Southern District of New York

            Preet Bharara, the United States Attorney for the Southern District of New York, and Diego Rodriguez, Assistant Director-in-Charge of the New York Office of the Federal Bureau of Investigation (“FBI”), announced that HASSAN KHAN, a Long Island resident, was arrested today and charged in a criminal complaint with five counts stemming from his sexual exploitation and enticement of a minor and his receipt of child pornography.  KHAN was presented today in Manhattan federal court before U.S. Magistrate Judge Gabriel W. Gorenstein.         

            U.S. Attorney Preet Bharara said: “As alleged, Hassan Khan sexually exploited an innocent child, beginning the grooming process when she was just 11 years old.  This Office is dedicated to ensuring that those who sexually abuse children are held to account.  I want to thank the FBI for their remarkable work in this case.”

            Assistant Director-in-Charge Diego Rodriguez said:  “Khan was arrested today for allegedly targeting, grooming, and exploiting a minor for several years. He carried out this illicit behavior by enticing her online and engaging in sexually explicit conduct with her, both in the United States and abroad. As this terrifying ordeal comes to an end, the nightmare continues for the victim and her family. Innocence, once stolen, is not easily restored. The FBI, with assistance from our local and international partners, will continue to pursue sexual predators, remove them from their hideaway, and deliver them into the arms of the law.”

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

            In or about 2007, KHAN initiated online conversations with a then-11-year-old girl (the "Victim.").  Between 2007 and 2013, KHAN, who was aware of the Victim's age, coerced and enticed the Victim to engage in illegal sexual activity.  The Complaint further alleges that KHAN engaged in a sexual act with the Victim, and coerced and enticed the Victim to engage in sexually explicit conduct for the purpose of producing a visual depiction of such conduct.

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            KHAN, 28, was arrested today in Manhattan, New York.  The Complaint charges KHAN in five counts.  Counts One and Two charge KHAN with coercing and enticing a minor to engage in illegal sexual activity.  Count Three charges KHAN with sexual exploitation of a child.  Count Four charges KHAN with sexual exploitation of a child outside of the United States.  Count Five charges KHAN with receipt of child pornography.  Counts One and Two carry a mandatory minimum sentence of 10 years in prison and a maximum penalty of life in prison.  Counts Three and Four carry a mandatory minimum sentence of 15 years in prison and a maximum sentence of 30 years in prison.  Count Five carries a mandatory minimum sentence of five years in prison and a maximum sentence of 20 years in prison.  The maximum potential sentences in this case are prescribed by Congress and are provided here for informational purposes only, as any sentencing of the defendant will be determined by the judge.

            Mr. Bharara praised the efforts of the FBI in this investigation.  He added that the investigation is continuing. Any individuals who believe they have information concerning HASSAN KHAN that may be relevant to the investigation should contact the Federal Bureau of Investigation at 1-212-384-1000.

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

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

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

Preet Bharara, United States Attorney for the Southern District of New York, announced today that LENA LASHER, a licensed pharmacist, was sentenced in Manhattan federal court today to three years in prison for misbranding and fraud offenses arising from an Internet pharmacy scheme.  LASHER was convicted on May 15, 2015, after a two-week trial before U.S. District Judge Naomi Reice Buchwald.

Manhattan U.S. Attorney Preet Bharara said: “Lena Lasher abused her position as a licensed pharmacist by dispensing prescription drugs to customers without valid prescriptions and customers who had never consulted with a physician. Prescription drugs, especially the pain medications that Lasher dispensed, can be addictive and dangerous, and this Office is committed to prosecuting those who illegally dispense prescription drugs.”

According to the Indictment, and Superseding Indictment, public filings, and evidence presented at trial:

From 2008 through late November 2012, LASHER, along with others, engaged in a scheme to dispense prescription drugs, including addictive pain medications, to customers who ordered them online, without meeting or consulting with a physician.  Over the course of the scheme, LASHER, a licensed pharmacist who was the Pharmacist-In-Charge at Hellertown Pharmacy in Hellertown, Pennsylvania, and who supervised a second pharmacy, Palmer Pharmacy & Much More in Easton, Pennsylvania, dispensed and caused others to dispense hundreds of thousands of pain pills without valid prescriptions.

LASHER also directed employees at the two pharmacies she supervised to ship pills in vials with false or misleading labels.  At LASHER’s direction, instructions on the labels for how often a customer should take certain drugs were often altered, and the descriptions on the labels regarding the quantity of pills in the pill vial were often inaccurate.  She also directed employees to take pills that had been returned by customers or delivery services, remove the labels, and then to re-dispense the pills to other customers with new labels, without informing those new customers that they were receiving pills that had previously been dispensed to others.  LASHER also instructed her employees to store pills without required information, such as a lot number or expiration date.

As part of her effort to conceal the nature of the Internet pharmacy business at both pharmacies, LASHER made false representations to multiple state boards of pharmacy and to an investigator with the Commonwealth of Pennsylvania.  LASHER also instructed her employees to use code when talking about the Internet pharmacy scheme, telling them to refer to prescription drugs dispensed pursuant to prescriptions obtained over the Internet as “nursing home meds” and not to use the word “Internet” in describing the pharmacies’ business.

LASHER, 47, of High Bridge, New Jersey, was convicted after trial of one count of conspiracy to introduce misbranding prescription drugs into interstate commerce and to misbrand prescription drugs while held for sale, with intent to defraud or mislead; one count of introducing misbranding prescription drugs into interstate commerce, with intent to defraud or mislead; one count of conspiracy to commit mail fraud and wire fraud; one count of mail fraud; and one count of wire fraud.  In addition to the prison term, LASHER was also sentenced to two years supervised release, and was ordered to pay $2.5 million in forfeiture.

United States Attorney Bharara praised the work of the Drug Enforcement Administration, the Food and Drug Administration, Office of Criminal Investigations, and the United States Postal Inspection Service, and expressed his appreciation for the assistance of the Commonwealth of Pennsylvania, Department of State, and the New Jersey Department of Law & Public Safety, Division of Law, Professional Boards Prosecution Section.

The case is being handled by the Office’s Narcotics Unit.  Assistant U.S. Attorneys Daniel C. Richenthal and Kristy J. Greenberg are in charge of the prosecution.

            Preet Bharara, the United States Attorney for the Southern District of New York, Diego Rodriguez, the Assistant Director-in-Charge of the New York Field Division of the Federal Bureau of Investigation (“FBI”), and Daniel McMahon, the Chief of the Yorktown Police Department, today announced the unsealing of a Complaint charging four defendants with participating in a scheme to steal, transport, and sell  a shipment of approximately 1,200 computers, valued at over $1 million, that were bound for two public high schools in New Jersey.  All four defendants were arrested this morning and will be presented in White Plains federal court today before U.S. Magistrate Judge Lisa Margaret Smith.          

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

            On or about January 15, 2014, ANTON SALJANIN, a driver for a shipping company, drove a truck from Yorktown Heights, New York, to a technology company located in Massachusetts to pick up a shipment of approximately 1,200 Apple MacBook Air computers.  ANTON SALJANIN brought his brother, GJON SALJANIN, with him.  The computers were being shipped to two public high schools located in New Jersey, and were valued at over $1 million.

            The next morning, ANTON SALJANIN reported to the Yorktown Police Department that the truck had been stolen from a parking lot located in Yorktown Heights.  Later that day, ANTON SALJANIN reported to Yorktown Police that he had been driving around looking for the truck when he happened to spot it from the highway in a parking lot in Danbury, Connecticut.  The truck would not have been visible in the Danbury parking lot to a driver passing by on the highway.  Furthermore, historical cell site data for ANTON SALJANIN’s cellphone contradicts his claims about the route he took to look for the truck.

            Yorktown Police detectives examined the truck and found that a window had been broken.  The detectives found broken glass on the scene in the Danbury parking lot but found no broken glass on the scene in the Yorktown Heights parking lot, suggesting that the window had been broken at the Danbury parking lot rather than at the Yorktown Heights parking lot.

            During interviews with the Yorktown Police, ANTON SALJANIN and GJON SALJANIN claimed that on the night of January 15, 2014, they drove directly from a convenience store outside of Yorktown Heights to the Yorktown Heights parking lot.  Security camera footage from various locations in Yorktown Heights shows that a truck matching the description of the truck driven by the SALJANIN brothers departed from their claimed route, and instead traveled in the direction of the residence of UJKA VULAJ, a long-time friend of ANTON SALJANIN.  The video surveillance footage also shows that the duration of the detour corresponds to the approximate length of time it would have taken to drive to VULAJ’s residence, unload the computers from the truck, and return to the route to the Yorktown Heights parking lot.

            From in or about January 2014 through at least in or about April 2014, VULAJ and a co-worker, CARLOS CACERES, sold at least dozens of Apple MacBook Air computers.  They sold the computers, which had a retail value of approximately $1,000, for far below the market price.  VULAJ and CACERES charged $500 to $800 in cash for each computer, and handed over each computer in plain brown cardboard packaging.

            Count One of the Complaint charges all four defendants, ANTON SALJANIN, a/k/a “Tony,” GJON SALJANIN, UJKA VULAJ, a/k/a “Tito,” and CARLOS CACERES, with conspiring to commit theft from an interstate shipment, interstate transportation of stolen property, and receipt, possession, and sale of stolen property.  Count Two of the Complaint charges ANTON SALJANIN, GJON SALJANIN, and VULAJ with stealing property with a value of at least $1,000 from an interstate shipment, and aiding and abetting such theft.  Count Three of the Complaint charges ANTON SALJANIN, GJON SALJANIN, and VULAJ with transporting in interstate commerce stolen property with a value of at least $5,000, and aiding and abetting such transport.  Count Four of the Complaint charges VULAJ and CACERES with receiving, possessing, and selling stolen property with a value of at least $5,000, and aiding and abetting such receipt, possession, and sale.

            Charts containing the charges against the defendants and the maximum penalties they face, as well as the defendants’ ages and residences, 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 judge.

            Mr. Bharara praised the outstanding investigative work of the FBI, the Yorktown Police Department, the Westchester County Police Department, and the New York City Police Department.  Mr. Bharara also thanked the Bronx County District Attorney’s Office for its ongoing assistance in the case.

            This case is being handled by the Office’s White Plains Division.  Assistant United States Attorneys Won Shin, Benjamin Allee, and Scott Hartman are in charge of the prosecutions.

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

COUNT

CHARGE

DEFENDANTS

MAXIMUM PENALTIES

1

Conspiracy

18 U.S.C. § 371

ANTON SALJANIN,    a/k/a “Tony,”
GJON SALJANIN, UJKA VULAJ,    a/k/a “Tito,” and
CARLOS CACERES

Five years in prison

2

Theft from an interstate shipment

18 U.S.C. § 659

ANTON SALJANIN,    a/k/a “Tony,”
GJON SALJANIN, and
UJKA VULAJ,    a/k/a “Tito”

10 years in prison

3

Interstate transportation of stolen property

18 U.S.C. § 2314

ANTON SALJANIN,    a/k/a “Tony,”
GJON SALJANIN, and
UJKA VULAJ,    a/k/a “Tito”

10 years in prison

4

Receipt, possession, and sale of stolen property

18 U.S.C. § 2315

UJKA VULAJ,    a/k/a “Tito,” and
CARLOS CACERES

10 years in prison

DEFENDANT

AGE

RESIDENCE

ANTON SALJANIN,    a/k/a “Tony”

43

Yorktown Heights, NY

GJON SALJANIN

40

Yorktown Heights, NY

UJKA VULAJ,    a/k/a “Tito”

54

Yorktown Heights, NY

CARLOS CACERES

37

Bronx, NY

[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.

“My Office has been in communication with the office of Dutchess County District Attorney William Grady, and we will be coordinating and working with his office to investigate the April 21, 2015 death of Samuel Harrell, an inmate at Fishkill Correctional Facility.” 

Preet Bharara, the United States Attorney for the Southern District of New York, announced that Westchester businessman SELIM ZHERKA pled guilty today to conspiring to make false statements to a bank in order to receive millions of dollars in loans and to file materially false tax returns with the IRS.  As part of his plea agreement, ZHERKA agreed to forfeit $5.23 million.  ZHERKA entered his guilty plea before U.S. District Judge Cathy Seibel.

U.S. Attorney Preet Bharara said: “With his guilty plea, Selim Zherka now has admitted to what we have been alleging all along, that he waged a years-long campaign of lies to a bank and the IRS to obtain millions of dollars in loans and fraudulently reduce his tax liabilities.  In addition to admitting his guilt, Zherka has agreed to forfeit over $5 million in ill-gotten gains.  I want to thank the FBI, IRS, and the TARP Special Inspector General for the excellent work in this investigation and prosecution.”

According to the Superseding Information filed today in White Plains federal court and other court documents filed in this case:

From December 2005 through the present, ZHERKA conspired with others to obtain $63.5 million in loans from Sovereign Bank (now Santander), for the purchase and/or refinancing of apartment house complexes in Tennessee by lying about the purchase price of the real estate he was acquiring and the amount of the down payment he was making toward the purchase in question.

Additionally, the Superseding Information to which ZHERKA pled guilty charges him with engaging in a five-year-long tax fraud scheme.  The Information alleges that ZHERKA repeatedly submitted fraudulent tax returns to the IRS that overstated depreciation expenses and understated his capital gains for the real estate holding companies in which he was a partner and which, in turn, owned apartment house complexes, thereby reducing their tax liabilities.

Four other individuals have previously pled guilty in White Plains federal court to conspiring with ZHERKA to commit offenses related to the conduct to which ZHERKA pled guilty today, and are awaiting sentencing.

SELIM ZHERKA, 47, of Somers, New York, faces a maximum sentence of five years in prison, based on the conspiracy charge to which he pled guilty.  ZHERKA is scheduled to be sentenced by U.S. District Judge Cathy Seibel on December 22, 2015, at 10:00 a.m.  The maximum potential sentences in this case are prescribed by Congress and are provided here for informational purposes only, as any sentencing of the defendant will be determined by the judge.

*          *         *

Mr. Bharara praised the outstanding efforts of the IRS, the FBI, and the Special Inspector General for the Troubled Asset Relief Program.  He also thanked the Department of Justice’s Tax Division for their significant assistance in the investigation.

This case is being handled out of the White Plains Division.  Assistant United States Attorneys Elliott B. Jacobson and Perry A. Carbone and Special Assistant United States Attorney Andrew J. Kameros are in charge of the prosecution.

Preet Bharara, the United States Attorney for the Southern District of New York, announced today that CHENG LE was found guilty of attempting to acquire ricin to use as a weapon, postal fraud, and identity theft.  LE was convicted after a four-day jury trial before United States District Judge Alison J. Nathan.

U.S. Attorney Bharara said:  “As a unanimous jury has found, Cheng Le attempted to acquire ricin, a potentially lethal toxin, through the Dark Web so that it could be used to kill without a trace.  As Le himself put it, he was looking for ‘simple and easy death pills’ and ways to commit ‘100% risk-free’ murder.  Thanks to the FBI, the NYPD, and the Postal Inspection Service, he was thwarted in his poisonous plot.”

According to the allegations contained in the Complaint and Indictment filed in federal court, and the evidence presented at trial:

Ricin is a highly potent and fatal toxin with no known antidote.  The “Dark Web” is a colloquial name for a number of extensive, sophisticated, and widely used online criminal marketplaces, which allow participants to buy and sell illegal items, including ricin.

In early December 2014, LE contacted an FBI online covert employee (the “OCE”) on a particular Dark Web marketplace using an encrypted messaging service.  The OCE had taken over the Dark Web identity from another individual who had a reputation for selling lethal poisons.  After making contact with the OCE, LE inquired, “this might sound blunt but do you sell ricin?”

Following that initial contact, LE exchanged a series of messages with the OCE concerning his efforts to purchase ricin.  During these messages, LE confirmed his understanding of the lethal nature of ricin, revealed his intent to resell the ricin to at least one secondary buyer, proposed that the OCE conceal the ricin in a single pill in an otherwise ordinary bottle of pills, and indicated a desire to obtain more ricin in the future.  LE’s messages to the OCE included the following:

• “If [the ricin’s] good quality, I’ve already had buyers lining up.”

• “Does ricin have antidote? Last I check there isn’t one, isn’t it?”

• “Injection can be difficult to pull off. Ricin doesn’t work immediately. You wouldn’t expect the target to not fight back after being jabbed.”

• “The client would like to know . . . if it is wise to use ricin on someone who is hospitalized. . . .  Injection will leave needle holes on the body which could be found in regular forensic examination. But hospitalized people already have needles in them so it wouldn’t be suspicious. Thing is, would ricin make the death look like someone succumbed to the injuries after an accident and didn’t make it through? In that case then, a little anethestical gas in the target’s car, get him drowsy when driving, get into an accident, and then kill him in the hospital bed.”

• “I probably told you this before, about mixing one and only one toxic pill into a bottle of normal pills. They all look identical. And as the target takes the medicine every day, sooner or later he’d ingest that poisonous pill and die. Even if there is a murder investigation, they won’t find any more toxin. 100% Risk Free.”

• “If you can make them into simple and easy death pills, they’d become bestsellers.”

• “I’ll be trying out new methods in the future. After all, it is death itself we’re selling here, and the more risk-free, the more efficient we can make it, the better.”

• “Also, besides that one bottle of pills with one poisonous pill in there, can you send some extra loose powder/liquid ricin? I’d like to test something.”

Moreover, during these exchanges, LE further revealed to the OCE that he had a specific victim in mind: “someone middle-aged.  Weight around 200 lbs.”

On December 18, 2014, LE directed the OCE to send a quantity of ricin in the name of an individual whose stolen identity LE had assumed, and to a particular postal box in Manhattan (the “Postal Box”).  On December 22, 2014, the FBI prepared a mock shipment of ricin (the “Sham Shipment”) that was consistent with LE’s request to the OCE.  The Sham Shipment included both a fake “ricin” tablet concealed in a pill bottle (the “Pill Bottle”), and a quantity of loose fake “ricin” powder.   The next day, the Sham Shipment was delivered to the Postal Box.  LE, wearing latex gloves, retrieved the Sham Shipment, opened it, and took the contents to his apartment.

When FBI agents entered LE’s apartment to arrest LE and to search the apartment, pursuant to a search warrant, they saw the Pill Bottle open in his apartment.  The agents additionally recovered from LE’s apartment an envelope containing castor seeds, which is the substance from which ricin is derived.  The agents further observed that LE’s computer – which was protected with encryption software – was open to the online account that he had used to communicate with the OCE and to LE’s personal email account.

*                      *                      *

LE, 22, of New York, New York was convicted of one count of attempting to possess a biological toxin for use as a weapon, in violation of Title 18, United States Code, Section 175(a), which carries a maximum sentence of life in prison; one count of using a fictitious name in furtherance of unlawful business involving the mail, in violation of Title 18, United States, Section 1342, which carries a maximum sentence of five years in prison; and one count of aggravated identity theft during and in relation to a terrorism offense, in violation of Title 18, United States Code, Section 1028A(a)(2), which carries an additional mandatory minimum sentence of five years in prison.  This prosecution marked the first convictions after trial in this District for violations of Sections 175(a) and 1028A(a)(2).

The mandatory minimum and maximum potential sentences in this case are prescribed by Congress and are provided here for informational purposes only, as any sentencing of the defendant will be determined by a judge.  Sentencing has not yet been scheduled.

Mr. Bharara praised the outstanding investigative efforts of the FBI’s New York Joint Terrorism Task Force – which principally consists of agents from the FBI and detectives from the New York City Police Department – and the United States Postal Inspection Service.  He also thanked the National Security Division of the U.S. Department of Justice for its assistance.

The case is being prosecuted by the Office’s Terrorism and International Narcotics Unit.  Assistant U.S. Attorneys Ilan Graff and Andrew D. Beaty are in charge of the prosecution.

Preet Bharara, the United States Attorney for the Southern District of New York, announced today the guilty plea of SCOTT STAMMERS, a citizen of the United Kingdom, to conspiring to import 100 kilograms of North Korean-produced methamphetamine into the United States.  STAMMERS was arrested in September 2013, along with co-defendants Philip Shackels, Ye Tiong Tan Lim, Kelly Allan Reyes Peralta, and Adrian Valkovic, following a long-term investigation by the Drug Enforcement Administration (“DEA”).  STAMMERS pled guilty before Magistrate Judge James L. Cott.

Manhattan U.S. Attorney Preet Bharara said:  “Scott Stammers conspired to import into the United States 100 kilograms of dangerously pure North Korean methamphetamine.  Thanks to the work of the DEA and the cooperation of law enforcement partners around the world, including in Thailand, Liberia and Romania, Stammers’s scheme ended, not with the North Korean methamphetamine flooding American streets as he had intended, but rather with a guilty plea in a Manhattan federal court.”

According to the allegations contained in the Indictment, the plea agreement for STAMMERS, and statements made in court proceedings:

In 2012, Tan Lim and Peralta, members of a criminal organization operating in Hong Kong and the Philippines, sold more than 30 kilograms of methamphetamine that had been produced in North Korea.  STAMMERS and Shackels were responsible for storing the methamphetamine after it had been sold by Tan Lim and Peralta.  This North Korean methamphetamine was later seized by law enforcement agents in Thailand and in the Philippines and tested at more than 99% pure.

In 2013, Tan Lim and Peralta again agreed to provide North Korean methamphetamine, this time agreeing to supply 100 kilograms of the methamphetamine to confidential sources working at the direction of the DEA (the “CSes”) for importation to the United States.  As Tan Lim explained, his criminal organization was the only one currently able to obtain methamphetamine from North Korea:  “Because before, there were eight [other criminal organizations].  But now only us, we have the NK [i.e., North Korea] product. . . . [I]t’s only us who can get from NK.”  Tan Lim further explained that, because of recent international tensions, the North Korean government had destroyed some methamphetamine labs, leaving behind only the labs of Tan Lim’s organization:  “And all the, the NK government already burned all the labs.  Only our labs are not closed. . . . To show Americans that they [the North Korean government] are not selling it any more, they burned it.  Then they transfer to another base.”  In anticipation of these geo-political complications, Tan Lim noted that his organization had stockpiled one ton of North Korean methamphetamine in the Philippines for storage.

As a prelude to the 100-kilogram methamphetamine deal, Tan Lim and Peralta arranged to have a sample of the drug delivered to Shackels, who sent that sample (along with a second sample from another supplier) to an address from which the methamphetamine samples would be sent to the United States.  These two methamphetamine samples tested at more than 98% and 96% pure.

Tan Lim and Peralta agreed to deliver the 100 kilograms of North Korean methamphetamine in Thailand, from where they understood it would be shipped to the United States by boat.  In preparation, Tan Lim and Peralta arranged for a “dry run,” sending a shipping container of tea leaves from the Philippines to Thailand in order to test delivery channels that would later be used for the shipment of methamphetamine.

STAMMERS, Valkovic, and Shackels agreed to provide security, transportation, and storage for the 100 kilograms of methamphetamine once it arrived in Thailand.  Valkovic, the Sergeant-at-Arms of the Outlaw Motorcycle Club (“OMC”) in Thailand, was to be the “ground commander,” and would supervise an armed crew of OMC members that would provide security for the methamphetamine.  STAMMERS and Shackels were to arrange for the 100 kilograms to be taken to a warehouse, counted, re-packaged, and delivered to a marina in Thailand, to be transferred to a boat that would deliver the methamphetamine to the United States.

In September 2013, Tan Lim and Peralta traveled to Thailand in order to receive payment for the 100 kilogram methamphetamine deal.  STAMMERS, Tan Lim, Peralta, Valkovic, and Shackels were arrested by Thai law enforcement on September 25, 2013.

*                *                *

As a result of his guilty plea, STAMMERS, 46, faces a maximum possible term of life in prison and a mandatory term of 10 years in prison.  The minimum and maximum potential sentences are prescribed by Congress and are provided here for informational purposes only, as any sentence will be determined by the judge.  A sentencing date for STAMMERS has not been scheduled.

Valkovic pled guilty on August 5, 2015, before Judge Carter to conspiring to import 100 kilograms of methamphetamine into the United States.  Peralta pled guilty on August 18, 2015, and Tan Lim pled guilty on August 19, 2015, to the same charge before U.S. Magistrate Judge Debra Freeman.

The remaining defendant, Shackels, 32, is charged with conspiracy to import methamphetamine into the United States.  His trial is scheduled to commence before Judge Carter on September 21, 2015.

The guilty plea was the result of the close cooperative efforts of the United States Attorney’s Office for the Southern District of New York; DEA’s Special Operations Division, Bilateral Investigations Unit; and DEA’s Bangkok, Manila, Ghana, Pretoria, Bucharest, Nassau, and Copenhagen Country Offices.  Mr. Bharara also thanked the Thai Police Narcotics Suppression Bureau and Crime Suppression Division; the Royal Thai Immigration; the Royal Thai Attorney General’s Office; the Republic of Liberia’s National Security Agency; the Republic of Liberia’s Attorney General’s Office; the Romanian National Police; Interpol; and the U.S. Department of Justice Office of International Affairs for their support and assistance.

This prosecution is being handled by the Office’s Terrorism and International Narcotics Unit.  Assistant United States Attorneys Anna Skotko, Michael D. Lockard, and Emil Bove are in charge of the prosecution.

The allegations against Shackels in the Indictment are merely accusations and that defendant is presumed innocent unless and until proven guilty.

Preet Bharara, the United States Attorney for the Southern District of New York, John P. Carlin, Assistant Attorney General for National Security, Diego Rodriguez, Assistant Director-in-Charge of the New York Field Office of the Federal Bureau of Investigation (“FBI”), and William J. Bratton, the Commissioner of the Police Department for the City of New York (“NYPD”), announced that AHMED MOHAMMED EL GAMMAL, a/k/a “Jammie Gammal,” was indicted today for providing, and conspiring to provide, material support to the Islamic State of Iraq and the Levant (“ISIL”), a designated foreign terrorist organization, as well as for aiding and abetting the receipt of military-type training from ISIL and conspiring to receive such training.  EL GAMMAL was arrested on Monday in Avondale, Arizona, and presented in federal court in the District of Arizona, pursuant to a criminal complaint that was unsealed yesterday in Manhattan federal court.  The case is assigned to Judge Edgardo Ramos of United States District Court for the Southern District of New York.

Manhattan U.S. Attorney Preet Bharara said: “As alleged, Ahmed Mohammed el Gammal actively touted online his support for ISIL and its terrorist ways, ultimately meeting and assisting a New York college student to travel to Syria to obtain military training from ISIL.  Individuals like Gammal who allegedly serve as facilitators for ISIL fuel the hatred and radicalization that keep terrorist organizations like ISIL alive.”

Assistant Attorney General John P. Carlin said: “Ahmed Mohammed El Gammal is charged with conspiring to provide and providing material support to ISIL.  The National Security Division’s highest priority is counterterrorism, and we will continue to pursue justice against those who seek to provide material support to designated foreign terrorist organizations.”

FBI Assistant Director in Charge Diego Rodriguez said: “As alleged, Gammal helped a college student in New York receive terrorist training in Syria through a contact in Turkey, in order to support ISIL.  These relationships were allegedly made and solidified through the internet while Gammal was in Arizona.  This is another example of how social media is utilized for nefarious and criminal purposes around the world.  The identification of the conspiracy, and arrest today, demonstrate how federal and local law enforcement continue to work together to mitigate such threats globally and protect the United States.”

NYPD Commissioner William Bratton said: “This investigation demonstrates how easily people can support a terrorist organization without ever meeting, from the anonymity of their own computer and hidden behind obscure social media accounts and the veil of the internet. I commend the detectives and agents on the Manhattan based Joint Terrorism Task Force and the prosecutors of the U.S. Attorney’s Office for the Southern District for their unwavering commitment to keeping our city safe.”

As alleged in the criminal Complaint unsealed yesterday and the Indictment filed today in Manhattan federal court[1]:

In August 2014, a 24-year-old New York City resident (“CC-1”) who was growing increasingly radicalized learned via social media that EL GAMMAL had posted social media comments supportive of ISIL.  Minutes later, CC-1 contacted EL GAMMAL.  Over the next several months, CC-1 and EL GAMMAL continued corresponding over the Internet, although CC-1 deleted many of these exchanges.

In the midst of these communications, in October 2014, EL GAMMAL traveled to Manhattan, where CC-1 was enrolled in college, and contacted and met with CC-1.  While in New York City, EL GAMMAL also contacted another co-conspirator (“CC-2”), who lived in Turkey, about CC-1’s plans to travel to the Middle East.  EL GAMMAL later provided CC-1 with social media contact information for CC-2.  Thereafter, EL GAMMAL and CC-2 had multiple social media exchanges about CC-1 traveling to the Middle East.  In addition, CC-1 began communicating with CC-2, introducing himself as a friend of “Gammal’s.”

In late January 2015, CC-1 abruptly left New York City for Istanbul, Turkey.  After CC-1 arrived in Turkey, EL GAMMAL continued to communicate with him over the Internet, providing advice on traveling toward Syria and on meeting with CC-2.  After CC-1 arrived in Syria, he received military-type training from ISIL between early February and at least early May 2015.

On May 7, 2015, CC-1 reported to EL GAMMAL that “everything [was] going according to plan.”

*                      *                      *

EL GAMMAL, 42, of Avondale, Arizona, is charged with one count of providing material support to a designated foreign terrorist organization and one count of conspiring to provide material support to a designated foreign terrorist organization, each of which carries a maximum sentence of 20 years in prison; one count of receiving military-type training from a designated foreign terrorist organization, which carries a mandatory sentence of 10 years in prison; and one count of conspiring to receive military-type training from a designated foreign terrorist organization, 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 a judge.

Mr. Bharara praised the outstanding efforts of the FBI’s New York Joint Terrorism Task Force – which principally consists of agents from the FBI and detectives from the NYPD.  Mr. Bharara also thanked the Counterterrorism Section of the Department of Justice’s National Security Division, the U.S. Attorney’s Office for the District of Arizona, and the Phoenix Field Office of the FBI for their assistance.

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

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 texts of the Complaint and the Indictment and the descriptions of the Complaint and the Indictment set forth below constitute only allegations, and every fact described should be treated as an allegation.

Ahmed Mohammed El Gammal, aka Jammie Gammal, 42, of Avondale, Arizona, was indicted today for providing and conspiring to provide material support to the Islamic State of Iraq and the Levant (ISIL), a designated foreign terrorist organization, as well as for aiding and abetting the receipt of military-type training from ISIL and conspiring to receive such training. 

Assistant Attorney General for National Security John P. Carlin, U.S. Attorney Preet Bharara of the Southern District of New York, Assistant Director in Charge Diego G. Rodriguez of the FBI’s New York Field Office and Commissioner William J. Bratton of the New York City Police Department (NYPD) made the announcement. 

“Ahmed Mohammed El Gammal is charged with conspiring to provide and providing material support to ISIL,” said Assistant Attorney General Carlin.  “The National Security Division’s highest priority is counterterrorism, and we will continue to pursue justice against those who seek to provide material support to designated foreign terrorist organizations.”

“As alleged, Ahmed Mohammed el Gammal actively touted online his support for ISIL and its terrorist ways, ultimately meeting and assisting a New York college student to travel to Syria to obtain military training from ISIL,” said U.S. Attorney Bharara.  “Individuals like Gammal who allegedly serve as facilitators for ISIL fuel the hatred and radicalization that keep terrorist organizations like ISIL alive.”

“As alleged, Gammal helped a college student in New York receive terrorist training in Syria through a contact in Turkey, in order to support ISIL,” said Assistant Director in Charge Rodriguez.  “These relationships were allegedly made and solidified through the internet while Gammal was in Arizona.  This is another example of how social media is utilized for nefarious and criminal purposes around the world.  The identification of the conspiracy, and arrest today, demonstrate how federal and local law enforcement continue to work together to mitigate such threats globally and protect the United States.”

“This investigation demonstrates how easily people can support a terrorist organization without ever meeting, from the anonymity of their own computer and hidden behind obscure social media accounts and the veil of the internet,” said Commissioner Bratton.  “I commend the detectives and agents on the Manhattan based Joint Terrorism Task Force and the prosecutors of the U.S. Attorney’s Office for the Southern District for their unwavering commitment to keeping our city safe.”

As alleged in the indictment returned today and the complaint unsealed yesterday in the Southern District of New York:

In August 2014, a 24-year-old New York City resident (CC-1) learned via social media that El Gammal had posted social media comments that supported ISIL.  Minutes later, CC-1 contacted El Gammal.  Over the next several months, CC-1 and El Gammal continued corresponding over the Internet, although CC-1 deleted many of these exchanges.

In the midst of these communications, in October 2014, El Gammal traveled to Manhattan, New York, where CC-1 was enrolled in college, and contacted and met with CC-1.  While in New York City, El Gammal also contacted another co-conspirator (CC-2), who lived in Turkey, about CC-1’s plans to travel to the Middle East.  El Gammal later provided CC-1 with social media contact information for CC-2.  Thereafter, El Gammal and CC-2 had multiple social media exchanges about CC-1 traveling to the Middle East.  In addition, CC-1 began communicating with CC-2, introducing himself as a friend of “Gammal’s.”

In late January 2015, CC-1 abruptly left New York City for Istanbul.  After CC-1 arrived in Turkey, El Gammal continued to communicate with him over the Internet, providing advice on traveling toward Syria and on meeting with CC-2.  After CC-1 arrived in Syria, he received military-type training from ISIL between early February and at least early May 2015.

On May 7, 2015, CC-1 reported to El Gammal that “everything [was] going according to plan.” 

*                      *                      *

El Gammal is charged with one count of providing material support to a designated foreign terrorist organization and one count of conspiring to provide material support to a designated foreign terrorist organization, each of which carries a maximum sentence of 20 years in prison; one count of receiving military-type training from a designated foreign terrorist organization, which carries a mandatory sentence of 10 years in prison; and one count of conspiring to receive military-type training from a designated foreign terrorist organization, 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 the defendant’s sentence, if any, will be determined by a judge.

El Gammal was arrested on Aug. 24, 2015, in Avondale, and presented in federal court in the District of Arizona, pursuant to a criminal complaint.  The case is assigned to U.S. District Judge Edgardo Ramos of the Southern District of New York.

Assistant Attorney General Carlin joins U.S Attorney Bharara in praising the outstanding investigative efforts of the FBI’s New York Joint Terrorism Task Force.  The FBI’s Phoenix Field Office also provided valuable assistance.

The case is being prosecuted by Assistant U.S. Attorneys Brendan F. Quigley, Negar Tekeei and Andrea L. Surratt of the Southern District of New York, with assistance from Trial Attorney Ranganath Manthripragada of the National Security Division’s Counterterrorism Section.  The U.S. Attorney’s Office of the District of Arizona also provided significant assistance.

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

El Gammal Indictment

Preet Bharara, the United States Attorney for the Southern District of New York, Janet DiFiore, the District Attorney for Westchester County, and Diego Rodriguez, 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 seven members and associates of a Mount Vernon-based street gang, “Boss Playa Family” or “BPF,” with participation in a racketeering conspiracy and firearms offenses, and charging certain of those BPF members and associates with murder in aid of racketeering and narcotics conspiracy.

Two of the defendants charged in the Indictment were arrested today.  ANTOINE LITTLE was arrested in Bedford, Texas, and will be presented today in federal court in Fort Worth, Texas.  GORHAM VALENTINE was arrested today in Norwalk, Connecticut and will be presented this afternoon along with RAMSEUR in White Plains federal court before U.S. Magistrate Judge Lisa Margaret Smith.  Four of the seven defendants charged in the Indictment unsealed today, JAMEL UPSON, TYRONE McCALLUM, PORTLAND RAMSEUR, and JASON WHITE, were previously in state custody.

U.S. Attorney Preet Bharara said:  “Members of the BPF gang allegedly unleashed a terrifying wave of violence on the streets of Mount Vernon.  Over the course of several years, BPF gunfire erupted in and around the gang’s territory with shocking and tragic frequency.  On two of those occasions, the defendant Jamel Upson, one of BPF’s leaders, allegedly shot and killed members of a rival gang.  The charges brought today serve as a reminder that we and our law enforcement partners are determined to combat the scourge of gang and drug violence in Mount Vernon.”

Westchester County District Attorney Janet DiFiore stated:  “The allegations in this indictment describe the frightening and brazen hold these defendants had on neighborhoods in and around the City of Mount Vernon. Over the past several years we have worked tirelessly to pursue members and associates of this gang and now as a result of the collaborative efforts of federal, state and local law authorities these defendants will be held accountable for the crimes they now stand accused of. Our priority is and will continue to be enhancing the safety and quality of life for all of the hard working residents of the City of Mount Vernon.”

FBI Assistant Director-in-Charge Diego Rodriguez stated:  “As alleged, the Mount Vernon-based street gang ‘Boss Playa Family’ used violence and an array of criminal activities to enhance the gang’s power and protect its territory. It’s gang related activity like this that infects our communities with an illness that kills our neighborhoods’ safety and growth. However, there is an antidote to this that is made of law enforcement working at both the federal and local level to get gangs like this off the street.”

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

The BPF street gang was a criminal enterprise that operated principally in and around the City of Mount Vernon, New York, from at least in or about 2007 up to and including 2014.  BPF members and associates sought to enhance the gang’s power, protect and expand its territory, and enrich its members through a wide array of criminal activities, including murder, attempted murder, larceny, arson, and the distribution of cocaine and marijuana.  BPF members and associates expressly acknowledged and celebrated their gang affiliation through various means, including by wearing clothing emblazoned with “Boss Playa Family” and “BPF,” and by creating and posting on the Internet rap videos that promoted BPF.

One of BPF’s principal objectives was to maintain and exercise control over its territory, the area of Seventh Avenue and Sandford Boulevard in Mount Vernon.  To that end, BPF sought to assert its dominance over rival gangs, particularly the “Goonies,” a gang based in a neighboring area of Mount Vernon.  During the time period relevant to the Indictment, BPF members and associates were responsible for numerous acts of violence targeting members of the rival Goonies gang, including multiple murders and many other shootings.  In furtherance of such violence, firearms were maintained in stash locations by certain BPF members and associates for shared use by other members and associates of the gang when guns were needed to strike or retaliate against the Goonies.

The violence perpetrated by BPF turned deadly on two occasions in 2008.  On or about August 13, 2008, JAMEL UPSON, one of BPF’s lead enforcers or “shooters,” aided and abetted by others known and unknown, murdered Shomari Knox, a member of the Goonies, by shooting Knox in the area of Ninth Avenue and Third Street in Mount Vernon.  Several months later, on or about December 14, 2008, UPSON, again aided and abetted by others known and unknown, murdered another member of the Goonies, Cory Cabiness, by shooting him in the vicinity of the Ebony Gardens apartment complex in Mount Vernon.  As alleged in the Indictment, UPSON committed these murders in order to maintain and increase his position in the BPF gang.

*                      *                      *

Counts One and Two of the Indictment charge all seven defendants, JAMEL UPSON, SHAWN EVANS, ANTOINE LITTLE, TYRONE McCALLUM, PORTLAND RAMSEUR, GORHAM VALENTINE, and JASON WHITE, with a BPF racketeering conspiracy and firearms offenses in connection with that conspiracy.  As alleged, various combinations of those defendants committed, among other acts of racketeering, at least eight shootings in furtherance of the BPF conspiracy.  Counts Three and Four of the Indictment charge UPSON with murder in aid of racketeering activity and a related firearms offense in connection with the August 2008 murder of Shomari Knox, and Counts Five and Six charge UPSON with murder in aid of racketeering activity and a related firearms offense in connection with the December 2008 murder of Cory Cabiness.  Finally, Count Seven of the Indictment charges UPSON, RAMSEUR, and WHITE with conspiring to distribute cocaine and marijuana in and around BPF territory.

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 the FBI and the Mount Vernon Police Department.  He also thanked the Westchester County District Attorney’s Office for its participation and support in this ongoing investigation.

The prosecution is being handled by the Office’s White Plains Division.  Assistant U.S. Attorneys George Turner and Daniel Filor 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.

15-221
 

United States v. Jamel Upson, et al., 15 Cr. 570

COUNT

CHARGE

DEFENDANTS

MAX. PENALTIES

1

Racketeering conspiracy

18 U.S.C. § 1962(d)

JAMEL UPSON

SHAWN EVANS

ANTOINE LITTLE

TYRONE McCALLUM

PORTLAND RAMSEUR

GORHAM VALENTINE

JASON WHITE

UPSON: Life in prison

Other Defendants: 20 years in prison

2

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

18 U.S.C. § 924(c)

JAMEL UPSON

SHAWN EVANS

ANTOINE LITTLE

TYRONE McCALLUM

PORTLAND RAMSEUR

GORHAM VALENTINE

JASON WHITE

Life in prison

Mandatory minimum of 10 years in prison

3

Murder in aid of racketeering activity

18 U.S.C. § 1959(a)(1)

JAMEL UPSON

Death penalty, or mandatory life in prison

4

Murder through use of a firearm

18 U.S.C. §§ 924(j), 924(c)(1)(A)(iii), 924(c)(1)(C)(i)

JAMEL UPSON

Death penalty, or life in prison

Mandatory minimum of 25 years in prison

5

Murder in aid of racketeering activity

18 U.S.C. § 1959(a)(1)

JAMEL UPSON

Death penalty, or mandatory life in prison

6

Murder through use of a firearm

18 U.S.C. §§ 924(j), 924(c)(1)(A)(iii), 924(c)(1)(C)(i)

JAMEL UPSON

Death penalty, or life in prison

Mandatory minimum of 25 years in prison

7

Narcotics conspiracy

21 U.S.C. §§ 846, 841(b)(1)(C), 841(b)(1)(D)

JAMEL UPSON

PORTLAND RAMSEUR

JASON WHITE

20 years in prison

Defendant

Age

Residence

JAMEL UPSON

31

Mount Vernon, NY

SHAWN EVANS

27

Mount Vernon, NY

ANTOINE LITTLE

32

Bedford, TX

TYRONE McCALLUM

28

Mount Vernon, NY

PORTLAND RAMSEUR

30

Mount Vernon, NY

GORHAM VALENTINE

30

Mount Vernon, NY

JASON WHITE

32

Mount Vernon, 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, Diego Rodriguez, the Assistant Director-in-Charge of the New York Field Office of the Federal Bureau of Investigation (“FBI”), and Philip R. Bartlett, Inspector-in-Charge of the New York Office of the U.S. Postal Inspection Service (“USPIS”), announced today that ROBERT A. OLINS was arrested this morning on conspiracy, obstruction, and bank fraud charges stemming from his scheme to hide assets from a receiver (the “Receiver”) appointed by U.S. District Judge Denise L. Cote of the United States District Court for the Southern District of New York to oversee the liquidation of OLINS’s art and antiques collection (the “Art and Antiques Collection”) to satisfy a $3.3 million disgorgement judgment entered in connection with an enforcement proceeding by the Securities and Exchange Commission (“SEC”).

Among other misrepresentations, OLINS caused the Receiver to make false statements to the Court concerning the value of the items in the Art and Antiques Collection in order to induce the Receiver and the Court to approve sales of certain items without knowledge that OLINS had secretly sold or planned to resell the items at higher prices, with OLINS illicitly pocketing the difference instead of paying the SEC.

OLINS is expected to be presented today in federal court in Manhattan before United States Magistrate Judge James L. Cott.

U.S. Attorney Preet Bharara said:  “As alleged, Robert Olins carried out a brazen shell game to deceive and hide assets from two federal courts, a court-appointed receiver, and the SEC.  Olins allegedly lied repeatedly, grossly understating what he received from the sale of valuable art and antiquities so that he could pocket money that should have gone to satisfy a court judgment.”

FBI Assistant Director-in-Charge Diego Rodriguez said:  “Olins had a $3 million judgment due from previous securities violations, but instead of paying it back, he sought to conspire and hide assets to profit himself. This case should be a warning to others who seek to enrich themselves rather than pay judgments. This type of scheming only ends in handcuffs.”

USPIS Inspector-in-Charge Philip R. Bartlett said: “Similar to Mr. Olins’s innovative ways to enrich himself, the Postal Inspectors will also be innovative, as well as tireless, to investigate individuals who create fraudulent schemes to enrich themselves.”

According to the allegations contained in the Complaint and in court documents previously filed in federal court:[1]

On or about December 20, 2007, the SEC filed a civil complaint against OLINS in the United States District Court for the Northern District of California (the “California Court”) alleging that OLINS had violated provisions of the federal securities laws.  See SEC v. Olins, 07 Civ. 6423 (MMC).  On or about February 25, 2011, the California Court entered a $3,373,225 disgorgement judgment against OLINS (the “Disgorgement Judgment”).  On or about July 27, 2011, the SEC filed an action in the United States District Court for the Southern District of New York (the “New York Court”), registering the Disgorgement Judgment and asking that a receiver be appointed to liquidate certain assets belonging to OLINS, including the Art and Antiques Collection.  See SEC v. Olins et al., 11 Misc. 261 (DLC).  On or about May 11, 2012, the New York Court issued an order appointing American Bank and Trust Company as the Receiver.  The order prohibited OLINS, as well as any person or entity with “possession, custody or control” of any item from the Art and Antiques Collection, from engaging in any form of side deal, self-help, set-off, or transaction not approved by the Court.

OLINS devised a scheme, in coordination with an executive (“CC-1”) of an arts and antiques dealer based in London and New York (the “Antiques Dealer”), to hide assets from the Receiver and the Courts and personally enrich himself.  Based on material misrepresentations by OLINS and CC-1, the Receiver and the New York Court approved sales of certain items in the Art and Antiques Collection without the knowledge that OLINS and CC-1 had secretly sold or planned to resell the items at higher prices, with OLINS illicitly pocketing the difference.

Specifically, OLINS illicitly profited from the improper liquidation of at least two pieces from the Arts and Antiques Collection:

The Antique Vases

On or about April 3, 2012, the Antiques Dealer recorded the sale of a Louis XV Porcelain Garniture of Three Vases (the “Vases”) to a client for approximately $1.2 million.  At the time of the sale, the Vases were part of the Art and Antiques Collection and not owned by the Antiques Dealer.  On or about April 10, 2012, the Antiques Dealer received payment of approximately $1.2 million, a fact which was relayed via email to CC-1.

On or about June 14, 2012, the Receiver filed an application requesting approval to sell the Vases to the Antiques Dealer for $540,000.  The application was supported by a declaration of a vice president at the Receiver (“Individual-1”), based on information he received from CC-1 that the Antiques Dealer was negotiating the sale of the Vases to a client for approximately $600,000.  Based on this information, the New York Court approved the sale of the Vases from the Receiver to the Antiques Dealer for $540,000.

In truth, and as OLINS and CC-1 well knew, in or about April 2012, the Antiques Dealer had already pre-sold the Vases to another client for approximately $1.2 million and received payment for that sale.  OLINS personally received at least $460,000 in cash and credit from the sale of the Vases.

At no time did OLINS disclose his receipt of the proceeds from the Vases to the SEC, the Receiver, the New York Court, or the California Court, nor did he provide those proceeds to the SEC or the Receiver.

The Dragon Candelabra

In November and December 2012, Individual-1 communicated with OLINS and CC-1 concerning the sale of a pair of Louis XV Gilt Bronze Dragon Candelabra (the “Dragon Candelabra”), an item from the Art and Antiques Collection.

In or about November 2013, Individual-1 agreed to sell the Dragon Candelabra to an individual not named herein (“Individual-2”) for $235,000.  At the time he approved the sale, Individual-1 understood that Individual-2 intended to place the Dragon Candelabra on consignment with the Antiques Dealer in an effort to find a buyer who would pay in excess of $235,000.

On or about November 19, 2013, after taking possession of the Dragon Candelabra from Individual-2, the Antiques Dealer recorded a sale of the Dragon Candelabra to a client not named herein for approximately $1.2 million.  Individual-2 was subsequently credited at least $653,000 for the sale of the Dragon Candelabra.

Notwithstanding the representation by OLINS to Individual-1 that OLINS would not receive any proceeds from the sale of the Dragon Candelabra, OLINS in fact received at least $197,000 from the sale of the Dragon Candelabra.

At no time did OLINS disclose his receipt of the proceeds from the Dragon Candelabra to the SEC, the Receiver, the New York Court, or the California Court, nor did he provide those proceeds to the SEC or the Receiver.

The 2014 Contempt Proceeding

On September 29, 2014, the California Court issued an order to show cause why OLINS should not be held in contempt for failure to pay the Disgorgement Judgment.  In response, OLINS filed a declaration with the California Court in which he made the following statements, among others:

     a.  “There has been no effort on my part to secret assets or ignore the Disgorgement Judgment.”

     b.  “I have spent untold hours trying to find buyers for pieces of the [Arts and Antiques] Collection so that [the Receiver] will be paid in full and the SEC will get monies from the proceeds as well.”

     c.  “I continue[] to work cooperatively with the Receiver/Bank in assisting in the sales of the Receivership assets.  I have been doing everything I can to repay my debt to [the Receiver] and the SEC’s penalty Judgment and Disgorgement Order.”

     d.  OLINS also made the following representations about his income for the 2012 and 2013 calendar years:

          i.  Apart from $114,281 in consulting fees, OLINS said he “received no other . . . income for 2012.”

          ii.  Apart from $57,882.06 in consulting fees, OLINS said he “received no other . . . income for 2013.”

In truth, OLINS had earned a total of at least $657,000 in 2012 and 2013: (a) in 2012, OLINS received at least $460,000 in proceeds from the sale of the Vases; and (b) in 2013, OLINS received at least $197,000 in proceeds from the sale of the Dragon Candelabra.

*                      *                      *

OLINS, 58, was arrested this morning in West Hartford, Connecticut.  He is charged with one count of conspiracy to obstruct justice, one count of obstruction of justice, one count of conspiracy to commit bank fraud and one count of bank fraud.

The conspiracy to obstruct justice count carries a maximum of five years in prison; the obstruction charge carries a maximum of 10 years in prison; each of the conspiracy to commit bank fraud and bank fraud charges carries a maximum of 30 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 work of the Federal Bureau of Investigation and the United States Postal Inspection Service, and thanked the SEC for its assistance.  He added that the investigation is continuing.

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

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

[1] As the introductory phrase signifies, the entirety of the text of the Complaint and the description of the Complaint set forth 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 OSCAR HUACHILLO, the former owner and operator of multiple HIV/AIDS clinics in New York City, was sentenced today in Manhattan federal court to 87 months in prison for orchestrating a scheme to defraud Medicare out of more than $31 million; he was also sentenced to 60 months in prison, to be served concurrently, for evading more than $3.4 million in federal income taxes by falsely underreporting his income.  As part of the scheme, HUACHILLO submitted bills to Medicare for expensive treatments that were administered at highly diluted doses or never administered at all, and were often unnecessary.  HUACHILLO previously pled guilty to conspiring to commit health care fraud and committing tax evasion before U.S. District Judge Katherine Polk Failla, who imposed today’s sentence.

Manhattan U.S. Attorney Preet Bharara said: “Oscar Huachillo defrauded Medicare out of tens of millions of dollars and evaded millions of dollars in taxes on his illegal windfall.  His schemes put patients at risk, undermined and exploited the Medicare program, and cheated honest taxpayers.”      

According to the criminal complaint, superseding information, and other documents filed in Manhattan federal court, as well as statements made at related court proceedings:

HUACHILLO set up and operated multiple health care clinics in New York City that purported to provide injection and infusion treatments to Medicare-eligible HIV/AIDS patients, but that were, in reality, health care fraud mills (the “Clinics”) that routinely billed Medicare for medications that were never provided or were provided at highly diluted doses, and that were often unnecessary because the person being “treated” did not medically need the treatments.

HUACHILLO and his co-conspirators executed the fraudulent scheme by recruiting HIV/AIDS patients who were eligible for Medicare to come to the Clinics multiple times per week, for multiple months, to undergo expensive “treatments” that were often unnecessary.  The purported treatments included drugs costing hundreds of dollars each to administer and typically reserved for cancer and anemia patients.  HUACHILLO and his co-conspirators paid the patients cash kickbacks of up to $300 per week in exchange for coming to the Clinics and agreeing to undergo the treatments.  Patients were also offered approximately $50 for each additional patient they referred to the Clinics.  HUACHILLO and his co-conspirators then used these patients’ status as Medicare beneficiaries to submit claims to Medicare for reimbursement for the treatments purportedly administered to the patients, often receiving tens of thousands of dollars in reimbursements per patient.  As a result of the scheme, from 2009 through 2013, HUACHILLO and his co-conspirators defrauded the Medicare system out of at least $31 million.

In addition, HUACHILLO willfully evaded over $3.4 million in taxes owed to the IRS during the tax years 2009 through 2011 by falsely underreporting his taxable income, including income he had obtained through fraudulent Medicare claims.

In pronouncing the sentence, Judge Failla said, “[I]n the cases I’ve had as a judge, this is the worst fraud I’ve had.  $31 million in losses; that’s terrible.” She also said, “The conduct is simply reprehensible.”

*                *                *

In addition to the term of prison, HUACHILLO, 55, of Manhattan, was sentenced to three years of supervised release and was ordered to pay $3,454,244.16 in restitution and $31,177,987.84 in forfeiture, including forfeiture of approximately $14 million of assets that were seized at or around the time of HUACHILLO’s arrest in August 2013.

George Juvier, 58, of Manhattan, has been charged separately in connection with the Medicare fraud scheme.  In January 2015, Juvier pled guilty to engaging in a health care fraud conspiracy before U.S. Magistrate Judge Frank Maas.  Juvier is scheduled to be sentenced at 11:00 a.m. on October 8, 2015, by U.S. District Judge Kimba M. Wood.

Mr. Bharara praised the outstanding efforts of the Department of Health and Human Services-Office of the Inspector General, IRS-Criminal Investigation Division, and the Federal Bureau of Investigation in the investigation.  Mr. Bharara also thanked the U.S. Department of Justice’s Tax Division for their assistance in the investigation.

This case is being handled by the Office’s Complex Frauds and Cybercrime Unit.  Assistant U.S. Attorney Jonathan Cohen is in charge of the prosecution.

Preet Bharara, the United States Attorney for the Southern District of New York, announced that CHARLES ANTONUCCI, SR., the former president and chief executive officer of The Park Avenue Bank, was sentenced today to 30 months in prison for his involvement in a massive fraud involving self-dealing, bank bribery, embezzlement of bank funds, attempting to fraudulently obtain more than $11 million worth of taxpayer rescue funds from the Troubled Asset Relief Program (“TARP”), and participating in a $37.5 million fraud scheme that left an Oklahoma insurance company in receivership.  ANTONUCCI pled guilty pursuant to a cooperation agreement with the government in October 2010 before U.S. District Judge Naomi Reice Buchwald, who imposed today’s sentence.  Yesterday, Judge Buchwald sentenced Matthew L. Morris, a former senior vice president of the Bank, who also pled guilty pursuant to a cooperation agreement, to one year and one day in prison.

ANTONUCCI was the first defendant convicted of fraud of TARP funds, a program whose purpose was to provide funds to viable financial institutions to stabilize and strengthen the nation’s financial system, and to enable those financial institutions to increase the flow of financing to U.S. businesses and consumers.

According to the Information, Complaint, sentencing submissions, and statements made during court proceedings:

Background

The Park Avenue Bank (the “Bank”) was a federally insured and state-chartered bank that was headquartered on Park Avenue, New York, New York.  The Bank’s clients consisted primarily of small businesses, for which the Bank made loans, extended lines of credit, and maintained depository accounts.  As of the end of 2009, the Bank had approximately $500 million on deposit, and over $520 million in assets.  ANTONUCCI served as president and chief executive officer (“CEO”) of the Bank from June 2004 to October 2009, and also served on its Board of Directors.  During this period, and as part of the fraudulent schemes for which he was convicted and sentenced, ANTONUCCI maintained a corrupt relationship with Wilber Anthony Huff, a Kentucky-based businessman, and Morris, the senior vice president of the Bank.

The Schemes

From 2006 through 2010, ANTONUCCI, Morris, and Huff engaged in a massive multifaceted conspiracy, in which they schemed to (i) receive and pay bank bribes, (ii) engage in self-dealing; (iii) defraud bank regulators and the board and shareholders of a publicly traded company, and (iv) fraudulently purchase an Oklahoma insurance company.

Bank Bribery

From 2007 to 2009, Huff paid ANTONUCCI and Morris at least $400,000 in exchange for which they: (i) provided Huff with fraudulent letters of credit obligating the Bank to pay an investor in one of Huff’s businesses $1.75 million if Huff failed to pay the investor back himself; (ii) allowed certain of Huff’s beneficially owned businesses to accrue $9 million in overdrafts; (iii) facilitated intra bank transfers in furtherance of certain of Huff’s other frauds; and (iv) fraudulently caused the Bank to issue at least $4.5 million in loans to Huff’s beneficially owned businesses.

In particular, ANTONUCCI and Morris accepted bribes from Huff, including but not limited to hundreds of thousands of dollars of cash bribes, free use of Huff’s airplane, and free use of another customer’s luxury automobile.  On more than 10 occasions in 2008 and 2009, ANTONUCCI used a private plane owned by Huff to fly to, among other places, Florida, Panama, Arizona (so that ANTONUCCI could attend the Super Bowl), and Augusta, Georgia (so that ANTONUCCI could attend the Masters Golf Tournament).

Self-Dealing

ANTONUCCI also engaged in a pattern of self-dealing in connection with his position as President and CEO of the Bank.  For example, ANTONUCCI, among other things, approved a $400,000 loan through the Bank to an entity he controlled called Easy Wealth, through which ANTONUCCI obtained tens of thousands of dollars in proceeds. ANTONUCCI also had the Bank pay rent to him for one or more properties that ANTONUCCI owned and which the Bank did not use, including a property in Fishkill, New York, and directed Bank employees to perform substantial work on non-Bank matters in which he had personal financial interests.

Fraud on Bank Regulators and a Publicly Traded Company

From 2008 to 2009, ANTONUCCI, Morris, and Huff engaged in a scheme to prevent the Bank from being designated as “undercapitalized” by regulators – a designation that would prohibit the Bank from engaging in certain types of banking transactions, and that would subject the Bank to a range of potential enforcement actions by regulators.  Specifically, they engaged in a series of deceptive, “round-trip” financial transactions to make it appear that ANTONUCCI had infused the Bank with $6.5 million in new capital when, in actuality, the $6.5 million was part of the Bank’s pre-existing capital.  ANTONUCCI, Morris, and Huff funneled the $6.5 million from the Bank through accounts controlled by Huff to ANTONUCCI.  This was done to make it appear as though ANTONUCCI was helping to stabilize the Bank’s capitalization problem, so the Bank could continue engaging in certain banking transactions that it would otherwise have been prohibited from doing, and to put the Bank in a better posture to receive $11 million from the TARP.  To conceal their unlawful financial maneuvering, Huff created, or directed the creation of, documents falsely suggesting that ANTONUCCI had earned the $6.5 million through a transaction involving another company ANTONUCCI owned.  When the Bank’s regulators began investigating the source of the purported $6.5 million capital infusion, ANTONUCCI lied to them about the true nature of the transaction.  ANTONUCCI, Morris, and Huff further concealed their scheme by stealing $2.3 million from General Employment Enterprises, Inc. (“GEE”), a publicly traded temporary staffing company, in order to pay the Bank back for monies used in connection with the $6.5 million transaction.  In order to conceal this transaction, ANTONUCCI caused a counterfeit certificate of deposit (“CD”) to be created by the Bank, making it appear that GEE’s $2.3 million had been invested in a CD at the Bank.

Fraud on Insurance Regulators and the Investment Firm

From July 2008 to November 2009, ANTONUCCI, Morris, Huff, and Allen Reichman, an employee at an investment bank and financial services company headquartered in New York, New York (the “Investment Firm”), conspired to (i) defraud Oklahoma insurance regulators into allowing ANTONUCCI to purchase the assets of Providence P&C (the Oklahoma insurance company), and (ii) defraud the Investment Firm into providing a $30 million loan to finance the purchase.  Specifically, ANTONUCCI and Huff devised a scheme in which ANTONUCCI would purchase Providence P&C’s assets by obtaining a $30 million loan from the Investment Firm, which used Providence P&C’s own assets as collateral for the loan.  However, because Oklahoma insurance regulators had to approve any sale of Providence P&C, and because Oklahoma law forbade the use of Providence P&C’s assets as collateral for such a loan, ANTONUCCI, Morris, Huff, and Reichman made, and conspired to make, a number of material misstatements and material omissions to the Investment Firm and Oklahoma insurance regulators concerning the true nature of the financing for ANTONUCCI’s purchase of Providence P&C.  Among other things, Reichman directed ANTONUCCI to sign a letter that provided false information regarding the collateral that would be used for the loan, and ANTONUCCI, Morris, and Huff conspired to falsely represent to Oklahoma insurance regulators that the Bank – not the Investment Firm – was funding the purchase of Providence P&C.

After deceiving Oklahoma regulators into approving the sale of Providence P&C, Huff took $4 million of the company’s assets.  Ultimately, in November 2009, the insurance company became insolvent and was placed in receivership after ANTONUCCI, Morris, and Huff had pilfered its remaining assets.

*                *                *

In addition to the prison sentence, ANTONUCCI, 64, of Woodside, New York, was also ordered to forfeit $11.2 million to the United States and to provide more than $54 million in restitution to victims of his crimes, including, among others, the Federal Deposit Insurance Corporation (“FDIC”).

Huff, who pled guilty to his role in the above-described offense and other interrelated frauds in December 2014, was sentenced by Judge Buchwald on June 4, 2015, to 12 years in prison.  Reichman, who pled guilty to his role in the Providence P&C scheme in February 2015, was sentenced by Judge Buchwald on July 15, 2015, to 21 months in prison.

Mr. Bharara praised the investigative work of the Special Inspector General for the Troubled Asset Relief Program, the Federal Bureau of Investigation, the IRS, the New York State Department of Financial Services, Immigration and Customs Enforcement’s Homeland Security Investigations, and the Office of Inspector General of the FDIC.  Mr. Bharara also thanked the Department of Justice’s Tax Division and the United States Attorney’s Office for the Southern District of Florida for their assistance.

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.

The case is being handled by the Office’s Complex Frauds and Cybercrime Unit.  Assistant U.S. Attorneys Janis Echenberg and Daniel Tehrani are in charge of the criminal case.       

            Preet Bharara, the United States Attorney for the Southern District of New York, announced today that RENE CARDONA, a former employee of an afterschool program in the Bronx, was sentenced to 17½ years in prison for producing, receiving, distributing, and possessing child pornography.  On April 9, 2015, CARDONA was found guilty by U.S. District Judge Ronnie Abrams following a bench trial.  CARDONA, who was arrested on April 30, 2014, has been detained since his arrest.

            Manhattan U.S. Attorney Preet Bharara said:  “Rene Cardona sexually exploited and victimized young children, including children he was supposed to care for at an afterschool program.  He preyed on the most innocent and vulnerable in our community.”

            According to the Complaint and other documents filed in this case, and statements made in related court proceedings:

            On or about March 13, 2014, the Guam Police Department received information that an 11-year-old boy (“Victim-1”), while residing in Guam, produced child pornography for an adult male in New York, New York, later identified as CARDONA.  Victim-1 met CARDONA over the social media site Instagram in or about February 2014.  FBI agents in Guam subsequently obtained a search warrant directed to Instagram, which revealed that, in or about February 2014, CARDONA and Victim-1 traded photographs, with CARDONA repeatedly asking Victim-1 to provide sexually explicit photographs of himself.  Victim-1 eventually provided CARDONA with five sexually explicit photographs of himself engaged in the lascivious exhibition of his genitals.

            After identifying CARDONA’s residence, and learning that CARDONA had been employed in an afterschool program located in the Bronx, New York, law enforcement agents obtained a search warrant for CARDONA’s residence.  During the execution of the search warrant, CARDONA admitted to law enforcement agents that he had engaged in the chats with Victim-1 described above.  CARDONA further admitted, among other things, that: (1) CARDONA had had sexual contact with a 14-year-old boy (“Victim-2”); (2) CARDONA took three to four sexually explicit photographs of Victim-2; and (3) CARDONA had had inappropriate sexual contact with children, including children he had encountered through an afterschool program.  CARDONA’s Instagram account further reflects that in or about February 2014, CARDONA provided an image of Victim-2 engaged in sexually explicit conduct to another individual over the Internet.

            During the course of the search of CARDONA’s residence, law enforcement agents identified a laptop computer and an iPhone, which were each later confirmed to belong to CARDONA.  Forensic analysis revealed that the laptop and iPhone contained hundreds of images and videos that depicted actual minors engaged in sexually explicit conduct.  Some of the files contained on the laptop and iPhone depicted pre-pubescent minors engaged in sexually explicit conduct.

*                *                *

            For the offenses with which he was convicted, CARDONA faced a statutory mandatory minimum of 15 years in prison.  In addition to his term of imprisonment, CARDONA, 23, was also sentenced to 10 years of supervised release.          

            CARDONA worked at the Betances summer camp and afterschool programs in the Bronx from 2012 to approximately 2014 and thereafter as a mentor for youths at the Youth Men’s Initiative at Betances Community Center from January to April 2014.  Cardona also worked as a volunteer at the Betances Community Center at various times starting in 2011.   The investigation of CARDONA’s conduct relating to inappropriate sexual contact with youths in violation of state law is being handled by the Manhattan District Attorney’s Office.          

            Mr. Bharara thanked and praised the investigative work of the Federal Bureau of Investigation and the New York City Police Department in this matter, as well as the Manhattan District Attorney’s Office and the U.S. Attorney’s Office for the Districts of Guam and the Northern Mariana Islands.

            This case is being handled by the Office’s General Crimes Unit.  Assistant United States Attorneys Gina Castellano and Andrew DeFilippis are in charge of the prosecution.

            Preet Bharara, the United States Attorney for the Southern District of New York, Diego Rodriguez, Assistant Director-in-Charge of the New York Field Office of the Federal Bureau of Investigation (“FBI”), and William J. Bratton, the Commissioner of the Police Department for the City of New York (“NYPD”), announced that JASON PAUL SMITH was arrested today in Lubbock, Texas, for communicating a hoax threat to bomb the Statue of Liberty that precipitated the evacuation of more than 3,200 people from Liberty Island in New York Harbor.  SMITH is expected to be presented later today in federal court in the Northern District of Texas.

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

            On April 24, 2015, SMITH initiated a call to the emergency 911 system (the “911 Call”) from his iPad using a service that assists hearing-impaired individuals with making and receiving telephone calls (the “Service”).  In the 911 Call, SMITH identified himself as “Abdul Yasin,” described himself as an “ISI terrorist,” and threatened that “we” are preparing to “blow up” the Statue of Liberty. 

            Law enforcement officers responded to the threat that SMITH conveyed in the 911 Call, and conducted a sweep of the areas in and around the Statue of Liberty and Liberty Island with the aid of canine units trained to detect explosives.  Canine units alerted to the area of the visitor lockers at the base of the Statue of Liberty, prompting law enforcement officers and emergency responders to evacuate the more than 3,200 people who were on Liberty Island at the time.  Subsequently, the threat conveyed by SMITH was determined to be unfounded.

            The iPad registered in SMITH’s name has used the Service to make other 911 calls, including at least two calls in May 2015 from a user who identified himself as “Isis allah Bomb maker” and who threatened to attack Times Square and kill police officers at the Brooklyn Bridge.

*                      *                      *

            SMITH, 42, of Harts, West Virginia, is charged with one count of conveying false and misleading information and hoaxes, which carries a maximum sentence of five years in prison.  The 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 outstanding efforts of the FBI’s New York Joint Terrorism Task Force – which principally consists of agents from the FBI and detectives from the NYPD.  Mr. Bharara also thanked the United States Park Police for its assistance.

            The prosecution is being handled by the Office’s Terrorism and International Narcotics Unit.  Assistant U.S. Attorney David Zhou 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 text of the Complaint and the description of the Complaint 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 today the guilty pleas of YE TIONG TAN LIM, a citizen of Taiwan, ALLAN KELLY REYES PERALTA, a citizen of the Philippines, and ADRIAN VALKOVIC, a citizen of the Czech Republic, to conspiring to import 100 kilograms of North Korean-produced methamphetamine into the United States.  TAN LIM, PERALTA, and VALKOVIC were arrested in September 2013, along with co-defendants Scott Stammers and Philip Shackels, following a long-term investigation by the Drug Enforcement Administration (“DEA”).  VALKOVIC pled guilty on August 5, 2015, before U.S. District Judge Andrew L. Carter.  PERALTA pled guilty on August 18, 2015, and TAN LIM pled guilty August 19, 2015, both before U.S. Magistrate Judge Debra Freeman.

Manhattan U.S. Attorney Preet Bharara said:  “Ye Tiong Tan Lim, Kelly Reyes Peralta, and Adrian Valkovic’s conspiracy reads much like the script of an action movie - outlaw biker gangs providing protection and logistics for a U.S.-bound load of North Korean methamphetamine.  But the plan was all too real, and the target for the drugs they planned to import were the streets of the United States.  Thanks to the expert work of the DEA and prosecutors in my office, the conspiracy was thwarted and the drug traffickers’ mission made impossible.”

According to the allegations contained in the Indictment, the plea agreements for TAN LIM, PERALTA, and VALKOVIC, and statements made in court proceedings:

In 2012, TAN LIM and PERALTA, members of a criminal organization operating in Hong Kong and the Philippines, sold more than 30 kilograms of methamphetamine that had been produced in North Korea.  Stammers and Shackels were responsible for storing the methamphetamine after it had been sold by TAN LIM and PERALTA.  This North Korean methamphetamine was later seized by law enforcement agents in Thailand and in the Philippines and tested at more than 99% pure.

In 2013, TAN LIM and PERALTA again agreed to provide North Korean methamphetamine, this time agreeing to supply 100 kilograms of the methamphetamine to confidential sources working at the direction of the DEA (the “CSes”) for importation to the United States.  As TAN LIM explained, his criminal organization was the only one currently able to obtain methamphetamine from North Korea:  “Because before, there were eight [other criminal organizations].  But now only us, we have the NK [i.e., North Korea] product. . . . [I]t’s only us who can get from NK.”  TAN LIM further explained that, because of recent international tensions, the North Korean government had destroyed some methamphetamine labs, leaving behind only the labs of TAN LIM’s organization:  “And all the, the NK government already burned all the labs.  Only our labs are not closed. . . . To show Americans that they [the North Korean government] are not selling it any more, they burned it.  Then they transfer to another base.”  In anticipation of these geo-political complications, TAN LIM noted that his organization had stockpiled one ton of North Korean methamphetamine in the Philippines for storage.

As a prelude to the 100-kilogram methamphetamine deal, TAN LIM and PERALTA arranged to have a sample of the drug delivered to Shackels, who sent that sample (along with a second sample from another supplier) to an address from which the methamphetamine samples would be sent to the United States.  These two methamphetamine samples tested at more than 98% and 96% pure.

TAN LIM and PERALTA agreed to deliver the 100 kilograms of North Korean methamphetamine in Thailand, from where they understood it would be shipped to the United States by boat.  In preparation, TAN LIM and PERALTA arranged for a “dry run,” sending a shipping container of tea leaves from the Philippines to Thailand in order to test delivery channels that would later be used for the shipment of methamphetamine.

VALKOVIC, Stammers, and Shackels agreed to provide security, transportation, and storage for the 100 kilograms of methamphetamine once it arrived in Thailand.  VALKOVIC, the Sergeant-at-Arms of the Outlaw Motorcycle Club (“OMC”) in Thailand, was to be the “ground commander,” and would supervise an armed crew of OMC members that would provide security for the methamphetamine.  Stammers and Shackels were to arrange for the 100 kilograms to be taken to a warehouse, counted, re-packaged, and delivered to a marina in Thailand, to be transferred to a boat that would deliver the methamphetamine to the United States.

In September 2013, TAN LIM and PERALTA traveled to Thailand in order to receive payment for the 100 kilogram methamphetamine deal.  TAN LIM, PERALTA, VALKOVIC, Stammers, and Shackels were arrested by Thai law enforcement on September 25, 2013.

*          *          *

As a result of their guilty pleas, TAN LIM, 55, PERALTA, 43, and VALKOVIC, 45, each face a maximum possible term of life in prison and a mandatory term of 10 years in prison.  The minimum and maximum potential sentences are prescribed by Congress and are provided here for informational purposes only, as any sentencing of these defendants will be determined by the judge.  VALKOVIC is scheduled to be sentenced by Judge Carter on November 6, 2015.  Sentencing dates have not yet been scheduled for TAN LIM and PERALTA.

The remaining defendants, Stammers, 46, and Shackels, 32, are charged with conspiracy to import methamphetamine into the United States.  Trial is scheduled to commence before Judge Carter on September 21, 2015.

The guilty pleas were the result of the close cooperative efforts of the United States Attorney’s Office for the Southern District of New York; DEA’s Special Operations Division, Bilateral Investigations Unit; and DEA’s Bangkok, Manila, Ghana, Pretoria, Bucharest, Nassau, and Copenhagen Country Offices.  Mr. Bharara also thanked the Thai Police Narcotics Suppression Bureau and Crime Suppression Division; the Royal Thai Immigration; the Royal Thai Attorney General’s Office; the Republic of Liberia’s National Security Agency; the Republic of Liberia’s Attorney General’s Office; the Romanian National Police; Interpol; and the U.S. Department of Justice Office of International Affairs for their support and assistance.

This prosecution is being handled by the Office’s Terrorism and International Narcotics Unit.  Assistant United States Attorneys Anna Skotko, Michael D. Lockard, and Emil Bove are in charge of the prosecution.

The charges against Stammers and Shackels are merely accusations and these defendants are presumed innocent unless and until proven guilty.

Preet Bharara, the United States Attorney for the Southern District of New York, announced that JOHNNY MORGAN was sentenced today in Manhattan federal court to seven years in prison for illegally possessing a firearm after previously having been convicted of a felony.  In November 2014, MORGAN was convicted after a jury trial.  MORGAN was sentenced by United States District Judge Gregory H. Woods.

Manhattan U.S. Attorney Preet Bharara said: “Federal gun laws – including one that prohibits a convicted felon from possessing a firearm or ammunition – play a critical role in reducing gun violence in our communities.  Following more than 40 convictions for crimes ranging from drugs to assault, Johnny Morgan not only possessed a gun, but shot it four times near a nightclub in the Bronx.  For committing that federal crime, Morgan will now spend seven years in prison.  I want thank the New York City Police Department for their excellent work in this and countless other gun cases our office brings with them. ”

According to the allegations contained in court documents previously filed in federal court, and statements made in Court during the trial and sentencing proceedings of MORGAN:

On or about February 20, 2012, MORGAN was asked to leave a nightclub (the “Club”) in the Bronx, New York, by the Club’s security staff.  MORGAN left the Club, but returned several minutes later.  Once inside, after being confronted by the Club’s staff and owner, MORGAN pulled out a .40 caliber, semi-automatic Glock pistol (the “Firearm”), and pointed it at the Club’s owner.  Although MORGAN was ultimately persuaded to leave the Club without harming anyone, once outside, he walked a short distance away, and then fired four gunshots into the air.

New York City Police Department officers, responding to a 911 call, began to canvas the area.  Officers ultimately found MORGAN walking alone, down a street several blocks away from the Club.  MORGAN was arrested and the Firearm was recovered.  Subsequent DNA testing by the New York City Office of Chief Medical Examiner (“OCME”) revealed that a profile of DNA found on the Firearm was consistent with MORGAN’s DNA.

MORGAN was taken into custody in February 2012.  Before trial, MORGAN challenged the admissibility of OCME’s DNA testing, which was ultimately found to be sufficiently reliable to be admitted at trial.  In November 2014, a jury trial was held before Judge Woods.  The jury returned a guilty verdict on November 14, 2014.

Prior to his conviction on this charge, MORGAN had previously been convicted of 40 crimes, including a federal conviction in the Southern District of New York for marijuana distribution and state assault charges.    

*                *                *

In imposing today’s sentence, Judge Woods noted that in light of MORGAN’s extensive criminal history, he posed a significant risk of recidivism and had not been sufficiently deterred by his prior terms of imprisonment.

Mr. Bharara praised the investigative work of the New York City Police Department.  He also thanked OCME for its efforts.

The case is being prosecuted by the Office’s General Crimes Unit.  Assistant United States Attorneys Sidhardha Kamaraju and Robert Allen are in charge of the prosecution.

Preet Bharara, the United States Attorney for the Southern District of New York, announced that ROBERT STEWART, the father of former investment bank managing director Sean Stewart, pled guilty today to participating in a conspiracy to trade on inside information about several mergers and acquisitions announced between 2011 and 2014.  ROBERT STEWART was arrested on May 14, 2015, and Sean Stewart surrendered to federal authorities that same day.  Charges against Sean Stewart remain pending before U.S. District Judge Laura Taylor Swain.  A third member of the charged conspiracy, cooperating witness Richard Cunniffe, pled guilty before Judge Swain on May 12, 2015, and awaits sentencing.   ROBERT STEWART is scheduled to be sentenced by Judge Swain on November 12.

Manhattan U.S. Attorney Preet Bharara said:  “Instead of teaching his son lessons of right and wrong, Robert Stewart worked with him to break the law by trading on nonpublic information and sharing in the benefits with him.  Robert Stewart’s criminal actions – to which he has pled guilty today – perpetuate the unfortunate perception that the markets are rigged in favor of those with connections.”

According to the agreement pursuant to which ROBERT STEWART entered his plea of guilty today, the underlying criminal Complaint filed May 13, 2015, the Superseding Indictment filed July 15, 2015, and statements made during court proceedings:

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 nonpublic information about upcoming mergers and acquisitions.  The first of these deals involved the acquisition of Kendle International Inc. (“Kendle”) 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 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 and cooperating witness Richard Cunniffe that ROBERT STEWART was “too close to the source” to be trading in KCI stock in 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.

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. (“Lincare”) by Linde AG, announced on July 1, 2012; and (3) the acquisition of CareFusion Corp. (“CareFusion”) by Becton, Dickinson & Co. (“Becton”), announced on October 5, 2014.  Investment Bank B represented Hologic Inc. in connection with its acquisition of Gen-Probe Inc.; Linde AG 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 approximately $1.1 million.  In the midst of the scheme, in December 2012, ROBERT STEWART transferred at least $15,000 to Sean Stewart.

To try to avoid detection for their crimes, ROBERT STEWART and Cunniffe refrained from speaking explicitly about their trading over the phone or e-mail, sometimes using “golf”-related code.  For example, shortly after the announcement of Lincare’s proposed acquisition by Linde AG, a German company, ROBERT STEWART wrote to Cunniffe that he had seen a news story about the “high cost of golf reservations since a foreign company purchased all-even more expensive than imagined.”  Other steps ROBERT STEWART and Cunniffe took to avoid detection included trying to discuss their trading at face-to-face meetings and adopting a profit-splitting mechanism that had Cunniffe paying ROBERT STEWART his portion of the illegal proceeds in small increments, over time, typically in cash.  

In March and April of 2015, Cunniffe 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.”      

*                      *                      *

ROBERT STEWART, 60, of North Merrick, New York, pled guilty to Count One of a nine-count Superseding Indictment.  Count One charges a conspiracy to commit insider trading and carries a maximum term of five years in prison.  As part of his guilty plea, ROBERT STEWART agreed to forfeit $150,000.  The maximum potential sentence in this case is prescribed by Congress and is provided here for informational purposes only, as any sentencing of the defendant will be determined by a judge.

Mr. Bharara praised the investigative work of the FBI and also thanked the Securities and Exchange Commission, which has filed civil charges in a separate action.

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 E. McCallum and Brooke E. Cucinella are in charge of the prosecution.  

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

Preet Bharara, the United States Attorney for the Southern District of New York, announced that SHANE FUSCO was sentenced today by United States District Judge Cathy Seibel to 100 months in prison on bank fraud charges.

FUSCO previously plead guilty to one count of conspiracy to commit bank fraud and one count of bank fraud.

Manhattan U.S. Attorney Preet Bharara said:  “In scheme to steal upwards of a million dollars, Shane Fusco brazenly defrauded dozens of small businesses up and down the Eastern seaboard by using fraudulent bank and personal checks.  We thank the FBI, the Secret Service, the Orange County Sherriff’s Office, the Connecticut State Police and our colleagues at the U.S. Attorney’s Office in Connecticut for the work in this case.”

According to the Information previously filed in White Plains federal court and public information:  For almost two years, FUSCO fraudulently created bank and personal checks in a scheme to obtain vehicle parts and jewelry, among other items, from 34 business and one individual.  FUSCO was eventually caught using a fake check in an attempt to buy tires while driving a stolen truck that was hitched to a stolen trailer.

*          *         *

Mr. Bharara praised the outstanding efforts of the United States Attorney’s Office for the District of Connecticut, the FBI, the United States Secret Service Connecticut Financial Crimes Task Force, the Orange County Sherriff’s Office and the Connecticut State Police.

This case is being handled by the Office’s White Plains Division.  Assistant U.S. Attorneys John P. Collins, Jr., is in charge of the prosecution.

Preet Bharara, the United States Attorney for the Southern District of New York, announced that SEAN ROBINSON was sentenced today in Manhattan federal court to 20 years in prison for leading a robbery crew that committed violent daytime robberies of jewelry and watch stores in 2013 and 2014.  Since February 2014, ROBINSON and ten other defendants have been charged for their respective roles in this robbery conspiracy.  In May 2014, ROBINSON pled guilty to participating in the robbery conspiracy.  ROBINSON was sentenced by United States District Judge Loretta A. Preska.

Manhattan U.S. Attorney Preet Bharara said: “Sean Robinson led a violent robbery crew that terrorized employees and customers at high-end jewelry and watch stores up and down the Northeastern seaboard, from Manhattan, Brooklyn, and Connecticut to New Jersey and Virginia.  Robinson’s crime spree included a gunpoint robbery in broad daylight of a Brooklyn jewelry store where the robbers shot the store owner.”

According to the allegations contained in court documents previously filed in federal court, and statements made in court during the pleas and sentencing proceedings of ROBINSON and other members of the conspiracy:

Between approximately July 1, 2013, and January 30, 2014, a highly organized crew engaged in a series of violent robberies of high-end jewelry and watch stores located in four states.  During those robberies, crew members smashed display cases with hammers while customers and employees were in the stores and stole more than a million dollars in luxury watches.

The crew at times used violence to carry out the scheme.  For example, during the September 23, 2013, armed daytime robbery of a jewelry store in Brooklyn, New York, in which two of the robbers displayed handguns, one of the robbers shot the store owner when he attempted to prevent members of the crew from fleeing with stolen jewelry.  ROBINSON, the leader of the crew, planned the September 23, 2013, robbery, as well as a series of other robberies committed by this crew.

Among the stores robbed by the crew are: Cartier, Travers Jewelers, and Golden Nugget Jewelry, all in Manhattan, the Borgata Hotel and Casino in Atlantic City, New Jersey, Schwarzschild’s Jewelers in Richmond, Virginia, Martin Jewelers in Cranford, New Jersey, Henry Reid and Sons Jewelers in New Canaan, Connecticut, and Litan Jewelers in Brooklyn, New York.

*                *                *

In imposing today’s sentence, Judge Preska noted that ROBINSON “planned and organized all of these robberies,” which were “very serious offenses with serious consequences to victims [and] bystanders.”  Judge Preska also said that ROBINSON’s “involvement reflects a total disregard for the law.”

Eleven defendants have been charged in this investigation.  Two members of this conspiracy were previously sentenced.  On March 18, 2015, Judge Preska sentenced Allen Williams to 108 months in prison.  On October 23, 2014, United States District Judge Robert P. Patterson sentenced Terrell Ratliff to 33 months in prison.  Two members of the conspiracy, Jamal Dehoyos and Courtney Hardin, are currently fugitives.

Mr. Bharara praised the investigative work of the Federal Bureau of Investigation’s Interstate Robbery Apprehension Team and the New York City Police Department.  He also thanked the police departments of Cranford, New Jersey, Atlantic City, New Jersey Richmond, Virginia, and New Canaan, Connecticut, and the Manhattan and Brooklyn District Attorneys’ Offices, and the Union County, New Jersey, Prosecutor’s Office, for their assistance in the investigation, which he noted is ongoing.

The case is being prosecuted by the Office’s General Crimes Unit.  Assistant United States Attorneys Andrea M. Griswold and Richard Cooper are in charge of the prosecution.

Preet Bharara, the United States Attorney for the Southern District of New York, and Mark Hamlet, the Special Agent in Charge of the Special Operations Division of the United States Drug Enforcement Administration (“DEA”), today announced the extradition of EDMUND QUINCY MUNTSLAG, a citizen of Suriname, who is charged with conspiring to import cocaine into the United States.  MUNTSLAG’s co-defendant, Dino Bouterse, a citizen of Suriname who held himself out as Commander of that country’s Counter-Terrorism Unit, previously pled guilty in Manhattan federal court to participating in the cocaine importation conspiracy as well as to attempting to provide material support and resources to Hezbollah, a designated terrorist organization, and a firearms offense.  MUNTSLAG was arrested in Trinidad & Tobago on August 29, 2013, at the request of the United States.  He arrived in the Southern District of New York last night, and was presented today before Magistrate Judge Andrew J. Peck.  The case is assigned to United States District Judge Shira A. Scheindlin.

Manhattan U.S. Attorney Preet Bharara said: “Now that Edmund Quincy Muntslag has arrived in the Southern District of New York, he can be held accountable for his alleged role in conspiring to import massive quantities of cocaine from Suriname to the United States.  Today’s extradition is the result of the continued collaboration between our office, the DEA and our international law enforcement partners.”

DEA Special Operations Division Special Agent in Charge Mark Hamlet said: “Critical to strengthening our national security are efforts such as DEA‘s successful pursuit of global criminals like Edmund Muntslag and dangerous facilitators of terror such as Dino Bouterse.  The frightening connection between drug trafficking and terror across the world is clearly illustrated in this successful case.  This could not have been done without our strong foreign partnerships, and DEA is extremely pleased that Muntslag has been extradited to face justice in a U.S. court.”

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

 In June 2013, MUNTSLAG and Bouterse met in Suriname with confidential sources working with the DEA (the “CSes”), in a local government office.  During the meeting, Bouterse showed the CSes a rocket launcher and a kilogram of cocaine.  According to MUNTSLAG, the cocaine had been treated to evade detection by drug-sniffing dogs.

Approximately one month later, MUNTSLAG and Bouterse worked together to provide transportation and security for cocaine being sent through Suriname to the United States.  As a test run, MUNTSLAG and Bouterse sent ten kilograms of cocaine on a commercial flight departing from Suriname.  MUNTSLAG personally oversaw the arrangements for the 10-kilogram cocaine shipment, and confirmed its departure from Suriname via text message.  The cocaine was intercepted by law enforcement officials after it departed Suriname.

In July 2013, Bouterse met in Suriname with one of the CSes to discuss opening Suriname to the CSes’ purported Hezbollah associates.  Later that month, Bouterse met in Greece with the same CS and two other men who purported to be associated with Hezbollah.  During this meeting, Bouterse discussed initially hosting 30 to 60 Hezbollah members in Suriname for training and operations.  He also indicated that he wanted a Hezbollah cell in Suriname, in part, to act as a kind of personal armed force.  Immediately after the conclusion of the meeting in Europe, Bouterse sent MUNTSLAG a text message stating “we hit the jackpot.”

At a subsequent meeting in August 2013 in Panama, Bouterse delivered a Surinamese passport with false identifying information to one of the CSes.  As had been discussed at the July 2013 meeting in Greece, one of the purported Hezbollah operatives was to use the fraudulent passport to travel to Suriname.  At the August 2013 meeting, Bouterse indicated that everything was ready in Suriname for the arrival of the purported Hezbollah members, and that some “toys,” or weapons, would be available for inspection.  Bouterse also discussed receiving $2 million in cash in exchange for giving the purported Hezbollah operatives arms and access to Suriname, and asked the CSes to have the cash delivered to MUNTSLAG in Trinidad & Tobago.  At that time, MUNTSLAG was waiting in Trinidad & Tobago to receive the cash, which he planned to transport back to Suriname to deliver to Bouterse.  Shortly after the August 2013 meeting, MUNTSLAG was arrested in Trinidad & Tobago.

*              *             *

The Indictment charges MUNTSLAG with conspiring to import cocaine into the United States and to distribute cocaine, knowing and intending that it would be imported to the United States.

If convicted, MUNTSLAG faces a maximum sentence of life in prison and a mandatory minimum term of 10 years in prison.The maximum and mandatory minimum potential sentences in this case are prescribed by Congress and are provided here for informational purposes only, as any sentence will be determined by the judge.

On August 29, 2014, Bouterse pleaded guilty to the narcotics importation conspiracy with which MUNTSLAG is charged as well as attempting to provide material support to Hezbollah, a Foreign Terrorist Organization; and using and carrying, or aiding and abetting the use and carrying of, a firearm, during and in relation to a drug-trafficking crime.On March 10, 2015, Judge Scheindlin sentenced Bouterse to 195 months’ imprisonment on all counts.

Mr. Bharara praised the outstanding efforts of the Special Operations Division of the DEA. Mr. Bharara also thanked the DEA’s Miami Field Division, Panama City Country Office, Port-of-Spain Country Office, and Bogota Country Office; the Government of the Republic of Panama; the Government of the Republic of Trinidad and Tobago; and the U.S. Department of Justice’s Office of International Affairs and its National Security Division.

This case is being handled by the Office’s Terrorism and International Narcotics Unit.Assistant United States Attorneys Adam Fee and Michael D. Lockard are in charge of the prosecution.

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

[1] As the introductory phrase signifies, the entirety of the text of the Indictment and the description of the Indictment set forth 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 NORAMIE JASMIN, the former mayor of Spring Valley in Rockland County, was sentenced today in federal court in White Plains to four years in prison for fraud and extortion, charges that stemmed from her misuse of her position as mayor in an effort to enrich herself.  JASMIN negotiated a 50% stake in a development company and $5,000 cash for herself in exchange for her use of her office to obtain land and various government approvals to construct a community center in Spring Valley.  JASMIN was convicted in April after a one-week bench trial before U.S. District Judge Colleen McMahon, who imposed today’s sentence.

Manhattan U.S. Attorney Preet Bharara said: “By abusing her position as mayor for her own personal gain, Noramie Jasmin betrayed the trust the people of Spring Valley put in her.  As the conviction and prison sentence today make clear, we do not accept public corruption in New York as the status quo.  I would like to thank our partners at the FBI, the Rockland County District Attorney’s Office, and the Spring Valley Police Department for their excellent work in this important case.”

According to the evidence presented at trial, the Indictment, and the Complaint:

NORAMIE JASMIN was sworn in as Mayor of the Village of Spring Valley, New York in December 2009.  From September 2011 through April 2013, JASMIN accepted cash and other benefits from an undercover FBI agent (the “UC”) and a witness cooperating with the Government (the “CW”) on multiple occasions in exchange for official acts.  The scheme centered on the development of a community center in the Village of Spring Valley whose construction costs were expected to be at least $12 million.  In exchange for her vote in favor of the sale of land owned by Spring Valley to a company she believed was controlled by the UC, JASMIN demanded a secret ownership stake in the company.  JASMIN also asked for an advance on her profits from the scheme and accepted a $5,000 cash payment from the CW.  In support of the scheme, JASMIN directed the UC to find people to pose as bidders for the project so that the transaction would appear legitimate to the other members of the Spring Valley Board of Trustees who were to, and did, vote on the sale.  Over the course of two days, JASMIN met the UC, together with two other undercover FBI agents posing as straw bidders (the “Straw Bidders”), in hotel rooms and instructed the Straw Bidders on how to make a presentation before the Spring Valley Board of Trustees such that the Straw Bidders would lose their purported bids on the land sale.  JASMIN then presided over the presentations made by the company in which she had a secret financial stake and the fake presentations that she had helped prepare.  The following day, JASMIN presided over a Village Board of Trustees meeting, during which she asked the Board for permission to negotiate the sale of Village land to the UC’s company and then voted a “strong yes” to grant herself that permission.  When questioned as to why the Board needed to vote to grant her that permission, JASMIN remarked that she “cannot sit behind closed doors with a developer to negotiate on behalf of the Board.” The evidence showed that that was precisely what she did; she sat behind closed doors and negotiated a financial stake for herself in the days preceding the vote.

*                      *                      *

 In addition to her prison sentence, JASMIN, 51, of Spring Valley, New York, was sentenced to three years of supervised release and ordered to pay $15,000 in restitution of her salary and to forfeit $5,000.  JASMIN was ordered to surrender to the Bureau of Prisons on November 2.

Mr. Bharara praised the outstanding investigative work of the Federal Bureau of Investigation, the Rockland County District Attorney’s Office, and Chief Paul Modica and the Spring Valley Police Department.

This case is being handled by the Office’s White Plains Division and Public Corruption Unit.  Assistant United States Attorneys Douglas B. Bloom and Jessica K. Feinstein are in charge of the prosecution.

Preet Bharara, the United States Attorney for the Southern District of New York, announced that STEVEN HART was sentenced yesterday to four months in prison in Manhattan federal court for obstruction of justice and perjury charges relating to an investigation that the U.S. Securities and Exchange Commission (the “SEC”) had conducted into potential violations of the federal securities laws.  Hart previously pled guilty on March 13, 2015 to a two-count criminal information.  He was sentenced by U.S. District Judge Katherine Polk Failla.

Manhattan U.S. Attorney Preet Bharara said:  “Steven Hart obstructed an SEC investigation into securities fraud by giving false testimony under oath and even going so far as to impersonate his boss when the SEC called with questions.  Prosecutors and regulators cannot do their jobs properly if people deliberately obstruct their investigations, as Hart did here.”

According to the Information filed in Manhattan federal court, other court documents, and statements made in court:

HART, who was employed at an investment management firm headquartered in Englewood Cliffs, New Jersey (the “Investment Firm”), and reported directly to the president of the Investment Firm (the “Investment Firm President”), served as a portfolio manager at the firm and, in that capacity, exercised trading authority over the brokerage accounts for one of the funds managed by the Investment Firm (the “Fund”).  At the same time, HART also controlled and directed Octagon Capital Partners, LP (“Octagon”), a private investment fund with its principal place of business in New York, NY.  Through Octagon, HART invested his own money and the money of several of his associates.

In 2009, the SEC was investigating HART’s trading activities at the Investment Firm (the “SEC Investigation”).  First, the SEC was investigating whether HART, in his capacity as a portfolio manager at the Investment Firm, had conducted improper “match trades” or “cross trades” between his personal fund, Octagon, and the Fund.  The SEC was also investigating whether HART had traded in securities based on material non-public information (“MNPI”) relating to confidentially-marketed securities offerings – information that HART had obtained while being solicited to invest in those offerings.

As part of this investigation, SEC officials, among other things, issued a subpoena to the Investment Firm, care of the Investment Firm President, seeking the production of several different categories of documents.  HART received the subpoena at the Investment Firm before it was seen by any other employee and produced documents to the SEC in New York without (1) informing anyone else at the Investment Firm about the subpoena, or (2) informing the SEC that it was HART alone who responded to the subpoena.

Moreover, in the course of providing sworn testimony to the SEC, HART made several materially false statements.  He falsely testified that the Investment Firm President had agreed that HART should conduct match trades involving the Fund as part of an investment strategy for the Fund.  HART also falsely testified that he and the Investment Firm President had discussed the SEC Investigation, and that the Investment Firm President was aware that HART had been subpoenaed to testify before the SEC.    

On two occasions, HART impersonated the Investment Firm President during telephone conversations with the SEC.  Specifically, on December 9, 2009, an SEC attorney called the Investment Firm to speak with the firm’s President about the SEC Investigation.  HART received the phone call and pretended to be the Investment Firm President.  During that call, HART, speaking as the Investment Firm President, falsely stated that:  (1) the Investment Firm President was aware that HART had engaged in improper trading activity, but nevertheless wanted HART to remain an employee of the Investment Firm; and (2) the Investment Firm President was aware of, and had approved, HART’s match trading activity as a means for the Fund to dispense of restricted shares of stock.

On December 11, 2009, the same SEC attorney, along with a second SEC attorney, called the Investment Firm again to speak with the firm’s President.  HART again received the phone call and pretended to be the Investment Firm President.  During that call, HART, speaking as the Investment Firm President, falsely stated to the SEC attorneys that:  (1) HART’s match trading activity was an intentional strategy of the Investment Firm to take a loss on the trading in exchange for the ability to sell otherwise restricted shares of stock; (2) HART was still a valued employee of the Investment Firm who had earned the Investment Firm far more than whatever amount HART had gained through match trading; and (3) HART had fully disclosed to the Investment Firm President that HART had traded based on MNPI and that this was a one-time mistake that would not happen again.  Each of these statements was false.     

*                      *                      *

In addition to the prison term, Judge Failla sentenced Hart, 42, who currently resides in Manhattan, New York, to two years’ supervised release.

Mr. Bharara thanked the U.S. Securities and Exchange Commission for its assistance in the investigation. 

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

Preet Bharara, the United States Attorney for the Southern District of New York, announced that RANA KHANDAKAR, and USAWAN SAELIM were sentenced today to 56 and 36 months in prison, respectively, for engaging in a massive internet credit card fraud and identity theft scheme.  KHANDAKAR and SAELIM were convicted in July 2014 following a three-week jury trial before U.S. District Judge John G. Koeltl, who imposed their sentences.

Manhattan U.S. Attorney Preet Bharara said: “Khandakar and Saelim used the internet to engage in a smorgasbord of frauds, ranging from the unauthorized sale of EZPass tags to Medicaid fraud.  For their years of cyber scamming, the defendants now face years in federal prison.”

According to the Superseding Indictment, evidence admitted at trial, and submissions made in connection with sentencing:

From 2008 through 2012, KHANDAKAR and SAELIM engaged in a large-scale and sophisticated cyber fraud involving millions of dollars in completed and attempted fraudulent charges on hundreds of stolen credit cards and debit cards.  The defendants’ fraud consisted principally of two types of schemes from which they netted over $1 million worth of goods, services, and cash.  In one type of scheme, the defendants used stolen credit and debit card numbers to buy goods, such as EZ Pass tags, baby care items, gift cards, movie tickets and computers, and then resold those items online.  The second scheme involved the use of stolen identities to set up merchant processing accounts, which were then used to incur charges on stolen credit cards for the benefit of the defendants.  In addition, KHANDAKAR and SAELIM used stolen personal identifying information of their victims to establish fake businesses, open bank accounts, acquire and manufacture credit and debit cards, and create counterfeit checks, among other things.

One way in which the defendants obtained the personal identifying information of their victims was by posting fake job listings online, in which they required applicants to submit their Social Security number and other personal identifying information.  The defendants also used stolen credit and debit account information to obtain goods and services for their personal use, such as food delivery, pet insurance, entertainment, and cash.   Throughout the course of their fraud scheme, while amassing hundreds of thousands of dollars in ill-gotten gains, the defendants were also defrauding the Medicaid program, by collecting thousands of dollars in health insurance benefits intended for low-income individuals to which they were not entitled.

The Fraudulent Purchase and Re-Sale of EZ Pass Tags and other Items

KHANDAKAR and SAELIM used at least 50 stolen American Express credit cards to purchase EZ Pass tags and credits.  They then resold the tags and credits through two websites they founded – www.drezpass.com and www.ezpasstag.com.  Neither of these websites was an authorized EZ Pass retailer.  The defendants also purchased baby care items using stolen credit card information and re-sold those items on another website they founded – www.udiapers.com. In addition, the defendants purchased tens of thousands of dollars of gift cards, computers, and movie tickets, and resold those items on websites such as eBay and Craigslist.  Because they had obtained the merchandise for free using stolen credit cards, their profit margin in reselling the merchandise was 100% of the sale price. 

The Fraudulent Merchant Accounts

In order to process credit and debit card transactions, a business must establish an account with a credit and debit card processor, known as a “merchant account.”  Each merchant account is linked to a bank account associated with the business.

As part of their scheme, KHANDAKAR and SAELIM established fraudulent online merchant accounts linked to phony businesses, such as “Tips,” “La Pala Pa,” and “Cafe 007,” which they used to process bogus credit and debit card charges.  The defendant used stolen personal identifying information to set up the merchant accounts, and then made unauthorized charges to those merchant accounts using stolen credit and debit card numbers.

Through these fraudulent merchant accounts, KHANDAKAR and SAELIM attempted to make millions of dollars’ worth of charges on at least 385 stolen American Express credit card accounts, and on more than 1,000 credit or debit card accounts at Citibank, JP Morgan Chase, Bank of America, and Discover, among others.  In some cases, the same credit cards that incurred charges in connection with the fraudulent EZ Pass purchases were also charged in connection with the fraudulent merchant accounts.

KHANDAKAR and SAELIM were convicted of one count of conspiracy to commit mail and bank fraud; one count of access device fraud; one count of aggravated identity theft; and one count of theft from the government.  In addition, Khandakar was convicted of one count of mail fraud and SAELIM was convicted of one count of bank fraud.

*          *          *

In addition to their prison sentences, KHANDAKAR and SAELIM were sentenced to three years of supervised release, and were each ordered to pay $263,000 in restitution and $950,000 in forfeiture.

Mr. Bharara praised the work of the Secret Service, the MTA-OIG, the Port Authority OIG, and U.S. Department Health and Human Services OIG.   He also thanked the New York State Police, the New York State Department of Vehicles Field Investigative Unit, and the Social Security Administration for their assistance in the investigation.

This case is being handled by the Office’s Complex Frauds and Cybercrime Unit. Assistant U.S. Attorney Christine I. Magdo is in charge of the prosecution.

Stradivarius Violin, Constructed in 1734, was Missing for 35 Years Before Its Recovery by the FBI

U.S. Attorney Preet Bharara of the Southern District of New York, and Assistant Director in Charge Diego Rodriguez of the FBI’s New York Field, announced today the return of a 1734 Stradivarius violin to the heirs of deceased violinist Roman Totenberg today at a ceremony at the U.S. Attorney’s Office in the Southern District of New York.  The violin was stolen from Totenberg in 1980.  It was recently recovered by the FBI following a tip to a New York City Police Department (NYPD) detective’s source about the stolen violin.  The detective exercised due diligence and conducted an initial assessment before passing the case along to the FBI’s Art Crime Team.

“Today, we return to its rightful owners the centuries-old Ames Stradivarius, stolen 35 years ago from renowned violinist Roman Totenberg,” said U.S. Attorney Bharara.  “This is a remarkable story of a quick-witted violin appraiser who recognized the long-lost Ames Stradivarius and immediately called law enforcement.  Thanks to the violin appraiser’s good citizenship and law enforcement’s prompt response, today we celebrate the Totenberg family’s reunion with a priceless family heirloom, thought for decades to have been lost forever – a joyful ending to an amazing story.”

“Today’s ceremony is just one example of our commitment to restore significant arts and antiquities to their rightful owners,” said Assistant Director in Charge Diego Rodriguez.  “We will continue to provide investigative support to address these criminal matters.  Many thanks to our partners at the U.S. Attorney’s Office for the Southern District of New York and the New York City Police Department for their continued partnership in this and so many investigations.  I’d like to remind the public that two antique bows were stolen along with the Ames Stradivarius.  We ask anyone with information to please contact the FBI’s Art Crime Team in New York at (212) 384-2100 as we work to return this stolen property to the Totenberg family.”

According to court filings and other publically available information:

The violin, known as the Ames Stradivarius after violinist George Ames, the owner of the violin in the late 19th Century, was made in 1734 by Antonio Stradivari, a luthier based in Cremona, Italy.  Between 1666 and 1737, Stradivari created over 1,000 instruments, including approximately 400 violins that are known to exist today.  Stradivari’s violins are widely considered to be of the highest quality of craftsmanship.

In 1980, the Ames Stradivarius was owned by Totenberg, a Polish-born violinist who immigrated to the United States in 1938.  Totenberg enjoyed a long and distinguished career as a performer and a teacher.  He was chair of the strings department at Boston University from 1961 to 1978; the director of the Longy School of Music in Cambridge, Massachusetts, from 1978 to 1985; an instructor at various conservatories across the country; and co-chairman of the Boston University strings department for a second time beginning in 1994.  Totenberg passed away in 2012.

In May 1980, following a concert at the Longy School, the Ames Stradivarius was stolen, along with two antique bows also belonging to Totenberg. 

On June 26, 2015, after having been missing for over 35 years, the Ames Stradivarius surfaced at a hotel in Manhattan, where it was being presented for appraisal by an individual who had received the violin from a former spouse.  After being contacted by the appraiser, the FBI approached the individual, who voluntarily relinquished the Ames Stradivarius to a special agent assigned to the FBI’s Art Crime Team.  After contacting the heirs of Roman Totenberg, the U.S. Attorney’s Office of the Southern District of New York and the FBI have arranged for the return of the Ames Stradivarius to the Totenberg family.

The return today to Totenberg’s three daughters is being made pursuant to stipulated agreements that have been entered between the relevant parties and also so ordered by the Honorable Lorna G. Schofield, U.S. District Court Judge of the Southern District of New York.  

U.S. Attorney Bharara thanked the FBI and the NYPD for their outstanding work on this matter.

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

Stradivarius Stipulation (US-Totenberg)

Stradivarius Stipulation (US-Tran)

Ames Stradivarius - Photos

Preet Bharara, the United States Attorney for the Southern District of New York, and Brian M. Hickey, the Special Agent-in-Charge of the U.S. Department of Education Office of Inspector General’s Northeastern Regional Office (“ED-OIG”), announced charges today against three individuals for their participation in a scheme to fraudulently lower the student loan default rate of the for-profit school in whose Loan Management Department they were employed during the scheme.  Defendants DIANNA SALAZAR, ALEKSANDRA CHOLEWICKA, and SHAYNA POLITE are charged with conspiracy to commit federal student financial aid fraud and make false statements, attempted federal student financial aid fraud, making false statements, and wire fraud.  All of the defendants surrendered to law enforcement today and were presented before U.S. Magistrate Judge Andrew J. Peck in Manhattan federal court this afternoon.

Manhattan U.S. Attorney Preet Bharara said:  “Student financial aid fraud depletes federal funds meant to fuel the dreams of an affordable higher education for countless Americans.  The defendants charged today are alleged to have lied to lower their for-profit school’s student loan default rate in order to receive more such financial aid.”

ED-OIG Special Agent-in-Charge Brian Hickey said:  “Federal student aid exists so that individuals can make their dream of a higher education a reality, it’s not a slush fund for unscrupulous school officials. As the law enforcement arm of the U.S. Department of Education, we are committed to fighting student aid fraud and ensuring that those who steal student aid or game the system for their own selfish purposes are stopped and held accountable for their criminal actions.”

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

Each of the defendants was associated with a for-profit educational institution (the “For-Profit School”) that was located in New York, New York during the scheme and specializes in preparing students for employment in a technical career after graduation.  DIANNA SALAZAR was the manager of the School’s Loan Management Department.  ALEKSANDRA CHOLEWICKA and SHAYNA POLITE worked as loan advisors in the Loan Management Department.   

The named defendants are charged with preparing and submitting fraudulent applications for deferment or forbearance of student loans administered by the United States Department of Education (“ED”) in order to fraudulently lower the student loan default rate of the For-Profit School so that it would continue to be eligible to receive federal student aid.

The ED administers and provides loans to eligible students and families to help cover the cost of higher education through Title IV Federal Student Assistance Programs authorized by the Higher Education Act of 1965, as amended.  If a school’s student loan default rate, which is a measurement of the percentage of students who entered repayment on their loans and defaulted within a specific period, is 30 percent or higher in three consecutive years, the school loses its eligibility to receive certain federal student aid for its students.  A student that has entered repayment on his or her loan and has been granted a deferment or forbearance is relieved of making loan payments for a specified time period and is not considered in default.

The defendants submitted fraudulent deferment and forbearance applications to the ED and other loan holders in two ways.  First, the defendants manually altered dates on previously submitted deferment and forbearance applications using liquid paper and resubmitted the applications in order to extend the deferment or forbearance period.  Second, the defendants copied authentic student signatures from old deferment and forbearance documents and manually cut and pasted those signatures on new deferment and forbearance applications that were submitted with current dates.  By falsifying dates and forging student signatures, the defendants misrepresented to the ED and other loan holders that the For-Profit School’s students were eligible for a deferment or forbearance and that the student had certified that the information provided in the forms was true and correct.

*                      *                      *

Attached are charts containing the charges against the defendants and the maximum penalties they face, as well as the defendants’ ages and residences.  The maximum potential sentences in this case are prescribed by Congress and are provided here for informational purposes only, as any sentencings of the defendants will be determined by the judge.

Mr. Bharara praised the investigative work of ED-OIG.

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

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

[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, and Diego Rodriguez, Assistant Director-in-Charge New York Field Office of the Federal Bureau of Investigation (“FBI”), announced today the return of a 1734 Stradivarius violin to the heirs of deceased violinist Roman Totenberg today at a ceremony at the United States Attorney’s Office in Manhattan.  The violin was stolen from Mr. Totenberg in 1980.  It was recently recovered by the FBI, following a tip to a New York City Police Department (“NYPD”) detective’s source about the stolen violin.  The detective exercised due diligence and conducted an initial assessment before passing the case along to the FBI’s Art Crime Team.

            Manhattan U.S. Attorney Preet Bharara said: “Today, we return to its rightful owners the centuries-old Ames Stradivarius, stolen thirty five years ago from renowned violinist Roman Totenberg.  This is a remarkable story of a quick-witted violin appraiser who recognized the long-lost Ames Stradivarius and immediately called law enforcement.  Thanks to the violin appraiser’s good citizenship and law enforcement’s prompt response, today we celebrate the Totenberg family’s reunion with a priceless family heirloom, thought for decades to have been lost forever – a joyful ending to an amazing story.”

            Assistant Director-in-Charge Diego Rodriguez said: “Today’s ceremony is just one example of our commitment to restore significant arts and antiquities to their rightful owners. We will continue to provide investigative support to address these criminal matters.  Many thanks to our partners at the U.S. Attorney’s Office for the Southern District of New York and the New York City Police Department for their continued partnership in this and so many investigations.  I’d like to remind the public that two antique bows were stolen along with the Ames Stradivarius. We ask anyone with information to please contact the FBI’s Art Crime Team in New York at (212) 384-2100 as we work to return this stolen property to the Totenberg family.”

            According to court filings and other publically available information:

            The violin, known as the “Ames” Stradivarius after violinist George Ames, the owner of the violin in the late 19th Century, was made in 1734 by Antonio Stradivari, a luthier based in Cremona, Italy.  Between 1666 and 1737, Stradivari created over 1,000 instruments, including approximately 400 violins that are known to exist today.  Stradivari’s violins are widely considered to be of the highest quality of craftsmanship.

            In 1980, the Ames Stradivarius was owned by Roman Totenberg, a Polish-born violinist who immigrated to the United States in 1938.  Totenberg enjoyed a long and distinguished career as a performer and a teacher.  He was chair of the strings department at Boston University from 1961 to 1978; the director of the Longy School of Music in Cambridge, Massachusetts, from 1978 to 1985; an instructor at various conservatories across the country; and co-chairman of the Boston University strings department for a second time beginning in 1994.  Mr. Totenberg passed away in 2012.

            In May 1980, following a concert at the Longy School, the Ames Stradivarius was stolen, along with two antique bows also belonging to Totenberg.

            On June 26, 2015, after having been missing for over 35 years, the Ames Stradivarius surfaced at a hotel in Manhattan, where it was being presented for appraisal by an individual who had received the violin from a former spouse.  After being contacted by the appraiser, the FBI approached the individual, who voluntarily relinquished the Ames Stradivarius to a special agent assigned to the FBI’s Art Crime Team.  After contacting the heirs of Roman Totenberg, the U.S. Attorney’s Office and the FBI have arranged for the return of the Ames Stradivarius to the Totenberg family.

            The return today to Mr. Totenberg’s three daughters is being made pursuant to stipulated agreements that have been entered between the relevant parties and also so ordered by the Honorable Lorna G. Schofield, United States District Court Judge for the Southern District of New York. 

            Mr. Bharara thanked the FBI and the NYPD for their outstanding work on this matter.

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

Preet Bharara, the United States Attorney for the Southern District of New York, announced that PETER CANALE, a United States Citizen and resident of Jamestown, Kentucky, pled guilty today to willfully failing to file Reports of Foreign Bank and Financial Accounts (“FBARs”) with the Internal Revenue Service (“IRS”) regarding secret bank accounts that he maintained and controlled in Switzerland.  CANALE maintained his undeclared accounts at multiple different Swiss banks for approximately ten years, from 2000 through 2010.  During that time, CANALE’s undeclared assets reached a high value of over $780,000.  CANALE entered his guilty plea before U.S. District Judge Katherine B. Forrest.

According to the superseding Information filed in Manhattan federal court, other court documents, and statements made in connection with CANALE’s guilty plea:

Beginning in the early 1990s, a relative of CANALE (the “Relative”) maintained an undeclared offshore bank account at a predecessor firm of the Swiss bank UBS AG.  Upon the Relative’s death in July 2000, CANALE met in Manhattan with two Swiss bankers, Hans Thomann and Beda Singenberger, and discussed the continued maintenance of the assets that CANALE and his brother, Michael Canale, had inherited from the Relative.  They agreed that Thomann, working with Singenberger, would continue to maintain the assets in an undeclared bank account in Switzerland for the benefit of CANALE and Michael Canale.  Later, in July 2005, with the assistance of Singenberger, CANALE opened an undeclared account at Wegelin & Co. (“Wegelin”), a Swiss private bank.  CANALE’s undeclared account at Wegelin was opened in the name of a sham foundation organized under the laws of Liechtenstein, called the Janara Foundation.  CANALE, however, remained the beneficial owner of the assets in the Janara Foundation account.  As of December 31, 2009, the Janara Foundation account at Wegelin held assets valued at approximately $788,920.

In May 2010, Singenberger, acting under the authority given to him by CANALE, opened an undeclared bank account in the name of the Janara Foundation at another Swiss private bank (“Swiss Bank A”), and transferred the assets from the Janara Foundation account at Wegelin to the Janara Foundation account at Swiss Bank A.  As of October 31, 2010, the Janara Foundation bank account at Swiss Bank A, of which CANALE was the beneficial owner, held assets valued at approximately $718,143.

As charged in the superseding Information, for each of the calendar years from 2007 through 2010, CANALE was required, but failed, to file FBARs with the IRS disclosing his signatory or other authority over the Janara Foundation accounts held at Wegelin and Swiss Bank A, which had an aggregate value of more than $10,000 during each of these years.  For each of the calendar years from 2007 through 2010, CANALE also filed false Forms 1040 with the IRS, in which he failed to report as income the dividends, interest, and other income received by him from the Janara Foundation accounts at Wegelin and Swiss Bank A.

*                *                *

            CANALE, 62, faces a maximum sentence of five years in prison.  As part of his plea, CANALE has agreed to pay a civil penalty of $394,460, file amended tax returns, and pay back taxes of $106,820.  He is scheduled to be sentenced by Judge Forrest on December 3, 2015 at 1:00 p.m.  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 efforts of the IRS-CI in the investigation.  Mr. Bharara also thanked the U.S. Department of Justice’s Tax Division for their assistance in the investigation.

            This case is being prosecuted by the Office’s Complex Frauds and Cybercrime Unit.  Special Assistant United States Attorney Jorge Almonte (of the Tax Division) and Assistant United States Attorney Sarah E. Paul are in charge of the prosecution.

Preet Bharara, the United States Attorney for the Southern District of New York, announced that IRWIN LIPKIN, the former Controller at Bernard L. Madoff Investment Securities LLC (“BLMIS”), was sentenced today to six months in prison for fraud and other offenses set forth in a two-count Superseding Information to which LIPKIN pled guilty.  Specifically, LIPKIN pled guilty in November 2012 to one count of conspiracy to commit securities fraud, to falsify records, to make false filings with the Securities and Exchange Commission (“SEC”), and to falsify statements in relation to documents required by the Employee Retirement Income Security Act (“ERISA”), and to one substantive count of falsifying statements in relation to documents required by ERISA.  The overt acts in the conspiracy included, among other things, falsifying financial information BLMIS filed with the SEC, causing fake trades to be created in investment accounts LIPKIN and his family members maintained at BLMIS, and arranging to keep himself and his wife on the BLMIS payroll after his retirement in 1998 – even though neither was working for the firm – so they could collect benefits to which they were not entitled.  LIPKIN was sentenced in Manhattan federal court by U.S. District Judge Laura Taylor Swain.

Manhattan U.S. Attorney Preet Bharara said: “Bernard Madoff did not commit his massive fraud alone.  Irwin Lipkin, hired in the 1960s as BLMIS’s third employee, right after Madoff and Madoff’s wife, was among Madoff’s most loyal accomplices.  Year after year, Lipkin helped keep Madoff’s house of cards from collapsing, falsifying the very financial records that Lipkin, as the Controller, was supposed to monitor.  In exchange, Lipkin reaped the rewards of fake trades and no-show jobs for himself and his family.  Lipkin’s sentencing – the last among the 15 defendants convicted for their participation in Madoff’s fraud – marks the close of another chapter in this tragic tale of unchecked greed.”

According to the Superseding Information to which LIPKIN pled guilty and other court filings:

LIPKIN was employed by BLMIS from 1964 through 1998, and was the first person who was not a family member to be hired by Bernard L. Madoff.  In his role as Controller, LIPKIN participated in maintaining the firm’s financial books and records since at least the mid-1970s.  At the direction of Bernard L. Madoff, LIPKIN, along with Daniel Bonventre, Enrica Cotellessa-Pitz, and others, made false and misleading entries concerning BLMIS’s profit and loss numbers (“P&L”) in the General Ledger and Stock Record, and in supporting books and records. 

As an SEC-registered broker-dealer, BLMIS was required to file Financial and Operational Combined Uniform Single (“FOCUS”) Reports on a monthly, quarterly, and annual basis, as well as annual financial statements concerning BLMIS’s assets, liabilities, revenues, and expenses.  The information contained in the FOCUS Reports and the annual financial statements was derived principally from information recorded in the BLMIS General Ledger and the Stock Record.  Because those numbers were false and misleading, the corresponding numbers contained in the FOCUS Reports and annual financial statements were false and misleading as well.  The annual financial statements provided to various BLMIS Investment Advisory customers also failed to accurately reflect the P&L of BLMIS.  “These filings,” LIPKIN admitted when pleading guilty in November 2012, “helped Mr. Madoff run the Ponzi scheme that harmed thousands of people.”

When LIPKIN retired from BLMIS in 1998, he taught his successor as Controller how to manipulate the revenues at BLMIS in order to reach a particular P&L result, thereby allowing the fraud at BLMIS to continue.

In addition, since at least 1975, LIPKIN and his wife maintained their own personal Investment Advisory accounts at BLMIS.  On multiple occasions, LIPKIN asked Annette Bongiorno, a BLMIS employee who worked in the Investment Advisory business, to execute fake, back-dated trades in both his account and the accounts of his family members.  In an effort to reduce his capital gains income, LIPKIN also asked Bongiorno either to cancel the sales of shares in his account well after those sales had purportedly occurred, or to document nonexistent purchases of shares near the monthly high price, and nonexistent sales near the monthly low price, weeks later.  No such trades actually occurred.

 LIPKIN also arranged “no-show” jobs at BLMIS for both himself and his wife.   As a result, they received income from salaries, health care insurance, 401(k) plans, and other benefits to which they were not entitled.

*               *                 *

In addition to the prison term, Judge Swain sentenced LIPKIN, 77, of Paramus, New Jersey, to three years’ supervised release, including eighteen months of home confinement.  LIPKIN was also ordered to forfeit $170 billion dollars and various pieces of property, including a house in Florida, stocks from brokerage and retirement accounts, and artwork.  This amount represents all of the investor funds paid into BLMIS from the mid-1970s – when LIPKIN became involved with the conspiracy – through December 2008.

Mr. Bharara praised the investigative work of the Federal Bureau of Investigation.  He also thanked the U.S. Securities and Exchange Commission and the U.S. Department of Labor for their assistance on this case.

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.             

The case is being handled by the Office's Securities and Commodities Fraud Task Force.  Assistant U.S. Attorneys Christopher Frey, Andrea Griswold, and David Abramowicz are in charge of the prosecution.  Assistant U.S. Attorneys Jonathan Cohen, Paul Monteleoni, and Niketh Velamoor are responsible for the forfeiture aspects of the case.

Preet Bharara, the United States Attorney for the Southern District of New York, Philip R. Bartlett, Inspector-in-Charge of the New York Office of the United States Postal Inspection Service (“USPIS”), and Thomas E. Bishop, Acting Special Agent-in-Charge of the New York Field Office of the Internal Revenue Service’s Criminal Investigation Division (“IRS-CI”) announced the arrests today of BINDER TAL, BALDEV TAL, and SHARIFUL MINTU on bank fraud and money laundering charges.  BALDEV TAL was arrested this morning in Orefield, Pennsylvania and appeared in Philadelphia federal court this afternoon.  MINTU was arrested this morning in Orange County, New York, and appeared in White Plains federal court this morning, before U.S. Magistrate Judge Paul E. Davison.  BINDER TAL remains at large.  Each defendant is charged with one count of conspiring to commit bank fraud and one count of conspiring to commit money laundering.

Manhattan U.S. Attorney Bharara said: “For years, banks, credit unions, and small businesses have lost millions of dollars because of the fraud allegedly perpetrated by the defendants in this case.  I would like to thank our partner agencies for their assistance on this case.”

Inspector in Charge Philip R. Bartlett said: “Through disguise and deceit, these defendants created an elaborate scheme to defraud financial institutions. The use of the U.S. Mail to facilitate any fraud scheme will never be tolerated by members of America's oldest law enforcement agency"

 Acting Special Agent-in-Charge Thomas E. Bishop said: “IRS-CI is always ready to work with our law enforcement partners in the investigation of money laundering schemes and the financial crimes with which they are related.  It is important to remember that money laundering is not a victimless crime.  While the victims of bank fraud are usually identifiable individuals or institutions, the damage money laundering inflicts on our nation’s economic strength ultimately harms every American taxpayer.”

According to the allegations in the Complaint unsealed this morning in White Plains federal court[1]:

From at least in or about 2007 through in or about July 2015, BINDER TAL, BALDEV TAL, and MINTU fraudulently obtained loans and lines of credit from banks, credit unions, and other lending institutions.  The defendants obtained the loans by providing materially false information to the lenders about the borrowers’ assets, including false information about the borrowers’ employment and income.  Through their scheme, the defendants and their co-conspirators fraudulently obtained more than $2.5 million in proceeds in connection with dozens of loan applications and applications for lines of credit.  The vast majority of the loans and lines of credit went into default, and millions of dollars were not repaid.

As part of their fraud scheme, the defendants used the proceeds to personally enrich themselves and their families.  They used their proceeds for, among other things, (i) credit card debts for personal expenses; (ii) debts arising from business expenses; and (iii) debts arising from other fraudulently obtained loans, to conceal the fraudulent nature of these loans.

In addition, the defendants and their co-conspirators also engaged in extensive efforts to perpetuate and conceal the fraudulent scheme.  These efforts included members of the conspiracy acting as the borrowers for different loans, falsely claiming that the purpose of the loans was to purchase or finance used luxury automobiles.  In fact, many of the automobiles were never purchased or leased by the defendants or their co-conspirators, and the loan proceeds were later distributed to other members of the conspiracy and to entities they controlled.

                                                                *          *         *

BINDER TAL, BALDEV TAL, and MINTU each face a maximum sentence of 30 years in prison on the charge of conspiring to commit bank fraud and a maximum sentence of 20 years in prison on the charge of conspiring to commit money laundering.  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 efforts of the United States Postal Inspection Service, the Internal Revenue Service, Criminal Investigation Division, and the New York State Police Special Investigations Unit.

This case is being handled by the Office’s White Plains Division.  Assistant U.S. Attorney John P. Collins, Jr. is in charge of the prosecution.

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

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

Preet Bharara, the United States Attorney for the Southern District of New York, Diego Rodriguez, the Assistant Director-in-Charge of the New York Office of the Federal Bureau of Investigation (“FBI”), Adrian H. Anderson, the Dutchess County Sheriff, and Ronald J. Knapp,  the Chief of Police of City of Poughkeepsie Police Department, today announced the unsealing of an Indictment and two Complaints charging 10 defendants with committing heroin trafficking and firearms offenses in and around Dutchess County, New York.  Eight defendants were taken into federal custody today and were presented in White Plains federal court this afternoon before U.S. Magistrate Judge Paul E. Davison.  Two defendants were previously taken into federal custody on a Complaint filed on May 14, 2015. 

U.S. Attorney Preet Bharara said: “Heroin is a growing problem in New York, making an unfortunate comeback in cities and rural communities alike.  Heroin and prescription pill overdoses keep going up, killing more and more people every day.  With heroin trafficking and firearms charges like those brought today against ten defendants selling drugs in Dutchess County, we aim to confront this epidemic.  We thank the FBI, the Dutchess County Sherriff’s Office and the Poughkeepsie Police Department for their extraordinary efforts on this case.”

Assistant Director-in-Charge Diego Rodriguez said:  “Today, we announce the charges against ten individuals who allegedly sought to sell heroin in the City of Poughkeepsie with the aid of firearms. The charges demonstrate the FBI’s continued effort to work closely with our law enforcement partners in eliminating the terror these groups inflict on our communities. Dismantling violent gangs remains a priority for the FBI.”

Sheriff Adrian H. Anderson said: “Today the Dutchess County Sheriff’s Office partnered with Federal and local law enforcement agencies to assist in the arrests of numerous people who have allegedly been dealing heroin and other dangerous drugs throughout Dutchess County and surrounding areas. All of these law enforcement agencies are dedicated to working together to rid our streets of dangerous drugs, and I would like to take this opportunity to thank the U.S. Attorney’s Office, the FBI, and the City of Poughkeepsie Police for their outstanding work in helping to make this investigation such an enormous success. Those who deal in heroin and other dangerous drugs are not going to be allowed to poison our community, and this investigation is the latest example of how Federal and local law enforcement agencies working together can make a huge difference and go a long way towards making our streets and residents safer.”

Chief of Police Ronald J. Knap said: “These arrests culminate a joint investigation into regional narcotics trafficking, specifically heroin.  The City of Poughkeepsie was one of the communities that these suspects lived and operated in. We thank the U.S. Attorney’s Office for their work and pending prosecution of this case.  We also thank the FBI and Dutchess County Sheriff for their participation in this successful investigation. The City of Poughkeepsie has suffered more than its share of heroin deaths.  Arresting and prosecuting those who deal in these dangerous drugs on the Federal level is an important strategy as the effort cannot be deal with solely as a local problem.”

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

From December 2013 through June 2015, MONDU ALLAH, CARITA BENNERMAN, CLIFTON CATTS, EUGENE LAMONT GRAVES, LARRY GRAVES, MAURICE HOLLIS, JULIENNE KOLOZY, and SAMUEL TURNER conspired to sell more than one kilogram of heroin.  During the course of the conspiracy, law enforcement officers observed certain defendants participating in the sale of heroin to confidential informants working with law enforcement and to an undercover law enforcement officer.  Law enforcement officers, using a court-authorized wiretap, also intercepted numerous communications in which certain of the defendants discussed heroin trafficking and arranged heroin transactions.  On May 13, 2015, ALLAH and HOLLIS also carried, and aided and abetted the carrying of, a firearm in furtherance of the narcotics conspiracy charged in the Indictment.

In addition the Indictment, two Complaints were also unsealed today.  As alleged in those Complaints:

From December 2013 through January 2014, ROBERT NOVICK conspired to sell heroin, and sold 3, 4 methylenedioxymethamphetamine, commonly referred to as “MDMA,” in Poughkeepsie.  On May 9, 2015, VARICK GOSS conspired to sell heroin and crack cocaine in Poughkeepsie.

*              *             *

ALLAH and HOLLIS, two of the defendants charged in the Indictment, both face a mandatory term of 10 years in prison on Count One and a mandatory term of 5 years in prison on Count Two, consecutive to any sentence on Count One.  Each faces a maximum term of life in prison on both counts.  The other six defendants charged in the Indictment each face a mandatory term of 10 years in prison on Count One, and a maximum term of life.  Each defendant charged in the Complaints faces a maximum term of 20 years in prison.  The statutory minimum and maximum sentences are prescribed by Congress and are provided here for information purposes only, as any sentencing of the defendants would be determined by the respective judges.

Mr. Bharara praised the outstanding investigative work of the FBI Hudson Valley Safe Streets Task Force, the Dutchess County Sheriff’s Office, the City of Poughkeepsie Police Department, and other local law enforcement partners.

These cases are being handled by the Office’s White Plains Division.  Assistant U.S. Attorneys Lauren Schorr and Douglas Zolkind are in charge of the prosecutions.

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

15-202                                                  

CHARGE

DEFENDANTS

MAXIMUM PENALTIES

Narcotics conspiracy – Heroin

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

MONDU ALLAH,

a/k/a “Mindu Allah,”

a/k/a “Duberry,”

a/k/a “Du,”

CARITA BENNERMAN,

CLIFTON CATTS,

EUGENE LAMONT GRAVES,

LARRY GRAVES,

a/k/a “Knowledge,”

MAURICE HOLLIS,

a/k/a “Mo,”

JULIENNE KOLOZY, and

SAMUEL TURNER

Life in prison

Mandatory minimum: 10 years in prison

Use of a firearm in furtherance of a drug trafficking crime

(in violation of 18 U.S.C. § 924(c))

MONDU ALLAH,

a/k/a “Mindu Allah,”

a/k/a “Duberry,”

a/k/a “Du,” and

MAURICE HOLLIS,

a/k/a “Mo”

Life in prison

Mandatory minimum: 5 years in prison, to be imposed consecutively to any other sentence

Narcotics conspiracy – Heroin

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

ROBERT NOVICK

20 years in prison

Distribution and possession with intent to distribute 3, 4 methylenedioxymethamphetamine

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

ROBERT NOVICK

20 years in prison

Narcotics conspiracy – Heroin and crack cocaine

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

VARICK GOSS

20 years in prison

[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, announced today that SAMUEL TERWILLIGER was sentenced to 12 years in prison for his attempted enticement of a minor to engage in sexual activity.  TERWILLIGER pled guilty on October 22, 2014 before U.S. District Court Judge Vincent Briccetti, who also imposed today’s sentence.

Manhattan U.S. Attorney Preet Bharara said: “Samuel Terwilliger has now been sentenced for his predatory crime, attempting to entice a minor to engage in sexual activity.  This case – and others like it that we prosecute – underlines the need for law enforcement to be vigilant in its protection of children from those who prey on them.  I want to thank the FBI, the Rockland County Computer Crimes Task Force, the Child Protective Services of Sullivan County, and the Sullivan County Sheriff’s Department for their work in this investigation and prosecution. ”

According to the Complaint and other documents filed in this case, and statements made in related court proceedings:

In August 2013, an individual (the “Reporter”) advised the Federal Bureau of Investigation (“FBI”) that the Reporter, posing as a 14-year-old girl, had engaged in online communications with a person using the screen name “tas_128.”  During those communications, “tas_128” indicated that “tas_128” wanted to engage in sexual activities with the Reporter.  The FBI instructed the Reporter to advise “tas_128” that the Reporter had a young friend who would be interested in communicating with “tas_128” and provided the Reporter with an email address to provide to “tas_128” for an undercover FBI agent (“UC”).

Between August 16, 2013 and September 26, 2013, the UC and “Tas_128,” later identified as SAMUEL TERWILLIGER, engaged in a series of emails and text communications.  Among other things, TERWILLIGER told the UC that he was 24 years old and the UC told TERWILLIGER that she was a 13-year-old girl.  During these communications, TERWILLIGER acknowledged his understanding that the UC was a minor, solicited graphic sexual images of the minor from the UC, and described in detail a variety of sexual acts he wanted to engage in with the 13-year-old.  TERWILLIGER repeatedly requested that the minor join him in a “three-way relationship” with his girlfriend and told the girl that he wanted to impregnate her.  TERWILLIGER told the UC, “We have been trying to find a woman for a year now that would join our relationship.”

On April 10, 2014, the FBI executed a search warrant at the defendant’s residence.  On that date, the defendant admitted that he had engaged in sexually-explicit conversations with a girl whom he believed to be approximately 13 years old.  He also admitted that, at the time he was communicating with her, he planned to bring her to stay with him and his girlfriend because he wanted to have sex with her and impregnate her.  In addition, the defendant admitted that, in October 2013, he had engaged in sexual intercourse with a 15-year-old girl while his girlfriend watched.

*                *                  *

TERWILLIGER, 26, of Calicoon, NY, was also sentenced to 5 years’ supervised release to follow the imprisonment.

Mr. Bharara praised the efforts of the FBI, the Rockland County Computer Crimes Task Force, Child Protective Services of Sullivan County, and the Sullivan County Sheriff’s Department in connection with this case.

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.

Preet Bharara, the United States Attorney for the Southern District of New York, announced that HENRY JAMES was sentenced today in Manhattan federal court to 205 months in prison for leading a robbery crew that committed over two dozen armed robberies in the Bronx and Brooklyn in 2013.  Since September 2013, JAMES and ten other defendants have been charged for their respective roles in this armed robbery conspiracy.  In October 2014, JAMES pled guilty to participating in the robbery conspiracy and a firearms offense.  JAMES was sentenced by United States District Judge Sidney H. Stein.

In November 2014, co-defendants Markquez McFadden and Qushawn Woods were convicted after a two-week jury trial before Judge Stein.  McFadden and Woods were each found guilty of participating in the robbery conspiracy, and McFadden was also found guilty of a firearms offense.  On July 9, 2015, Judge Stein sentenced Woods to 46 months in prison.  On July 15, 2015 Judge Stein sentenced McFadden to 120 months in prison.

The eight other defendants in this case – Jerome Ortiz, Edward Matthews, Kelvin Green, Tyrell Jones, Untra Jones, Cesar Thomas, Dennis Buie, Sr., and Dennis Buie, Jr. – pled guilty to various offenses, including participating in the robbery conspiracy and/or firearms offenses.

Manhattan U.S. Attorney Preet Bharara said: “Henry James, a convicted murderer, led a violent and ruthless armed robbery crew that terrorized hard working employees at various stores in the Bronx and Brooklyn.  For his crime spree of over two dozen armed robberies, James has now been convicted and sentenced.”

            According to the allegations contained in the Indictments, evidence presented at trial, and other court documents previously filed in Manhattan federal court:

Between July and October 2013, the eleven-member crew that JAMES led and organized committed more than two dozen armed robberies in the Bronx and Brooklyn.  The robberies followed a simple but violent pattern.  Multiple robbers entered a store during business hours while customers and employees were inside and demanded money, cellphones, and other items at gunpoint.  During these robberies, one robber entered the store first, drew his gun, approached the clerk, and announced a robbery.  The other robber or robbers then walked in, often closed the door behind them, and then put a mask over (or pulled a hood onto) their faces.  The robbers would demand access to the “drop box” or “lock box” where they believed cash was held.  Afterward, the robbers left the store and drove away in a vehicle that was parked around the corner from the store.  In certain robberies, store employees were pistol whipped.

JAMES previously served a more than a 20-year sentence for a 1986 second degree murder in which a victim was killed during the course of a robbery.  Less than one year after he was released from prison, JAMES began recruiting members to commit these armed robberies.

*                *                *

            All eleven defendants have either pled guilty or been convicted after trial.  In addition to JAMES, Woods, and McFadden, the following defendants have been sentenced by Judge Stein:

• On July 31, 2014 Jerome Ortiz was sentenced to 120 months in prison.
• On October 28, 2014, Edward Matthews was sentenced to 132 months in prison.
• On December 17, 2014, Untra Jones was sentenced to 90 months in prison.
• On February 23, 2015, Dennis Buie, Sr. was sentenced to 27 months in prison.

Cesar Thomas, Dennis Buie, Jr., Kelvin Green, and Tyrell Jones have yet to be sentenced.

            Mr. Bharara praised the investigative work of the New York City Police Department, especially detectives from the Bronx Robbery Squad and Joint Robbery Task Force.  Mr. Bharara also thanked the United States Marshals Service Fugitive Task Force for their outstanding assistance in the pursuit and arrest of JAMES.

The case is being prosecuted by the Office’s Violent & Organized Crime Unit.  Assistant United States Attorneys Andrew Bauer, Andrea M. Griswold, and Joshua A. Naftalis are in charge of the prosecution.

Preet Bharara, the United States Attorney for the Southern District of New York, announced that JEFFREY S. STEIN and MARLA STEIN, who are husband and wife, were sentenced today to 18 months and 12 months and one day in prison, respectively, for obstructing the IRS by, among other things, providing to an IRS auditor phony documents designed to support false deductions both claimed on their joint tax returns for the years 2009-2012.  JEFFREY S. STEIN, a vascular surgeon, and MARLA STEIN, a New York personal injury lawyer, were both sentenced by U.S. District Judge Denise L. Cote.

Manhattan U.S. Attorney Preet Bharara said: “Taxpayers have an obligation not only to file truthful and accurate tax returns, but also to deal with the IRS honestly during audits.  Jeffrey and Marla Stein failed to do so, and as a result, both have been sentenced today to jail terms.”

According to the Information and other documents filed in Manhattan federal court, as well as the transcript of today’s sentencing proceedings:

JEFFREY S. STEIN was a vascular surgeon who, between 2009 and 2012, conducted business principally through his own Manhattan and Long Island-based medical practice, “Jeffrey Stein, M.D.”  Between 2008 and 2011, JEFFREY S. STEIN was also affiliated with and earned income from certain medical groups, including one based in Brooklyn that had contracts with the United States Department of Veterans Affairs (“V.A.”).

MARLA STEIN was an attorney who, between 2009 and 2012, performed legal services largely as an independent contractor to certain Manhattan-based personal injury law firms.

Both JEFFREY S. STEIN and MARLA STEIN reported the profits from their medical and law practices, respectively, on separate Schedules C (Profit or Loss From Business) attached to the joint U.S. Individual Income Tax Returns, Forms 1040, that they filed for the tax years 2009-2012.

Filing of False Tax Returns

In connection with the preparation of their Forms 1040 for the tax years 2009-2012, JEFFREY S. STEIN and MARLA STEIN provided false and fictitious information to their accountant in order to fraudulently reduce the amount of taxes they would have to pay to the IRS.  In particular, JEFFREY S. STEIN provided the accountant with (a) wholly fictitious Schedule C expenses purportedly incurred by his medical practice, such as contract labor expenses and transcription services that were, in truth and fact, never incurred or paid; and (b) falsely inflated Schedule C expenses purportedly incurred by his medical practice, including travel and auto expenses, deductible meals and entertainment, and the amounts of wages paid to employees of his medical practice.  In addition, MARLA STEIN provided this accountant with (a) wholly fictitious Schedule C contract labor and advertising expenses purportedly incurred by her law practice but which were, in truth and fact, never incurred or paid; and (b) falsely inflated Schedule C expenses purportedly incurred by her law practice, including those for office supplies and deductible meals and expenses.

In addition to the foregoing, for the tax years 2007-2013, JEFFREY S. STEIN and MARLA STEIN failed to inform their accountant that they employed and paid approximately $15,000 annually in cash wages to a household employee (“the Domestic Employee”) who performed certain cleaning and childcare services in their Upper East Side home.

As a result of the falsely inflated and wholly fictitious information provided by JEFFREY S. STEIN and MARLA STEIN to their accountant in connection with the preparation of their Forms 1040 for the 2009-2012 tax years, the accountant prepared tax returns for JEFFREY S. STEIN and MARLA STEIN that falsely and fraudulently understated their business income and, consequently, the amount of taxes due and owing to the IRS.  In addition, as a result of the failure of JEFFREY S. STEIN and MARLA STEIN to inform their accountant of the cash wages paid to their Domestic Employee for the 2007-2013 tax years, JEFFREY S. STEIN and MARLA STEIN failed to pay to the IRS various employment taxes due and owing to the IRS, and also aided the Domestic Employee in avoiding detection by the IRS of the employee’s failure to report her cash wages to the IRS for the tax years 2007-2013.

Obstruction of the IRS Audit

In February 2013, the IRS notified JEFFREY S. STEIN and MARLA STEIN, the defendants, that their tax returns for the 2010 and 2011 tax years had been selected for audit, specifically with respect to their respective Schedule C expenses.  In response to requests by the IRS auditor for documents supporting their claimed deductions and expenses, JEFFREY S. STEIN and MARLA STEIN created and provided to their accountant – whom they retained to represent them during the audit – various fabricated and fictitious documents and information as part of a corrupt effort to convince the IRS auditor that the expenses claimed on their respective Schedules C were legitimate.

Among the fabricated and fictitious documents created by JEFFREY S. STEIN and MARLA STEIN and provided to their accountant, in order to pass on to the IRS auditor, were the following:

(a) Using the names of four disabled military veterans (including two former patients) whose identities and other personal information JEFFREY S. STEIN obtained as a result of his work for the V.A., JEFFREY S. STEIN created bogus invoices in the names of those veterans (“the Bogus Invoices”).  The Bogus Invoices falsely recited that the individuals whose names were contained on the invoices had performed during 2010 and 2011, and been paid by JEFFREY S. STEIN for, various medical services rendered to JEFFREY S. STEIN’s medical practice, such as “ultrasound technologist” and “vascular technologist” services.  In truth and fact, none of the individuals whose names were placed on the Bogus Invoices provided any of the services recited in the fabricated invoices, which totaled $126,525.  One of the veterans whose name and social security number were placed on a Bogus Invoice by JEFFREY S. STEIN was not even alive in 2011 – a year for which JEFFREY S. STEIN created a Bogus Invoice for that individual.

(b) JEFFREY S. STEIN created invoices purportedly sent to STEIN’s medical practice in 2010 and 2011 by a Long Island hospital (“the Hospital”) reflecting payments sought by the Hospital for “surgical physician assistant cost sharing,” which invoices JEFFREY S. STEIN claimed were paid by his medical practice.  In truth and fact, the services reflected in the Hospital invoices were never provided to JEFFREY S. STEIN and never paid by his medical practice as expenses.

(c) JEFFREY S. STEIN created invoices purportedly sent to STEIN’s medical practice in 2010 and 2011 by a company that provided transcription services.  In truth and fact, the transcription company identified by JEFFREY S. STEIN never provided any transcription services to JEFFREY S. STEIN’s medical practice.

(d) MARLA STEIN created certain documentation indicating that two individuals, whose names and purported tax identification numbers were included thereon, had provided certain services to MARLA STEIN’s law practice and had been paid fee income by MARLA STEIN as a result.  In truth and fact, neither of those individuals had provided services to MARLA STEIN’s law practice.  Instead, the individuals whose identities and social security numbers were used were those of the Domestic Employee and a medical professional who had performed services for a member of MARLA STEIN’s immediate family.

(e) Using genuine invoices previously provided to MARLA STEIN by photographers and a videographer who had performed services in connection with religious celebrations for MARLA STEIN’s family, MARLA STEIN used the names of the photographers and videographer but fraudulently altered the real invoices to make them appear as if the services reflected in the invoices had been provided to MARLA STEIN’s law practice, as part of her work on personal injury cases.

*                *                *                                          

In addition to prison terms, JEFFREY S. STEIN, 58, of New York, New York, and MARLA STEIN, 52, also of Manhattan, were also ordered to pay restitution to the IRS in the aggregate amount of $344,989.

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

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

Preet Bharara, the United States Attorney for the Southern District of New York, Diego Rodriguez, Assistant Director-in-Charge of the New York Field Office of the Federal Bureau of Investigation (“FBI”), and William J. Bratton, the Commissioner of the New York City Police Department (“NYPD”), announced the unsealing today of an Indictment charging 20 defendants with participating in a conspiracy to distribute large quantities of heroin and crack cocaine in the vicinity of Hoe Avenue and Aldus Street in the Bronx.  Six of the 20 defendants were also charged with possessing firearms in furtherance of the narcotics trafficking conspiracy.  Several of the defendants charged in the Indictment were involved in a recent shooting in which a member of the conspiracy used a handgun to fire shots at two individuals – who luckily were not struck by the gunfire – in front of an apartment building on Aldus Street.  Fifteen of the defendants named in the Indictment are in federal custody and are expected to be arraigned in Manhattan federal court before U.S. Magistrate Judge Henry Pitman.  Fourteen of those defendants were taken into federal custody today, and one was already in federal custody on a separate criminal case pending in Manhattan federal court.

 Manhattan U.S. Attorney Preet Bharara said: “As alleged, the twenty defendants charged today were part of a dangerous drug trafficking crew that terrorized a Bronx neighborhood by peddling heroin and crack cocaine in apartment buildings with families and children, just a block from a public school.  As the indictment alleges, this crew protected its turf with guns, not afraid to shoot at people in front of a Bronx apartment building, as one of the defendants is alleged to have done in May.  Thanks to the outstanding work of the FBI and the NYPD, the residents of that Bronx neighborhood are safer today.”

FBI Assistant Director-in-Charge Diego Rodriguez said: “The FBI remains committed to protecting our community by targeting and removing violent drug distributors and their guns from our neighborhoods.  As alleged herein, the defendants committed their illegal acts near a school and surrounded by families.  With no regard for innocent lives, they brazenly carried and fired their weapons on crowded New York City streets.  We thank the New York City Police Department and the United States Attorney's Office for sharing our commitment through solid partnerships and strong joint investigations.”

NYPD Commissioner Bratton said: “There is no place in our communities for narcotics trafficking and the violence associated with this criminal enterprise.  I would like to commend the NYPD investigators, the agents of the FBI, and the prosecutors of the U.S. Attorney’s Office whose work in this investigation brought these individuals to justice.”

As alleged in the Indictment and other court documents unsealed today in Manhattan federal court***:

From May 2014 through July 2015, the twenty defendants named in the Indictment – specifically, RAFAEL OJEDA, 51, CALVIN OJEDA, 24, JONATHAN OJEDA, 22, SERVANDO JOSE GOMEZ, 41, HECTOR TIRADO, 22, TRAVIS PROFIT, 28, ANGEL SEPULVEDA, 35, EDUARDO VAZQUEZ, 23, JASON PEREZ, 24, TREVIS BOWENS, 25, JHOVY DIONIZIO, 27, CHRISTIAN DUMES, 33, CHRISTIAN RAMOS, 26, PAQUITO RODRIGUEZ, 56, GISETTE RIVERA, 56, SAMUEL PALMER, 20, JOSE COLON, 48, ANTOINE HENDERSON, 28, ADRIEL PONCE, 25, and CHRISTOPHER RICHARDSON, 22 – participated in a conspiracy to sell controlled substances, including heroin and crack cocaine, in the vicinity of Hoe Avenue in the Bronx.  Specifically, the Indictment charges these twenty defendants with conspiring to distribute and possess with intent to distribute at least one kilogram of mixtures and substances containing a detectable amount of heroin and an unspecified quantity of mixtures and substances containing cocaine base in a form commonly known as “crack.”  Six of the twenty defendants – namely, CALVIN OJEDA, JONATHAN OJEDA, GOMEZ, PROFIT, VAZQUEZ and PEREZ – are also charged with possessing firearms in furtherance of the narcotics trafficking conspiracy.

During the time period charged in the Indictment, members of the conspiracy sold large quantities of heroin and crack in the vicinity of Hoe Avenue in the Bronx, about one city block from a public school.  Members of the conspiracy sold heroin and crack from stairwells and other common areas in apartment buildings where families with children reside, and in private apartments that have been converted into drug stash houses in such buildings, among other locations.  Multiple members of the conspiracy used firearms in connection with their narcotics trafficking.  On or about May 29, 2015, several of the defendants charged in the Indictment were involved in a shooting in which one of the defendants used a handgun to fire shots at two people in front of an apartment building on Aldus Street.

*          *          *

Of the twenty defendants named in the Indictment, the fourteen defendants charged only with participating in the narcotics trafficking conspiracy face mandatory minimum prison terms of 10 years and maximum prison terms of life.  The remaining six defendants, who are charged both with participating in the narcotics trafficking conspiracy and also with possession of firearms in furtherance of that conspiracy, face mandatory minimum prison terms of fifteen years and maximum prison terms of life.  The statutory maximum sentences are prescribed by Congress and are provided here for informational purposes only, as any sentences imposed on the defendants will be determined by the Court.

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

The prosecution is being handled by the Office’s Narcotics Unit.  Assistant United States Attorneys Samson Enzer 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.

###

15 Cr. 487 (GBD).

CHARGE(S)

DEFENDANTS

MAXIMUM PENALTIES

Conspiracy to distribute and possess with intent to distribute one kilogram and more of heroin, and an unspecified quantity of crack cocaine

All twenty of the defendants named in the Indictment:

RAFAEL OJEDA

CALVIN OJEDA

JONATHAN OJEDA

SERVANDO JOSE GOMEZ

HECTOR TIRADO

TRAVIS PROFIT

ANGEL SEPULVEDA

EDUARDO VAZQUEZ

JASON PEREZ

TREVIS BOWENS

JHOVY DIONIZIO

CHRISTIAN DUMES

CHRISTIAN RAMOS

PAQUITO RODRIGUEZ

GISETTE RIVERA

SAMUEL PALMER

JOSE COLON

ANTOINE HENDERSON

ADRIEL PONCE

CHRISTOPHER RICHARDSON

Life in prison

Mandatory minimum: 10 years in prison

Possession of firearms in furtherance of the above-referenced narcotics conspiracy

Six of the twenty defendants named in the Indictment:

CALVIN OJEDA

JONATHAN OJEDA

SERVANDO JOSE GOMEZ

TRAVIS PROFIT

EDUARDO VAZQUEZ

JASON PEREZ

Life in prison

Mandatory minimum: 5 years in prison, to be imposed consecutively to any other sentence

***As the introductory phrase signifies, the text of the Indictment and other court papers referenced herein, and the description of those materials 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 today that RYAN TOMAZIN, the founder and managing partner of R2 Capital Group LLC (“R2 Capital”), pled guilty in Manhattan federal court to a two-count Indictment charging him with defrauding investors and misappropriating investment funds.  TOMAZIN and other principals at R2 Capital caused over $850,000 of investors’ funds to be withdrawn from bank accounts associated with the commodity pool and directed to bank accounts held in their own names or that of their respective holding companies.  TOMAZIN was arrested on December 11, 2014 and pled guilty today before United States District Judge Paul A. Crotty.

Manhattan U.S. Attorney Preet Bharara said:  “As Ryan Tomazin acknowledged today by pleading guilty to securities and commodities fraud, he lied to investors and used his company to line his own pockets with investors’ money.”

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

In late 2009, R2 Capital created a commodity pool, R2 Capital Partners I L.P. (the “Commercial Pool”) and began to solicit investors, eventually raising approximately $2.2 million.  In early 2010, TOMAZIN solicited a potential investor in the Commercial Pool (“Investment Fund-1”) and provided Investment Fund-1 with documentation that stated, among other things, that R2 Capital would receive a management fee limited to 50% of the profits earned by the Commercial Pool.  Investment Fund-1 invested over $1 million in the Commercial Pool.  From June 2010 up to and including July 2011, the Commercial Pool experienced significant net losses.  In July 2011, all trading activity in the Commercial Pool ceased.  By August 2011, there was less than $5,000 remaining in bank accounts associated with the Commercial Pool.  Nonetheless, between August 2011 and March 2013, TOMAZIN caused false “Trading Statements” to be sent to Investment Fund-1 reflecting false purported monthly trading profits and inaccurate trade balances.  Furthermore, contrary to prior representations that R2 Capital’s management fee would be limited to 50% of profits earned, TOMAZIN and other principals at R2 Capital caused approximately $850,000 to be withdrawn from bank accounts associated with the Commercial Pool for their own personal benefit.

*                *                *

TOMAZIN, 35, of Stamford, Connecticut, pled guilty to one count of securities fraud and one count of commodities fraud.  The securities fraud charge carries a maximum term of 20 years in prison and a maximum fine of $5 million, or twice the gross gain or loss from the offense.  The commodities fraud charge carries a maximum term of 10 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.  As part of the plea agreement, TOMAZIN agreed to pay forfeiture and restitution to the victims of the offense in the amount of $288,000.  TOMAZIN is scheduled to be sentenced by Judge Crotty on December 3, 2015.

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 thanked U.S. Commodity Futures Trading Commission for their assistance with the investigation.

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

Preet Bharara, the United States Attorney for the Southern District of New York,   announced that JONATHAN LYONS, a former sales representative at a company purporting to provide mortgage modification services, pled guilty yesterday in Manhattan federal court for his role in a multimillion-dollar scheme that victimized more than 500 financially struggling homeowners across the country.  LYONS, who was arrested in October 2013, pled guilty before U.S. District Judge George B. Daniels.

Manhattan U.S. Attorney Preet Bharara said:  “Through his plea, Jonathan Lyons acknowledged his role in a multimillion dollar scheme that targeted and victimized hundreds of desperate, financially vulnerable homeowners weighed down by debt.  We thank our partners, including the Special Inspector General for the Troubled Asset Relief Program, the Federal Bureau of Investigation, and the New York State Office of the Attorney General for their role in bringing Lyons to justice.”

According to the allegations contained in the Indictment and related Informations, the plea agreements, and statements made in court proceedings:

From approximately January 2009 to June 2011, LYONS and his co-conspirators perpetrated a scheme to defraud homeowners who were in danger of losing their homes because they could not afford to pay their residential mortgages.  Through a company located in Long Island, New York (“Company-1”), and its successor companies (the “Mortgage Modification Companies”), LYONS, his co-conspirators, and other employees falsely promised to help financially struggling residential mortgage holders refinance their mortgages for lower interest rates and monthly payments.  Despite the defendants’ claims, however, the Mortgage Modification Companies delivered little or no service to their customers, diverting most, if not all, of the customers’ payments to the Mortgage Modification Companies’ owners and employees rather than using those funds to assist customers in procuring mortgage modifications.  Through their scheme, the Mortgage Modification Companies obtained at least $2.3 million from more than 500 homeowners throughout the United States.

The Mortgage Modification Companies charged customers thousands of dollars in up-front fees—in violation of New York State law—and made fraudulent claims about the companies’ services, including that the Mortgage Modification Companies guaranteed that they would either: (i) secure a mortgage modification that would result in a significant reduction in the customer’s interest rate and/or monthly payments; or (ii) provide the customer’s money back.  Through the Mortgage Modification Companies, the defendants and other employees also falsely claimed to be affiliated with the federal government’s Home Affordable Modification Program (“HAMP”), a federally-funded mortgage assistance program that is part of the Troubled Asset Relief Program and is available to homeowners free of charge.

The Mortgage Modification Companies targeted homeowners who had fallen behind, or were in danger of falling behind, in making mortgage payments on their homes.  LYONS and two other company sales representatives, AREN GOLDFADEN and DARRELL KEYS, spoke to hundreds of struggling homeowners on behalf of the Mortgage Modification Companies, repeatedly making materially false or misleading representations to convince these prospective clients to pay upfront fees to the companies.  The false or misleading representations included that the Mortgage Modification Companies were associated with HAMP; that a mortgage modification was guaranteed and would take only approximately thirty to sixty days; and that the Mortgage Modification Companies would issue a full refund of the upfront fee to any client whose mortgage was not successfully modified in the stated time period.  ANTHONY BLACKWELL, who held himself out as an attorney for the Mortgage Modification Companies, despite not having a valid law license for most of the relevant period, and ANGEL GONZALEZ, a sales manager who was involved in training sales representatives, instructed the companies’ sales representatives on how to lie to customers and routinely refused to provide refunds to customers despite the fact that those customers did not obtain mortgage modifications as promised.

BLACKWELL and GONZALEZ also personally met with and spoke directly to customers and told similar lies.  They sought to cover up their fraudulent scheme by, among other things, directing sales representatives to assuage customers by falsely claiming that work was being done on the customer’s behalf and that the company just needed more time to obtain a mortgage modification, when, in fact, little or no work was being done to provide a mortgage modification to the customers.

*              *             *

LYONS, 53, of Rockville Center, New York, pled guilty to one count of conspiracy to commit wire fraud, and faces 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.  LYONS is scheduled to be sentenced on by Judge Daniels on January 7, 2016.

BLACKWELL, GOLDFADEN, GONZALEZ, and KEYS also each pled guilty to one count of conspiracy to commit wire fraud.  BLACKWELL, 49, of Manhattan, New York, pled guilty before Judge Daniels on July 8, 2015, and is scheduled to be sentenced on November 5, 2015.  GOLDFADEN, 38, of East Rockaway, pled guilty before Judge Daniels on June 1, 2015, and is scheduled to be sentenced on October 15, 2015.  GONZALEZ, 33, of Rosedale, New York, pled guilty before Judge Daniels on March 5, 2015.  KEYS, 52, of Uniondale, New York, pled guilty before U.S. District Judge Robert W. Sweet on September 19, 2013.

In addition, a founder and co-owner of Company-1, SCOTT SCHREIBER, 32, of Brooklyn, New York, pled guilty for his role in the offense to one count of conspiracy to commit wire fraud and one count of wire fraud, before the late U.S. District Judge Robert P. Patterson on October 16, 2013.  SCHREIBER’s case is now before U.S. District Judge Loretta A. Preska.  Sentencing dates have not yet been set for GONZALEZ, KEYS or SCHREIBER.

            Mr. Bharara praised the Special Inspector General for the Troubled Asset Relief Program and the Federal Bureau of Investigation for their outstanding work in the investigation.  Mr. Bharara also thanked the New York State Office of the Attorney General for its assistance.

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 matter is being handled by the Office’s Complex Frauds and Cybercrime Unit.  Assistant U.S. Attorneys Janis Echenberg and Daniel Tehrani are in charge of the case.

            Preet Bharara, the United States Attorney for the Southern District of New York, announced today that DIMITRY BRAVERMAN, a former senior information systems engineer at a prominent national law firm, was sentenced to 24 months in prison for insider trading.  Specifically, BRAVERMAN repeatedly used material nonpublic information concerning planned merger and acquisition activity of at least eight clients of the law firm to acquire stocks and options, resulting in profits of more than $300,000.  BRAVERMAN was originally charged in September 2014, and he was sentenced today by the Honorable Paul A. Engelmayer, United States District Judge.

            U.S. Attorney Preet Bharara said: “Taking advantage of confidential, market-moving information that he got from his work at a major law firm, Dimitry Braverman made more than $300,000 in ill-gotten gains.  Braverman’s sentencing today concludes yet another illegal insider trading scheme brought to light by the efforts of the Federal Bureau of Investigation and the Securities and Exchange Commission, working closely with securities prosecutors in my office.”

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

            From at least in or about September 2010 through December 2013, BRAVERMAN was engaged in an insider trading scheme. BRAVERMAN, who was a senior information systems engineer at a national, full-service law firm, had access to financial and billing databases of the firm, including information about, among other things, the law firm’s clients’ potential merger and acquisition activity, as well as information about the identities of the other parties to the potential deals.

Between about 2010 and 2011, BRAVERMAN engaged in at least four trades that were based on inside information concerning potential mergers and acquisition activity of clients of the law firm.  In April 2011, however, BRAVERMAN closed out the last of these trades on the same day that another employee of the law firm, Matthew Kluger, was arrested on separate insider trading charges. In November 2012, BRAVERMAN opened a new brokerage account in the name of a relative living in Russia, and continued trading on the basis of inside information he obtained from the law firm.  Specifically, between November 2012 and December 2013, BRAVERMAN engaged in at least four additional trades based on inside information. In total, BRAVERMAN made more than approximately $300,000 in profits from the trades between 2010 and December 2013.

                                                            *                      *                      *

            BRAVERMAN, 42, of San Mateo, California, pled guilty to one count of securities fraud on November 13, 2014.  BRAVERMAN was also sentenced to two years of supervised release, with 100 hours of community service.

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

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. Attorney Amy Lester is in charge of the prosecution.  

Preet Bharara, the United States Attorney for the Southern District of New York, James R. Farrell, the Sullivan County District Attorney, Diego Rodriguez, the Assistant Director-in-Charge of the New York Field Division of the Federal Bureau of Investigation (“FBI”), Raymond Parmer Jr., the Special Agent in Charge of the Homeland Security Investigations New York, Joseph A. D’Amico, the Superintendent of the New York State Police (“NYSP”), Michael A. Schiff, the Sullivan County Sheriff, Robert Mir, the Chief of the Village of Monticello Police Department, and Scott Kinne, the Chief of the Village of Liberty Police today announced the unsealing of nine Indictments charging a total of 34 defendants with committing various narcotics and firearms offenses in Sullivan County, New York.

Manhattan U.S. Attorney Preet Bharara said: “With the coordinated narcotics and firearms charges brought today, we seek to neutralize at least four different drug rings that allegedly have been selling massive amounts of heroin and crack cocaine for years.  The devastating impact that this type of drug dealing can have on the small, rural communities like those in Sullivan County cannot be overstated.  Heroin is back, with a vengeance, but so are we.  The law enforcement effort today is the product of remarkable cooperation among federal, state and local agencies and I thank all of our partners.”

Sullivan County District Attorney James R. Farrell said: “Sullivan County, like the rest of our country, is not immune from the scourge of heroin and other dangerous narcotics and the threats they pose to our rural community.  These drugs destroy lives, rip apart families and fuel a cycle of violence in our communities that threatens our safety and security.  Today, in close collaboration and partnership with our federal law enforcement counterparts, we have disrupted, dismantled, and put out of business significant heroin and crack cocaine trafficking operations in Sullivan County.  Over the last year, this joint investigation, involving local, state, county and federal assets, has concentrated on local dealers and local suppliers of heroin and crack cocaine.  The successful partnership that has been forged will continue moving forward, unabated. Individuals who engage in these dangerous criminal activities, and import and distribute dangerous narcotics like crack cocaine and heroin, should take notice: all of our law enforcement resources are committed to protecting our community, targeting those who put our safety in danger and holding those people accountable and responsible for their criminal acts. ”

FBI Assistant Director-in-Charge Diego Rodriguez said: “Today’s charges describe alleged conspiracies to distribute crack and heroin in and around Monticello and other locations in Sullivan County. Infecting our neighborhoods with drugs peddled by criminals who arm their sales force with guns is a violent and dangerous combination. We’re here today to let the good people of Sullivan County know their streets are safer, their families are safer, and we’re one step closer to eliminating the drugs and violence that threaten the future and stability of their community.”

Homeland Security Investigations Special Agent in Charge Raymond Parmer Jr. said: “Today’s arrests help  make the neighborhoods of Sullivan County a much safer place for its residents by taking violent drug dealers and other criminals off its streets. HSI will continue working with our law enforcement partners using every tool at our disposal to dismantle ruthless criminal organizations such as these.”

NYSP Superintendent Joseph A. D’Amico said: “The hard work and partnership between federal, state, county and local law enforcement are responsible for putting a stop to these drug operations. Thirty-four dangerous people are off the streets today, responsible for selling and distributing crack cocaine and heroin for money and firearms in and around Sullivan County. The State Police will continue to work closely with our law enforcement partners to make sure our neighborhoods are safe and the individuals who engage is this illegal activity are held accountable.”

Sullivan County Sheriff Michael A. Schiff said: “Today’s arrests are a clear indication of our resolve to address the drug epidemic that has besieged our community. Even though Sullivan County is the smallest population in the Southern District of New York, I would like to thank the U.S. Attorney’s Office and the Federal Bureau of Investigation for committing significant resources to our situation. We will continue to partner with federal, state and local agencies and use every tool at our disposal. All of the law enforcement agencies involved in this case should be commended for the outstanding job they have done.”

Village of Monticello Police Chief Robert Mir said: “I’m very appreciative and proud of the hard work of the law enforcement professionals that dedicated themselves to this operation. We have formed excellent working relationships with the U.S. Attorney’s Office, the FBI, Sullivan County District Attorney’s Office, New York State Police, Sullivan County Sheriff’s Office and the Liberty Police Department. The success of this mission would not have been possible had it not been for our collective resources. The arrests of these 34 individuals will make a significant dent in the criminal underworld of Sullivan County. The actions of those charged have been driving the violence and drug epidemic that have brought blight on our communities. Thanks to this concerted and continuing effort, we are creating a much safer place to live.”

Village of Liberty Police Chief Scott Kinne said: “This type of partnership and sharing of investigative resources is a necessity in modern day law enforcement, and the arrests of these individuals attests to this. I would like to thank all of the agencies that participated in this operation to help investigate, arrest, and prosecute these individuals who fueled crime and violence in our communities.”

 As alleged in the Indictments unsealed today in White Plains federal court***

United States v. Errol Davis, et al., 15 Cr. 468

Between 2012 and 2015, ERROL DAVIS, a/k/a “MI,” 34, JAHMAL MCINTOSH, a/k/a “Blood,” 30, DARNELL SAUNDERS, a/k/a “Big D,” 36, CANDICE BROOKS, 30, ALFRED FRANKLIN, a/k/a “Junior,” 30, DEREK MOORER, a/k/a “D Moore,” 34, SCOTT MUSGRAVE, a/k/a “S,” 31, SAM REED, a/k/a “Elmo,” 25, JULIO RENTA, a/k/a “Tank,” 26, JAMES WILKES, a/k/a “Diamond,” 38, and SEAN YORK, a/k/a “Boogie,” 41, conspired to sell 280 grams or more of crack cocaine and 100 grams or more of heroin.  The conspiracy was led, at different times, by DAVIS, MCINTOSH, and SAUNDERS.  Members of the conspiracy distributed crack and heroin in and around Monticello and other locations in Sullivan County.

In October 2014, REED used and carried a firearm during and in relation to, and possessed a firearm in furtherance of, the narcotics conspiracy charged in the Indictment.

United States v. Damon Mitchell Sr., et al., 15 Cr. 463

Between 2013 and 2015, DAMON MITCHELL SR., a/k/a “Trip,” 40, LUIS GONZALEZ, 31, JULIO MARTINEZ, 36, KYRA MATAN, 33, PERNELL MOORE, a/k/a “Dog,” 48, HARMEEN NIX, a/k/a “Hollow,” 34, RAMON NUNEZ, a/k/a “Wellington,” 35, RONALD RIVERA, a/k/a “RJ,” 26, TYRELL SIMON, a/k/a “Shmeez,” 26, and GEORGE VEGA JR., a/k/a “Pito,” 29, conspired to sell one kilogram or more of heroin.  MITCHELL, NIX, and NUNEZ served as sources of heroin supply to the conspiracy.  The conspiracy was centered in Monticello, and members of the conspiracy distributed heroin in and around Sullivan County.  MARTINEZ, MATAN, MOORE, RIVERA, SIMON, and VEGA distributed heroin in furtherance of the conspiracy.  GONZALEZ helped NUNEZ transport and supply heroin to the conspiracy.

Between 2013 and 2015, RIVERA and SIMON each used and carried a firearm during and in relation to, and possessed a firearm in furtherance of, the narcotics conspiracy charged in the Indictment.

In the summer of 2014, MOORE possessed a firearm after having been convicted of a felony.

United States v. Darcy Copeland, et al., 15 Cr. 465

Between 2011 and 2015, DARCY COPELAND, a/k/a “Moey,” 33, JENILYN BOYCE, a/k/a “JL,” 31, PRISCILLA FRANKLIN, 33, and JERRELL CLARK, a/k/a “Rell,” 30, conspired to sell one kilogram or more of heroin.  The conspiracy was based in Monticello and led by COPELAND.  COPELAND distributed heroin to other drug dealers for resale, and on multiple occasions received firearms as payment for heroin.  Since July 2014, COPELAND has been incarcerated on a state charge and has continued to maintain the drug distribution conspiracy while incarcerated.  BOYCE distributed heroin for COPELAND and has helped him maintain his drug distribution operation while he is incarcerated. FRANKLIN and CLARK have also distributed heroin for COPELAND.

Between 2011 and 2015, COPELAND used and carried firearms during and in relation to, and possessed firearms in furtherance of, the narcotics conspiracy charged in the Indictment.

United States v. Frederick Gang, et al., 15 Cr. 471

Between 2007 and 2015, FREDERICK GANG, 55, APRIL WATSON, a/k/a “Nee Nee,” 30, and TYRONE HAGANS, a/k/a “Dirty T,” 38, conspired to sell 280 grams or more of crack cocaine.  The conspiracy was based in Monticello and led by GANG.  GANG supplied crack to other drug dealers for resale.  WATSON maintained crack for GANG at her residence on Wood Avenue in Monticello and distributed crack in furtherance of the conspiracy.  HAGANS distributed crack in furtherance of the conspiracy.

Between 2012 and 2013, WATSON used and carried firearms during and in relation to, and possessed firearms in furtherance of, the narcotics conspiracy charged in the Indictment.

United States v. Raheim Bolden, 15 Cr. 466

Between 2013 and 2015, RAHEIM BOLDEN, a/k/a “Red,” 32, conspired to sell 280 grams or more of crack cocaine.

United States v. Michael Hughes Jr., 15 Cr. 467

On January 10, 2015, MICHAEL HUGHES JR., 20, sold heroin.  On February 6, 2015, HUGHES sold heroin and used and carried a firearm during and in relation to, and possessed a firearm in furtherance of, the sale of heroin.

United States v. Charles Gonzales, 15 Cr. 469

On May 5, 2015, CHARLES GONZALES, 39, possessed a firearm after having had three previous convictions for a violent felony or a serious drug offense.

United States v. Lamont McNeal and Gualberto Roman, Jr., 15 Cr. 470

On November 17, 2014, LAMONT MCNEAL, a/k/a “Ferl,” 42, possessed a firearm after having been convicted of a felony, and GUALBERTO ROMAN, JR., a/k/a “Bizzy Bert,” 31, possessed a firearm that had the manufacturer’s serial number obliterated.

United States v. Deon Morgan, 15 Cr. 464

 On April 29, 2015, DEON MORGAN, 29, possessed a firearm after having been convicted of a felony.

*                      *                     *

32 of the 34 defendants are now in federal custody.  The defendants will be presented in White Plains federal court today before U.S. Magistrate Judge Judith C. McCarthy and U.S. Magistrate Judge Paul E. Davison.

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 New York State Police, the Sullivan County Sheriff’s Department, the Village of Monticello Police Department, the Village of Liberty Police Department, the Town of Fallsburg Police Department, the Department of Homeland Security, the United States Marshals Service, the Bureau of Alcohol, Tobacco, Firearms, and Explosives, and the Orange County Sheriff’s Office.  Mr. Bharara also thanked the Sullivan County District Attorney’s Office for its ongoing assistance in the case.

These cases are being handled by the Office’s White Plains Division.  Assistant United States Attorneys Michael Gerber, Max Nicholas, Won Shin, and Jennifer Beidel are in charge of the prosecutions.

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

###

United States v. Errol Davis, et al., 15 Cr. 468

CHARGE(S)

DEFENDANT(S)

MAXIMUM PENALTIES

Narcotics conspiracy

(Conspiracy to distribute and possess with intent to distribute 280 grams or more of crack cocaine and 100 grams or more of heroin.)

ERROL DAVIS,    a/k/a “MI,”
JAHMAL MCINTOSH,    a/k/a “Blood,”
DARNELL SAUNDERS,    a/k/a “Big D,”
CANDICE BROOKS, ALFRED FRANKLIN,    a/k/a “Junior,”
DEREK MOORER,    a/k/a “D Moore,”
SCOTT MUSGRAVE,    a/k/a “S,”
SAM REED,    a/k/a “Elmo,”
JULIO RENTA,    a/k/a “Tank,”
JAMES WILKES,    a/k/a “Diamond,” and
SEAN YORK,    a/k/a “Boogie”

Life in prison

Mandatory minimum: 10 years in prison

Possession of a firearm in furtherance of a drug trafficking crime

SAM REED,    a/k/a “Elmo”

Life in prison

Mandatory minimum: five years in prison, to be imposed consecutively to any other sentence

United States v. Damon Mitchell Sr., et al., 15 Cr. 463

CHARGE(S)

DEFENDANT(S)

MAXIMUM PENALTIES

Narcotics conspiracy

(Conspiracy to distribute and possess with intent to distribute one kilogram or more of heroin.)

DAMON MITCHELL SR.,    a/k/a “Trip,”
LUIS GONZALEZ, JULIO MARTINEZ, KYRA MATAN, PERNELL MOORE,    a/k/a “Dog,”
HARMEEN NIX     a/k/a “Hollow,”
RAMON NUNEZ,    a/k/a “Wellington,”
RONALD RIVERA,    a/k/a “RJ,”
TYRELL SIMON,    a/k/a “Shmeez,” and
GEORGE VEGA JR.,    a/k/a “Pito”

Life in prison

Mandatory minimum: 10 years in prison

Possession of a firearm in furtherance of a drug trafficking crime

RONALD RIVERA,    a/k/a “RJ,” and
TYRELL SIMON,    a/k/a “Shmeez”

Life in prison

Mandatory minimum: five years in prison, to be imposed consecutively to any other sentence

Possession of a firearm after having been convicted of a felony

PERNELL MOORE,    a/k/a “Dog”

10 years in prison

United States v. Darcy Copeland, et al., 15 Cr. 465

CHARGE(S)

DEFENDANT(S)

MAXIMUM PENALTIES

Narcotics conspiracy

(Conspiracy to distribute and possess with intent to distribute one kilogram or more of heroin.)

DARCY COPELAND,    a/k/a “Moey,”
JENILYN BOYCE,    a/k/a “JL,”
PRISCILLA FRANKLIN, and
JERRELL CLARK,    a/k/a “Rell,”

Life in prison

Mandatory minimum: 10 years in prison

Possession of a firearm in furtherance of a drug trafficking crime

DARCY COPELAND,    a/k/a “Moey”

Life in prison

Mandatory minimum: five years in prison, to be imposed consecutively to any other sentence

United States v. Frederick Gang, et al., 15 Cr. 471

CHARGE(S)

DEFENDANT(S)

MAXIMUM PENALTIES

Narcotics conspiracy

(Conspiracy to distribute and possess with intent to distribute 280 grams or more of crack cocaine.)

FREDERICK GANG, APRIL WATSON,    a/k/a “Nee Nee,”
TYRONE HAGANS,    a/k/a “Dirty T,” and
RAHEIM BOLDEN,    a/k/a “Red”

Life in prison

Mandatory minimum: 10 years in prison

Possession of a firearm in furtherance of a drug trafficking crime

APRIL WATSON,    a/k/a “Nee Nee”

Life in prison

Mandatory minimum: five years in prison, to be imposed consecutively to any other sentence

United States v. Raheim Bolden, 15 Cr. 466

CHARGE(S)

DEFENDANT(S)

MAXIMUM PENALTIES

Narcotics conspiracy

(Conspiracy to distribute and possess with intent to distribute 280 grams or more of crack cocaine.)

RAHEIM BOLDEN,    a/k/a “Red”

Life in prison

Mandatory minimum: 10 years in prison

United States v. Michael Hughes Jr., 15 Cr. 467

CHARGE(S)

DEFENDANT(S)

MAXIMUM PENALTIES

Distribution and possession with intent to distribute heroin

MICHAEL HUGHES JR. (two counts)

20 years in prison

Possession of a firearm in furtherance of a drug trafficking crime

MICHAEL HUGHES JR.

Life in prison

Mandatory minimum: five years in prison, to be imposed consecutively to any other sentence

United States v. Charles Gonzales, 15 Cr. 469

CHARGE(S)

DEFENDANT(S)

MAXIMUM PENALTIES

Possession of a firearm after having had three previous convictions for a violent felony or a serious drug offense

CHARLES GONZALES

Life in prison

Mandatory minimum: 15 years in prison

United States v. Lamont McNeal and Gualberto Roman, Jr., 15 Cr. 470

CHARGE(S)

DEFENDANT(S)

MAXIMUM PENALTIES

Possession of a firearm after having been convicted of a felony

LAMONT MCNEAL,    a/k/a “Ferl”

10 years in prison

Possession of a firearm that had the manufacturer’s serial number obliterated

GUALBERTO ROMAN, JR.,    a/k/a “Bizzy Bert”

5 years in prison

United States v. Deon Morgan, 15 Cr. 464

CHARGE(S)

DEFENDANT(S)

MAXIMUM PENALTIES

Possession of a firearm after having been convicted of a felony

DEON MORGAN

10 years in prison

Preet Bharara, the United States Attorney for the Southern District of New York, and Judith Enck, Regional Administrator of the U.S. Environmental Protection Agency (“EPA”), announced today that the United States has filed a civil lawsuit against Accolade Construction Group Inc. (“Accolade”), alleging that Accolade repeatedly violated provisions of the Toxic Substances Control Act (“TSCA”) and EPA’s Renovation, Repair, and Painting Rule (“RRP Rule”).  The provisions violated by Accolade are designed to protect public health by minimizing the risk of lead exposure during renovations of residential buildings.

Manhattan U.S. Attorney Preet Bharara said:  “As alleged in the complaint, Accolade has repeatedly violated rules designed to protect children and others from lead poisoning during renovation of residential buildings.  The complaint demonstrates a blatant disregard by Accolade of its responsibilities, and the public health.  Through this lawsuit, we aim to protect the public from future violations and ensure that Accolade does not keep the money it took for work that allegedly skirted the law and put people at risk.”

EPA Regional Administrator Judith Enck stated:  “Exposure to lead-based paint and paint dust is the leading cause of lead poisoning in the country.  Lead is extremely toxic and even low levels of lead in children’s blood affect their IQ and ability to learn.  Time after time, this company has violated EPA regulations designed to protect people from lead exposure and, in doing so, has shown little regard for the health of people in buildings they were renovating or for their own workers.”

The lawsuit alleges that in the course of renovating six different Manhattan apartment buildings in 2013 and 2014, Accolade violated the TSCA and the RRP Rule by failing to hire renovators trained and certified in lead-safe renovation work practices, failing to seal off renovation work areas to prevent lead from contaminating other apartments or common areas, and failing to warn building owners and occupants of the risks of lead exposure from its renovations.  Accolade also violated the TSCA and the RRP Rule by failing to provide EPA with the records required by the regulations to enable EPA to monitor Accolade’s compliance.

Accolade had previously entered into an administrative Consent Agreement and Final Order with EPA to settle other TSCA and RRP Rule violations.  As part of that settlement, Accolade agreed to obey the law in the future.  Despite that agreement, Accolade went on to commit additional violations of the same laws designed to prevent lead poisoning.       

*          *         *

The Complaint filed by the United States seeks an order enjoining Accolade from conducting further renovation work until it demonstrates compliance with the TSCA and the RRP Rule and a permanent injunction compelling Accolade to comply with the TSCA and the RRP Rule in the future.  The United States also seeks the proceeds received by Accolade for renovation work on jobs in which it failed to comply with TSCA and the RRP Rule.

This case is being handled by the Office’s Environmental Protection Unit.  Assistant U.S. Attorney Mónica P. Folch is in charge of the case.

###

Preet Bharara, the United States Attorney for the Southern District of New York, announced that BRIAN FANELLI, the former Chief of the Mount Pleasant, New York, Police Department, pled guilty today to one count of possession of child pornography.  FANELLI, who was arrested in January 2014, entered his plea before United States District Judge Kenneth M. Karas.

Manhattan U.S. Attorney Preet Bharara stated:  “By his guilty plea to downloading and possessing child pornography, Brian Fanelli, a former police chief who swore to protect and serve, admitted to a crime that victimizes and exploits some of the most vulnerable in our community.” 

According to the Complaint and Indictment:

From at least as early as October 2013, through January 2014, FANELLI used a Peer-to-Peer File Sharing Program (“the “P2P Network”) to download more than 120 files containing images and videos believed to be child pornography; certain of those files were made available to other P2P Network users through FANELLI’s computer’s shared folder on the P2P Network program.  On three occasions, agents with the Department of Homeland Security (“DHS”), Homeland Security Investigations (“HSI”), acting in an undercover capacity, used the P2P Network to download from FANELLI’s computer files containing images and videos believed to contain child pornography.           

*                      *                      *

FANELLI, 56, of Mahopac, New York, pled guilty to one count of possessing child pornography, which carries a maximum sentence of 10 years in prison.  The count also carries a maximum fine of $250,000 or twice the gross gain or loss from the offense.  The statutory maximum penalty is prescribed by Congress and is provided here for informational purposes only, as any sentencing will be determined by the judge.

Mr. Bharara praised the outstanding investigative work of the Department of Homeland Security.

HSI encourages the public to report suspected child predators and any suspicious activity through its toll-free hotline at 1-866-DHS-2ICE. Investigators staff this hotline around the clock. Suspected child sexual exploitation or missing children may also be reported to the National Center for Missing and Exploited Children, an Operation Predator partner, at 1-800-843-5678 or http://www.cybertipline.com.

The prosecution is being overseen by the Office’s White Plains Division and the Public Corruption Unit.  Assistant United States Attorneys Anden F. Chow and Andrew D. Goldstein are in charge of the prosecution.

###

“Public corruption is a scourge.  Every New Yorker wants us to work as hard as possible to end it.  But lies to law enforcement make the job of fighting corruption doubly difficult.  Today, a jury unanimously found that Tom Libous, the second highest ranking New York Senator, told lie after lie to hide the truth from federal agents investigating corruption in Albany.  Libous’s lies have been exposed, his crime has been proven, and Albany will be the better for it.”

Preet Bharara, United States Attorney for the Southern District of New York, announced today that New York State Senator THOMAS W. LIBOUS was found guilty of making false statements to the Federal Bureau of Investigation (“FBI”) following a seven-day trial in White Plains before the Hon. Vincent L. Briccetti, United States District Judge.

Manhattan U.S. Attorney Preet Bharara said:  “Public corruption is a scourge. Every New Yorker wants us to work as hard as possible to end it.  But lies to law enforcement make the job of fighting corruption doubly difficult.  Today, a jury unanimously found that Tom Libous, the second highest ranking New York Senator, told lie after lie to hide the truth from federal agents investigating corruption in Albany.  Libous’s lies have been exposed, his crime has been proven, and Albany will be the better for it.”

The evidence at trial proved that a federal grand jury in White Plains was investigating allegations that THOMAS LIBOUS had obtained a job for a family member at a Westchester law firm (“the Law Firm”) in exchange for a promise to refer business to the firm, and had arranged for an Albany lobbying firm that regularly lobbied him to secretly pay the law firm $50,000 per year to defray the cost of the family member's salary and lease of a Range Rover.  The lobbying firm specialized in transportation issues and THOMAS LIBOUS served as the Chairman of the Senate's Transportation Committee at the time.  The evidence also showed that THOMAS LIBOUS told a partner of the Law Firm that the firm would have to "build a new wing" to accommodate the business he would refer to it if it hired the member of his family.

Special Agents of the FBI interviewed THOMAS LIBOUS on June 24, 2010, as part of the grand jury's investigation.  The evidence at trial showed THOMAS LIBOUS made the following false statements to the agents during the interview:

1. he could not recall how the family member began to work at the Law Firm;
2. no deals were made to get the family member the job at the Law Firm;
3. he was not aware that the lobbying firm had paid any part of  the family member's salary at the Law Firm;
4. he never promised to refer work to the Law Firm;
5. he was not involved in the family member's decision to work at the Law Firm;
6. he had no business or personal relationship with the Law Firm; and
7. he did know of any relationship between the lobbying firm and the Law Firm.

*              *              *

LIBOUS, 62, of Binghamton, New York, is scheduled to be sentenced by Judge Briccetti on October 30, 2015.  LIBOUS faces a maximum sentence of five years in prison.  The maximum potential sentence is prescribed by Congress and is provided here for informational purposes, as any sentencing of the defendant will be determined by the judge.

*              *              *

Mr. Bharara praised the investigative work of the FBI.

The prosecution is being handled by the Office's White Plains Division.  Assistant U.S. Attorneys Benjamin R. Allee and James McMahon are in charge of the prosecution.

Preet Bharara, the United States Attorney for the Southern District of New York, and Mark Hamlet, the Special Agent in Charge of the Special Operations Division of the United States Drug Enforcement Administration (“DEA”), today announced the arrests of two defendants – ADAM SAMIA and CARL DAVID STILLWELL, both citizens of the United States and residents of North Carolina.  SAMIA and STILLWELL were arrested in Roxboro, North Carolina, and will be presented tomorrow before U.S. Magistrate Judge L. Patrick Auld of the Middle District of North Carolina.

SAMIA and STILLWELL are charged in three separate counts with conspiracy to kidnap and murder in the Philippines; discharging a firearm in furtherance of a crime of violence; and conspiracy to launder the proceeds of committing murder-for-hire.

Manhattan U.S. Attorney Preet Bharara said: “As alleged in the indictment, Samia and Stillwell traveled as hired guns from North Carolina to the Philippines to commit a cold-blooded murder, ultimately shooting their victim in the face several times and dumping her body on a pile of garbage.  After their contract killing, they allegedly covered their tracks by conspiring to launder the blood-money back to the United States.  Thanks to the DEA’s exemplary investigative work and the cooperation of local and federal law enforcement in North Carolina, Samia and Stillwell are now in custody,”

Special Operations Division Special Agent in Charge Mark Hamlet said: “U.S. citizens who murder and commit crimes overseas are not immune from justice.  Adam Samia and Carl Stillwell are accused of heinous crimes and DEA is pleased that they will stand trial in a U.S. court of law.”

According to the Indictment against SAMIA and STILLWELL unsealed today[1]:

SAMIA is a self-described “Personal Protection/Security Industry” professional.  According to SAMIA’s resume, he has worked as an “Independent Contractor” for clients in the Philippines, China, Papua New Guinea, the Democratic Republic of the Congo, and the Republic of the Congo; and has training in tactics and weapons, including handguns, shotguns, rifles, sniper rifles, and machineguns.  According to STILLWELL’s resume, he has training and experience in the field of information technology and has worked at a firm in North Carolina that provides firearms training.

In 2011 and 2012, SAMIA and STILLWELL agreed to commit murders-for-hire in overseas locations in exchange for monthly salaries and bonus payments for each victim.  In early 2012, SAMIA and STILLWELL traveled from North Carolina to the Philippines, where they obtained, among other things, information about their intended victims and firearms to use to commit the murders.

In January and February 2012, SAMIA and STILLWELL conducted surveillance on their intended victims in the Philippines as they formulated their plans for the murders.  On or about February 12, 2012, SAMIA and STILLWELL killed one of their intended victims – a Filipino woman – in the Philippines by shooting her in the face multiple times (“Victim-1”).  After killing Victim-1, SAMIA and STILLWELL disposed of her body on a pile of garbage.  SAMIA and STILLWELL were to be paid $35,000 each for completing the murder, and they sent thousands of dollars from the payments they received to the United States using, among other methods, structured wire transfers in amounts under $10,000.

In or about late February and early March 2012, SAMIA and STILLWELL returned from the Philippines to North Carolina, where they continued to reside until their arrests today.

*          *          *

SAMIA, 41, and STILLWELL, 47, have each been charged with conspiracy to murder and kidnap in a foreign country (Count One), using and carrying a firearm during and in relation to a crime of violence (Count Two), and conspiracy to commit money laundering (Count Three).  Counts One and Two each carry a maximum penalty of life in prison and Count Three carries a maximum penalty of 20 years in prison.  Count Two also carries a mandatory consecutive sentence 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 would be determined by the judge.  The case is assigned to U.S. District Judge Laura Taylor Swain.

The arrests of the defendants were the result of the close cooperative efforts of the United States Attorney’s Office for the Southern District of New York; DEA’s Special Operations Division, Bilateral Investigations Unit; DEA’s Atlanta Field Division, Raleigh Resident Office; the Durham Police Department; the Raleigh Police Department; the Harnett County Sherriff’s Office; the Wake County Sherriff’s Office; the Person County Sherriff’s Office; the Cary Police Department; the North Carolina State Bureau of Investigations; and Customs and Border Protection’s National Targeting Center.  Mr. Bharara also thanked the United States Attorney’s Office for the Middle District of North Carolina for its support and assistance.

This prosecution is being handled by the Office’s Terrorism and International Narcotics Unit.  Assistant United States Attorneys Anna Skotko, Emil Bove, and Michael D. Lockard 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.

Preet Bharara, the United States Attorney for the Southern District of New York, announced that EDWIN MEJIA was sentenced today in Manhattan federal court to 44 months in prison for his participation in a scheme to cash more than $400,000 in fraudulently obtained federal tax refund checks issued in other people’s names.  MEJIA pled guilty to one count of theft of public funds and one count of aggravated identity theft in December 2014 before U.S. District Judge Paul A. Engelmayer, who imposed today’s sentence.

According to the allegations in the Complaint and Information filed in this case, and statements made at related court proceedings:

Until March 2014, MEJIA worked at branches of a bank (“Bank-1”) in Yonkers and Manhattan.  MEJIA initially was a banker and later became the branch manager of multiple branches of Bank-1.  From 2010 through 2013, MEJIA participated in a scheme to fraudulently obtain and cash tax refund checks issued by the United States Treasury.  The fraudulent refund checks were generated by the filing of false and fraudulent tax returns in the names of other people (the “Purported Filers”), and the checks were made payable to the Purported Filers.  As part of this scheme, MEJIA helped facilitate the cashing of the fraudulent refund checks.

In particular, MEJIA obtained personal identification information for the Purported Filers, including their Social Security numbers and dates of birth.  MEJIA then cashed the fraudulent checks himself or by paying a co-conspirator to do so.  When cashing a fraudulent check himself, MEJIA presented the refund check, along with the corresponding Social Security number and date of birth of the Purported Filer, to a complicit bank employee.  Other times, MEJIA paid a co-conspirator to open bank accounts in the names of the Purported Filers and cash the checks.  As part of the scheme, MEJIA cashed, or caused others to cash, more than $400,000 in fraudulent Treasury checks.

In imposing the sentence, Judge Engelmayer told MEJIA: “You played a central role in a fraud that cost the IRS more than $442,000.  That was money that the IRS uses to pay for the public good; it pays for first responders, it pays for teachers, it pays for other government employees, it goes to clean our streets, it goes to clean our parks, it goes to fund our military.  Tax fraud is a very serious matter.  It should be taken every bit as seriously as fraud directed to individual victims.”

*                *                *

In addition to the term of prison, MEJIA, 31, was sentenced to three years of supervised release and was ordered to pay $442,642.58 in forfeiture and $442,642.58 in restitution.

Mr. Bharara praised the outstanding efforts of the Internal Revenue Service Criminal Investigation Division and the U.S. Immigration and Customs Enforcement’s Homeland Security Investigations in this investigation.

This case is being handled by the Office’s Complex Frauds and Cybercrime Unit.  Assistant U.S. Attorney Jonathan Cohen is in charge of the prosecution.

Preet Bharara, the United States Attorney for the Southern District of New York, Diego Rodriguez, Assistant Director-in-Charge of the New York Field Office of the Federal Bureau of Investigation (“FBI”), and Robert Sica, Special Agent-in-Charge of the New York Field Office of the United States Secret Service, announced today the unsealing of criminal complaints charging ANTHONY R. MURGIO and YURI LEBEDEV with running an unlicensed Internet Bitcoin exchange, which they operated through a phony front-company and, at times, a federal credit union that MURGIO acquired for purposes of the scheme.  The defendants were arrested today at their residences in Florida, and are expected to be presented today in federal court in the Middle District of Florida.

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

Since at least late 2013, MURGIO, LEBEDEV, and their co-conspirators have knowingly operated Coin.mx, a Bitcoin exchange service, in violation of federal anti-money laundering (“AML”) laws and regulations, including those requiring money services businesses like Coin.mx to meet registration and reporting requirements set forth by the United States Treasury Department.  Through Coin.mx, MURGIO, LEBEDEV, and their co-conspirators enabled their customers to exchange cash for Bitcoins, charging a fee for their service.  In doing so, they knowingly exchanged cash for people whom they believed may be engaging in criminal activity.  MURGIO and his co-conspirators have also knowingly exchanged cash for Bitcoins for victims of “ransomware” attacks, that is, cyberattacks in which criminals (here, distributors of the ransomware known as “Cryptowall”) electronically block access to a victim’s computer system until a sum of “ransom” money, typically in Bitcoins, is paid to them.  In doing so, MURGIO, and his co-conspirators knowingly enabled the criminals responsible for those attacks to receive the proceeds of their crimes, yet, in violation of federal anti-money laundering laws, MURGIO never filed any suspicious activity reports regarding any of the transactions.

In total, between approximately October 2013 and January 2015, Coin.mx exchanged at least $1.8 million for Bitcoins on behalf of tens of thousands of customers.  In addition, in the course of the scheme, MURGIO transferred hundreds of thousands of dollars to bank accounts in Cyprus, Hong Kong, and Eastern Europe, and received hundreds of thousands of dollars from bank accounts in Cyprus and the British Virgin Islands, in furtherance of the operations of his unlawful business.

MURGIO, LEBEDEV, and their co-conspirators engaged in substantial efforts to evade detection of their scheme by operating through a phony front-company, “Collectables Club,” and maintaining a corresponding phony “Collectables Club” website.  In doing so, they sought to trick the major financial institutions through which they operated into believing that their unlawful Bitcoin exchange business was simply a members-only association of individuals who discussed, bought, and sold collectable items, such as sports memorabilia.

More recently, in an effort to evade potential scrutiny from these institutions and others, MURGIO obtained beneficial control of a New Jersey-based federal credit union (the “Credit Union”) which served primarily low-income local residents.  MURGIO then installed LEBEDEV and others on the Credit Union’s Board of Directors, and transferred Coin.mx’s banking operations to the Credit Union, which MURGIO, LEBEDEV and other co-conspirators operated, at least until early 2015, as a captive bank for their unlawful business.  At that time, after discovering that substantial payment processing activity was being conducted through the Credit Union, the National Credit Union Administration forced the Credit Union to cease engaging in such activity, and MURGIO thereafter found new, overseas payment processing channels for his unlawful business.

***

MURGIO, 31, of Tampa, Florida, and LEBEDEV, 37, of Jacksonville, Florida, are each charged with one count of conspiracy to operate an unlicensed money transmitting business, and one count of operating an unlicensed money transmitting business, each of which carries a maximum sentence of five years in prison.   MURGIO is also charged with one count of money laundering, which carries a maximum sentence of 20 years in prison and one count of willful failure to file a suspicious activity report, 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 defendants will be determined by the judge.

Mr. Bharara praised the investigative work of the FBI and the Secret Service.  He also thanked the National Credit Union Administration for their assistance with the investigation.

The prosecution of this case is being overseen by the Office’s Complex Frauds and Cybercrime Unit.Assistant U.S. Attorneys Nicole Friedlander, Sarah Lai, and Eun Young Choi are in charge of the prosecution.Assistant U.S. Attorney Alexander Wilson of the Office’s Money Laundering and Asset Forfeiture Unit is in charge of the forfeiture aspects of the case.

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

[1] As the introductory phrase signifies, the entirety of the text of the complaints, and the description of the complaints set forth 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 Diego Rodriguez, Assistant Director-in-Charge of the New York Field Office of the Federal Bureau of Investigation (“FBI”), and Robert J. Sica, Special Agent in Charge of the US Secret Service New York Field Office (“USSS”) announced today the unsealing of an indictment charging GERY SHALON, JOSHUA SAMUEL AARON, and ZIV ORENSTEIN with orchestrating a scheme to manipulate the price and volume of traded shares in numerous publicly traded stocks by means of deceptive and misleading email campaigns, and manipulative, prearranged stock trading.  SHALON and ORENSTEIN were arrested today in Israel by the Israel Police.  The United States Attorney's Office will seek their extradition to stand trial in the United States.  AARON remains at large.

Manhattan U.S. Attorney Preet Bharara said:  “As alleged, the defendants manipulated trading in U.S. securities from overseas, using fake identities to funnel millions of dollars in unlawful proceeds through a web of international shell companies.  Using false and misleading spam emails sent to millions of people, these defendants allegedly directed their pump-and-dump scheme from their computers halfway around the world.”

FBI Assistant Director-in-Charge Diego Rodriguez said:  “Crimes, such as the ones alleged herein, are multinational and complex in nature.  The defendants are alleged to have profited in the millions of dollars and defrauded innocent investors for their own gain.  The FBI is committed to working with our partners, both foreign and domestic, to ensure the integrity of our markets and protect our communities from fraud and deception, regardless of the scheme, means, or medium.”

USSS Special Agent in Charge Robert J. Sica said:  “This case highlights the Secret Service’s investigative skills and our commitment to collaborate with our partners in detecting and dismantling highly sophisticated transnational criminal enterprises targeting the United States.  These crimes can have a detrimental impact to our nation’s critical financial infrastructure.  The Secret Service, in conjunction with its many law enforcement partners across the United States and around the world, is committed to deploying cutting edge investigative practices and technology in order to bring these offenders to justice.”

In a separate action, the United States Securities and Exchange Commission (“SEC”) announced civil charges against SHALON, AARON and ORENSTEIN.

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

Since 2011, SHALON, AARON, ORENSTEIN, and their co-conspirators have orchestrated multi-million dollar stock manipulation -- or “pump and dump” -- schemes to manipulate the price and trading volume of numerous publicly traded microcap stocks (“penny stocks”) in order to enable members of the conspiracy to sell their holdings in those stocks at artificially inflated prices.  In furtherance of the conspiracy, SHALON and AARON partnered with “promoters” who identified the companies whose stock would be targeted for manipulation. In doing so, AARON acted as the scheme’s “front-man,” using the alias “Mike Shields” (including false identification and a Social Security Number belonging to another person) to communicate with the promoters and others at SHALON’s direction.  In some instances, at the time SHALON and AARON partnered with the promoters, the targeted companies were already publicly traded, and in other instances, SHALON and AARON worked with the promoters to cause the companies to become publicly traded in furtherance of the scheme.  In either case, upon partnering with the promoters, SHALON, AARON and the promoters agreed upon the compensation SHALON and AARON would receive for their role in the scheme, which typically amounted to either hundreds of thousands of dollars, or to shares in the targeted stock that SHALON and AARON typically sold for hundreds of thousands or millions of dollars in profits in the course of the scheme.

Also in furtherance of the conspiracy, the promoters -- along with, at certain times, SHALON and AARON -- acquired control over all or substantially all of the free-trading shares of the targeted stock, that is, shares that the owner could trade without restriction on a national stock exchange or in the over-the-counter market.  At certain times, in furtherance of the scheme, when they acquired such free-trading shares, SHALON and AARON held the shares in brokerage accounts in the United States, which were opened in the names of shell companies (the “Brokerage Accounts”) and managed in part at SHALON’s direction by ORENSTEIN under aliases that ORENSTEIN supported with false and fraudulent passports and other false personal identification information.

As a further part of the scheme to defraud, after members of the conspiracy acquired control of a substantial portion of the free-trading shares of the targeted stock, SHALON, AARON, and their co-conspirators artificially inflated the stock’s price and trading volume through two fraudulent and deceptive means.  First, certain members of the conspiracy typically executed pre-arranged manipulative trades to cause the stock’s price to rise small amounts on successive days.  Second, in connection with that trading, SHALON and AARON began disseminating materially misleading, unsolicited (“spam”) emails – emailing up to millions of recipients per day – that falsely touted the stock in order to trick others into buying it.  As orchestrated by SHALON and AARON, these emails contained materially false and fraudulent statements including, for example, (i) that the stock’s recent trading activity reflected legitimate demand for the stock (when in fact, and as AARON and SHALON well knew, the trading activity was caused in whole or in part by the manipulative trading of their co-conspirators) and (ii) that the emails were being distributed and financed by certain third parties when, in fact, and as AARON and SHALON well knew, the emails were being distributed and financed by SHALON, AARON, and their co-conspirators, who controlled all or nearly all of the free-trading shares of the stock.

After causing the stock’s price and trading volume to increase artificially during the days or weeks of the email promotional campaign, members of the conspiracy (including, when they owned shares, SHALON and AARON) began dumping, or selling, their shares in a coordinated fashion, often resulting in huge profits to members of the conspiracy.  SHALON and AARON alone earned millions of dollars in illicit profits this way, selling shares of manipulated stocks from the Brokerage Accounts in coordination with their email promotional campaigns and co-conspirators.  The co-conspirators’ massive coordinated sales typically placed downward pressure on the stock’s price and caused its trading volume to plummet, exposing unsuspecting investors to significant losses.  SHALON and AARON then laundered their criminal proceeds overseas, directing millions of dollars of their criminal profits to a shell company bank account in Cyprus for further distribution in part to another Cyprus-based shell company account owned and controlled by AARON, and to other overseas shell company accounts beneficially owned and controlled by SHALON and other members of the conspiracy.

***

For this alleged conduct, SHALON, AARON, and ORENSTEIN are charged with the following offenses, which carry the maximum prison terms listed below:

Count

Defendants

Charge

Maximum Prison Term

One

SHALON, AARON, and ORENSTEIN

Conspiracy to commit securities fraud

Five years

Two

SHALON, AARON, and ORENSTEIN

Conspiracy to commit wire fraud

20 years

Three

SHALON, AARON, and ORENSTEIN

Securities fraud

20 years

Four

SHALON and AARON

Securities fraud

20 years

Five

SHALON and AARON

Securities fraud

20 years

Six

SHALON and AARON

Securities fraud

20 years

Seven

SHALON, AARON, and ORENSTEIN

Securities fraud

10 years

Eight

SHALON, AARON, and ORENSTEIN

Wire fraud

20 years

Nine

SHALON, AARON, and ORENSTEIN

Conspiracy to commit identification document fraud

15 years

Ten

SHALON and AARON

Aggravated Identity Theft

Mandatory two years

Eleven

SHALON and AARON

Conspiracy to commit money laundering

20 years

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

SHALON, 31, of Savyon, Israel, and ORENSTEIN, 40, of Bat Hefer, Israel, are Israeli nationals, and were arrested earlier today at their residences.  AARON, 31, a U.S. citizen who resides in Moscow, Russia, and Tel Aviv, Israel, remains at large.

Mr. Bharara praised the investigative work of the FBI, the USSS, and expressed his sincere gratitude to the Israel Police and the Israel Ministry of Justice for their support and assistance with the investigation.  He also thanked the SEC.

The prosecution of this case is being overseen by the Office’s Complex Frauds and Cybercrime Unit.Assistant U.S. Attorneys Nicole Friedlander, Sarah Lai, and Eun Young Choi are in charge of the prosecution.Assistant U.S. Attorney Alexander Wilson of the Office’s Money Laundering and Asset Forfeiture Unit is in charge of the forfeiture aspects of the case.

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.

Preet Bharara, the United States Attorney for the Southern District of New York, and Shantelle P. Kitchen, Special Agent-in-Charge of the New York Field Office of the Internal Revenue Service’s Criminal Investigation Division (“IRS”), announced today the unsealing of an indictment (the “Indictment”) charging HARRY FALTERBAUER, a United States citizen and resident of Florida, for failing to disclose a bank account worth more than $1 million that he maintained in Liechtenstein, and for lying to federal agents who questioned him about this offshore account.  FALTERBAUER was arrested this morning at his residence in Coconut Creek, Florida, and was presented in federal court in Fort Lauderdale, Florida.

Manhattan U.S. Attorney Preet Bharara said: “As alleged, in order to evade taxes, Harry Falterbauer hid from the U.S. authorities a million-dollar offshore bank account he maintained in Liechtenstein.  The indictment unsealed today is part of our ongoing efforts, with our partners at the IRS, to ensure that taxpayers do not use a foreign country’s bank-secrecy laws to avoid their tax obligations.”

IRS-CI Special Agent-in-Charge Shantelle P. Kitchen said:             “The Internal Revenue Service has made the investigation of individuals who allegedly conceal assets in offshore accounts and who willfully fail to report the income that those accounts generate a priority.  Such actions undermine our nation’s tax system and essentially make law abiding taxpayers pay more than their fair share.  In a similar way, individuals who allegedly lie to government investigators undermine our nation’s justice system.  As a law enforcement agency, IRS-CI will pursue the prosecution of anyone who lies to a Special Agent during the course of a criminal investigation.”

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

From approximately 1988 to 2008, FALTERBAUER maintained an undeclared bank account at Liechtensteinische Landesbank AG, a bank based in Vaduz, Liechtenstein (“LLB-Vaduz”).  FALTERBAUER opened the account in his own name, presenting his United States passport so LLB-Vaduz could verify his identity.  To conceal the connection to FALTERBAUER, the bank then referred to the account exclusively by its account number.  In an affidavit provided to the bank in 2003, FALTERBAUER declared that he was a United States citizen and that he was not authorizing LLB-Vaduz to disclose his name to U.S. tax authorities.

The undeclared account generated capital gains and losses from investments.  It reached a high balance of more than $1.5 million in approximately 2007, and had a balance of more than $1.1 million before its closure in 2008.

For the calendar year 2008, FALTERBAUER willfully failed to disclose on his tax returns both his interest in the offshore account and the income that account generated.  For the same year, FALTERBAUER also willfully failed to file with the IRS a Report of Foreign Bank and Financial Accounts, or FBAR, as the law required him to do.

In 2012, Liechtenstein amended its laws to permit banks to produce documents relating to certain United States taxpayers to the Department of Justice.  LLB-Vaduz subsequently provided files from undeclared accounts, including FALTERBAUER’s, to this Office.

IRS Special Agents from Manhattan interviewed FALTERBAUER about the undeclared account in or about April 2013.  During that interview, FALTERBAUER falsely stated that he had not opened an account at LLB-Vaduz.  After being shown documents indicating otherwise, FALTERBAUER falsely stated that he never reported the account to the IRS because he had opened it for another person whose identity he did not know.

*                *                *

FALTERBAUER, 59, of Coconut Creek, Florida, is charged with willful failure to disclose an offshore bank account for the calendar year 2008, and with making false statements to IRS Special Agents.  Each charge 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.

Mr. Bharara praised the outstanding investigative work of IRS-CI.  Mr. Bharara also thanked the U.S. Department of Justice’s Tax Division for its assistance.

The case is being prosecuted by the Office’s Complex Frauds and Cybercrime Unit.  Assistant United States Attorneys Sarah Paul and David Abramowicz are in charge of the prosecution.

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

[1] As the introductory phrase signifies, the entirety of the text of the Indictment, and the description of the Indictment set forth herein, 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 RAFAEL ANTONIO GARAVITO-GARCIA was sentenced to 25 years in prison for his participation in a conspiracy to engage in narco-terrorism (Count One), a conspiracy to distribute five kilograms or more of cocaine, knowing or intending that the cocaine would be imported into the United States (Count Two), a conspiracy to provide material support and resources to the Fuerzas Armadas Revolucionarios de Colombia (the “FARC”) (Count Three), and a conspiracy to acquire and transfer anti-aircraft missiles (Count Four).  Garavito was arrested in April 2013, following a long-term investigation conducted by the Drug Enforcement Administration’s (“DEA”) Special Operations Division, and arrived in the Southern District of New York on July 22, 2014.  On March 26, 2015, Garavito was convicted on all four counts with which he was charged following an eight-day trial before U.S. District Judge Jed S. Rakoff, who imposed sentence.  GARAVITO-GARCIA’s conviction marked the first time in the District that a defendant had been convicted at trial of conspiring to engage in narco-terrorism.

            Manhattan U.S. Attorney Preet Bharara said:  “Rafael Antonio Garavito-Garcia was at the hub of a narco-terrorism conspiracy that targeted the United States.  His aims were to import massive quantities of cocaine into the U.S., while at the same time arming the FARC with sophisticated weaponry to be used against U.S. forces in Colombia.  I want to thank our partners at the National Security Division and the DEA for their excellent work in this investigation and prosecution.”

            According to court documents and the evidence presented at trial:                Beginning in the summer of 2012, GARAVITO-GARCIA communicated with confidential sources (the “CSs”) working with the DEA who purported to be representatives and/or associates of the FARC.  The communications occurred by telephone, over e-mail, and in a series of audio-recorded and videotaped meetings.  Following initial recorded meetings in Brazil, GARAVITO-GARCIA accompanied the CSs to Guinea Bissau, where he introduced them to two local men, whom he indicated were his associates in that country.  GARAVITO-GARCIA later introduced the CSs to a Colombian man, whom GARAVITO-GARCIA identified as his drug trafficking partner.

             During meetings in Guinea-Bissau beginning in June 2012, and continuing through November 2012, GARAVITO-GARCIA agreed to receive and store multi-ton shipments of FARC-owned cocaine in Guinea-Bissau.  He agreed, in particular, to receive the cocaine in Guinea-Bissau and to store the cocaine there pending the eventual shipment of some of the cocaine to the United States, where it would be sold for the financial benefit of the FARC.  GARAVITO-GARCIA also agreed to sell some of the cocaine himself, and to provide the FARC with some of the proceeds of his drug sales.  Also during those meetings, GARAVITO-GARCIA and his associates agreed to help arrange to purchase weapons for the FARC, including surface-to-air missiles, by importing them into Guinea-Bissau for the nominal use of the Guinea-Bissau military.

             For example, on June 30, 2012, during a recorded meeting in Guinea Bissau with the CSs, GARAVITO-GARCIA and his Guinea Bissau-based associates agreed to assist in the distribution of FARC cocaine by facilitating the shipment of cocaine to Guinea Bissau inside loads of military uniforms.  They also agreed to establish a front company in Guinea Bissau to facilitate the export of cocaine from Guinea Bissau to the United States.  On July 2, 2012, GARAVITO-GARCIA introduced the CSs to General Antonio Indjai,[1] who was then head of the Guinea-Bissau Armed Forces, and helped win Indjai’s support for the drug and weapons deal.  During another recorded meeting in Guinea Bissau the following day, GARAVITO-GARCIA met with the CSs and a Guinea Bissau military representative and discussed the benefits of using Guinea Bissau as a transshipment point for cocaine obtained in South America and destined for the United States.  GARAVITO-GARCIA also discussed with the others the process for offloading the cocaine once it arrived in Guinea Bissau, and the nature of the weapons to be supplied to the FARC to combat American forces in Colombia, including surface-to-air missiles and AK-47 assault rifles.

            Thereafter, on August 31, 2012, during a recorded meeting in Bogota, Colombia, GARAVITO-GARCIA and his Colombian partner agreed to facilitate the receipt of approximately 4,000 kilograms of cocaine from the FARC in Guinea Bissau, with the understanding that approximately 500 kilograms of that cocaine would later be sent to customers in the United States and Canada.  During a recorded meeting in Guinea Bissau on November 13, 2012, GARAVITO-GARCIA explained to a Guinea Bissau military official that the FARC needed anti-aircraft missiles to be used against United States helicopters operating in Colombia.  The military official then advised one of the CSs that the weapons transaction could be executed once the FARC brought money to Guinea Bissau.

            GARAVITO-GARCIA was arrested in Bogota, Colombia, on April 5, 2013.

*              *              *

            In addition to the term of imprisonment, GARAVITO-GARCIA, 70, was sentenced to five years of supervised release.

            The conviction was the result of the close cooperative efforts of the United States Attorney’s Office for the Southern District of New York, DEA’s Special Operations Division and DEA’s Foreign-deployed Advisory Support Team, the DEA Lisbon Country Office, the DEA Bogota Country Office, the U.S. Department of Justice’s Office of International Affairs and National Security Division, and the U.S. State Department.

            This prosecution is being handled by the Office’s Terrorism and International Narcotics Unit.  Assistant United States Attorneys Aimee Hector, Shane Stansbury, and Ilan Graff are in charge of the prosecution.

[1] In April 2013, an indictment was unsealed charging Indjai with conspiracy to commit narco-terrorism, conspiracy to import cocaine into the United States, conspiracy to provide material support to the FARC, and conspiracy to acquire and transfer anti-aircraft missiles.  Indjai is currently a charged defendant located outside the arrest jurisdiction of the United States.  The charges against Indjai are merely accusations and he is presumed innocent unless and until proven guilty

Preet Bharara, the United States Attorney for the Southern District of New York, and Mark Hamlet, Special Agent in Charge of the Special Operations Division of the United States Drug Enforcement Administration (“DEA”), today announced the unsealing of an indictment charging HAJI LAJAWARD, AMAL SAID SAID ALAM SHAH, a/k/a “Haji Zar Mohammad,” and HABIBULLAH with conspiring to import heroin into the United States.  LAJAWARD and SHAH were arrested in Thailand on June 13, 2015, and subsequently brought to the United States.  They will be presented and arraigned before U.S. Magistrate Judge Ronald L. Ellis this afternoon.  HABIBULLAH remains at large.

Manhattan U.S. Attorney Preet Bharara said: “At a time when heroin use and overdose deaths are on the rise in our communities, these three men allegedly conspired to import into this country kilogram quantities of heroin from Afghanistan.  I want to thank the DEA for their excellent work in investigating this matter.”

DEA Special Agent in Charge Mark Hamlet said: “Like many international criminal networks, these alleged drug traffickers have no respect for borders, and no regard for either the rule of law or who they harm as a result of their criminal endeavors.  This investigation highlights the significance of Afghanistan as a source for heroin around the world.  I wish to thank all of our international law enforcement partners for their outstanding efforts and partnership in dismantling this sophisticated and dangerous international criminal enterprise.”

According to the allegations in the Indictment,[1] the defendants and others conspired between May 2014 and April 2015 to violate U.S. narcotics laws prohibiting the importation of heroin.  Specifically, the Indictment charges LAJAWARD, SHAH, and HABIBULLAH with conspiring to (i) import one or more kilograms of heroin into the United States from a foreign country; and (ii) distribute one or more kilograms of heroin knowing and intending that it would be imported into the United States.

As alleged in the Indictment, on January 15, 2015, Lajaward caused the delivery of three kilograms of heroin to another individual in Kabul, Afghanistan, while, on the same day, Habibullah received payment for that heroin in the United Arab Emirates.  Later that day, Lajaward and Shah spoke on the phone regarding the heroin transaction.

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

Mr. Bharara praised the outstanding investigative work of the DEA’s Special Operations Division; the DEA’s Kabul, Dubai, Tokyo, and Bangkok Country Offices; the DEA’s New York Field Division; the CNP-A Sensitive Investigative Unit of the Afghan Ministry of the Interior; the Dubai Police Department and the Anti-Narcotics Unit of the Emirati Ministry of Interior; Japan’s National Police Agency and the Saitama Prefectural Police; Thailand’s Sensitive Investigative Unit of the Royal Thai Police Narcotics Suppression Bureau; Thailand’s Attorney General’s Office; Thailand’s Ministry of Foreign Affairs; INTERPOL; the U.S. Department of State; and the U.S. Department of Justice Office of International Affairs.

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

The charge contained in the Indictment is merely an accusation 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.