the Phony Patients’ Medicaid and/or Medicare insurance information, and then contacted the Insurance Providers to confirm that the Insurance Providers would reimburse for the tests. Swaffar and Pinez engaged in such conduct knowing that the Phony Patients were being recruited and paid by the Runners to undergo the tests. Once they determined that a particular Phony Patient’s insurance would pay out claims made by the clinic for the planned medical tests, Swaffar and Pinez notified the Runners that the individuals were eligible and could be brought to the clinic to undergo such tests.

After the Phony Patients had been recruited, confirmed to be Medicare and/or Medicaid eligible, and transported to one of the clinics by the Runners or Chochiev, in many instances certain individuals who were not physicians administered a host of unnecessary medical tests to them. In particular, for example, Fatakhov administered unnecessary medical tests, including stress tests, to the Phony Patients of the Elmhurst Avenue Clinic. Fatakhov administered these tests outside the presence and supervision of the Doctor or other licensed physician, despite knowing that the presence or supervision of a licensed physician was required. After the unnecessary medical tests were administered, the Phony Patients were paid cash kickbacks. The defendants, through the clinics, then submitted fraudulent claims to Medicaid and Medicare seeking reimbursement for the unnecessary medical tests. In total, in the course of the scheme, the defendants fraudulently billed over $70 million to Medicaid and Medicare, for which they received over $25 million in reimbursements.

* * *

In addition to the prison term, Judge Abrams ordered LIPKIN, 51, of Brooklyn, New York, to serve three years of supervised release and to pay over $8 million in restitution and forfeiture

As set forth below, all of the other defendants charged in this matter have pled guilty. On January 13, 2017, Pinez was sentenced to six months in prison. The remaining defendants are pending sentencing.

Vadim Zubkov, 49, pled guilty on January 13, 2017, to one count of conspiracy to commit wire fraud, mail fraud, and health care fraud.

Nikoloz Chochiev, 42, pled guilty on August 11, 2016, to one count of conspiracy to commit wire fraud, mail fraud, and health care fraud.

Anatoliy Fatakhov, 59, pled guilty on July 28, 2016, to one count of conspiracy to commit wire fraud, mail fraud, and health care fraud.

Mariana Swaffar, 51, pled guilty on August 15, 2016, to one count of conspiracy to commit wire fraud, mail fraud, and health care fraud.

Jacqueline Pinez, 33, pled guilty on July 11, 2016, to one count of conspiracy to commit wire fraud, mail fraud, and health care fraud.

Jonathan Oliver, 53, pled guilty on September 6, 2016, to one count of conspiracy to commit wire fraud, mail fraud, and health care fraud.

Giorgi Buleishvili, 42, pled guilty on January 31, 2017, to one count of conspiracy to commit wire fraud, mail fraud, and health care fraud.

Eduard Zavalunov, 35, pled guilty on February 7, 2017, to one count of conspiracy to commit wire fraud, mail fraud, and health care fraud.

Mr. Bharara praised the outstanding investigative work of the Federal Bureau of Investigation, the New York Police Department, and the U.S. Department of Health and Human Services. He also thanked the New York State Office of the Medicaid Inspector General for its assistance.

The prosecution of this case is being handled by the Office’s Complex Frauds and Cybercrime Unit. Assistant United States Attorneys Daniel Tehrani, Patrick Egan, and Timothy T. Howard are in charge of the prosecution.

Preet Bharara, the United States Attorney for the Southern District of New York, announced today that TIMOTHY SEDLAK pled guilty in Manhattan federal court to attempting to access without authorization the computer network of a global charitable organization based in New York, New York (the “Organization”), and as a result of such conduct, recklessly causing damage to computers of the Organization. He pled guilty before U.S. District Judge Ronnie Abrams.

Manhattan U.S. Attorney Preet Bharara said: “Although ultimately unsuccessful, Timothy Sedlak attempted hundreds of thousands of times to hack into a charitable organization, impairing the organization’s work. Today, Sedlak admitted to his crime and now awaits his sentence.”

According to the Superseding Information, other documents filed in Manhattan federal court, and statements made at various proceedings in this case, including today’s guilty plea:

SEDLAK made hundreds of thousands of attempts to gain access without authorization to the computer network systems of the Organization, and in so doing, impaired the availability of the email accounts and web-based applications of more than 10 employees of the Organization.

From in or about June 2015, up to and including in or about July 2015, computers associated with two particular internet protocol addresses (the “IP Addresses”) made nearly 400,000 attempts to gain unauthorized access to the Organization’s computer network. As a result, numerous Organization employees experienced difficulty accessing their Organization email accounts, and were disrupted in their ability to conduct regular business functions. Both of the IP Addresses were subscribed to SEDLAK at SEDLAK’s residence in Florida (the “Sedlak Residence”).

In particular, between June 22, 2015, and July 8, 2015, from one of the IP Addresses, there were approximately 195,000 attempts to log into approximately 20 email accounts of the Organization. Between July 8, 2015, and July 10, 2015, from the other IP Address, there were an additional approximately 195,000 attempts to log into approximately six email accounts of the Organization. SEDLAK has never been employed by the Organization, and was not authorized to access any email accounts of the Organization.

On or about September 11, 2015, United States Secret Service (“USSS”) agents executed a search warrant at the Sedlak Residence, from which they seized, among other things, (i) approximately 30 computers connected to the same internal network, which enabled each computer to communicate with the others (the “Sedlak Computers”); (ii) notes pertaining to the Organization, an executive of the Organization (“Individual-1”), and an individual who has been publicly affiliated with the Organization (“Individual-2”), including email addresses, registrant information for certain website domain names, and certain IP address information associated with the Organization, Individual-1, and/or Individual-2; and (iii) lists of email addresses and email servers, many of which included the word “jihad.” The Sedlak Computers contained, among other things, a list of certain Organization employees’ email account usernames, and a “brute force” password-cracking tool. Such a tool is designed to launch a relentless barrage of potential passwords at an email account in an attempt to guess the account’s password.

On or about September 11, 2015, USSS agents interviewed SEDLAK, who claimed to be using the Sedlak Computers to conduct “research” into charitable organizations in the course of his work as a private investigator. In particular, SEDLAK claimed to be trying to determine if such organizations are unintentionally financing jihadist groups by sending, to charitable organizations in the Middle East, funds that are then seized by jihadist groups. When asked about notes pertaining to Individual-1 and Individual-2 found at the Sedlak Residence, SEDLAK claimed that he came across such information in his “research” into the financing of jihadist groups. SEDLAK claimed that he hoped to sell the information he found.

* * *

SEDLAK, 43, of Ocoee, Florida, faces a maximum of five years in prison and three years of supervised release. The statutory maximum 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. SEDLAK is scheduled to be sentenced by Judge Abrams on June 6, 2017, at 1:00 p.m.

Mr. Bharara praised the investigative work of the United States Secret Service.

The prosecution of this case is being handled by the Office’s Complex Frauds and Cybercrime Unit. Assistant United States Attorneys Kristy J. Greenberg and Jennifer L. Beidel are in charge of the prosecution.

Preet Bharara, the United States Attorney for the Southern District of New York, James J. Hunt, 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”), today announced the unsealing of an Indictment charging a total of eight defendants with engaging in the distribution of crack cocaine and marijuana in the vicinity of the Soundview Houses housing project in the 43rd Precinct, in the Bronx, New York. One of the defendants, ELLIOT JAMES, a/k/a “L Boogie,” a/k/a “Ace,” was also charged with using a firearm in furtherance of his drug trafficking crimes. Seven defendants were arrested today, and one defendant remains at large. The seven defendants who are in custody will be presented and arraigned before U.S. Chief Magistrate Judge Debra Freeman later today. The case is assigned to U.S. District Judge Naomi Reice Buchwald.

Manhattan U.S. Attorney Preet Bharara said: “The Soundview Houses residents deserve to live free of drug-dealing and guns in their neighborhood, something that the eight defendants charged today allegedly made difficult. We thank our partners at the DEA and NYPD for their efforts in this and other investigations aimed at keeping our communities safe from drugs and gun violence.”

DEA Special Agent in Charge James J. Hunt said: “These eight defendants allegedly made the Soundview Houses their stomping ground for drug trafficking. No one chooses to live next door to drug dealers and today’s arrests have paved ground for a safer neighborhood with less drugs and drug-related crimes.”

Police Commissioner James P. O’Neill said: “As alleged, these individuals distributed narcotics in and around the Soundview Houses and by doing so, endangered the safety of surrounding residents with their criminal enterprise. An investigation conducted by the NYPD’s Gun Violence Suppression Division and our law enforcement partners strategically targeted this illegal activity and as a result, effected the arrests of several individuals responsible for trafficking narcotics. I commend the work of the investigators and prosecutors who committed themselves to this investigation.”

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

Between 2014 and February 2017, ELLIOT JAMES, a/k/a “L Boogie,” a/k/a “Ace,” JAMEL DAVIS, a/k/a “Pootie,” TYLER MASSEY, a/k/a “Gordo,” DONOVAN MOSS, a/k/a “Don,” JONATHAN NUNEZ, a/k/a “Munna,” BRANDON RAMSEUR, a/k/a “BR,” JONATHAN REYES, a/k/a “Grillz,” and JAMEL SIMS, a/k/a “Jamal Brown,” conspired to sell crack cocaine and marijuana in the vicinity of the Soundview Houses in the Bronx. During the course of the conspiracy, the defendants sold crack cocaine to confidential informants and undercover law enforcement officers on numerous occasions. Certain defendants also sold crack cocaine to the undercover officers on behalf of their co-conspirators or worked together to complete the sales to the undercover officers.

* * *

The defendants face maximum terms of life in prison and mandatory minimum terms of 10 years in prison. The statutory maximum penalties are prescribed by Congress and are provided here for informational purposes only, as any sentencing of the defendants will be determined by the Court.

A chart containing the names, ages, and residences of the defendants who were arrested today is below.

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

These cases are being handled by the Office’s Violent and Organized Crime Unit. Assistant United States Attorneys Michael Longyear, Jessica Fender, and Scott Hartman 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.

United States v. Elliot James, et al.

NAME

AGE

RESIDENCE

Elliot James, a/k/a “L Boogie,” a/k/a “Ace”

27

Bronx, NY

Jamel Davis, a/k/a “Pootie”

25

Bronx, NY

Tyler Massey, a/k/a “Gordo”

22

Bronx, NY

Donovan Moss, a/k/a “Don”

22

Bronx, NY

Jonathan Nunez, a/k/a “Munna”

19

Bronx, NY

Brandon Ramseur, a/k/a “BR”

19

Bronx, NY

Jonathan Reyes, a/k/a “Grillz”

21

Bronx, NY

Jamel Sims, a/k/a “Jamal Brown”

25

Bronx, NY

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

Jacob Chait, 34, the head of acquisitions and auctioneer of a Beverley Hills, California gallery and auction house (“Auction House #1”), appeared yesterday in Manhattan federal court in New York to face charges of conspiring to smuggle rhinoceros horns, in violation of the Lacey Act. A one-count indictment charging Chait was returned by a federal grand jury on February 15.

Acting Assistant Attorney General Jeff Wood for the Department of Justice’s Environment and Natural Resources Division, U.S. Attorney Preet Bharara for the Southern District of New York and Acting Director Jim Kurth for the U.S. Fish and Wildlife Service made the announcement.

 “The defendant and his co-conspirators are alleged to have engaged in a scheme to illegally traffic in the horns of highly protected rhinoceros,” said Acting Assistant Attorney General Wood. “Illegal wildlife trafficking is a serious crime under federal law and should be vigorously prosecuted.”

“As alleged, Jacob Chait trafficked in and smuggled rhinoceros horns, further threatening an already endangered species. Rhinoceros have no known predators other than humans, and yet, driven by the illegal trade in their horns, literally worth more than their weight in gold in the black market, rhinoceros are on their way to extinction. This Office, along with our partners at the Department of Justice’s Environmental and Natural Resources Division, as well as the U.S. Fish and Wildlife Service, will continue to combat the illegal trade of rhinoceros horns fueling the senseless poaching of this critically endangered animal,” said U.S. Attorney Bharara.

 “Illegal trafficking like that allegedly conducted by these defendants is fueling the unprecedented slaughter of wild rhinos,” said Acting Director Kurth. “In Africa, a rhino is currently poached every eight hours - a rate that threatens to make the rhino extinct in the wild in less than 15 years. Our Special Agents will continue to work with the Justice Department to aggressively investigate and secure the prosecutions of individuals and criminal organizations engaged in rhino horn trafficking to protect wild populations of this imperiled species.”

According to allegations contained in the indictment:

From approximately 2009 and 2012, Chait and his co-conspirators purchased rhinoceros horns and taxidermy mounts in the U.S. and sought to sell them to foreign buyers in private deals, including in at least eight separate deals or attempted deals involving 15 rhinoceros horns worth an estimated $2.4 million. This included one alleged incident in which Chait personally smuggled two endangered black rhino horns to China in his luggage. Rhinoceros horns are worth more per pound than gold due to the high demand in Asia and increasing scarcity of supply.

Rhinoceros are an herbivore species of prehistoric origin and one of the largest remaining mega-fauna on earth. They have no known predators other than humans. The trade in rhinoceros horn and elephant ivory have been restricted since 1976 under the Convention on International Trade in Endangered Species of Wild Fauna and Flora (CITES), a treaty signed by over 180 countries around the world.

Chait is charged in one count of conspiring to smuggle rhinoceros horns and to violate the Lacey Act. The charge carries a maximum penalty of five years in prison. The maximum 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. The case is assigned to U.S. District Judge Jesse M. Furman, whom Chait will appear before on Februar 27.

On June 22, 2016, Joey Chait, the Senior Auction Administrator of Auction House #1, was sentenced by the Honorable J. Paul Oetken to one year and one day for conspiring to smuggle wildlife products made from rhinoceros horn, elephant ivory and coral with a market value of at least $1 million, and to violate the Lacey Act.

This matter is part of Operation Crash, a continuing nation-wide crackdown by the Department of the Interior’s Fish and Wildlife Service and the Department of Justice on illegal trafficking in rhinoceros horns and other wildlife crimes. A “crash” is the term for a herd of rhinoceros. This indictment represents the sixth Operation Crash case to be brought in the Southern District of New York.

An indictment contains allegations that crimes have been committed. A defendant is presumed innocent until proven guilty beyond a reasonable doubt.

U.S. Attorney Bharara and Acting Assistant Attorney General Wood thanked the U.S. Fish and Wildlife Service for its work in this investigation. This case is being prosecuted by the U.S. Attorney Office’s Complex Frauds and Cybercrime Unit and the Environmental Crimes Section of the Department of Justice. Assistant U.S. Attorney Elizabeth Hanft and Senior Litigation Counsel Richard A. Udell with Department of Justice’s Environmental Crimes Section in Washington, D.C. are in charge of the prosecution.

Preet Bharara, the United States Attorney for the Southern District of New York, Jeffery Wood, Acting Assistant Attorney General for the Department of Justice’s Environment and Natural Resources Division, and Jim Kurth, Acting Director for the U.S. Fish and Wildlife Service, announced that JACOB CHAIT, the head of acquisitions and the auctioneer of a Beverly Hills, California gallery and auction house (“Auction House #1”), was presented yesterday in U.S. Magistrate’s Court in Manhattan on a one-count Indictment charging a conspiracy to smuggle rhinoceros horns and violate the Lacey Act. The Indictment was returned on February 15, 2017.

Manhattan U.S. Attorney Preet Bharara said, “As alleged, Jacob Chait trafficked in and smuggled rhinoceros horns, further threatening an already endangered species. Rhinoceros have no known predators other than humans, and yet, driven by the illegal trade in their horns, literally worth more than their weight in gold in the black market, rhinoceros are on their way to extinction. This Office, along with our partners at the Department of Justice’s Environmental and Natural Resources Division, as well as the U.S. Fish and Wildlife Service, will continue to combat the illegal trade of rhinoceros horns fueling the senseless poaching of this critically endangered animal.”

Acting Assistant Attorney General Wood said, “The defendant and his co-conspirators are alleged to have engaged in a scheme to illegally traffic in the horns of highly protected rhinoceros. Illegal wildlife trafficking is a serious crime under federal law and should be vigorously prosecuted.”

Acting U.S. Fish & Wildlife Service Director Jim Kurth said, “Illegal trafficking like that allegedly conducted by the defendant is fueling the unprecedented slaughter of wild rhinos. In Africa, a rhino is currently poached every eight hours - a rate that threatens to make the rhino extinct in the wild in less than 15 years. Our Special Agents will continue to work with the Justice Department to aggressively investigate and secure the prosecutions of individuals and criminal organizations engaged in rhino horn trafficking to protect wild populations of this imperiled species."

According to allegations contained in the indictment[1]:

From approximately 2009 to 2012, Chait and his co-conspirators purchased rhinoceros horns and taxidermy mounts in the U.S. and sought to sell them to foreign buyers in private deals, including in at least eight separate deals or attempted deals involving 15 rhinoceros horns worth an estimated $2.4 million. This included one alleged incident in which Chait personally smuggled two endangered black rhino horns to China in his luggage. Rhinoceros horn is worth more per pound than gold due to the high demand in Asia and increasing scarcity of supply.

Rhinoceros are an herbivore species of prehistoric origin and one of the largest remaining mega-fauna on earth. They have no known predators other than humans. The trade in rhinoceros horn and elephant ivory has been restricted since 1976 under the Convention on International Trade in Endangered Species of Wild Fauna and Flora (CITES), a treaty signed by over 180 countries around the world.

* * *

Chait, 34, is charged in one count of conspiring to smuggle rhinoceros horns and to violate the Lacey Act. The charge carries a maximum penalty of five years in prison. The maximum 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. The case is assigned to U.S. District Judge Jesse M. Furman, before whom Chait will appear on February 27, 2017.

On June 22, 2016, Joey Chait, the Senior Auction Administrator of Auction House #1, was sentenced by the Honorable J. Paul Oetken to one year and one day for conspiring to smuggle wildlife products made from rhinoceros horn, elephant ivory, and coral with a market value of at least $1 million, and to violate the Lacey Act.

This matter is part of Operation Crash, a continuing nation-wide crackdown by the Department of the Interior’s Fish and Wildlife Service and the Department of Justice on illegal trafficking in rhinoceros horns and other wildlife crimes. A “crash” is the term for a herd of rhinoceros. This indictment represents the sixth Operation Crash case to be brought in the Southern District of New York.

An indictment contains allegations that crimes have been committed. The defendant is presumed innocent until proven guilty beyond a reasonable doubt.

U.S. Attorney Bharara and Acting Assistant Attorney General Wood thanked the U.S. Fish and Wildlife Service for its work in this investigation. This case is being prosecuted by the U.S. Attorney Office’s Complex Frauds and Cybercrime Unit and the Environmental Crimes Section of the Department of Justice. Assistant U.S. Attorney Elizabeth Hanft and Senior Litigation Counsel Richard A. Udell with Department of Justice’s Environmental Crimes Section in Washington, D.C. are in charge of the prosecution.

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

Preet Bharara, the United States Attorney for the Southern District of New York, announced that SEAN STEWART, a former managing director at an investment advisory firm headquartered in Manhattan, was sentenced today to 36 months in prison by U.S. District Judge Laura Taylor Swain for tipping his father and co-defendant Robert Stewart with inside information about five health care company mergers and acquisitions before they were publicly announced.  SEAN STEWART was convicted after a jury trial that ended on August 17, 2016. 

Manhattan U.S. Attorney Preet Bharara said:  “As proven at trial, Sean Stewart used his position as an investment banker to feed confidential inside information about clients to his father so that he could profit illegally from well-timed trades.  Despite his various efforts to cover-up his scheme, including claiming he did not recognize his own father’s name on a FINRA list of those who had traded in advance of an acquisition, Stewart has been held to account by a jury and sentenced to three years in federal prison.  This case and today’s sentence is a victory for all who believe in a fair securities market.” 

According to the allegations contained in the Indictment as well as the evidence presented during trial:

In early 2011, SEAN STEWART, who at the time held the position of Vice President in the Healthcare Investment Banking Group of a global bank headquartered in Manhattan (“Investment Bank A”), began tipping his father, Robert Stewart, with material nonpublic information about upcoming mergers and acquisitions, including with the names of the companies that were acquisition targets, both when the target was an Investment Bank A client and when the bank represented the acquirer, as well as with information that indicated the likely timing of an upcoming deal. 

The first of these deals involved the acquisition of Kendle International Inc. by INC Research, LLC, which was announced publicly on May 4, 2011.  SEAN STEWART worked on the deal, representing Kendle.  Robert Stewart made about $7,900 in profits on purchases of Kendle stock executed in February and March of 2011.  When questioned by the Securities and Exchange Commission about his Kendle trades in May 2013, Robert Stewart reported that he used the proceeds of those trades to pay expenses related to SEAN STEWART’s June 2011 wedding.    

The second deal about which SEAN STEWART tipped Robert Stewart was the acquisition of Kinetic Concepts, Inc. (“KCI”) by Apax Partners, announced on July 13, 2011.  Although Robert Stewart purchased some stock in KCI based on SEAN STEWART’s tip, he sold that stock before the acquisition was announced, around the same time that SEAN STEWART learned the Financial Industry Regulatory Authority (“FINRA”) was conducting an inquiry into Robert Stewart’s Kendle trading. 

Also around this time, in the spring of 2011, Robert Stewart expressed a concern to co-conspirator Richard Cunniffe that Robert Stewart was “too close to the source” to be trading in KCI stock his own account, and asked Cunniffe to make purchases of KCI call options for Robert Stewart in Cunniffe’s brokerage account.  Cunniffe agreed to do so, and also mirrored for his own benefit the KCI trades that Robert Stewart was directing.

In connection with the FINRA inquiry, FINRA prepared a list of persons and entities that had traded in advance of the Kendle deal.  The list included Robert Stewart’s name.  When Investment Bank A asked SEAN STEWART whether he knew anyone on the list, he initially denied recognizing the name of his father; later, when confronted by lawyers from Investment Bank A, SEAN STEWART acknowledged that his father was on the list but told a series of lies designed to make it seem as if Robert Stewart had independently decided to invest in Kendle.  SEAN STEWART told these lies one day after meeting with his father to apprise his father of the FINRA inquiry and to get their stories straight. 

When the KCI/Apax Partners deal was announced, Robert Stewart and Cunniffe reaped profits totaling approximately $107,790.  At around this time, Robert Stewart told Cunniffe that the source of the KCI tip and the earlier Kendle tip had been Robert’s son.  Later, around the spring of 2012, Robert Stewart clarified for Cunniffe that the son in question was SEAN STEWART, who worked on the “sell side” on Wall Street.

In October 2011, SEAN STEWART left Investment Bank A.  A few months later, he joined an investment banking advisory firm headquartered in Manhattan (“Investment Bank B”) as a managing director.

During SEAN STEWART’s tenure with Investment Bank B, based on tips concerning nonpublic acquisition-related information supplied by SEAN STEWART, Robert Stewart had Cunniffe conduct options trading in advance of the public announcements of three more deals: (1) the acquisition of Gen-Probe Inc. by Hologic, Inc., announced on April 30, 2012; (2) the acquisition, by tender offer, of Lincare Holdings Inc. by Linde AG, announced on July 1, 2012; and (3) the acquisition of CareFusion Corp. by Becton, Dickinson & Co. (“Becton”), announced on October 5, 2014.  Investment Bank B represented Hologic in connection with its acquisition of Gen-Probe; Linde in connection with its acquisition of Lincare; and CareFusion in connection with its acquisition by Becton.  The profits that Robert Stewart and Cunniffe reaped from illegal insider trading in advance of the announcements of these three deals totaled over $1 million. 

During the course of the scheme, SEAN STEWART became aware that his father was having financial problems.  Rather than loan his father money, SEAN STEWART gave his father stock tips, the proceeds of which Robert Stewart used to benefit himself and his son.

In March and April of 2015, Cunniffe, who was then cooperating with the Government, recorded meetings he had with Robert Stewart.  During one such meeting, Robert Stewart accepted a payment of $2,500 cash from Cunniffe, which was the balance of the proceeds owed to Robert Stewart for profitable trading executed in Cunniffe’s account in advance of the CareFusion acquisition announcement.  Also during this meeting, Robert Stewart admitted that SEAN STEWART once chastised him for failing to make use of a tip, saying, “I can’t believe I handed you this on a silver platter and you didn’t invest in it.”  

           *                      *                      *

In addition to his prison sentence, SEAN STEWART, 35, of New York, New York, was sentenced to three years of supervised release, which includes one year of home detention.  Judge Swain will set a restitution amount at a future proceeding. 

Robert Stewart pled guilty on August 12, 2015, to one count of conspiracy to commit securities fraud and fraud in connection with a tender offer and was sentenced to four years’ probation, with the first year to be served in home detention, and $150,000 in forfeiture.

Richard Cunniffe pled guilty on May 12, 2015, to one count of conspiracy to commit securities fraud and fraud in connection with a tender offer, one count of conspiracy to commit wire fraud, three counts of securities fraud, and one count of fraud in connection with a tender offer.

Mr. Bharara praised the investigative work of the FBI and also thanked the Securities and Exchange Commission.

The charges were brought in connection with the President’s Financial Fraud Enforcement Task Force.  The task force was established to wage an aggressive, coordinated and proactive effort to investigate and prosecute financial crimes.  With more than 20 federal agencies, 94 U.S. attorneys’ offices, and state and local partners, it’s the broadest coalition of law enforcement, investigatory and regulatory agencies ever assembled to combat fraud.  Since its formation, the task force has made great strides in facilitating increased investigation and prosecution of financial crimes; enhancing coordination and cooperation among federal, state and local authorities; addressing discrimination in the lending and financial markets; and conducting outreach to the public, victims, financial institutions and other organizations.  Since fiscal year 2009, the Justice Department has filed over 18,000 financial fraud cases against more than 25,000 defendants.  For more information on the task force, please visit www.StopFraud.gov.

This case is being handled by the Office’s Securities and Commodities Fraud Task Force.  Assistant U.S. Attorneys Sarah K. Eddy and Brooke E. Cucinella are in charge of the prosecution.   

Preet Bharara, the United States Attorney for the Southern District of New York, announced today that ERIC IAN HORNAK SPOUTZ, a/k/a “Robert Chad Smith,” a/k/a “John Goodman,” a/k/a “James Sinclair,” was sentenced today to 41 months in prison by U.S. District Judge Lewis A. Kaplan for wire fraud charges arising out of his sale of dozens of forged artworks purportedly by renowned American artists such as Willem De Kooning, Franz Kline, and Joan Mitchell.

Manhattan U.S. Attorney Preet Bharara said: “Eric Spoutz made a lucrative ‘career’ selling forged art as originals from American masters like De Kooning, Kline and Mitchell. From creating fake documents to assuming new identities, Spoutz used the full palette of deception to complete his decade-long work of fraud, swindling art collectors out of more than a million dollars. Now, thanks to the dedicated work of the FBI and the prosecutors in my Office, Spoutz will spend time in a federal prison.”

According to the allegations contained in the criminal complaint and information and other documents in the public record, and statements made in court:

Since at least 2006, SPOUTZ engaged in a fraudulent scheme to sell works of art he falsely claimed were by well-known artists, using forged documents to convince buyers of the authenticity of those works. During the course of the scheme, SPOUTZ sold dozens of fraudulent works of art – which he attributed to, among others, Willem De Kooning, Franz Kline, and Joan Mitchell – through various channels, including auction houses and on EBay.

SPOUTZ was publicly accused of selling forged works of art as early as 2005, after which he began selling them under various aliases, particularly “Robert Chad Smith” and “John Goodman.” To deceive his victims into believing the works of art were authentic, SPOUTZ created and provided forged receipts, bills of sale, and letters from deceased attorneys and other individuals.

These documents falsely indicated that SPOUTZ, in the guise of one of his false identities, had inherited or purchased dozens of works by these artists. Despite his efforts to create false histories for the artwork, investigators identified multiple inconsistencies and errors in SPOUTZ’s forged provenance documents. Many of the purported transactions took place before SPOUTZ was born, and the forged letters included nonexistent addresses both for the purported sender and various parties referenced as sources of the artworks. SPOUTZ also consistently used a single distinctive typesetting when forging documents purportedly authored by entirely different art galleries in different decades regarding unrelated transactions. In one instance, investigators located the original letter used by SPOUTZ as a model for one of his forgeries in a collection at a private university, which holds letters from the individual whose identity SPOUTZ used to create a false story of inheritance.

In total, SPOUTZ stole at least $1,450,000 from his victims over the course of a decade of fraudulent art sales.

* * *

In addition to the prison sentence, SPOUTZ, 33, of Mount Clemens, Michigan, was sentenced to three years of supervised release. Judge Kaplan also ordered SPOUTZ to forfeit $1,450,000 in ill-gotten gains and to pay restitution in the amount of $154,100.

Mr. Bharara praised the outstanding investigative work of the FBI’s Art Crime Team.

The case is being handled by the Office’s Money Laundering and Asset Forfeiture Unit. Assistant United States Attorney Andrew C. Adams is in charge of the prosecution.

Preet Bharara, the United States Attorney for the Southern District of New York, announced that JOHN GALANIS and his son DEREK GALANIS were each sentenced today to six years in prison for manipulating the market for Gerova Financial Group, Ltd. (“Gerova”), a publicly traded company listed on the New York Stock Exchange, and defrauding the shareholders of that company. JOHN GALANIS and DEREK GALANIS each pled guilty to one count of conspiracy to commit securities fraud and one count of securities fraud, on July 20, 2016, and August 15, 2016, respectively. Both were sentenced today by United States District Judge P. Kevin Castel.

U.S. Attorney Preet Bharara said: “John and Derek Galanis conspired to have more than $70 million worth of stock issued, hiding Jason Galanis’s control of those shares, so that they could cash out at the expense of unwitting victim investors. Today, they have been sentenced to prison for their securities fraud.”

According to the allegations contained in the Indictment filed against JOHN GALANIS, DEREK GALANIS, and their co-conspirators, and statements made in related court filings and proceedings:

The Gerova Scheme

From 2009 to 2011, JOHN GALANIS, DEREK GALANIS, and co-conspirators Jason Galanis, Gary Hirst, Ymer Shahini, and Gavin Hamels, engaged in a scheme to defraud the shareholders of Gerova, and the investing public, by effecting securities transactions in Gerova stock for the purpose of conferring millions of dollars of undisclosed remuneration on the co-conspirators, without adequate disclosure of Jason Galanis’s role in directing the transactions or the benefits received by Jason Galanis and his co-conspirators.

As a part of the scheme to defraud, Jason Galanis obtained sufficient control over Gerova to be able to cause Gerova to enter into transactions of his design, and for his benefit, including the issuance of Gerova stock. Jason Galanis obtained this control without causing himself to be identified as an officer or director of Gerova in order to appear to abide by an SEC-imposed bar that forbade him from holding such positions at publicly traded companies. Among other means and methods, Jason Galanis, with the assistance of Hirst, caused over five million shares of Gerova stock, which represented nearly half the company’s public float and which were intended for Jason Galanis’s ultimate benefit, to be issued to and held in the name of Ymer Shahini, who knowingly served as a foreign nominee for Jason Galanis. DEREK GALANIS recruited his longstanding friend Shahini to the scheme, telling Shahini in an email, “All we need is a foreign national we trust which is where you come in my friend.” DEREK GALANIS, JOHN GALANIS, Jason Galanis, Hirst, and Shahini understood that the purpose of the stock grant to Shahini was to disguise Jason Galanis’s ownership interest in the stock, and to evade the SEC’s regulations for issuing unregistered shares of stock.

At the same time, and as a further part of the scheme to defraud, JOHN GALANIS, with the assistance of DEREK GALANIS and the knowledge and approval of Jason Galanis, opened and managed brokerage accounts in the name of Shahini (the “Shahini Accounts”), effected the sale of Gerova stock from the Shahini Accounts, and received and concealed the proceeds, knowing that this activity was designed to conceal from the investing public Jason Galanis’s ownership of and control over the Gerova stock.

Jason Galanis, among others, also fraudulently induced investment advisers, including Gavin Hamels, to purchase shares of Gerova stock in the investment advisers’ client accounts by offering compensation and/or other benefits to the respective investment adviser. JOHN GALANIS and Jason Galanis thereafter coordinated the purchase of Gerova stock at the time, quantity, and/or price of their choosing, thus effectuating the sale of large quantities of Gerova stock from the Shahini Accounts while artificially maintaining the price of Gerova stock through match trading. Such coordinated trading served to manipulate the market for Gerova stock and deceive the investing public. In total, JOHN GALANIS, DEREK GALANIS, Jason Galanis, and their co-conspirators sold nearly $20 million worth of Gerova shares from the Shahini accounts for their own benefit.

* * *

In addition to the prison terms, JOHN GALANIS, 73, and DEREK GALANIS, 44, were each sentenced to three years of supervised release, and each ordered to forfeit $19,038,650.53. Judge Castel will set a restitution amount for each at a future proceeding.

Jason Galanis, who pled guilty to two counts of conspiracy to commit securities fraud, one count of securities fraud, and one count of investment adviser fraud, was sentenced to a term of 135 months in prison on February 15, 2017. Jared Galanis, who pled guilty to misprision of a felony, was sentenced to a term of 150 days in prison on January 11, 2017. Gary Hirst, who was found guilty after trial of conspiracy to commit securities fraud, securities fraud, conspiracy to commit wire fraud, and wire fraud, is scheduled to be sentenced on March 17, 2017. Defendant Ymer Shahini remains a fugitive. The allegations contained in the Indictment as to Shahini are merely accusations, and he is presumed innocent unless and until proven guilty.

Mr. Bharara praised the work of the U.S. Postal Inspection Service and the Federal Bureau of Investigation, and thanked the SEC.

The charges were brought in connection with the President’s Financial Fraud Enforcement Task Force. The task force was established to wage an aggressive, coordinated and proactive effort to investigate and prosecute financial crimes. With more than 20 federal agencies, 94 U.S. attorneys’ offices, and state and local partners, it is the broadest coalition of law enforcement, investigatory and regulatory agencies ever assembled to combat fraud. Since its formation, the task force has made great strides in facilitating increased investigation and prosecution of financial crimes; enhancing coordination and cooperation among federal, state and local authorities; addressing discrimination in the lending and financial markets; and conducting outreach to the public, victims, financial institutions and other organizations. Since fiscal year 2009, the Justice Department has filed over 18,000 financial fraud cases against more than 25,000 defendants. For more information on the task force, please visit www.StopFraud.gov.

This case is being handled by the Office’s Securities and Commodities Fraud Task Force. Assistant U.S. Attorneys Brian Blais, Aimee Hector, and Rebecca Mermelstein are in charge of the prosecution.

###

Preet Bharara, the United States Attorney for the Southern District of New York, and Anthony J. Annucci, Acting Commissioner of the New York State Department of Corrections and Community Supervision (“DOCCS”), announced today the unsealing of a criminal complaint charging a former New York State Correction Officer in the sexual assault of a female inmate (“Victim-1”) at the Bedford Hills Correctional Facility for Women (the “Bedford Facility”). JEFFREY GREEN, then a correction officer at the Bedford Facility, was charged with assaulting and forcing himself upon Victim-1 by licking, biting, kissing, fondling, groping, and restraining her against her will, in violation of her civil rights under the United States Constitution. GREEN was arrested today on charges contained in a Criminal Complaint and is expected to be presented in federal court later today.

Manhattan U.S. Attorney Preet Bharara said: “As alleged, Jeffrey Green, a former New York State correction officer at Bedford Hills Correctional Facility, entered a prison cell, pushed a defenseless female inmate against a wall, and sexually assaulted her. Green’s alleged predatory conduct not only betrayed his duty as an officer to protect those under his charge, but violated our Constitution. The protections of our Constitution do not end at our prisons’ walls, and when inmates’ civil rights are violated, as they allegedly were here, we will act.”

DOCCS Acting Commissioner Anthony J. Annucci said: “DOCCS has zero tolerance for any criminal activity involving staff or inmates within our facilities. This latest arrest highlights the successful investigation by the Department’s Office of Special Investigations, Westchester County District Attorney and the US Attorney’s Office for the Southern District, all cooperating in this pursuit of justice.”

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

The Bedford Facility is a jail complex located in Bedford Hills, in Westchester County, New York, maintained by the New York State Department of Corrections and Community Supervision. At the time of the assault, Victim-1 was an inmate incarcerated at the Bedford Facility.

In the late evening hours of March 10, 2016, GREEN unlocked and opened the cell of Victim-1, and entered her cell unaccompanied by any other correction officer or other Bedford Facility staff. GREEN then grabbed Victim-1 by her arms, held her with her back against the wall of her cell, and began to lick, kiss, and bite her neck area, and to fondle her chest. After Victim-1 pushed GREEN away, he grabbed her, pushed her up against the wall of her cell, and again forced himself on her. GREEN then pulled up the shirt and bra of Victim-1 and bit, licked, and kissed her neck, chest, and breast and nipple areas, and fondled Victim-1’s groin area. The assault stopped only when GREEN was interrupted by the arrival of another correction officer knocking on a door to be admitted into the unit, upon which GREEN immediately departed Victim-1’s cell.

Victim-1 reported the assault the following morning, and a medical examination produced samples taken from Victim-1’s neck, left breast, and right breast that gave positive results with a presumptive test for saliva. A swab from Victim-1’s left breast generated a single-source male profile. Surveillance video and audio recordings from the Bedford Facility show GREEN entering Victim-1’s cell without any other correction officer the evening of March 10 and also audibly saying at one point “[y]ou ready [unintelligible] me my blow job?”
 

* * *

JEFFREY GREEN, 48, of Brooklyn, New York, is charged with one count of deprivation of rights under color of law, which carries a maximum penalty of 10 years in prison.

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

Mr. Bharara praised the investigative work of the New York State Department of Corrections and Community Supervision Office of Special Investigations and the Criminal Investigators at the United States Attorney’s Office.

This case is being handled by the Office’s Civil Rights and Public Corruption Units. Assistant U.S. Attorneys Alex Rossmiller and Ellen Blain are in charge of the prosecution.

The charges and 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 below constitute only allegations, and every fact described should be treated as an allegation.

Preet Bharara, 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 that CHRISTOPHER CANALE was charged with wire fraud, bank fraud, and aggravated identity theft for allegedly using his position at a global financial services firm (the “Firm”) to defraud the Firm out of at least $7 million over a thirteen-year period.  CANALE was arrested this morning in Poughkeepsie, New York, and will be presented later today in federal court in the Southern District of New York.

Manhattan U.S. Attorney Preet Bharara said:  “As alleged, Christopher Canale took advantage of his position as an accounts payable manager and used his employer’s bank accounts as his own, siphoning off millions to pay for personal expenses, including an outdoor pool, vacations, and luxury cars. Thanks to the efforts of the FBI and prosecutors in our Office, Christopher Canale’s alleged thirteen-year fraud scheme has come to an end.”

FBI Assistant Director-in-Charge William F. Sweeney Jr. said:  “It would make most of our lives easier to know there was a large stash of cash in the bank, and we didn’t have to worry about the cost of landscaping the yard, putting in a pool or buying a luxury car. However in this case, the alleged suspect did those things using money that wasn’t his. Making matters worse, he’s accused of forging his boss’s name. The FBI is dedicated to the pursuit of those who steal from our financial community.”     

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

From 2003 to September 2016, CANALE, a former accounts payable manager at the Firm, abused his position at the Firm to embezzle at least $7 million.  CANALE accomplished this fraud by making unauthorized wire transfers and by cashing checks without authorization.

In some instances, CANALE effected the fraud by inputting fake invoices and wire transfer instructions into one of the Firm’s software programs.  In other instances, CANALE made checks out to petty cash, forged the name of his former supervisor on those checks, and kept the cash. 

CANALE used the Firm’s funds to pay for numerous exorbitant personal expenses, including an outdoor pool, an outdoor sound system, landscaping for his home, and at least one luxury car.  CANALE also paid bills for a credit card account and sent approximately $40,000 in wire transfers to another individual.

*                *                *

CANALE, 47, of Poughkeepsie, New York, is charged with one count of wire fraud, which carries a maximum sentence of 20 years in prison and a maximum fine of $250,000 or twice the gross gain or loss from the offense, and one count of bank fraud, which carries a maximum sentence of 30 years in prison and a maximum fine of $1 million or twice the gross gain or loss from the offense.  CANALE is also charged with one count of aggravated identity theft, which carries a mandatory consecutive sentence of two years in prison and a maximum fine of $250,000 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. Bharara praised the work of the FBI.  He added that the investigation is continuing.

This case is being handled by the Office’s Complex Frauds and Cybercrime Unit.  Assistant U.S. Attorney Jennifer L. Beidel 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.

Preet Bharara, the United States Attorney for the Southern District of New York, announced that JASON GALANIS was sentenced today to 135 months in prison for manipulating the market for Gerova Financial Group, Ltd. (“Gerova”), a publicly traded company listed on the New York Stock Exchange, and to defrauding the shareholders of that company. JASON GALANIS was also sentenced for defrauding the clients of an investment advisory firm. JASON GALANIS pled guilty on July 21, 2016, to two counts of conspiracy to commit securities fraud, one count of securities fraud and one count of investment adviser fraud. GALANIS was sentenced today by United States District Judge P. Kevin Castel.

U.S. Attorney Preet Bharara said: “As he previously admitted in his guilty plea, Jason Galanis swindled the shareholders and clients of Gerova Financial and Tag Virgin Islands out of tens of millions of dollars in a massive fraud scheme. Today, he was sentenced to a lengthy prison term for his participation in these fraud schemes.”

According to the allegations contained in the Indictment filed against JASON GALANIS and his co-conspirators and statements made in related court filings and proceedings:

The Gerova Scheme

From 2009 to 2011, JASON GALANIS, along with his co-conspirators John Galanis, Gary Hirst, Derek Galanis, Ymer Shahini, and Gavin Hamels, engaged in a scheme to defraud the shareholders of Gerova and the investing public by effecting securities transactions in Gerova stock for the purpose of conferring millions of dollars of undisclosed remuneration on JASON GALANIS and his co-conspirators, without adequate disclosure of JASON GALANIS’s role in directing the transactions or the benefits received by JASON GALANIS and his co-conspirators.

As a part of the scheme to defraud, JASON GALANIS obtained sufficient control over Gerova to be able to cause Gerova to enter into transactions of his design, and for his benefit, including the issuance of Gerova stock. JASON GALANIS obtained this control without causing himself to be identified as an officer or director of Gerova in order to appear to abide by an SEC-imposed bar that forbade him from holding such positions at publicly traded companies. Among other means and methods, JASON GALANIS, with the assistance of Hirst, caused over five million shares of Gerova stock, which represented nearly half the company’s public float and which were intended for JASON GALANIS’s ultimate benefit, to be issued to and held in the name of Ymer Shahini, who knowingly served as a foreign nominee for JASON GALANIS. JASON GALANIS, John Galanis, Derek Galanis, Hirst, and Shahini understood that the purpose of the stock grant to Shahini was to disguise JASON GALANIS’s ownership interest in the stock, and to evade the SEC’s regulations for issuing unregistered shares of stock.

At the same time, and as a further part of the scheme to defraud, JASON GALANIS’s co-conspirators, with his knowledge and approval, opened and managed brokerage accounts in the name of Shahini (the “Shahini Accounts”), effected the sale of Gerova stock from the Shahini Accounts, and received and concealed the proceeds, knowing that this activity was designed to conceal from the investing public JASON GALANIS’s ownership of and control over the Gerova stock.

JASON GALANIS, among others, also fraudulently induced investment advisers, including Gavin Hamels, to purchase shares of Gerova stock in the investment advisers’ client accounts by offering compensation and/or other benefits to the respective investment adviser. By causing the purchase of Gerova stock at the time, quantity, and/or price of their choosing, JASON GALANIS and others were able to, among other things, effectuate the sale of large quantities of Gerova stock from the Shahini Accounts that JASON GALANIS controlled while artificially maintaining the price of Gerova stock through coordinated match trading. Such coordinated trading served to manipulate the market for Gerova stock and deceive the investing public. As a result, JASON GALANIS and his co-conspirators reaped nearly $20 million in profits.

The Scheme to Defraud Clients of TAG Virgin Islands, Inc.

From 2007 to 2010, JASON GALANIS, along with an investment adviser named James Tagliaferri, participated in a scheme to defraud the clients of Tagliaferri’s investment advisory firm, which was called TAG Virgin Islands, Inc. (“TAG”). Often in exchange for compensation from JASON GALANIS, Tagliaferri caused TAG’s clients to invest in notes issued by entities associated with JASON GALANIS.

When obligations owed by entities associated with JASON GALANIS became due, Tagliaferri used client funds to purchase either notes issued by other entities associated with JASON GALANIS or publicly traded shares held by such entities. The funds generated were then used to pay the original obligations owed to other TAG clients. Through these securities trades, funds in client accounts of one set of TAG investors were used to pay obligations owed to a different set of TAG investors by entities associated with JASON GALANIS.

* * *

In addition to the prison term, GALANIS, 46, was sentenced to three years of supervised release, and was ordered to forfeit $37,591,681.10, as well as his interests in properties in New York and Los Angeles. Judge Castel will set a restitution amount at a future proceeding.

JASON GALANIS’s co-defendant Jared Galanis, who pled guilty to misprision of a felony in connection with the Gerova scheme, was sentenced to a term of 150 days in prison on January 11, 2017. John Galanis and Derek Galanis, each of whom pled guilty to conspiracy to commit securities fraud and securities fraud in connection with the Gerova scheme, are scheduled to be sentenced on February 16, 2017. Gary Hirst, who was found guilty after trial of conspiracy to commit securities fraud, securities fraud, conspiracy to commit wire fraud, and wire fraud, is scheduled to be sentenced on March 17, 2017.

Defendant Ymer Shahini remains a fugitive. The allegations contained in the Indictment as to Shahini are merely accusations, and he is presumed innocent unless and until proven guilty.

Mr. Bharara praised the work of the U.S. Postal Inspection Service and the Federal Bureau of Investigation, and thanked the SEC.

The charges were brought in connection with the President’s Financial Fraud Enforcement Task Force. The task force was established to wage an aggressive, coordinated and proactive effort to investigate and prosecute financial crimes. With more than 20 federal agencies, 94 U.S. attorneys’ offices, and state and local partners, it is the broadest coalition of law enforcement, investigatory and regulatory agencies ever assembled to combat fraud. Since its formation, the task force has made great strides in facilitating increased investigation and prosecution of financial crimes; enhancing coordination and cooperation among federal, state and local authorities; addressing discrimination in the lending and financial markets; and conducting outreach to the public, victims, financial institutions and other organizations. Since fiscal year 2009, the Justice Department has filed over 18,000 financial fraud cases against more than 25,000 defendants. For more information on the task force, please visit www.StopFraud.gov.

This case is being handled by the Office’s Securities and Commodities Fraud Task Force. Assistant U.S. Attorneys Brian Blais, Aimee Hector, and Rebecca Mermelstein are in charge of the prosecution.

Preet Bharara, the United States Attorney for the Southern District of New York, William F. Sweeney Jr., the Assistant Director-in-Charge of the New York Field Division of the Federal Bureau of Investigation (“FBI”), 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”), George Beach, the Superintendent of the New York State Police (“NYSP”), Carl E. Dubois, the Sheriff of Orange County, and Daniel C. Cameron, Chief of the City of Newburgh Police Department,  today announced the unsealing of two Indictments charging 10 members of two drug trafficking organizations based in Orange County, New York, with conspiracy to distribute cocaine.  Additionally, two other members were arrested on separate complaints.  In a coordinated operation earlier today, federal, state, and local law enforcement officers arrested eight defendants in Orange County and the Bronx.  One of the charged defendants had already been arrested and presented.  Most of the defendants are expected to be presented in White Plains federal court today before U.S. Magistrate Judge Judith C. McCarthy. 

Manhattan U.S. Attorney Preet Bharara stated:  “The narcotics charges brought today strike at the heart of an entrenched group of alleged drug dealers operating out of Newburgh and the surrounding areas of Orange County.  With today’s charges, made possible by the outstanding work of the FBI, ICE HSI, and our state and local law enforcement partners, we seek to help stem the flow of cocaine in Orange County.”

FBI Assistant Director-in-Charge William F. Sweeney Jr. stated: “The ultimate goal in an investigation like this is to take out the leadership of these groups. It’s not just the drugs that take a toll on the communities where these subjects were operating, it’s the crime accompanying the drugs that impacts everyone. The FBI Hudson Valley Safe Streets Task Force and our law enforcement partners will continue to do all we can to stop the spread of the drug trade and the criminals who support it.”

HSI Special Agent-in-Charge Angel Melendez said:  “With many of the individuals arrested today facing up to 40 years in prison if convicted, we have sent a clear message to drug dealers in Orange County that they should immediately seek other employment.  HSI will remain steadfast in its commitment to working with its law enforcement partners to dismantle these drug trafficking organizations that destroy our neighborhoods with their poison.”

NYSP Superintendent George P. Beach II said:  “Today’s arrests are a result of an aggressive strategy to stop illegal drug trafficking and keep cocaine and other deadly substances off our streets.  Together, with our partners in federal, local and state law enforcement, we can combat the infiltration of narcotics into our communities and continue to put dangerous individuals like these 11 criminals behind bars.”

Orange County Sheriff Carl E. DuBois stated:  “These arrests prove once again that agencies cooperating with each other benefit the communities they serve.  The FBI Safe Streets Task Force has been instrumental in dismantling drug networks in the Hudson Valley area, and the Orange County Sheriff’s Office is proud to participate with and support the FBI, the U.S. Attorney’s office and other participating agencies.”

City of Newburgh Police Chief Daniel C. Cameron stated:  “Collaborative efforts like this are critical to targeting high level narcotics traffickers who plague our cities.  When we all work together in this capacity, we can truly improve the quality of life for the residents in Newburgh, Orange County, and across the state.”          

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

RIGOBERTO DIAZ, JAIRO ESQUIVIAS, a/k/a “Jalisco,” JUAN ROMERO, SAUL GARZON, ANDRES RIOS, and JUAN SANCHEZ PEREZ are charged in an indictment with conspiring to distribute and possess with intent to distribute 500 grams of cocaine, from 2013 to September 2016.  DIAZ and his alleged co-conspirators distributed cocaine in and around the City of Newburgh, New York, and other locations in Orange County, New York. 

ADAN SOLIS-TEYO, a/k/a “Adan Hernandez,” CHRISTOPHER POOL, LUIS SANCHEZ, a/k/a “Eito,” and LUIS MEJIA, a/k/a “Miguel Contreras,” are charged in an indictment with conspiring to distribute and possess with intent to distribute 500 grams of cocaine, from 2014 to February 2017.  SOLIS-TEYO and his alleged co-conspirators distributed cocaine in and around the City of Newburgh, New York, and in the Bronx, New York.

WILLIAM PERELDA, a/k/a “William Peralda,” a/k/a “Arturo Pelez-Gonzalez,” was charged by complaint and arrested on February 11, 2017.  PERELDA is charged with conspiracy to distribute and possess with intent to distribute 500 grams and more of cocaine.  PERELDA is also charged with five counts of distribution of cocaine based on sales of cocaine to a cooperating witness.   

All of the defendants except SOLIS-TEYO and MEJIA were arrested today. 

*                      *                     *

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. Bharara praised the outstanding investigative work of the FBI, the Department of Homeland Security, Homeland Security Investigations, the New York State Police, the Orange County Sheriff’s Department, the City of Newburgh Police Department, and the Village of Port Chester Police Department. 

These cases are being handled by the Office’s White Plains Division.  Assistant United States Attorneys Jennifer Burns, Lauren Schorr, and Olga Zverovich are in charge of the prosecutions.

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

CHARGE(S)

DEFENDANT(S)

MAXIMUM PENALTIES

Narcotics conspiracy – Cocaine

(conspiracy to distribute and possess with intent to distribute cocaine, in violation of 21 U.S.C. §§ 846, 841(a)(1) & 841(b)(1)(B))

RIGOBERTO DIAZ, JAIRO ESQUIVIAS, a/k/a “Jalisco,” JUAN ROMERO, SAUL GARZON, ANDRES RIOS, and JUAN SANCHEZ PEREZ, ADAN SOLIS-TEYO, a/k/a “Adan Hernandez,” CHRISTOPHER POOL, LUIS SANCHEZ, a/k/a “Eito,” LUIS MEJIA, a/k/a “Miguel Contreras,” WILLIAM PERELDA, a/k/a “William Peralda,” a/k/a “Arturo Pelez-Gonzalez,”

40 years in prison

Mandatory minimum: Five years in prison

Narcotics distribution

(distribution of cocaine, in violation of 21 U.S.C. §§ 846, 841(a)(1) & 841(b)(1)(C))

WILLIAM PERELDA, a/k/a “William Peralda,” a/k/a “Arturo Pelez-Gonzalez”

40 years in prison

Narcotics distribution

(distribution of cocaine, in violation of 21 U.S.C. §§ 846, 841(a)(1) & 841(b)(1)(C))

WILLIAM PERELDA, a/k/a “William Peralda,” a/k/a “Arturo Pelez-Gonzalez”

40 years in prison

Narcotics distribution

(distribution of cocaine, in violation of 21 U.S.C. §§ 846, 841(a)(1) & 841(b)(1)(C))

WILLIAM PERELDA, a/k/a “William Peralda,” a/k/a “Arturo Pelez-Gonzalez”

40 years in prison

Narcotics distribution

(distribution of cocaine, in violation of 21 U.S.C. §§ 846, 841(a)(1) & 841(b)(1)(C))

WILLIAM PERELDA, a/k/a “William Peralda,” a/k/a “Arturo Pelez-Gonzalez”

40 years in prison

Narcotics distribution

(distribution of cocaine, in violation of 21 U.S.C. §§ 846, 841(a)(1) & 841(b)(1)(C))

WILLIAM PERELDA, a/k/a “William Peralda,” a/k/a “Arturo Pelez-Gonzalez”

40 years in prison

[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.

Preet Bharara, the United States Attorney for the Southern District of New York, announced that FRANK JENKINS, 23, pled guilty today before the Honorable John G. Koeltl to shooting and killing Rashaun Nicholson on or about December 28, 2014, in furtherance of a narcotics distribution conspiracy. The charges to which JENKINS pled guilty are set forth in a seven-count superseding indictment (the “Indictment”), which was filed in December 2015.

Manhattan U.S. Attorney Preet Bharara said: “Frank Jenkins not only supplied a large part of the New York City-to-Bennington pipeline of crack and heroin, but as part of that drug business, he shot and killed a man in lower Manhattan, just a few blocks from the Manhattan federal courthouse. Today, in that courthouse, Jenkins pled guilty to his crimes and faces a lengthy prison sentence.”

As alleged in the Superseding Indictment and in other documents previously filed in Manhattan federal court and in statements made during court proceedings:

On December 28, 2014, in connection with a narcotics trafficking offense, FRANK JENKINS shot and killed Rashaun Nicholson in the vicinity of 78 Catherine Street, New York, New York. The narcotics trafficking conspiracy in which JENKINS was a participant involved the sale of controlled substances, including crack cocaine and heroin, in Vermont and elsewhere. Specifically, between 2014 and 2015, JENKINS, together with other members of the conspiracy, obtained crack 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.

As a result of his plea, JENKINS faces a mandatory minimum sentence of 10 years in prison, and a maximum sentence of life. JENKINS is scheduled to be sentenced by Judge Koeltl on June 2, 2017, at 10:00 a.m.

* * *

Mr. Bharara 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. Bharara also thanked the United States Attorney’s Office for District of Vermont for assisting his Office at all stages of the investigation.

The prosecution is being handled by the Office’s Violent and Organized Crime Unit. Assistant U.S. Attorneys Michael Gerber, Hadassa Waxman, Andrew Adams, and Margaret Graham are in charge of the prosecution.

Preet Bharara, the United States Attorney for the Southern District of New York, announced today that the United States has settled a federal civil rights lawsuit against ALBANESE ORGANIZATION, INC. (“ALBANESE”) and three of its affiliates, NORTH END ASSOCIATES, LLC, RIVER TERRACE ASSOCIATES, LLC, and CHELSEA ASSOCIATES, LLC (together, the “DEVELOPER DEFENDANTS”), by consent decree. Under the settlement, ALBANESE has agreed to make retrofits at The Verdesian, a rental complex located at 211 North End Avenue in Manhattan, in order to comply with the federal Fair Housing Act (“FHA”) and make The Verdesian more accessible to individuals with disabilities. The DEVELOPER DEFENDANTS also have agreed to inspect two additional rental complexes in Manhattan, The Solaire and The Vanguard Chelsea, and, where necessary, make retrofits at those buildings as well. Additionally, ALBANESE commits in the consent decree to establish procedures to ensure that its ongoing and future development projects will comply with the accessibility requirements of the FHA. Finally, as part of the consent decree, the DEVELOPER DEFENDANTS have agreed to provide up to $500,000 to compensate aggrieved persons and pay a civil penalty of $45,000. The consent decree was approved late yesterday by U.S. District Judge Jed S. Rakoff.

Manhattan U.S. Attorney Preet Bharara said: “This lawsuit – the fifteenth of its kind filed in recent years – is another step in our ongoing effort to ensure equal accessibility for New Yorkers with disabilities. Today’s settlement not only provides compensation for those who have been aggrieved by existing inaccessible conditions, but also provides that Albanese and its affiliates will implement procedures to guarantee accessibility at The Verdesian, The Solaire, The Vanguard Chelsea, and future development projects.”

The FHA’s accessible design and construction provisions require new multifamily housing complexes constructed after January 1993 to have basic features accessible to persons with disabilities. According to the allegations in the Complaint, Verdesian, a rental complex with 253 rental units, was designed and constructed with numerous inaccessible features, including excessively high thresholds interfering with accessible routes in the public and common areas as well as into and within individual units, and insufficient widths, clearance, and clear floor space in bedrooms, bathrooms, closets, and kitchens for maneuvering by people who use wheelchairs.

Under the settlement, ALBANESE agrees to make extensive retrofits at The Verdesian to make it accessible. The DEVELOPER DEFENDANTS also agree to arrange for inspections of two additional rental complexes in Manhattan, The Solaire, located at 20 River Terrace, and The Vanguard Chelsea, located at 77 West 24th Street, and, where necessary, to make retrofits at those properties. Together, The Verdesian, The Solaire, and The Vanguard Chelsea contain more than 800 rental apartments.

The settlement also requires ALBANESE to establish procedures to ensure FHA compliance at its ongoing and future development projects, including retaining an FHA compliance consultant to ensure that each residential building developed by ALBANESE will, as constructed, comply with the FHA. The FHA consultant also will conduct a site visit to identify non-compliant conditions and recommend appropriate solutions prior to the completion of construction. In addition, ALBANESE agrees to institute policies and training to ensure that its employees and agents will comply with the FHA’s accessibility requirements.

Finally, the settlement requires the DEVELOPER DEFENDANTS to provide up to $500,000 to compensate aggrieved persons. The DEVELOPER DEFENDANTS also agree to pay a civil penalty of $45,000.

The government’s lawsuit also asserts claims against the architect of The Verdesian, SLCE Architects, LLP. Those claims remain pending.

Aggrieved individuals may be entitled to monetary compensation from the fund created through today’s settlement. Aggrieved individuals may include those who:

• Were discouraged from living at The Verdesian, Vanguard Chelsea, or The Solaire because of the lack of accessible features;

• Have been hurt in any way by the lack of accessible features at The Verdesian, Vanguard Chelsea, or The Solaire;

• Paid to have an apartment at The Verdesian, Vanguard Chelsea, or The Solaire made more accessible to persons with disabilities; or

• Otherwise were discriminated against on the basis of disability at The Verdesian, Vanguard Chelsea, or The Solaire as a result of the inaccessible design and construction of the properties.

Any individual who may be entitled to compensation should file a claim by contacting the Civil Rights Complaint Line at (212) 637-0840, using the Civil Rights Complaint Form available on the United States Attorney’s Office’s website http://www.justice.gov/usao/nys/civilrights.html, or by sending a written claim to:

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

86 Chambers Street, 3rd Floor

New York, New York 10007

Attention: Chief, Civil Rights Unit

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