Southern District of New York

Preet Bharara, United States Attorney for the Southern District of New York, announced that RICHARD KASSEL, an immigration lawyer who conspired to obtain immigration visas for his clients based on fraudulent advanced-degree diplomas and transcripts, was sentenced today in Manhattan federal court to 27 months in prison, a $6,000 fine, 2 years supervised release, and $187,000 in forfeiture.  The sentence was imposed by U.S. District Judge Paul G. Gardephe.  KASSEL pled guilty to conspiring to commit immigration fraud on April 15, 2015.

Manhattan U.S. Attorney Preet Bharara said:  “As a lawyer, Richard Kassel had a duty to know and uphold the law.  Instead, he violated the law and advised his clients do the same.  Kassel helped his clients fraudulently obtain immigration visas through fake diplomas and advanced degrees, including from schools they did not even attend.”

According to the allegations in documents filed in Manhattan federal court, and statements made at today’s sentencing and other court proceedings:

Federal immigration law provides that alien workers who are professionals holding advanced degrees may apply for employment-based immigration visas.  Applicants must submit advanced-degree diplomas and other related documents to U.S. immigration authorities in support of their applications for such visas.

From at least January 2008 until his arrest in August 2014, KASSEL, a lawyer and graduate of the City University of New York (“CUNY”) Law School, orchestrated a scheme to submit to U.S. immigration authorities false advanced-degree diplomas and supporting documents on behalf of his clients.  KASSEL, who practiced at his own law firm, instructed certain of his clients to obtain fraudulent diplomas and transcripts representing that they obtained degrees that they had not in fact earned from schools that they had not in fact attended.  KASSEL directed his clients to a co-conspirator who provided the fraudulent diplomas and supporting documents, which were created by another co-conspirator on a home computer and printer.  KASSEL and an assistant at his law firm helped coordinate the manufacturing of the fraudulent documents.  KASSEL then prepared and submitted fraudulent visa applications to U.S. immigration authorities on behalf of his clients based on the false documents.

KASSEL’s law firm typically charged, and in many cases received, thousands of dollars from clients in exchange for these fraudulent services.  These fees were on top of money paid by KASSEL’s clients directly to KASSEL’s co-conspirators for the creation of the fraudulent documents.                     

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KASSEL, 51, of New York, New York, was arrested in August 2014.  In addition to the prison term, KASSEL was sentenced to 2 years of supervised release, a $6,000 fine, and the forfeiture of $187,000, which represents the proceeds of the fraudulent scheme.

Vaclav Haloda, who created false documents, pled guilty to conspiring to commit immigration fraud and substantive immigration fraud in May 2015 before U.S. Magistrate Judge Kevin Nathaniel Fox and is awaiting sentencing.

Rosanna Almonte, KASSEL’s office assistant who helped coordinate the creation of false documents, pled guilty to conspiring to commit immigration fraud in May 2015 before U.S. Magistrate Judge Kevin Nathaniel Fox and is awaiting sentencing.

Mr. Bharara praised the outstanding investigative work of U.S. Immigration and Customs Enforcement’s Homeland Security Investigations and the United States Department of Labor, Office of Inspector General, Office of Labor Racketeering and Fraud Investigations.

The case is being handled by the Office’s General Crimes Unit.  Assistant U.S. Attorneys Andrea Griswold and Drew Johnson-Skinner are in charge of the prosecution.

Preet Bharara, the United States Attorney for the Southern District of New York, today announced that TIMOTHY VAMVAKIAS, a former member of the U.S. Army, was sentenced to 20 years in prison for his participation in a conspiracy to murder a Drug Enforcement Administration (“DEA”) agent and a confidential informant working at the direction of the DEA, a conspiracy to import cocaine into the United States, and a conspiracy to possess a firearm in furtherance of the murder conspiracy.  VAMVAKIAS was arrested in September 2013 along with co-defendants Joseph Hunter, Dennis Gogel, Slawomir Soborski, and Michael Filter following a long-term DEA undercover investigation.  VAMVAKIAS pled guilty on January 9, 2015, before U.S. District Judge Laura Taylor Swain, who imposed the sentence.   

Manhattan U.S. Attorney Preet Bharara said:  “Timothy Vamvakias’s callous disregard for human life made him an ideal member of an international mercenary team that conspired in an elaborate and diabolical scheme to murder a DEA agent and an informant.  Vamvakias went from serving his country in the military to serving the interests of drug lords and contract killers.  Thanks to the investigative efforts of the DEA, Vamvakias’s descent into the criminal underworld has been put to an end.”

According to the Indictment filed against VAMVAKIAS, Hunter, Gogel, Soborski, and Filter, and other documents filed in Manhattan federal court:

All five defendants have previously served in the armed forces of their respective nations. VAMVAKIAS served in the U.S. Army between approximately 1991 and 2004; Gogel served in the German armed forces until 2010; Hunter served in the U.S. Army between approximately 1983 and 2004; Filter served in the German armed forces until 2009; and Soborski served in the Polish armed forces until 2011.  VAMVAKIAS attained the rank of sergeant and served both as infantryman and a military police officer.  Gogel was trained as a sniper.  Hunter served as a sniper instructor and a senior drill sergeant, training other soldiers in marksmanship and tactics; and Soborski and Filter were also trained as snipers.

In 2013, VAMVAKIAS was recruited by Hunter to serve as security for a Colombian drug trafficking organization and to perform contract killings.  Hunter recruited VAMVAKIAS based on their prior experiences working together for a transnational criminal organization.  During meetings in Asia, Africa, and the Caribbean, beginning in January 2013 and continuing through late September 2013, Hunter communicated with three confidential sources (the “CSs”) working with the DEA, who purported to be Colombian narcotics traffickers.  Hunter agreed to serve as the head of security for the CSs’ purported narcotics trafficking organization and assembled a “security team” consisting of VAMVAKIAS, Gogel, Filter, and Soborski.  Hunter also told the CSs that he had previously been involved in contract killings – referred to as “bonus jobs” – and that some team members wanted to do as much “bonus work” as possible.

Hunter and his co-defendants thereafter agreed, in meetings and communications with the CSs, to provide security and surveillance services to the narcotics trafficking organization.  Furthermore, VAMVAKIS, Gogel, and Hunter agreed to commit murder-for-hire in Liberia by assassinating both a Special Agent of the DEA and a person who, according to the CSs, was providing information to the DEA about the CSs’ narcotics trafficking organization.  In exchange for the murders, VAMVAKIAS and Gogel were together to be paid approximately $700,000, and Hunter was to receive an additional $100,000 for his leadership role.  Communications between the defendants and the CSs occurred by telephone, over email, and in a series of surreptitiously audio-recorded and videotaped meetings over a nine-month period.

In late June 2013, VAMVAKIAS, Gogel, Filter, and Soborski conducted surveillance of a purported U.S.-registered aircraft at the direction of the third CS (“CS-3”), who posed as a member of the CSs’ narcotics trafficking organization.  CS-3 informed the defendants that the aircraft was to be loaded with 300 kilograms of cocaine to be shipped to New York.

With respect to the murder-for-hire scheme, in mid-May 2013, at a meeting with the CSs in Thailand, VAMVAKIAS, Gogel, Hunter, and Soborski were told that a “bonus job” – that is, a contract killing – was in the offing, due to a leak within the CSs’ narcotics trafficking organization.  In late May 2013, in email communications, Hunter confirmed that his team would be willing to murder both a U.S. law enforcement agent and an informant (a boat captain) who was providing information to U.S. law enforcement authorities.  Hunter confirmed by email that his team would kill both the DEA agent and the informant who was providing information to law enforcement about the CSs’ narcotics trafficking organization.  At a meeting in late June 2013, CS-3 explained to VAMVAKIAS and Gogel that “the job is to kill a U.S. DEA agent and a source with the DEA,” who would be located in Liberia.  VAMVAKIAS and Gogel discussed the weapons that could be used and masks to be worn for the murders, and VAMVAKIAS stated that it would be better to “hit the agent first” and then “the snitch.”  In early July 2013, Hunter sent via email a list of the items needed for the murders, including “[t]wo Submachine Guns with silencers . . .[t]wo .22 pistols with Silencers.”

In mid-August 2013, at a meeting in Thailand, VAMVAKIS, Gogel, and Hunter discussed in detail the weapons that would be used and the possibility of entering Liberia without having their passports stamped.  They suggested that CS-3 fly them out of the country via private plane following the murders.  VAMVAKIAS stated that among other weapons, a sub-machine gun and two .22 caliber pistols would be needed for the murders, and CS-3 agreed to deliver the weapons to Liberia.  The next day, at a meeting with Gogel, CS-3 confirmed that an order for the requested weapons had been made.  Later that same day, Gogel met again with CS-3 and provided CS-3 with two highly sophisticated latex facemasks, which can make the wearer appear to be of another race, for CS-3 to transport to Liberia. 

In late September 2013, VAMVAKIAS and Gogel arrived in Liberia to commit the planned murders-for-hire.

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In addition to prison, VAMVAKIAS, 43, was sentenced to five years of supervised release.

The remaining defendants, Hunter, 50, Gogel, 29, Soborski, 43, and Filter, 30, each pled guilty to conspiracy to import cocaine into the United States.  Hunter and Gogel also pled guilty to conspiracy to murder a law enforcement agent and a person assisting a law enforcement agent; and conspiracy to possess a firearm in furtherance of a crime of violence.  Each defendant faces a maximum possible term of life in prison.  The maximum potential sentences faced by these remaining defendants are prescribed by Congress and are provided here for informational purposes only, as any sentencing of these defendants will be determined by the judge.

Soborski is scheduled to be sentenced on July 29, 2015; Gogel is scheduled to be sentenced on August 4, 2015; Hunter is scheduled to be sentenced on August 5, 2015; and Filter is scheduled to be sentenced on September 9, 2015.  Each of the defendants will be sentenced by Judge Swain.

The prosecution 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; DEA’s  Bangkok, Ghana, Pretoria, Bucharest, Manila, Nassau and Copenhagen Offices; the Royal Thai Police Narcotics Suppression Bureau and Crime Suppression Division;  the Royal Thai Immigration; the Royal Thai Attorney General’s Office; Republic of Liberia’s National Security Agency; the Republic of Liberia’s Attorney General’s Office; the Estonian Police and Border Guard; the Estonian National Criminal Police, Investigative Bureau; the Estonian State Prosecutors Office; the Romanian National Police; Interpol; 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 United States Attorneys Michael Lockard, Anna Skotko, Aimee Hector, and Emil Bove are in charge of the prosecution.

Preet Bharara, the United States Attorney for the Southern District of New York, announced that STEVEN KNOWLES, 27, was sentenced on July 10, 2015, for various racketeering charges, murder, conspiracy to murder, attempted murder, narcotics conspiracy, and firearms charges.  KNOWLES was sentenced to life in prison plus 35 consecutive years arising out of his involvement, from 2000 through 2013, in the criminal activities of the Elm Street Wolves gang (the “Wolves”) – a violent street gang that was involved in drug trafficking and multiple acts of violence, including murder and attempted murder, in Yonkers, New York.  KNOWLES was convicted on July 1, 2013, after a four-week jury trial before U.S. District Judge Kenneth M. Karas, who imposed the sentence.  In imposing sentence, Judge Karas emphasized the seriousness of Knowles’s criminal conduct, which included over 20 shootings of rival gang members, and the impact of the terror caused by Knowles and the Wolves on the community of southwest Yonkers.

According to the Superseding Indictment and evidence admitted at trial:

From 2000 through 2013, KNOWLES was a member, and then leader, of a racketeering enterprise – the Elm Street Wolves.  As part of his participation in that enterprise, KNOWLES conspired to murder a member of a rival gang, the Strip Boyz, which culminated in the violent murder, by KNOWLES and others, of Christopher Cokley on July 4, 2009.  KNOWLES also participated in a number of other gang-related shootings, including the October 14, 2007, attempted murder of Tremaine Garrison, a/k/a “Triggermain,” also a member of the Strip Boyz.  KNOWLES also participated in more than a decade-long conspiracy to distribute kilograms of crack cocaine within a several block radius of Elm Street and Oak Street in Southwest Yonkers, New York.  The evidence at trial also showed that KNOWLES and other members of the Wolves possessed, brandished, and discharged a number of firearms in connection with their drug trafficking and racketeering activities with the Elm Street Wolves gang.

KNOWLES was convicted of one count of racketeering, one count of racketeering conspiracy, one count of conspiracy to murder in aid of racketeering, one count of murder in aid of racketeering, one count of conspiracy to distribute or possess with intent to distribute 280 grams and more of crack cocaine, two counts of discharging a firearm in furtherance of a crime of violence or a drug-trafficking crime, and one count of discharging a firearm in connection with the murder of Christopher Cokley on July 4, 2009.

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Since 2011, as part of the “Yonkers Gang Initiative,” this Office has charged over 150 members and associates of Yonkers street gangs, including 48 members and associates of the Elm Street Wolves.

Mr. BHARARA praised the outstanding investigative work of the FBI and the Yonkers Police Department.  He also thanked the Westchester County Department of Public Safety and the Westchester County District Attorney’s Office for their assistance in the case.  He added that the investigation into Yonkers gang activity is continuing.

The case is being handled by the Office’s Violent and Organized Crime Unit and the White Plains Division.  Assistant U.S. Attorneys Andrew Bauer and Jessica Ortiz are in charge of the prosecution.

Preet Bharara, the United States Attorney for the Southern District of New York, announced that ALLEN REICHMAN, a former Executive Director of Investments at a New York investment bank and financial services company, was sentenced today to 21 months in prison and $10 million in restitution for defrauding his employer in connection with the fraudulent purchase of an Oklahoma-based insurance company.  REICHMAN pleaded guilty in February 2015 before Magistrate Judge Henry B. Pitman.  U.S. District Judge Naomi Reice Buchwald imposed today’s sentence.

Manhattan U.S. Attorney Preet Bharara said:  “To line his own pockets, Allen Reichman fraudulently induced his investment firm to enter into a $30 million loan transaction with an Oklahoma insurance company.  His dishonest scheme caused the collapse of the insurance company, and has now led to his loss of liberty.”

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

Background

During the relevant time period, REICHMAN was an executive at an investment bank and financial services company headquartered in New York, New York (the “Investment Firm”).  From July 2008 to November 2009, REICHMAN conspired with Charles J. Antonucci, Sr., and Matthew L. Morris, the President and Senior Vice President, respectively, of Park Avenue Bank, a New York bank, and Wilbur Anthony Huff, a Kentucky businessman who controlled numerous entities located throughout the United States, to defraud the Investment Firm and Oklahoma insurance regulators regarding Antonucci’s purchase of Providence Property and Casualty Insurance Company (“Providence P&C”), an Oklahoma-based insurance company that was owed $5 million by a company Huff controlled.  Providence P&C was licensed to operate by the Oklahoma Insurance Department (“OID”), which regulated various practices of Oklahoma insurance companies.  Under the OID’s regulations and applicable Oklahoma law, Providence P&C was required to maintain a certain amount of assets to ensure that adequate funds were on hand to pay policyholders’ claims and anticipated claims.

REICHMAN and his co-conspirators schemed to defraud the Investment Firm into providing a $30 million loan to finance Antonucci’s purchase of Providence P&C and to defraud Oklahoma insurance regulators into approving the purchase.  Antonucci’s purchase of Providence P&C was financed by a $30 million loan from the Investment Firm, which used Providence P&C’s own assets, including the reserve assets, as collateral for the loan.  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, REICHMAN, Huff, Morris, and Antonucci 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 the purchase.  Specifically, Investment Firm executives and others warned REICHMAN on several occasions that using Providence P&C’s assets as collateral for the loan was illegal and that he should not cause the loan to be issued.

At his guilty plea, REICHMAN admitted that he attended a meeting where he was advised by Providence P&C’s general counsel that “under Oklahoma regulations Providence's assets could not be pledged to secure a loan.”  Reichman “never passed on to [the Investment Firm] what Providence’s lawyers had said at the meeting.”  Instead, he provided misleading information to various individuals at the Investment Firm and elsewhere regarding the loan, including directing Antonucci to sign a letter that provided false information regarding the collateral that would be used for the loan.  Despite the warnings from Investment Firm executives and others, and REICHMAN’s knowledge that the loan was in fact illegal, on January 30, 2009, REICHMAN caused the Investment Firm to issue the illegal $30 million loan, which was secured by the very assets that were supposed to be unencumbered and maintained in reserve to pay Providence P&C’s policyholder claims.

After deceiving the Investment Firm into issuing the $30 million loan, REICHMAN received at least $200,000 in commissions from the Investment Firm as a result of the illegal loan.  Ultimately, in November 2009, encumbered by the $30 million loan, the insurance company became insolvent and was placed in receivership.  The Investment Firm incurred losses totalling $10 million as a result of the insurance company’s insolvency.  The amount of restitution ordered today as part of the sentencing is based on the $10 million loss.

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In addition to prison, REICHMAN, 54, of Irvington, New York, was sentenced to two years of supervised release, and ordered to forfeit $200,000 to the United States and to pay $10 million in restitution to the Investment Firm, his former employer.

Wilbur Anthony 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.   Charles Antonucci and Matthew Morris pled guilty for their roles in the criminal conduct on October 8, 2010, and October 17, 2013, respectively.  They are scheduled to be sentenced before Judge Buchwald on August 19, 2015, and August 20, 2015, respectively.

Mr. Bharara praised the investigative work of the Special Inspector General for the Troubled Asset Relief Program, the Federal Bureau of Investigation, 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.

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

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

            Preet Bharara, the United States Attorney for the Southern District of New York, Raymond R. Parmer, Jr., Special Agent-in-Charge of the New York Field Office of U.S. Immigration and Customs Enforcement’s Homeland Security Investigations (“HSI”), Robert J. Sica, the Special Agent-in-Charge of the New York Office of the United States Secret Service (“USSS”), Philip R. Bartlett, Inspector-in-Charge of the New York Office of the U.S. Postal Inspection Service (“USPIS”),  and William J. Bratton, the Commissioner of the New York City Police Department (“NYPD”), today announced the unsealing of an Indictment charging twelve defendants, all of whom are members or associates of the Van Dyke Money Gang, with committing bank fraud and aggravated identity theft.  Eight defendants were taken into custody today.  The eight defendants who were arrested today will be presented and arraigned before U.S. Magistrate Judge Ronald L. Ellis later today.  Four defendants remain at large.  The case has been assigned to U.S. District Court Judge Lewis A. Kaplan.          

            Manhattan U.S. Attorney Preet Bharara said: “Today’s allegations suggest that members of street gangs, like the Van Dyke Money Gang, have expanded their criminal repertoire to include white collar crimes like bank fraud and identity theft.  I want to thank our law enforcement partners at HSI, the Secret Service, the Postal Inspection Service and the NYPD for the great work in this case.”

            HSI Special Agent-in-Charge Raymond R. Parmer, Jr., stated: “Today’s arrests dismantle a gang that allegedly used bank fraud and identity theft to line their pockets with cash using a scheme that cost New York banks over $1.5 million dollars.  HSI will continue to use every tool at our disposal to combat financial crimes that support gangs and their illegal activity.”

            U.S. Secret Service Special Agent-in-Charge Robert J, Sica stated: “This case demonstrates the effectiveness of multijurisdictional partnerships in the dismantling of criminal enterprises that inflict damage to our nation’s financial infrastructure and the safeguarding of our citizens’ identity.  This investigation and the resulting indictment should serve as a warning to criminals that law enforcement will not cease to pursue them.”

            USPIS Inspector in Charge Philip R. Bartlett said, “This was a straight up larceny scheme where fraudsters allegedly used stolen Postal Money Orders to steal from financial institutions through the use of hundreds of bank accounts.  Gang members underestimated the resolve of federal law enforcement working together to bring those responsible before the court to answer for their crimes.”                                      

            Police Commissioner William J. Bratton said: “Through collaboration with our partners, an organization whose alleged purpose was to lie, cheat and steal was dismantled and taken off the streets of New York this morning.  I want to thank the investigators, agents and prosecutors involved in this long term investigation for bringing those responsible to justice.  ”

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

            The Van Dyke Money Gang (“VDMG”) is an organization composed of principally young men aged 20 to 30 years old.  The VDMG operates primarily out of a housing project called the Van Dyke Houses, located at 370 Blake Avenue, in the Brownsville neighborhood of Brooklyn, New York.

            From in or about December 2013 up to and including in or about June 2015, the VDMG conducted a fraudulent money order scheme (the “Money Order Scheme”) at banks in the New York area, specifically, in Manhattan, Brooklyn, and Queens, and along the east coast, as far north as Boston, Massachusetts, and as far south as Washington, D.C.  Other individuals who were not members of the VDMG also participated in the Money Order Scheme.

            In furtherance of the Money Order Scheme, members of the VDMG and others recruited bank account holders and then used the accounts of those individuals to deposit fraudulent money orders.  Members of the VDMG and others then withdrew the money from the bank accounts.  The Money Order Scheme entailed, among other things, fraudulently obtaining blank Postal Money Orders and Western Union Money Orders.  Members of the VDMG and others printed a specific dollar amount, usually under $1,000, onto the money orders and then deposited those fraudulent money orders into bank accounts.

            ANGEL VILLALBA, a/k/a “Ace,” ANTHONY FABERS, a/k/a “Ant,” CURTIS CONGRESS, a/k/a “Murda,” MELIEK SANDERS, a/k/a “Mickey,” JUNIOR ANTWI, a/k/a “OG Rob,” GEORGE FANDAL, a/k/a “Panama,” ISAAC GONZALEZ, a/k/a “K-Tone,” TYRONE BAKER, a/k/a “Pumpkin,” STANLEY CURRIE, a/k/a “Stan,” LEROY SMITH, a/k/a “Pops,” ERIC BALLINGER, a/k/a “Boogs Von Swavy,” and TERELL STEWART, a/k/a “Lil Biscuit,” the defendants, are members of the VDMG and/or participated in the Money Order Scheme.

            In furtherance of the Money Order Scheme, the defendants and others have used more than 350 bank accounts.  The loss amount to the banks affected by the Money Order Scheme exceeds $1.5 million.

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            The defendants are each charged with one count of conspiring to commit bank fraud and one count of bank fraud, each of which carries a maximum term of 30 years in prison, as well as one count of aggravated identity theft, which carries a mandatory consecutive sentence of two years in prison.  The Indictment also seeks forfeiture of crime proceeds.

            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.

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

            Mr. Bharara praised the outstanding investigative work of HSI, the USSS, the USPIS, and the NYPD, and also thanked the New York City Department of Investigation’s Office of the Inspector General for the New York City Housing Authority for their assistance.

            This case is being handled by the Office’s Violent and Organized Crime Unit.  Assistant United States Attorneys Jessica Lonergan and Rebekah Donaleski are in charge of the prosecution.

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

 

NAME

AGE

RESIDENCE

Angel Villalba, a/k/a “Ace”

28

Brooklyn

Anthony Fabers, a/k/a “Ant”

32

Brooklyn

Meliek Sanders, a/k/a “Mickey”

30

Brooklyn

George Fandal, a/k/a “Panama”

32

Brooklyn

Isaac Gonzalez, a/k/a “K-Tone”

27

Brooklyn

Leroy Smith, a/k/a “Pops”

24

Brooklyn

Eric Ballinger, a/k/a “Boogs Von Swavy”

26

Brooklyn

Terell Stewart, a/k/a “Lil Biscuit”

23

Brooklyn

 

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[1] As the introductory phrase signifies, the entirety of the text of the Indictment, and the description of the Indictment set forth 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 Division 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 the arrest last night of LEONID KAZIYEV by agents and detectives of the FBI-NYPD Joint Violent Crimes Task Force (the “Task Force”).  KAZIYEV is charged with the armed robberies of three Manhattan banks over the last six months.  

            Manhattan U.S. Attorney Preet Bharara said: “In this day and age of electronic banking, old-fashioned, stickup bank robberies still happen.  As alleged in the Complaint, Leonid Kaziyev went on an armed bank robbery spree over the last several months, targeting two banks in Manhattan on three different occasions, putting innocent people at risk.  Thanks to the work of the FBI-NYPD Joint Violent Crimes Task Force, Kaziyev is now in custody.”

            FBI Assistant Director-in-Charge Diego Rodriguez said: “As alleged, Leonid Kaziyev brandished a weapon to obtain cash from bank tellers carrying out their daily duties.  This dangerous situation happened not once, but at least three times.  Thanks to the diligent work of FBI Special Agents and NYPD Detectives assigned to the FBI/NYPD Joint Violent Crimes Task Force, Kaziyev was arrested yesterday."

            NYPD Commissioner William J. Bratton said: “There is no better example of collaboration: NYPD detectives and FBI agents working together to address a crime problem. Diligent investigative work has led to the arrest of Mr. Kaziyev for holding up banks across Manhattan, as alleged. I want to thank the agents, detectives and prosecutors who have been working to make this possible.”

            A six-count Complaint was unsealed in Manhattan federal court.[1]  According to the Complaint, on two different occasions, on December 9, 2014 and June 5, 2015, KAZIYEV robbed the same branch of HSBC bank located on Fifth Avenue and East 21st Street in Manhattan, while brandishing a firearm; and robbed a branch of Bank of America, on Broadway and West 63rd Street in Manhattan, while brandishing a firearm, on May 21, 2015.  During each of these robberies, KAZIYEV demanded money from the bank teller working at the window, while displaying a firearm.  He escaped with over $10,000 cash each time.  KAZIYEV was captured on surveillance video footage during each of the three armed robberies, and a vehicle registered to KAZIYEV was captured on Automatic License Plate Reader (“LPR”) data, arriving to, and leaving, the scenes of the robberies.

            KAZIYEV was arrested last night in Queens, New York, by the Task Force, which comprises FBI agents and NYPD detectives.  He will be presented later today in Manhattan federal court before U.S Magistrate Judge Ronald L. Ellis.  KAZIYEV is charged with three counts of bank robbery, each of which carries a maximum term of 20 years in prison, and three counts of brandishing a firearm in connection with each robbery, each of which carries a mandatory minimum term of seven years in prison consecutive to any other term of imprisonment, up to life in prison.  The statutory maximum penalties are prescribed by Congress and are provided here for informational purposes only, as any sentencing of the defendant would be determined by the judge.             

*                   *                  *            

            Mr. Bharara praised the outstanding investigative work of the FBI-NYPD Joint Violent Crimes Task Force.  He added that the investigation is continuing.

            The Office’s Violent and Organized Crime Unit is overseeing the case.  Assistant U.S. Attorney Justina L. Geraci is in charge of the prosecution.

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

 

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

Preet Bharara, the United States Attorney for the Southern District of New York, announced today that MARCELLO TREBITSCH pled guilty in Manhattan federal court to an Information charging him with one count of securities fraud in connection with his operation of a Ponzi scheme that defrauded investors of nearly $6 million over the course of seven years.  Among other things, TREBITSCH admitted that he lied to investors by telling them that he would invest their money through an investment fund he controlled that would generate double-digit returns with very low risk.  To that end, TREBITSCH provided investors with phony account statements and federal tax forms that reflected significant gains, when, in reality, TREBITSCH invested only a portion of the investors’ money and suffered enormous trading losses, and used the remainder of the investors’ money for his own personal benefit and to pay back other investors.  TREBITSCH was arrested on April 13, 2015, and pled guilty today before United States District Judge Vernon S. Broderick.

U.S. Attorney Preet Bharara said:  “As Marcello Trebitsch admitted in court today, he ran a multimillion-dollar Ponzi scheme, defrauding investors who put their faith in him and entrusted him with their hard-earned savings.  He returned their faith with deceit and self-dealing, lying about his trading losses and using investor money on himself.  I want to thank the FBI for their outstanding investigative work on this case.”

According to the Complaint, the Information that was filed today in Manhattan federal court, and other statements made in open court:

From 2007 through 2014, TREBITSCH engaged in a multimillion-dollar fraudulent investment scheme, during which he solicited money from investors based on materially false and misleading representations.  Specifically, TREBITSCH told the investors that he, through an investment fund he created called Allese Capital LLC, would (a) create and perfect public shell companies to sell to private companies; (b) execute specific trades at the direction of an investor; and (c) purchase and sell stocks on a daily basis, with little or no funds remaining invested in the market at the end of each trading day.  In some cases, TREBITSCH told the investors that they would receive double digit returns with minimal risk of loss.  In fact, TREBITSCH did not invest the money as he said he would, and instead principally used the investors’ money for his own personal benefit, including to repay other investors.

With respect to the portion of investor funds that he did use to purchase securities, TREBITSCH suffered net trading losses, which he did not disclose to the investors.  Rather, TREBITSCH sent the investors false and misleading monthly account statements and tax forms, which purported to show positive annual returns.

During the course of the fraudulent scheme, TREBITSCH solicited more than $8 million from four investors.

*                      *                      *

TREBITSCH, 37, of Brooklyn, New York, pled guilty to one count of securities fraud, which carries a maximum sentence of 20 years in prison, a maximum fine of $5 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, TREBITSCH agreed to pay forfeiture and restitution to the victims of the offense in the amount of $5,905,949.  TREBITSCH is scheduled to be sentenced by Judge Broderick on November 2, 2015, at 10:00 a.m.

Mr. Bharara praised the work of the Federal Bureau of Investigation.

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

This case is being handled by the Office’s Securities and Commodities Fraud Task Force.  Assistant U.S. Attorneys Daniel S. Goldman and Amy Lester are in charge of the prosecution.

Preet Bharara, the United States Attorney for the Southern District of New York, announced that CARLOS LOPEZ, 27, was sentenced on July 7, 2015, and FELIX LOPEZ-CABRERA, 25, and LUIS BELTRAN, 27, were sentenced on Wednesday, July 8, 2015, for racketeering, murder, conspiracy to murder, attempted murder, narcotics, and firearms charges. LOPEZ and LOPEZ-CABRERA were each sentenced to life in prison plus 35 consecutive years. BELTRAN was sentenced to life in prison.  LOPEZ, LOPEZ-CABRERA, and BELTRAN were sentenced for charges arising out of their involvement, from 2003 through 2012, in the criminal activities of the Bronx Trinitarios Gang (“BTG”), a violent street and prison gang that engaged in drug trafficking and multiple acts of violence, including murder and attempted murder, throughout the New York region.  All three were convicted after a 12-week jury trial before U.S. District Judge Paul A. Engelmayer, who imposed the sentences.

In imposing sentence, Judge Engelmayer stated that “it doesn’t get more serious than premeditated murder, murder in cold blood,” and that the murders in this case had left a “permanent hole” in the lives of surviving family members of the murder victims, several of whom spoke at the sentencing hearings about the impact the defendants’ crimes have had on their lives and their families.

According to the Superseding Indictment and evidence admitted at trial:

The BTG operated primarily in the Bronx, New York.  It started in the prison system in the late 1980’s and subsequently spread to the streets.  LOPEZ-CABRERA was a member, and a leader, of the BTG who directed other members to carry out illegal and other activities as part of the racketeering conspiracy.  As part of their membership and participation in that enterprise, LOPEZ-CABRERA and LOPEZ murdered Raffy Tavares and Irving Cruz, both 19, in the vicinity of 81 East 181st Street, Bronx, New York, on May 23, 2010.  BELTRAN and LOPEZ-CABRERA murdered Raymond Casul, 23, in the vicinity of 271 West Kingsbridge Road, Bronx, New York, on March 31, 2009.  LOPEZ-CABRERA was also involved in the September 4, 2009, murder of David Avila-Gomez, 23, in the vicinity of 15 Mount Carmel Place, Yonkers, New York.  CARLOS LOPEZ was also involved in the November 20, 2010, murder of Freddy Polanco, 19, in the vicinity of 75 West 190th Street, Bronx, New York.  LOPEZ-CABRERA, LOPEZ, and BELTRAN also carried out multiple assaults and attempted murders of individuals believed to be members of rival gangs, including the Latin Kings, Dominicans Don’t Play, and the Bloods.  LOPEZ-CABRERA and LOPEZ also participated in a more than decade-long conspiracy to distribute kilograms of marijuana and crack cocaine in the Bronx.  The evidence at trial also showed that LOPEZ-CABRERA, LOPEZ, BELTRAN, and other members of the BTG possessed, brandished, and discharged a number of firearms in connection with their drug trafficking and racketeering activities with the Trinitarios gang.

FELIX LOPEZ-CABRERA was convicted of one count of racketeering; one count of racketeering conspiracy; two counts of conspiracy to murder in aid of racketeering; four counts of murder in aid of racketeering; two counts of assault and attempted murder in aid of racketeering; one count of conspiracy to distribute or possess with intent to distribute 100 kilograms and more of marijuana, 28 grams and more of crack cocaine, quantities of cocaine and oxycodone; two counts of discharging a firearm in furtherance of a crime of violence or a drug-trafficking crime; and four counts of discharging a firearm in connection with the murders of Raymond Casul, Raffy Taveras, Irving Cruz, and David Avila-Gomez.

CARLOS LOPEZ was convicted of one count of racketeering; one count of racketeering conspiracy; two counts of conspiracy to murder in aid of racketeering; three counts of murder in aid of racketeering; one count of assault and attempted murder in aid of racketeering; one count of conspiracy to distribute or possess with intent to distribute 100 kilograms and more of marijuana, 28 grams and more of crack cocaine, quantities of cocaine and oxycodone; two counts of discharging a firearm in furtherance of a crime of violence or a drug-trafficking crime; and three counts of discharging a firearm in connection with the murders of Raffy Taveras, Irving Cruz, and Freddy Polanco.

LUIS BELTRAN was convicted of one count of racketeering conspiracy; one count of conspiracy to murder in aid of racketeering; one count of murder in aid of racketeering; and one count of discharging a firearm in connection with the murder of Raymond Casul.

*                *                  *

In addition to the prison sentences, LOPEZ, LOPEZ-CABRERA, and BELTRAN were sentenced to five years of supervised release.

Since 2009, as part of “Operation Patria” and “Operation Green Haze,” this Office has charged at least 147 members and associates of the Trinitarios Gang.

Mr. Bharara praised the work of the New York City Police Department’s Bronx Gang Squad, the Bureau of Alcohol, Tobacco, Firearms, and Explosives’ Joint Firearms Task Force, the Drug Enforcement Administration, and Immigration and Customs Enforcement’s Homeland Security Investigations.

The case is being handled by the Office’s Violent and Organized Crime Unit.  Assistant U.S. Attorneys Jessica Ortiz, Rachel Maimin, Micah W. J. Smith, Nola B. Heller, Sarah Krissoff, and Matthew Laroche are in charge of the prosecution.

Preet Bharara, the United States Attorney for the Southern District of New York, announced today that DANIEL PAGANO, a Captain of the Genovese Organized Crime Family of La Cosa Nostra (the “Genovese Crime Family”) was sentenced to a term of 27 months in prison for his leadership role in the Genovese Crime Family.  PAGANO pled guilty to participating in a racketeering conspiracy in March 2015 and was sentenced today before by U.S. District Judge Ronnie Abrams.

Manhattan U.S. Attorney Preet Bharara said: “Danny Pagano, a Captain in the Genovese Crime Family, has been sentenced today for his leadership role in a racketeering conspiracy.  Pagano’s conviction and sentence reinforce a simple truth: if you join the mob and choose a life of crime, you end up behind bars.”

According to the Indictment and other documents filed in this case, and statements made during the plea and sentencing proceedings:

The Genovese Crime Family is part of a nationwide criminal organization known by various names, including the “Mafia” and “La Cosa Nostra” (“LCN”), which operates through entities known as “Families.”  The Genovese Crime Family operates through groups of individuals known as “crews” and “regimes,” most of which are based in New York City.  Each “crew” has as its leader a person known as a “Caporegime,” “Capo,” “Captain,” or “Skipper,” who is responsible for supervising the criminal activities of his crew and providing “Soldiers” and associates with support and protection.  In return, the Capo typically receives a share of the illegal earnings of each of his crew’s Soldiers and associates, which is sometimes referred to as Atribute.@  DANIEL PAGANO is a Caporegime or Captain in the Genovese Crime Family.

Each crew consists of “made” members, sometimes known as “Soldiers,” “wiseguys,” “friends of ours,” and “good fellows.”  Soldiers are aided in their criminal endeavors by other trusted individuals, known as “associates,” who sometimes are referred to as “connected” or identified as “with” a Soldier or other member of the Family.  Associates participate in the various activities of the crew and its members.  In order for an associate to become a made member of the Family, the associate must first be of Italian descent and typically needed to demonstrate the ability to generate income for the Family and/or the willingness to commit acts of violence.

From 2009 through August 2014, PAGANO, along with other members and associates of the Genovese Crime Family, committed a wide array of crimes including operating an illegal gambling business.  PAGANO, a Captain, exercised a leadership role within the Family by, among other things, settling disputes between and among associates of the Family.

As the Court noted, PAGANO had previously been convicted of racketeering conspiracy and served a term of over eight years in prison.  As a repeat offender, a sentence of incarceration was warranted to deter him from future crimes.

*          *          *

In addition to the prison term, Judge Abrams sentenced PAGANO, 61, of Rockland County, to a term of three years of supervised release, and ordered him to pay a fine of $5,000 and forfeiture of $2,000.

Mr. Bharara thanked the Federal Bureau of Investigation, the Rockland County District Attorney’s Office, the Drug Enforcement Administration, U.S. Immigration and Customs Enforcement’s Homeland Security Investigations, the New York City Police Department, and the New York State Police.

The prosecution is being handled by the Office’s Violent and Organized Crime Unit. Assistant United States Attorneys Jennifer Burns, Rahul Mukhi, and Abigail Kurland are in charge of the prosecution.

Preet Bharara, the United States Attorney for the Southern District of New York, Delano A. Reid, Special Agent in Charge of the New York Division of the United States Bureau of Alcohol, Tobacco, Firearms and Explosives (“ATF”), and William J. Bratton, Commissioner of the New York City Police Department (“NYPD”), announced today the unsealing of charges against ZUBEARU BETTIS, STEPHEN ADAMS, and MICHAEL ADAMS.

U.S. Attorney Preet Bharara stated: “A shopkeeper at a small store on the Upper West Side of Manhattan tragically lost his life last month when he was shot and killed during a robbery of his store.  My Office and our law enforcement partners will ensure that those responsible for such senseless violence will be held to account.”              

ATF Special-Agent-in-Charge Delano A. Reid stated: “With the arrest of Michael Adams, the reign of terror this alleged murderous robbery crew perpetrated on our streets comes to an end.  The crew’s violent acts necessitated a quick response from law enforcement.  I am grateful to all the investigators and prosecutors involved.  Their hard work made it possible to quickly identify and arrest each of the crew members so that they no longer pose a threat to the citizens of New York City.  The ATF is committed to combating violent crime and will invest its resources and personnel as needed to ensure that the quality of life in this great city is not diminished by those who have little or no regard for human life.”  

NYPD Commissioner William J. Bratton  stated: “Investigators wasted no time in tracking down and holding those persons allegedly responsible for this violent robbery, which ended in the senseless death of shopkeeper Bubacarr Camera.  I want to thank the NYPD detectives and our law enforcement partners who were integral to these arrests, which I hope will offer some consolation to the family who lost their loved one to a meaningless criminal act.”       

According to the allegations in the Indictment unsealed today in Manhattan federal court and other documents in the public record[1]:      

On June 18, 2015, ZUBEARU BETTIS, STEPHEN ADAMS, and MICHAEL ADAMS shot and killed a shopkeeper, Bubacarr Camera, in the course of a robbery of a store located at 906 Amsterdam Avenue on the Upper West Side of Manhattan.

Two days before that murder, on June 16, 2015, ZUBEARU BETTIS and STEPHEN ADAMS robbed another shopkeeper at a store located at 2251 7th Avenue, in Manhattan.  During that robbery, BETTIS brandished and discharged a firearm, while ADAMS physically accosted the victim.

*                      *                      *

BETTIS, 44, and STEPHEN ADAMS, 27, both of the Bronx, are charged with robbery and conspiracy to commit robbery, possessing a firearm in furtherance of a crime of violence, which firearm was brandished and discharged, and possessing a firearm in furtherance of a crime of violence resulting in death.  MICHAEL ADAMS, 29, of the Bronx, is charged with robbery and conspiracy to commit robbery, and possessing a firearm in furtherance of a crime of violence resulting in death.  If convicted, all three defendants face a maximum of life in prison or death, and a mandatory minimum of 10 years in prison.  The maximum and minimum 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.     

MICHAEL ADAMS was arrested this morning in the Bronx and was presented this afternoon before United States Magistrate Judge Michael H. Dolinger and ordered detained.  BETTIS and STEPHEN ADAMS were previously arrested on June 26, 2015, and ordered detained.

Mr. Bharara praised the outstanding investigative work of the SPARTA Task Force – which comprises agents and detectives of the ATF, the NYPD, and the U.S. Marshals Service –  and of detectives from the NYPD’s Manhattan North Homicide Squad and the 24th Precinct Detective Squad.  He also thanked the New York County District Attorney’s Office for their assistance.

 The prosecution is being handled by the Office’s Violent and Organized Crime Unit.  Assistant U.S. Attorney Jared Lenow is in charge of the prosecution.

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

United States v. Zubearu Bettis et al., 15 Cr. 410 (LAK)

 

COUNT

CHARGE

DEFENDANTS

MAXIMUM PENALTIES

1

Conspiracy to commit robbery

 

ZUBEARU BETTIS, STEPHEN ADAMS, and MICHAEL ADAMS

20 years in prison

 

 

2

Robbery

 

ZUBEARU BETTIS and STEPHEN ADAMS

20 years in prison

3

Robbery

 

ZUBEARU BETTIS, STEPHEN ADAMS, and MICHAEL ADAMS

20 years in prison

4

Carrying and using a firearm during and in relation to, and possessing a firearm in furtherance of, a crime of violence, which was brandished and discharged

 

ZUBEARU BETTIS and STEPHEN ADAMS

Life in prison

 

Mandatory minimum 10 years in prison consecutive to any other sentence

5

Carrying and using a firearm during and in relation to, and possessing a firearm in furtherance of, a crime of violence, resulting in the death of another

 

ZUBEARU BETTIS, STEPHEN ADAMS, and MICHAEL ADAMS

Life in prison or the death penalty

 

Mandatory minimum 10 years in prison consecutive to any other sentence

 

---

[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, James J. Hunt, the Special Agent-in-Charge of the New York Field Division of the U.S. Drug Enforcement Administration (“DEA”), and William J. Bratton, the Commissioner of the New York City Police Department (“NYPD”), announced today that the United States has filed and settled a civil lawsuit against ROCHESTER DRUG COOPERATIVE, INC., (“RDC”), a Rochester, New York, pharmaceutical distributor of controlled substances.  Under the settlement, RDC admitted and accepted responsibility for numerous violations of the Controlled Substances Act (the “CSA” or the “Act”), and agreed to pay $360,000 in penalties and to re-submit to DEA corrected record-keeping reports required by the CSA.  The settlement agreement, in the form of a consent order, was approved today in Manhattan federal court by United States District Judge Ronnie Abrams.

Manhattan U.S. Attorney Preet Bharara stated: “Pharmaceutical distributors are supposed to be one of the first lines of defense in the growing oxycodone epidemic.  Today’s consent order demonstrates that distributors that do not properly track and report the purchase and sale of drugs with a high potential for abuse will be held accountable.”

DEA Special Agent-in-Charge James J. Hunt said: “The Controlled Substances Act is the cornerstone of preventing prescription drug diversion and drug abuse.  Today’s announcement has a dual purpose; to remind pharmaceutical distributors of their reporting requirements, and to reiterate law enforcement’s ongoing efforts to curtail opioid abuse throughout our nation.”       

Commissioner William J. Bratton said: “The law mandates that pharmaceutical companies track their distribution of controlled substances, allowing law enforcement to investigate and stop the exploitation of highly addictive prescription drugs, especially those which have led to numerous opioid addictions and overdose deaths. The NYPD, along with our law enforcement partners, remain committed to stopping the distribution of illegal narcotics.”

According to the Complaint filed in federal court:  The CSA creates a comprehensive distribution and monitoring system for those authorized to handle controlled substances, at the heart of which are registration and tracking requirements.  The DEA tracks the commercial distribution of substances with a high potential for abuse through its Automation of Reports and Consolidated Orders System, or “ARCOS.”  The Complaint alleges that, following an audit of various pharmacies in the New York City area, the DEA discovered that the pharmacies had reported thousands of purchase orders from RDC that RDC did not correspondingly report to the DEA through ARCOS.  In response, in 2013, the DEA’s New York Field Division Tactical Diversion Squad conducted an on-site investigation and audit at RDC’s headquarters in Rochester, New York.  The DEA’s audit confirmed that RDC’s ARCOS reporting system was underreporting many thousands of drug sales to pharmacies throughout the northeast region.

RDC responded that it expected to be able to resolve this issue through the pending acquisition of a new computer ordering system.  But in 2014, DEA re-assessed RDC’s compliance, and discovered that RDC had not implemented the new order system.  As a result, RDC’s failure to electronically report thousands of shipments of CSA-controlled substances, including Oxycodone and its variants, continued.  During this time, the DEA also determined that RDC had failed to report the theft or significant loss of controlled substances in ARCOS, as required by the CSA and its implementing regulations.

In the settlement agreement, RDC admitted that between July 2013 and July 2014, it failed to report any electronic distribution transactions in its DEA ARCOS reports, and admitted that between July 2012 and July 2014, it failed to provide the required theft or significant loss reporting in ARCOS to the DEA.  Under the Consent Order, RDC must pay $360,000 in civil penalties to the United States and reconstruct complete and correct historical ARCOS data for the last five years for submission to the DEA.                  

Mr. Bharara praised the DEA New York Division Tactical Diversion Squad for their invaluable work on this case.  The DEA Tactical Diversion Squad comprises agents, investigators, and officers from the DEA, the New York City Police Department, the Orangetown Police Department, and the Westchester County Police Department.   

The case is being handled by the Office’s Civil Frauds Unit.  Assistant United States Attorney Louis A. Pellegrino is in charge of the case.

Preet Bharara, the United States Attorney for the Southern District of New York, Diego Rodriguez, Assistant Director in Charge New York Field Office of the Federal Bureau of Investigation (“FBI”), and Timothy P. Camus, Deputy Inspector General for Investigations of the United States Treasury Inspector General for Tax Administration (“TIGTA”), announced today that SAHIL PATEL was sentenced to 175 months in prison and $1 million in forfeiture for his role in organizing the U.S. side of a massive fraud and extortion ring run through various “call centers” located in India, through which PATEL and his coconspirators impersonated American law enforcement officials and threatened victims with arrest and financial penalties unless those victims made payments to avoid purported charges.  PATEL pleaded guilty in January 2015 before U.S. District Judge Alvin Hellerstein, who imposed the sentence today.

Manhattan U.S. Attorney Preet Bharara said:  “Sahil Patel’s elaborate scheme involved impersonating law enforcement officers and using intimidation and fear to bilk over a million dollars from hundreds of unsuspecting victims.  I want to thank the FBI and the Treasury Inspector General for Tax Administration for their excellent work in this investigation.”

Assistant Director in Charge Diego Rodriguez said:  “This duplicitous consumer fraud scheme preyed on the vulnerabilities of victims who were forced to pay false penalties for fear of retribution. Wreaking havoc on hundreds of innocent Americans, Patel and his co-conspirators also called into question the integrity of the federal law enforcement community by falsely portraying themselves as government officials. Today’s sentencing serves as a fine example of how the FBI and our partners are successfully combining efforts to eliminate sophisticated impersonation scams.”

Deputy Inspector General Timothy P. Camus said:  “Through his ruthless criminal enterprise, Mr. Patel has inflicted harm on thousands of innocent Americans who fell victim to his impersonation scheme.  Victimizing taxpayers by impersonating the IRS is a serious crime and individuals who do so will be prosecuted to the fullest extent of the law.”

According to the Superseding Indictment, other documents filed in Manhattan federal court, and statements made at related court proceedings:

From December 2011 through the day of his arrest on December 18, 2013, PATEL participated as a leader in a sophisticated scheme to intimidate and defraud hundreds of innocent victims of hundreds of dollars apiece.

Throughout the course of the fraud, telephone call centers located in India hired English-speaking employees to place telephone calls to individuals living in the U.S.  Armed with long lists of potential victims, referred to by PATEL and his co-conspirators as “lead sheets,” those India-based callers systematically placed thousands of calls to individuals in the U.S. in the hopes of intimidating the call recipients into providing a payment to the co-conspirators.  In order to extort these victims, the India-based callers impersonated law enforcement officials of the FBI and IRS and threatened their victims with financial penalties and arrest in connection with fabricated financial crimes.

In order to receive funds in a manner that would mask the identity of PATEL and his co-conspirators, the ring undertook several measures to anonymize itself, including by using anonymized voice-over-internet technology, which was subscribed under fraudulent names in order to give the appearance of being related to U.S. law enforcement agencies.

Patel and his co-conspirators also used several layers of wire transactions in order to conceal the destination and nature of the extorted payments, which totaled at least $1.2 million dollars.

*          *          *

In addition to the prison sentence, PATEL, 36, of Tatamy, Pennsylvania, was sentenced to three years of supervised release.

In imposing today’s sentence, Judge Hellerstein said:  “The nature of this crime robbed people of their identities and their money in a way that causes people to feel they have been almost destroyed.”

If you have been targeted by this scam, you can report the incident to TIGTA at www.tigta.gov and clicking on the IRS Impersonation Scam Reporting tab in the upper right corner, or call the TIGTA hotline at 1-800-366-4484.

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

Preet Bharara, the United States Attorney for the Southern District of New York, announced today that VLADIMIR TSASTSIN pled guilty to wire fraud and computer intrusion charges arising from his operation of a massive and sophisticated Internet fraud scheme that infected with malware more than four million computers located in over 100 countries.  The malware secretly altered the settings on infected computers, enabling TSASTSIN and the six other charged defendants – Timur Gerassimenko, Dmitri Jegorov, Valeri Aleksejev, Konstantin Poltev, Andrey Taame, and Anton Ivanov – to digitally hijack Internet searches, re-route computers to certain websites and advertisements, and receive payment for the hijacked Internet traffic.  TSASTSIN pled guilty today to one count of conspiracy to commit wire fraud and one count of conspiracy to commit computer intrusion before U.S. Magistrate Judge Michael H. Dolinger.  Sentencing is scheduled for October 14, 2015, before U.S. District Judge Lewis A. Kaplan.

Manhattan U.S. Attorney Preet Bharara said:  “Vladimir Tsastsin has admitted to his role in a massive cyber hack and fraud scheme that infected millions of computers in over one hundred countries and netted Tsastsin and his co-conspirators over fourteen million dollars.  Today’s guilty plea highlights not just the international scope of the threat posed by cyber criminals, but also the global reach of this Office and our law enforcement partners here and around the world to track down and prevent such criminals.”

According to the Indictment and other court documents previously filed in Manhattan federal court, and today’s plea proceeding:

From 2007 until October 2011, TSASTSIN, Gerassimenko, Jegorov, Aleksejev, Poltev, Taame, and Ivanov controlled and operated various companies that masqueraded as legitimate publisher networks (the “Publisher Networks”) in the Internet advertising industry.  The Publisher Networks entered into agreements with ad brokers under which they were paid based on the number of times Internet users clicked on the links for certain websites or advertisements, or based on the number of times certain advertisements were displayed on certain websites.  Thus, the more traffic that went to the advertisers’ websites and display ads, the more money the defendants earned under their agreements with the ad brokers.  The defendants fraudulently increased the traffic to the websites and advertisements that would earn them money and made it appear to advertisers that the Internet traffic came from legitimate clicks and ad displays on the defendants’ Publisher Networks when, in actuality, it had not.

To carry out the scheme, the defendants and their co-conspirators used what are known as “rogue” Domain Name System (“DNS”) servers, and malware (“the Malware”) that was designed to alter the DNS server settings on infected computers.  Victims’ computers became infected with the Malware when they visited certain websites or downloaded certain software to view videos online.  The Malware altered the DNS server settings on victims’ computers to route the infected computers to rogue DNS servers controlled and operated by the defendants and their co-conspirators.  The re-routing took two forms that are described in detail below: “click hijacking” and “advertising replacement fraud.”  The Malware also prevented the infected computers from receiving anti-virus software updates or operating system updates that otherwise might have detected the Malware and stopped it.  In addition, the infected computers were also left vulnerable to infections by other viruses.

Click Hijacking

When the user of an infected computer clicked on a search result link displayed through a search engine query, the Malware caused the computer to be re-routed to a different website.  Instead of being brought to the website to which the user asked to go, the user was brought to a website designated by the defendants.  Each “click” triggered payment to the defendants under their advertising agreements.  This click hijacking occurred for clicks on unpaid links that appeared in response to a user’s query as well as clicks on “sponsored” links or advertisements that appeared in response to a user’s query – often at the top of, or to the right of, the search results – thus causing the search engines to lose money.  For example, when the user of an infected computer clicked on the domain name link for the official website of Apple-iTunes, the user was instead taken to a website for a business unaffiliated with Apple Inc. that purported to sell Apple software.

Advertising Replacement Fraud                      

Using the DNS changer Malware and rogue DNS servers, the defendants also replaced legitimate advertisements on websites with substituted advertisements that triggered payments to the defendants.  For example, when the user of an infected computer visited the home page of the Wall Street Journal, a featured advertisement for the American Express “Plum Card” had been fraudulently replaced with an ad for “Fashion Girl LA.”

The defendants earned millions of dollars under their advertising agreements, not by legitimately displaying advertisements through their Publisher Networks, but rather by using the Malware to fraudulently drive Internet traffic to the websites and ads that would earn them more money.  As a result, the defendants and their co-conspirators earned at least $14 million in ill-gotten gains through click hijacking and advertisement replacement fraud.  The defendants laundered the proceeds of the scheme through numerous companies including, among others, Rove Digital, an Estonian corporation, and others listed in the Indictment.

*                      *                      *

TSASTSIN, 35, of Estonia, faces a maximum sentence of 20 years in prison on the wire fraud conspiracy count and five years in prison on the computer intrusion conspiracy count.  The statutory maximum sentences are prescribed by Congress and are provided here for informational purposes only, as any sentencing of the defendant will be determined by the judge.

Estonian nationals Gerassimenko, Jegorov, Poltev, and Aleksejev have each pled guilty to the same wire fraud and computer intrusion conspiracy counts.Aleksejev was sentenced to 48 months in prison.Ivanov pled guilty to all charges and was sentenced to time served.Judge Kaplan has scheduled the sentencings of Gerassimenko, Jegorov and Poltev for July 23, 2015. The last defendant, Taame, who is a Russian national, remains at large.  The charges against Taame are merely accusations and he is presumed innocent unless and until proven guilty.

Mr. Bharara praised the outstanding investigative work of the Federal Bureau of Investigation, the National Aeronautics and Space Administration-Office of the Inspector General, and the Estonian National Police and Border Guard Board.

This case is being handled by the Office’s Complex Frauds and Cybercrime Unit.  Assistant U.S. Attorneys Sarah Lai and Alexander Wilson are in charge of the prosecution.

Preet Bharara, the United States Attorney for the Southern District of New York, announced that ALLAH JUSTICE MCQUEEN pled guilty today in Manhattan federal court to conspiracy to commit wire fraud and wire fraud in connection with a scheme that targeted and victimized elderly people across New York State.  MCQUEEN, who was arrested in December 2014, entered his plea before U.S. Magistrate Judge Michael H. Dolinger.

Manhattan U.S. Attorney Preet Bharara said: “Allah Justice McQueen had a key role in a conspiracy that preyed on the emotions of vulnerable grandparents, falsely convincing them that their grandchildren were in legal trouble and needed bail money.  With his guilty plea, McQueen will be held to account for his role in a heartless scheme that exploited familial love for personal gain.”         

According to the Complaint, Superseding Indictment, and plea proceeding:

In or about August and September 2013, MCQUEEN and his co-conspirators perpetrated a scheme to defraud elderly victims around the United States by tricking them into believing their grandchildren had been imprisoned and needed immediate bail money.  In particular, in each case, a member of the conspiracy contacted the victim by phone, purported to be a law enforcement official or attorney, and falsely claimed that the victim’s grandchild had been taken into custody for a narcotics offense and would not be released unless the victim paid thousands of dollars, and in some cases tens of thousands of dollars, in purported bail money.  A member of the conspiracy also frequently posed on the call as the victim’s grandchild, typically crying and pleading with the elderly victim to send money to secure the grandchild’s release from jail, and asking the victim not to contact any other family members because the grandchild felt ashamed.  In each case, in extreme distress, the victim sent thousands of dollars, at a minimum, as instructed, to certain individuals who, among other things, provided that money to MCQUEEN at his direction.  In each case, after paying the “bail” money as directed, the victim directly contacted his or her grandchild and thereupon learned that the grandchild had not, in fact, been arrested, that the grandchild knew nothing about the claims made on the call to the victim, and that the call was fraudulent.

For example, a 79-year-old victim in New York received a phone call in August 2013 from an individual who identified himself as a police sergeant and claimed that the victim’s grandson had been arrested after drugs were discovered in a car in which the grandson was a passenger.  The purported sergeant said the grandson would be released if the victim sent $6,000 in bail money as directed.  The victim, who briefly heard, on the phone, an individual who sounded like the victim’s grandson, wired the money as directed.  The victim subsequently spoke directly with the victim’s grandson, and learned that he had not been arrested, and knew nothing about the purported sergeant or the basis for his request for bail money.  The victim never received any money back from the purported sergeant. 

In fact, the victim’s money was wired to particular individuals working with and at the direction of MCQUEEN who collected the wired funds on MCQUEEN’s behalf and provided the money to MCQUEEN and his co-conspirators.  As to a portion of the victim’s money, MCQUEEN appeared personally at a particular location in Brooklyn to arrange for the collection of the proceeds.  MCQUEEN subsequently deposited another portion of the money sent by the victim directly into his personal bank account.

*                *                *

MCQUEEN, 33, of Brooklyn, New York, pled guilty to one count of conspiracy to commit wire fraud and one count of wire fraud.  He faces a maximum sentence of 40 years in prison.  The maximum potential sentence is prescribed by Congress and is provided here for informational purposes only, as any sentencing of the defendant will be determined by the judge.  Sentencing has been scheduled for November 2, 2015, at 4:30 p.m., before U.S. District Judge Shira A. Scheindlin.

Mr. Bharara praised the outstanding investigative work of the FBI.  Mr. Bharara also thanked the Bronx District Attorney’s Office for its assistance.

The prosecution of this case is being handled by the Office’s Complex Frauds and Cybercrime Unit.  Assistant United States Attorney Elisha Kobre 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 Charles Gardner, the Commissioner of the Yonkers Police Department, announced the unsealing yesterday of a Second Superseding Indictment charging 11 members and associates of a Yonkers-based street gang, “Cruddy 650,” with participation in a racketeering conspiracy, murder in aid of racketeering, Hobbs Act robbery conspiracy, bank robbery, firearms offenses, and witness tampering.  The original Indictment, filed in November 2014, charged four Cruddy 650 affiliates with Hobbs Act robbery conspiracy, bank robbery, and witness tampering.  The First Superseding Indictment, filed in February 2015, charged eight Cruddy 650 affiliates with Hobbs Act robbery conspiracy, bank robbery, firearms offenses, and witness tampering.  Yesterday’s Superseding Indictment charges three additional Cruddy 650 members and associates (as well as the eight defendants previously charged) and adds racketeering charges, including charges relating to the murder of Andre Folsom, who was shot through the head in the parking lot of a Walmart store in Greenacres, Florida, on May 26, 2014.

Nine of the eleven defendants charged in the Superseding Indictment unsealed yesterday were previously in state or federal custody.  PAUL NEGRIN was arrested yesterday in Hollywood, Florida, and was presented in federal court in Ft. Lauderdale, Florida.  JAMES MORRIS was arrested yesterday in Yonkers and was presented in White Plains federal court.  The case is assigned to U.S. District Judge Vincent Briccetti.

U.S. Attorney Preet Bharara said:  “As alleged, members of the Cruddy 650 gang terrorized the streets and businesses of southwest Yonkers with countless robberies and other acts of violence.  Members of the gang also allegedly took their criminal activities on the road, traveling to Florida, leading to tragic consequences for murder victim Andre Folsom and his family.  I want to commend and thank the FBI and the Yonkers Police Department on their outstanding investigation.”

FBI Assistant Director-in-Charge Diego Rodriguez stated:  “We now have all 11, herein identified, members of the Cruddy 650 enterprise in custody where they can answer for the full extent of their alleged criminal activities.  The FBI thanks all its law enforcement partners, with whom we worked tirelessly, not only in the New York area, but up and down the East Coast.  We will continue to protect our communities from senseless violence, such as that alleged in the indictments, which serves only to promote illegal operations and terrify anyone who threatens their activities.”

Yonkers Police Commissioner Charles Gardner stated:  “This group of individuals recklessly engaged in numerous violent crimes against our residents.  These indictments will remove these violent gang members from our community and make our city a safer place.  Ongoing investigations with our federal law enforcement partners will continue to target those persons who choose to engage in this type of activity.  I would like to thank the US Attorney’s Office for the Southern District of New York and the FBI Violent Crimes Task force for their tireless efforts in this investigation.”

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

Cruddy 650 is a criminal enterprise operating principally in and around the City of Yonkers, New York.  Cruddy 650 was founded in 2013 as the result of an alliance between gang members hailing from various parts of Yonkers, including Riverdale Avenue, Woodworth Avenue, Warburton Avenue, and Cottage Place Gardens.  Even after the alliance, members of the gang hailing from Cottage Place Gardens continued to identify primarily as “Cruddy,” while members of the gang hailing from Riverdale Avenue identified primarily as “650.”

Cruddy 650 members and associates protected and promoted the gang’s power and territory, and sought to enrich its members, through acts of violence, intimidation, and the sale of illegal drugs.  During the time period relevant to the Superseding Indictment, members and associates of Cruddy 650 were responsible for multiple shootings and attempted murders, street robberies, robberies of banks and other businesses, bank fraud, witness tampering, and the distribution of narcotics, including crack cocaine and marijuana.  Victims of the shootings and other acts of violence perpetrated by members of Cruddy 650 included both rival gang members and innocent bystanders.

The violence of the Cruddy 650 enterprise and its members spread from Yonkers, New York, to Florida.  On or about May 26, 2014, KEVIN WILTSHIRE murdered Andre Folsom in Greenacres, Florida, shooting him in the head during a dispute in the parking lot of a Walmart store.  The Second Superseding Indictment alleges that WILTSHIRE committed the murder in order to maintain and increase his position in Cruddy 650.

*                      *                      *

Counts One and Two of the Second Superseding Indictment charge DIONDRE CARLISLE, MYKAI DAVIS, RAKEEM FLOWERS, TYRONE SMITH, WILTSHIRE, SAUDY GUERRERO, DARNELL KIDD, JAMES MORRIS, and PAUL NEGRIN with racketeering conspiracy and firearms offenses in connection with that conspiracy.  As alleged, various combinations of those defendants committed at least four shootings, and 11 robberies or attempted robberies, six of which were armed, in furtherance of the conspiracy.  Counts Three and Four of the Second Superseding Indictment charge WILTSHIRE with murder in aid of racketeering activity and a related firearms offense.  Count Five charges CARLISLE, DAVIS, FLOWERS, CESAR MUNGUIA, ISAIAH WASHINGTON, WILTSHIRE, GUERRERO, KIDD, and MORRIS with Hobbs Act robbery conspiracy.   Count Six charges CARLISLE, DAVIS, FLOWERS, CESAR MUNGUIA, WILTSHIRE, GUERRERO, KIDD, and MORRIS with a firearms offense related to the Hobbs Act robbery conspiracy.  As in the initial Indictment, CARLISLE, WASHINGTON, and WILTSHIRE are charged with bank robbery in connection with the October 27, 2014, robbery of a Citibank branch in Yonkers; CARLISLE is charged with attempted bank robbery in connection with the November 3, 2014, attempted robbery of a Chase Bank branch in Yonkers; and FLOWERS and TYRONE SMITH, are charged with witness tampering in connection with their threats against an individual who provided information to law enforcement relating to the November 3 attempted robbery of the Chase Bank branch.

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’s Westchester Violent Crimes Task Force, which comprises agents and detectives of the FBI, the City of Yonkers Police Department, the Westchester County Police, the Westchester County District Attorney’s Office, and the City of Peekskill Police Department.  He also thanked the FBI’s Miami Division and the Greenacres Department of Public Safety for their assistance.

The prosecution is being handled by the Office’s White Plains Division.  Assistant U.S. Attorneys Scott Hartman, George Turner, and Jessica Feinstein are in charge of the prosecution.

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

15-168                                                       ###
 

United States v. Diondre Carlisle, et al., S2 14 Cr. 768 (VB)

 

COUNT

CHARGE

DEFENDANTS

MAX. PENALTIES

1

Racketeering conspiracy, 18 U.S.C. § 1962(d)

DIONDRE CARLISLE

MYKAI DAVIS

RAKEEM FLOWERS

TYRONE SMITH

KEVIN WILTSHIRE

SAUDY GUERRERO

DARNELL KIDD

JAMES MORRIS

PAUL NEGRIN

 

20 years in prison

2

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

18 U.S.C. § 924(c)

DIONDRE CARLISLE

MYKAI DAVIS

RAKEEM FLOWERS

KEVIN WILTSHIRE

SAUDY GUERRERO

DARNELL KIDD

JAMES MORRIS

PAUL NEGRIN

Life in prison

Mandatory minim of seven years in prison (brandishing), or mandatory minimum 10 years in prison (shooting) consecutive to any other sentence on the first offense; or mandatory 25 years consecutive on the second offense.

3

Murder in aid of racketeering activity,  18 USC 1959(a)(1)

KEVIN WILTSHIRE

Mandatory life in prison or death

4

Carrying and using firearms during and in relation to and possessing firearms in furtherance of a crime of violence resulting in the death of another, 18 U.S.C. § 924(j)

KEVIN WILTSHIRE

Life in prison or death

Mandatory minimum of 25 years

5

Conspiracy to commit Hobbs Act robbery

18 U.S.C. § 1951

DIONDRE CARLISLE

RAKEEM FLOWERS

MYKAI DAVIS

CESAR MUNGUIA

KEVIN WILTSHIRE

DARNELL KIDD

SAUDY GUERRERO

JAMES MORRIS

 

20 years in prison

6

Brandishing a firearm during and in relation to a crime of violence

18 U.S.C. § 924(c)

DIONDRE CARLISLE

RAKEEM FLOWERS

MYKAI DAVIS

CESAR MUNGUIA

KEVIN WILTSHIRE

DARNELL KIDD

SAUDY GUERRERO

JAMES MORRIS

Life in prison

Mandatory minimum of seven years in prison, consecutive to any other sentence

7

Bank robbery

18 U.S.C. § 2113(a)

DIONDRE CARLISLE

ISAIAH WASHINGTON

KEVIN WILTSHIRE

 

20 years in prison

8

Attempted bank robbery

18 U.S.C. § 2113(a)

 

DIONDRE CARLISLE

20 years in prison

9

Witness tampering

18 U.S.C. § 1513(b)

RAKEEM FLOWERS

TYRONE SMITH

 

20 years in prison

 

Defendant

Age

Residence

DIONDRE CARLISLE

18

Yonkers, NY

MYKAI DAVIS

19

Yonkers, NY

RAKEEM FLOWERS

19

Yonkers, NY

CESAR MUNGUIA

20

Yonkers, NY

TYRONE SMITH

24

Yonkers, NY

ISAIAH WASHINGTON

19

Yonkers, NY

KEVIN WILTSHIRE

19

Yonkers, NY

SAUDY GUERRERO

20

Yonkers, NY

DARNELL KIDD

23

Yonkers, NY

JAMES MORRIS

24

Yonkers, NY

PAUL NEGRIN

22

Hollywood, FL

 

 

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

Preet Bharara, the United States Attorney for the Southern District of New York, announced that JOSE ISMAEL VENTURA was found guilty yesterday of murder in connection with a marijuana distribution conspiracy, conspiracy to commit murder-for-hire, and murder-for-hire.  The verdict came following a 13-day jury trial in Manhattan federal court before U.S. District Judge John G. Koeltl.

According to the Indictment and the evidence at trial:

From the 1980s through the mid-1990s, JOSE ISMAEL VENTURA owned and operated a marijuana distribution business in the vicinity of 207th Street and Sherman Avenue in northern Manhattan.  In the fall of 1995, VENTURA placed his nephew, Eugene Garrido, in charge of the day-to-day operations of the marijuana business while VENTURA’s son, Kevin Ventura, who had previously managed the business, was on home detention for a pending murder charge.  In the spring of 1996, Kevin Ventura’s murder charge was dismissed by state authorities and VENTURA told his nephew Eugene Garrido that his services were no longer needed.  Garrido refused to give up his management role, and instead began efforts to take over the entire marijuana business from VENTURA.  Because of this dispute over VENTURA’s marijuana business, in the summer of 1996, VENTURA ordered the murder of Garrido.  On VENTURA’s order, his son Kevin Ventura hired two brothers to kill Garrido in exchange for $10,000, derived from the VENTURA marijuana business.  On August 19, 1996, one of the two brothers shot and killed Garrido in the lobby of his apartment building in northern Manhattan.  A bystander, Carlos Penzo, who attempted to stop the fleeing shooter, was also shot and died a week later of his injuries.

Kevin Ventura was convicted of these murders, as well as one additional murder, following a jury trial in Manhattan federal court in December 2013.

The two brothers who were hired to commit the Garrido murder, Jorge Lafontaine and Jose Lafontaine, have both been charged federally and have entered pleas of guilty to their roles in the Garrido and Penzo murders.  They have not yet been sentenced.

*                      *                      *

JOSE ISMAEL VENTURA, 62, of Manhattan, faces a mandatory sentence of life in prison.  The maximum potential sentence is prescribed by Congress and is provided here for informational purposes only, as any sentencing of the defendant will be determined by the judge.  A sentencing hearing has been scheduled for October 2, 2015, at 3:00 p.m. before Judge Koeltl.

Mr. Bharara praised the investigative work of the Homeland Security Investigations Division of Immigration and Customs Enforcement, and the New York City Police Department.

This case is being prosecuted by the Office’s Violent and Organized Crime Unit.  Assistant United States Attorneys Margaret Garnett and Micah W.J. Smith are in charge of the prosecution.

Preet Bharara, United States Attorney for the Southern District of New York, Eileen Neff, Special Agent-in-Charge of the Northeast Area Field Office of the U.S. Postal Service, Office of Inspector General (“USPS-OIG”), Philip R. Bartlett, Inspector-in-Charge of the New York Office of the U.S. Postal Inspection Service (“USPIS”), 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 arrest of OSCAR LOPEZ in connection with a conspiracy to obtain over $1 million in fraudulently-issued tax refund checks from his U.S. Postal Service (“USPS”) delivery route.  The defendant, a USPS mail carrier, was arrested this morning and is expected to be presented later today in Manhattan federal court before U.S. Magistrate Judge Sarah Netburn.

Manhattan U.S. Attorney Preet Bharara said:  “As alleged, Oscar Lopez used his position as a U.S. Postal Service mail carrier to steal over $1 million in taxpayer funds.  The exemplary investigative work of the Postal Service Inspector General’s Office, the Postal Inspection Service, and the IRS put an end to Lopez’s alleged involvement in this scheme.”

USPS-OIG Special Agent in Charge said: “The U.S. Postal Service Office of Inspector General aggressively investigates Postal Service employees who would abuse their position of trust. We value our law enforcement partners who work closely with us in matters like these.”

USPIS Inspector in Charge Philip R. Bartlett said: “As a taxpayer and a United States Postal Service employee, I find the allegations against the defendant disturbing.  I have little tolerance for those who would use their position of public trust to facilitate criminal activity, as is alleged in this investigation.  Postal Inspectors and their law enforcement partners will put a stop to crime wherever it exists; keeping the mail safe and secure for its employees and customers.”

IRS-CI Special Agent-in-Charge Shantelle P. Kitchen said: “A fraudulent tax refund scheme is, essentially, the use of false pretenses to steal money from the U.S Treasury.  Yet, despite this simple description, fraudulent tax refund fraud schemes can involve a web of co-conspirators who obtain taxpayer information, file the tax returns and secure and negotiate the refund checks.  IRS-Criminal Investigation is responsible for investigating the abusers of our nation’s tax system, with the goals of safeguarding public funds and maintaining public confidence in the system.”

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

From at least June 2010 to May 2012, LOPEZ typically delivered mail on an assigned route in ZIP code 10460 in the Bronx.  LOPEZ obtained fraudulently-issued tax refund checks that had been mailed by the IRS to addresses along his delivery route.  He then provided those checks to his co-conspirators, who returned a portion of the value of the checks to him.  In total, over $1 million in fraudulently-issued tax refund checks that were mailed to LOPEZ’s delivery route ended up being negotiated against, or deposited into, a bank account associated with one of LOPEZ’s co-conspirators.      

*                      *                      *

LOPEZ, 36, of Brooklyn, New York, is charged with one count of conspiring to steal government funds, which carries a maximum term of five years in prison, and one count of theft of government funds, which carries a maximum term of ten years in prison.  The maximum potential sentences in this case are prescribed by Congress and are provided here for informational purposes only, as any sentencing of the defendant will be determined by the judge.

Mr. Bharara praised the outstanding work of the USPS-OIG, the USPIS, and the IRS in the investigation.

The case is being handled by the Office’s General Crimes Unit.  Assistant U.S. Attorney Drew Johnson-Skinner is in charge of the prosecution.

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

---

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

             Preet Bharara, the United States Attorney for the Southern District of New York, Diego Rodriguez, the Assistant Director-in-Charge of the New York Field Office of the Federal Bureau of Investigation (“FBI”), Cheryl Garcia, the Special Agent-in-Charge of the New York Regional Office of the United States Department of Labor, Office of Inspector General, Office of Labor Racketeering and Fraud Investigations (“DOL-OIG”), and William J. Bratton, Commissioner of the New York City Police Department (“NYPD”), announced the unsealing of charges against ROCCO MIRANTI, the business manager of the International Union of Allied Novelty and Production Workers, Local 223 (“Local 223”), JOHNNIE MIRANTI, the recording secretary-treasurer of Local 223, and LOUIS SMITH, the former president of the International Brotherhood of Teamsters, Local 810 (“Local 810”), for allegedly accepting more than one million dollars in kickback payments and embezzling money from Local 223 and Local 810.  ROCCO MIRANTI, JOHNNIE MIRANTI, and SMITH were arrested today and arraigned in Manhattan federal court before U.S. Magistrate Judge Sarah Netburn.

            Manhattan U.S. Attorney Preet Bharara said: “Rocco Miranti, Johnnie Miranti, and Louis Smith, by allegedly accepting more than a million dollars in bribes and embezzling union funds, put their self-interest above the interests of the union members they were supposed to represent.  Rank-and-file union members are entitled to leadership that is supportive, not criminally exploitive, as alleged here.”

            FBI Assistant Director Diego Rodriguez said: “Union leaders are supposed to represent workers for fair wages, benefits, and working conditions, not take kickback payments.   As alleged, the defendants received more than $1 million in payments over 10 years. The FBI will continue to investigate those who seek to use their organization and their position as a way to personally profit illegally.”

            DOL-OIG SAC Cheryl Garcia said: “The Office of Inspector General will continue to work cooperatively with our law enforcement partners to investigate these types of allegations.”

            NYPD Commissioner William J. Bratton said: “As alleged, the defendants betrayed their union colleagues by using their influence within the health care plan to gain more than a million dollars in kickbacks. The NYPD has no tolerance for corruption at any level. I want to thank all of the investigators, agents and prosecutors involved in this case for weeding out this criminal behavior.” 

            According to the allegations in the Indictment filed in Manhattan federal court on Monday, June 29, 2015[1]:

            Local 223 is headquartered in Manhattan and represents factory workers.  Local 810 is headquartered in Long Island City and represents workers in many industries, including freight drivers and warehouse workers.

           From at least 2004 up to and including the present, ROCCO MIRANTI and JOHNNIE MIRANTI were both officers of Local 223.  From at least 2000 through 2013, SMITH was the president of Local 810; from 2013 through December 2014, SMITH was a trustee of Local 810.  While they were officers of their respective unions, ROCCO MIRANTI, JOHNNIE MIRANTI, and SMITH were trustees of the unions’ health care benefit programs.  In that capacity, they owed fiduciary duties to Local 223 and Local 810, respectively.

            Claims for the Local 223 and Local 810 health care benefit programs were processed by Business-1, a third-party administrator.  The president of Business-1, who is cooperating with the Government (the “CW”), told the Government that ROCCO MIRANTI, JOHNNIE MIRANTI, and SMITH demanded monthly kickback payments in exchange for Local 223 and Local 810 doing business with Business-1.  At first, the CW made kickback payments solely to ROCCO MIRANTI; in or about 2005, ROCCO MIRANTI arranged for Business-1 to become the third-party administrator for Local 810, in exchange for kickback payments to SMITH.  Initially, the kickback payments to ROCCO MIRANTI and SMITH were approximately five percent of the fees paid by Local 223 and Local 810, respectively, to Business-1; in or about 2006, ROCCO MIRANTI and SMITH increased the kickback payments that they required from the CW to approximately 10 percent of the fees paid by Local 223 and Local 810, respectively, to Business-1.

            Beginning in or about October 2014, ROCCO MIRANTI, JOHNNIE MIRANTI, and SMITH each had conversations and meetings, which were recorded by the FBI, with the CW about the monthly kickback payments.  During some of these meetings, the CW made kickback payments to ROCCO MIRANTI, JOHNNIE MIRANTI, and SMITH, including, in December 2014, a $10,000 cash payment to ROCCO MIRANTI and JOHNNIE MIRANTI and a $12,000 cash payment to SMITH.

           In total, the kickback payments for the Local 223 account have exceeded $500,000, as have the kickback payments for the Local 810 account.

*                      *                      *

           ROCCO MIRANTI, 70, of Howard Beach, New York, JOHNNIE MIRANTI, 39, of Rockville Centre, New York, and SMITH, 73, of Pearl River, New York, are each charged with one count of conspiring to solicit and receive kickbacks to influence the operation of an employee benefit plan, one count of conspiring to embezzle from an employee benefit plan, and one count of conspiring to commit theft or embezzlement in connection with a health care benefit program, each of which carries a maximum term of five years in prison.  The Indictment also seeks forfeiture of crime proceeds.  U.S. v. Rocco Miranti et al. Indictment (562.41 KB)

          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 Federal Bureau of Investigation, the United States Department of Labor, Office of Inspector General, Office of Labor Racketeering and Fraud Investigations, the U.S. Department of Labor’s Office of Labor-Management Standards, and the New York City Police Department’s Organized Crime Investigation Division.

            The case is being prosecuted by the Office’s Violent and Organized Crime Unit.  Assistant U.S. Attorney Jessica Lonergan is in charge of the prosecution.

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

 

---

[1] As the introductory phrase signifies, the entirety of the 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.

Principal Deputy Assistant Attorney General Vanita Gupta, Head of the Civil Rights Division, issued the following statement today in connection with the filing of the proposed settlement agreement among the parties in Nunez v. City of New York:

“The unprecedented reforms announced today further the Civil Rights Division’s goals of protecting youth from unconstitutional conditions of confinement, whether in the juvenile or criminal justice system.  This proposed consent judgment is unprecedented in the detail and comprehensiveness of its use of force remedies.  Those remedies are highly appropriate, given the breadth of Rikers Island’s operations and the culture of excessive use of force that we found there.  In addition, the prohibitions restricting the use of isolation and reforming the disciplinary system for inmates under the age of 19 provide essential protections for the complicated, and often underserved, population of youth charged in the adult criminal justice system.”

U.S. Attorney Preet Bharara of the Southern District of New York issued the following statement today:

“Today marks another important step toward meaningful and lasting reform at Rikers Island.  The parties have executed, and we have submitted for the court’s approval, a 63-page agreement establishing a detailed and comprehensive framework of practices, systems and policies designed to reduce violence in the jails and to keep inmates and correction officers safe.  This agreement reflects the commitment of all involved to dismantle the culture of violence that has for too long denied those at Rikers Island the protections of the Constitution.  We look forward to the court’s approval of this landmark agreement, and through its vigilant enforcement, ensuring that the city lives up to its promises.”

Manhattan U.S. Attorney Preet Bharara issued the following statement today in connection with the filing of the proposed settlement agreement among the parties in Nunez v. City of New York:

“Today marks another important step toward meaningful and lasting reform at Rikers Island.  The parties have executed, and we have submitted for the Court’s approval, a 63-page agreement establishing a detailed and comprehensive framework of practices, systems and policies designed to reduce violence in the jails and to keep inmates and correction officers safe.  This agreement reflects the commitment of all involved to dismantle the culture of violence that has for too long denied those at Rikers Island the protections of the Constitution.  We look forward to the Court’s approval of this landmark agreement, and through its vigilant enforcement, ensuring that the City lives up to its promises.”

Principal Deputy Assistant Attorney General Vanita Gupta, Head of the Civil Rights Division, issued the following statement today:

“The unprecedented reforms announced today further the Civil Rights Division's goals of protecting youth from unconstitutional conditions of confinement, whether in the juvenile or criminal justice system.  This proposed Consent Judgment is unprecedented in the detail and comprehensiveness of its use of force remedies.  Those remedies are highly appropriate, given the breadth of Rikers Island's operations and the culture of excessive use of force that we found there.  In addition, the prohibitions restricting the use of isolation and reforming the disciplinary system for inmates under the age of 19 provide essential protections for the complicated, and often underserved, population of youth charged in the adult criminal justice system.”

Preet Bharara, the United States Attorney for the Southern District of New York, announced that former New York State Senate leader MALCOLM SMITH was sentenced today to seven years in prison for bribing New York City Republican Party leaders, including Queens County Republican Party Vice Chairman VINCENT TABONE, as part of a scheme to allow SMITH, a Democrat, to run as a Republican candidate for New York City Mayor in 2013 and for his role in obtaining New York State funding for a real estate project in Spring Valley, New York, in exchange for cash bribes paid on his behalf to the New York City Republican Party officials.  TABONE was sentenced to 42 months in prison for receiving bribes and witness tampering.  Both were convicted after a three-and-a-half week jury trial before U.S. District Judge Kenneth M. Karas, who imposed today’s sentences.

Manhattan U.S. Attorney Preet Bharara said: “Bribes and kickbacks should never play a role in the selection of candidates for public office.  By attempting to buy and sell a spot on New York City’s Mayoral ballot, Malcolm Smith and Vincent Tabone corrupted one of the most fundamental tenets of the democratic process, that candidates cannot bribe their way onto a ballot.  Today’s sentences make clear that the cost of violating the public trust in this way will be measured in years in a federal prison.”

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

The Bribery and Extortion Schemes

SMITH was first elected to the New York State Senate in November 2000, and represented a district within Queens, New York.  He was chairman of the Independent Democratic Conference of the State Senate and, among other positions, has served as the State Senate’s minority leader, majority leader, and acting lieutenant governor.  From about November 2012, through April 2, 2013, SMITH agreed with former New York City councilman Daniel Halloran, who was convicted in a separate trial, and an undercover FBI agent posing as a wealthy real estate developer (the “UC”), and a cooperating witness (“CW”) to bribe New York City Republican Party county leaders, including TABONE, in exchange for their authorization for SMITH to appear as a Republican candidate for New York City Mayor in 2013, even though SMITH is a registered Democrat.

SMITH participated in two overlapping criminal schemes that involved the payment of bribes to obtain official action.  First, SMITH, a registered Democrat, authorized the payment of $110,000 in cash bribes to be paid to leaders of the New York City Republican Party, including TABONE, so that they would allow SMITH to run for mayor on the Republican Party’s ballot line.  Second, SMITH agreed to use his influence to help steer at least $500,000 in New York State transportation funding to a real estate project the UC and CW had proposed to develop in Spring Valley, New York, in exchange for the UC and CW paying bribes on SMITH’s behalf to the New York City Republican Party Chairs.

In furtherance of the scheme, SMITH authorized the UC and the CW to meet TABONE, the Executive Vice Chairman of the Queens County Republican Party, Joseph Savino, the Chairman of the Bronx County Republican Party, and other party leaders.  During a meeting with the UC, TABONE accepted a $25,000 cash bribe in a dimly lit SUV parked in front of a Manhattan restaurant and agreed to accept another $25,000 after his committee authorized SMITH to compete in the Republican primary. Savino similarly accepted a $15,000 cash bribe and agreed to accept another $15,000 after he voted to authorize SMITH to compete for the Republican ballot line.  In return for his efforts in negotiating the bribes, Daniel Halloran accepted $15,500 as a down payment on a “broker’s” fee of at least $75,000 and expected to be appointed First Deputy Mayor if Smith was elected mayor.

Witness Tampering

Shortly before the start of a previously scheduled trial, the Government sought permission from the Court to take the deposition of Philip Ragusa, the former Chairman of the Queens County Republican Party. Ragusa, who was gravely ill at the time, was expected to testify favorably to the Government.  Over TABONE’s objections, the Court ordered the deposition to take place.  TABONE unexpectedly appeared at Ragusa’s home an hour before the scheduled start of the deposition and attempted to pressure Ragusa not to testify against him.

*            *           *

SMITH, 58, of Queens, was also sentenced to two years of supervised release.  TABONE, 48, of Queens, was sentenced to one year supervised release and ordered to forfeit $25,000.  SMITH was ordered to surrender to the Bureau of Prisons on September 21, 2015.  TABONE was ordered to surrender October 1, 2015.

Mr. Bharara praised the outstanding investigative work of the Federal Bureau of Investigation and the Rockland County District Attorney’s Office.

This case is being handled by the Office’s White Plains Division and Public Corruption Unit.  Assistant United States Attorneys Douglas B. Bloom, Justin Anderson and Perry Carbone are in charge of the prosecution.

              Preet Bharara, the United States Attorney for the Southern District of New York, announced that ALEX V. EKDESHMAN, the Chief Executive Officer of Paramount Management, LLC, was sentenced yesterday to eighty-seven months in prison for his role in a commodities fraud scheme.  EKDESHMAN ran a fraudulent scheme in which he solicited over $1.5 million from over 100 investors for the purpose of investing in foreign exchange currency transactions and then misappropriated the majority of investors’ funds to pay for personal and business expenses.  EKDESHMAN was originally charged in May 2014, and he was sentenced yesterday by the Honorable Vernon S. Broderick, United States District Judge.

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

            From at least May 2011 through May 2013, EKDESHMAN ran a fraudulent commodities trading scheme.  EKDESHMAN, who was chief executive officer of Paramount Management, LLC (“Paramount Management”), located in New York, New York, represented to investors that Paramount Management was in the business of investing in foreign exchange currency transactions, or “forex.”  Through various employees of Paramount Management, EKDESHMAN solicited investor funds on the understanding that the funds would be solely invested in forex.  As a result of these solicitations, EKDESHMAN and his employees collected at least $1.38 million from approximately 115 investors.

            Contrary to EKDESHMAN’s promise to invest the investors’ funds in forex, EKDESHMAN misappropriated the large majority of investor funds.  More than $1 million in investor funds were never traded in forex.  Instead, EKDESHMAN used those funds to make payments to himself and his family members, to buy personal items, to pay for business expenses related to Paramount Management, and to pay employees of Paramount Management.          

            EKDESHMAN, 42, of Holmdel, New Jersey, pled guilty to one count of commodities fraud on February 5, 2015.

            Mr. Bharara praised the work of the Federal Bureau of Investigation, and thanked the United States Commodity Futures Trading 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 is the broadest coalition of law enforcement, investigatory and regulatory agencies ever assembled to combat fraud.  Since its formation, the task force has made great strides in facilitating increased investigation and prosecution of financial crimes; enhancing coordination and cooperation among federal, state and local authorities; addressing discrimination in the lending and financial markets; and conducting outreach to the public, victims, financial institutions and other organizations.  Since fiscal year 2009, the Justice Department has filed over 18,000 financial fraud cases against more than 25,000 defendants.  For more information on the task force, please visit www.StopFraud.gov.     

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

             Preet Bharara, the United States Attorney for the Southern District of New York, announced that ERIC SALDARRIAGA, a private investigator in New York City, was sentenced today in Manhattan federal court to three months in prison.  The sentence was imposed by U.S. District Judge Richard J. Sullivan.  SALDARRIAGA pled guilty to conspiracy to commit computer hacking before Judge Sullivan on March 6, 2015.

            According to the allegations in documents filed in Manhattan federal court, and statements made at today’s sentencing and other court proceedings:

            The defendant, a private investigator, owned a company that provided private investigation services to members of the public for a fee.  Beginning in 2009, SALDARRIAGA, through services advertised on the Internet (the “Hacking Services”), hired individuals to hack into the e-mail accounts of almost 50 different victims.  For certain victims, SALDARRIAGA attempted to gain unlawful access to more than one email account.  SALDARRIAGA used the Hacking Services to access, unlawfully and secretly, the e-mail accounts of individuals he investigated on behalf of his clients, as well as individuals in whom SALDARRIAGA was interested for personal reasons.

            SALDARRIAGA paid the Hacking Services to provide him with login credentials, including usernames and passwords, for victims’ e-mail accounts.  SALDARRIAGA then unlawfully accessed and reviewed victims’ e-mail communications.  In total, SALDARRIAGA hired the Hacking Services to hack into, and provide unauthorized access to, at least 60 different e-mail accounts.

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            In addition to the prison term, SALDARRIAGA, 41, of Queens, New York, was also sentenced to three years of supervised release and ordered to forfeit $5,000 and pay a $1,000 fine.

            Mr. Bharara praised the FBI for their outstanding work in the investigation.

            This matter is being handled by the Office’s Complex Frauds and Cybercrime Unit. Assistant U.S. Attorney Daniel Noble is in charge of the case.

Preet Bharara, the United States Attorney for the Southern District of New York, Eugenia Cowles, Acting United States Attorney for the District of Vermont, Delano A. Reid, Special Agent in Charge of the New York Field Division of the Bureau of Alcohol, Tobacco, Firearms and Explosives (“ATF”), William J. Bratton, the Commissioner of the New York City Police Department (“NYPD”), Michael Greco, the United States Marshal for the Southern District of New York, and Colonel Thomas L’Esperance, Director of the Vermont State Police (“VSP”), announced the unsealing yesterday of an indictment charging 12 defendants with participating in a conspiracy to transport large quantities of crack cocaine and heroin from locations in New York City, to Bennington, Vermont, for resale in Bennington.  Seven of the 12 defendants were also charged with possessing and using firearms in connection with the narcotics trafficking conspiracy.  Seven defendants were taken into custody on June 23 and June 24, 2015. Six of them were presented in Manhattan federal court on June 24, 2015, before U.S. Magistrate Judge Debra Freeman. One is expected to be presented today.

Manhattan U.S. Attorney Preet Bharara stated:  “Yesterday’s arrests show once again that guns and illegal drugs seem to go hand in hand.  These defendants allegedly peddled crack cocaine and heroin, shuttling from Manhattan and the Bronx to Bennington, Vermont.  Illegal drugs, and the guns that go with them, are not just an urban problem or a local problem but a national one.  I thank my colleagues from the U.S. Attorney’s Office in Vermont, as well as all of our law enforcement partners, for their partnership and their dedication to fighting the dangers of drug trafficking in our communities.”

Acting U.S. Attorney Eugenia Cowles stated: “The District of Vermont is pleased to be working with our law enforcement colleagues in New York City to prosecute those who come to Vermont to traffic in guns and drugs.  For too long, heroin from New York City and guns from Vermont have been exchanged with lethal consequences in both districts.”

ATF Special Agent in Charge Reid stated: “Up until yesterday, the illicit trade of narcotics for weapons flourished from the streets of New York City to Bennington, Vermont. The United States Attorney's Office, the ATF and its law enforcement partners swiftly gathered the evidence necessary and now, in one fell swoop, have cast a wide, multi-State and multi-jurisdictional net over the alleged illegal activities of the Cory Harris et. al. conspiracy. Their arrests should serve as a stark reminder that the long arm of the law can easily extend into other States when necessary and remove from society those who don't deserve to inhabit it.”

NYPD Commissioner Bratton stated:  “These arrests and indictments are the result of our coordinated efforts to stop the sale and distribution of illegal firearms and narcotics. I want to commend the NYPD investigators involved in this case, the U.S. Attorney’s Office, Southern District, and our many law enforcement partners for their cooperation in this case and the resulting arrests.”

U.S. Marshal Michael Greco stated: “My office is completely committed to supporting our local, city, state and federal partners in apprehending the most dangerous criminals on our streets.  The continued cooperation of our agencies is paramount to the success of these complex missions.  I’m proud to be able to combine our resources and collaborate efforts in order to achieve our common goal.”

Vermont Sate Police Director Thomas L’Esperance stated: “I appreciate the collaboration between the Vermont Drug Task Force, NYPD, The U.S. Attorney’s Offices, ATF and the United Sates Marshals Service. This is a great example of the positive results that are achieved when law enforcement agencies and prosecutors work cooperatively across jurisdictional lines and all levels of government to ensure the safety of our communities.”   

As alleged in the Indictment unsealed yesterday in Manhattan federal court and statements made at yesterday’s court proceedings[1]:

From at least 2014 up to and including 2015, CORY HARRIS, 31, DANIEL HERRING, 25, FRANK JENKINS, JR., 21, JARON LANGHORNE, 20, MITCHELL MALDONADO, 24, RAHEEM MALDONADO, 23, UNIQUE NEWELL, 22, ADAM PHILLIPS, 32, KRYSTAL PINSONNEAULT, 32, ANDREW ROBLES, 21, MIGUEL ROBLES, 31, and LUIS ZABALA, 31, conspired to sell controlled substances, including crack cocaine and heroin, in Vermont and elsewhere.  Specifically, the Indictment charges (1) HERRING, JENKINS, LANGHORNE, MITCHELL MALDONADO, NEWELL, ANDREW ROBLES, and ZABALA with conspiring to distribute at least 280 grams of crack cocaine, and at least 100 grams of heroin;  (2) HARRIS, RAHEEM MALDONADO, and MIGUEL ROBLES with conspiring to distribute at least 100 grams of heroin; (3) PHILLIPS with conspiring to distribute at least 280 grams of crack cocaine; and (4) PINSONNEAULT with conspiring to distribute mixtures and substances containing crack cocaine and heroin.  HARRIS, JENKINS, LANGHORNE, MITCHELL MALDONADO, NEWELL, ANDREW ROBLES, and ZABALA are charged with using and possessing firearms between 2014 and 2015, in furtherance of the narcotics trafficking conspiracy.  HARRIS is also charged with using firearms in April 2012 in furtherance of possession with intent to distribute marijuana.

During the time period charged in the Indictment, members of the conspiracy obtained crack and heroin from locations in New York City, including Manhattan and the Bronx, and then transported the crack and heroin to Vermont, for distribution in and around Bennington, Vermont.  The members of the conspiracy sold crack and heroin from private apartments and certain motels in the Bennington area.  Many of the members of the conspiracy used firearms in connection with their narcotics trafficking.

Members of the conspiracy also provided heroin, crack, and other controlled substances to certain women in and around Bennington, who were addicted, or became addicted, to those controlled substances.  These women assisted members of the conspiracy with the transportation, storage, and distribution of crack and heroin in exchange for additional controlled substances, or in exchange for cash that the women used, in part, to purchase additional controlled substances.

*            *           *

Apart from PINSONNEAULT, all of the defendants face mandatory minimum prison terms ranging from five years to 35 years, and maximum prison terms ranging from 40 years to life.  PINSONNEAULT faces no mandatory term of imprisonment and faces a maximum term of 20 years in prison.

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.

A chart containing the names of the defendants who were arrested today, and the charges and maximum penalties they face, is attached.        

Mr. Bharara praised the outstanding investigative work of the Bureau of Alcohol, Tobacco, Firearms and Explosives, the New York City Police Department, the United States Marshals Service, the Vermont State Police, and the Bennington Police Department.

The prosecution is being handled by the Office’s Violent and Organized Crime Unit.  Assistant U.S. Attorneys Hadassa Waxman and Michael Gerber 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.

CHARGE(S)

DEFENDANTS

MAXIMUM PENALTIES

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

DANIEL HERRING, FRANK  JENKINS JR., JARON LANGHORNE, MITCHELL MADONADO, UNIQUE NEWELL, ANDREW ROBLES and LUIS ZABALA

Life in prison

 

Mandatory minimum: 10 years in prison

Conspiracy to distribute and possess with intent to distribute 100 grams and more of heroin

CORY HARRIS, RAHEEM MALDONADO and MIGUEL ROBLES.

Life in prison

 

Mandatory minimum: five years in prison

Conspiracy to distribute and possess with intent to distribute 280 grams and more of crack cocaine

ADAM PHILLIPS

Life in prison

 

Mandatory minimum: 10 years in prison

Conspiracy to distribute and possess with intent to distribute crack cocaine and heroin

KRYSTAL PINSONNEAULT

20 years in prison

Possession of a firearm in furtherance of a narcotics trafficking offense

CORY HARRIS (2 counts), FRANK  JENKINS JR., JARON LANGHORNE, MITCHELL MADONADO, UNIQUE NEWELL, ANDREW ROBLES and LUIS ZABALA

Life in prison

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

 

 

 

 

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[1] As the introductory phrase signifies, the entirety of the text of the Indictment, and the description of the Indictment set forth 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, Mark G. Peters, the Commissioner of the New York City Department of Investigation (“DOI”), and Diego Rodriguez, the Assistant Director-in-Charge of the New York Field Office of the Federal Bureau of Investigation (“FBI”), announced today the arrest of HARRY FLETCHER, an employee of the New York City Human Resources Administration (“HRA”), along with STANLEY HILL, KAREEM WASHINGTON, JAMES FORD, KENNETH WILLIAMSON, MARSHA RALPH, JASON BRYCE, KEVIN WHYTE, YESENIA VELAZQUEZ, and JOSEPH BULL, in connection with a food stamp fraud scheme. The Complaint alleges that FLETCHER, an HRA Eligibility Specialist whose job involved evaluating the issuance of Supplemental Nutrition Assistance Program (“SNAP”) benefits for New York City residents, solicited and accepted cash payments in exchange for issuing SNAP benefits to numerous individuals, including the remaining charged defendants.  The defendants were arrested today and presented in Manhattan federal court before U.S. Magistrate Debra Freeman.

            Manhattan U.S. Attorney Preet Bharara said:  “Harry Fletcher allegedly stole directly from the tables of some of the most vulnerable of our citizens, pocketing and misusing federal aid resources meant to help the less fortunate New York City residents feed their families.”

            DOI Commissioner Peters said:  “City workers who steal public funds undercut the effectiveness of government and its ability to help some of the neediest New Yorkers. This is fraud at its most shameful: HRA employees who used their public positions to enrich themselves and their associates, rather than the eligible individuals who willingly and diligently went through the vetting process, according to the charges. DOI will continue to work with its federal, state and City law enforcement partners to make arrests in these types of crimes.”

            FBI Assistant Director-in-Charge Rodriquez said:  “As alleged today, public funds were allocated to ineligible recipients of social service benefit programs. In a scheme to divert this money to those who did not qualify for assistance, those charged breached the trust of the public and will be held accountable for their actions.”

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

            The New York City Human Resources administration provides temporary help to individuals and families with social service and economic needs to assist them in reaching self-sufficiency.  Its services include, among other things, providing food stamps to low-income families and individuals.  Although the SNAP benefits program is administered locally through HRA, it is funded entirely by the federal government.  To apply for SNAP benefits, an applicant must complete and sign an application form listing, among other things, the applicant’s income and financial assets.  HRA Eligibility Specialists such as FLETCHER are supposed to interview SNAP program applicants and review applicant documentation in order to determine if the applicant is eligible to receive SNAP benefits.  

            Beginning in 2009, FLETCHER approached two landlords, who are referred to in the Complaint as CW-1 and CW-2, and who have pled guilty and are cooperating with the Government, and offered to provide CW-1 and CW-2 with monthly SNAP benefits in return for reoccurring payments of hundreds of dollars in bribes.  CW-1 and CW-2 agreed to pay the bribes and, as a result, received tens of thousands of dollars of SNAP benefits for which they were not eligible from 2009 through 2015.  CW-1 and CW-2 then recruited other individuals to take part in the scheme – including, but not limited to, the other defendants charged in the complaint – each of whom obtained monthly SNAP benefits arranged by FLETCHER, and without regard to whether the applicant qualified for such benefits, in return for continual bribes.  In total, FLETCHER accepted more than $20,000 in bribes for improperly approving over $240,000 in SNAP benefits to CW-1, CW-2 and the remaining defendants.   The applicants bribing FLETCHER were ineligible for SNAP benefits due to their income and/or the fact that they did not reside in New York City and thus were not eligible for New York City social service programs.

*              *             * 

            FLETCHER, 44, of the Bronx, New York, is charged with one count of conspiracy to commit bribery, which carries a maximum sentence of five years in prison; one count of solicitation and receipt of bribes, which carries a maximum sentence of 10 years in prison; one count of honest services fraud, which carries a maximum sentence of 20 years in prison; and one count of theft of government funds, which carries a maximum sentence of 10 years in prison.           

            The following defendants were each charged with one count of conspiracy to commit bribery, which carries a maximum sentence of five years in prison and one count of theft of government funds, which carries a maximum sentence of 10 years in prison:

• HILL, 48, Walkill, New York,
• WASHINGTON, 34, White Plains, New York
• FORD, 52, Jamaica, New York
• WILLIAMSON, 51, the Bronx, New York  
• RALPH, 38, New Rochelle, New York
• BRYCE, 42, New Rochelle, New York
• WHYTE, 30, Wappingers Falls, New York
• VELAZQUEZ, 37, the Bronx, New York    
• BULL, 39, the Bronx, New York

            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 investigative work of the DOI and the FBI in the investigation.  He also expressed his thanks to the Bronx County District Attorney’s Office for its assistance in the investigation.

            This case is being handled by the Office’s Public Corruption Unit.  Assistant United States Attorney Robert L. Boone is in charge of the prosecution.

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

 

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

Preet Bharara, United States Attorney for the Southern District of New York, Mark G. Peters, the Commissioner of the New York City Department of Investigation (“DOI”), and Diego Rodriguez, the Assistant Director-in-Charge of the New York Field Office of the Federal Bureau of Investigation (“FBI”), announced today the arrest of HARRY FLETCHER, an employee of the New York City Human Resources Administration (“HRA”), along with STANLEY HILL, KAREEM WASHINGTON, JAMES FORD, KENNETH WILLIAMSON, MARSHA RALPH, JASON BRYCE, KEVIN WHYTE, YESENIA VELAZQUEZ, and JOSEPH BULL, in connection with a food stamp fraud scheme. The Complaint alleges that FLETCHER, an HRA Eligibility Specialist whose job involved evaluating the issuance of Supplemental Nutrition Assistance Program (“SNAP”) benefits for New York City residents, solicited and accepted cash payments in exchange for issuing SNAP benefits to numerous individuals, including the remaining charged defendants.  The defendants were arrested today and presented in Manhattan federal court before U.S. Magistrate Debra Freeman.

Manhattan U.S. Attorney Preet Bharara said:  “Harry Fletcher allegedly stole directly from the tables of some of the most vulnerable of our citizens, pocketing and misusing federal aid resources meant to help the less fortunate New York City residents feed their families.”

DOI Commissioner Peters said:  “City workers who steal public funds undercut the effectiveness of government and its ability to help some of the neediest New Yorkers. This is fraud at its most shameful: HRA employees who used their public positions to enrich themselves and their associates, rather than the eligible individuals who willingly and diligently went through the vetting process, according to the charges. DOI will continue to work with its federal, state and City law enforcement partners to make arrests in these types of crimes.”

FBI Assistant Director-in-Charge Rodriquez said:  “As alleged today, public funds were allocated to ineligible recipients of social service benefit programs. In a scheme to divert this money to those who did not qualify for assistance, those charged breached the trust of the public and will be held accountable for their actions.”

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

The New York City Human Resources Administration provides temporary help to individuals and families with social service and economic needs to assist them in reaching self-sufficiency.  Its services include, among other things, providing food stamps to low-income families and individuals.  Although the SNAP benefits program is administered locally through HRA, it is funded entirely by the federal government.  To apply for SNAP benefits, an applicant must complete and sign an application form listing, among other things, the applicant’s income and financial assets.  HRA Eligibility Specialists such as FLETCHER are supposed to interview SNAP program applicants and review applicant documentation in order to determine if the applicant is eligible to receive SNAP benefits.

Beginning in 2009, FLETCHER approached two landlords, who are referred to in the Complaint as CW-1 and CW-2, and who have pled guilty and are cooperating with the Government, and offered to provide CW-1 and CW-2 with monthly SNAP benefits in return for reoccurring payments of hundreds of dollars in bribes.  CW-1 and CW-2 agreed to pay the bribes and, as a result, received tens of thousands of dollars of SNAP benefits for which they were not eligible from 2009 through 2015.  CW-1 and CW-2 then recruited other individuals to take part in the scheme – including, but not limited to, the other defendants charged in the complaint – each of whom obtained monthly SNAP benefits arranged by FLETCHER, and without regard to whether the applicant qualified for such benefits, in return for continual bribes.  In total, FLETCHER accepted more than $20,000 in bribes for improperly approving over $240,000 in SNAP benefits to CW-1, CW-2 and the remaining defendants.   The applicants bribing FLETCHER were ineligible for SNAP benefits due to their income and/or the fact that they did not reside in New York City and thus were not eligible for New York City social service programs.

*              *             *

FLETCHER, 44, of the Bronx, New York, is charged with one count of conspiracy to commit bribery, which carries a maximum sentence of five years in prison; one count of solicitation and receipt of bribes, which carries a maximum sentence of 10 years in prison; one count of honest services fraud, which carries a maximum sentence of 20 years in prison; and one count of theft of government funds, which carries a maximum sentence of 10 years in prison.

The following defendants were each charged with one count of conspiracy to commit bribery, which carries a maximum sentence of five years in prison, and one count of theft of government funds, which carries a maximum sentence of 10 years in prison:

• HILL, 48, Walkill, New York,
• WASHINGTON, 34, White Plains, New York
• FORD, 52, Jamaica, New York
• WILLIAMSON, 51, the Bronx, New York
• RALPH, 38, New Rochelle, New York
• BRYCE, 42, New Rochelle, New York
• WHYTE, 30, Wappingers Falls, New York
• VELAZQUEZ, 37, the Bronx, New York 
• BULL, 39, the Bronx, New York

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 investigative work of the DOI and the FBI in the investigation.  He also expressed his thanks to the Bronx County District Attorney’s Office for its assistance in the investigation.

This case is being handled by the Office’s Public Corruption Unit.  Assistant United States Attorney Robert L. Boone is in charge of the prosecution.

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

 

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

             Preet Bharara, United States Attorney for the Southern District of New York, announced that ERIC GIVENS, a former police officer with the National Railroad Passenger Corporation (“Amtrak”), and the former treasurer of the national union for Amtrak police officers, pled guilty yesterday in Manhattan federal court to embezzlement of union funds.  GIVENS, who was arrested last summer, entered his plea before U.S. District Judge Analisa Torres.

            According to the Complaint, Indictment, and plea proceeding:

            At the time of his arrest, GIVENS had been employed as a police officer with Amtrak since May 1997, and was most recently assigned to Penn Station, in New York, New York.  GIVENS served as the elected treasurer of the Amtrak Police Lodge 189 Labor Committee (the “Labor Committee”), the national union for Amtrak police officers, from 2003 through January 2010.  During the same period, and continuing until November 2013, GIVENS also served as the elected treasurer of Amtrak Police Lodge 189 Inc. (the “Lodge”), a fraternal organization affiliated with the Labor Committee.

           Starting in at least 2008, GIVENS improperly took more than $100,000 in total from the Labor Committee and Lodge by fraudulently charging personal expenses to the Labor Committee and Lodge and by withdrawing cash for his own purposes, and took steps to hide what he had done.  During this period, GIVENS used the debit card of the Labor Committee to pay for, among other things, gasoline and food, and used the debit card of the Lodge to pay for, among other things, travel, hotels in multiple cities, and entertainment in New York and New Jersey.  GIVENS also withdrew thousands of dollars in cash from Labor Committee and Lodge bank accounts.

*                      *                      *

           GIVENS, 52, of East Stroudsburg, Pennsylvania, pled guilty to embezzling union funds.  He faces a maximum sentence of five years in prison.  The maximum potential sentence in this case is prescribed by Congress and is provided here for informational purposes only, as any sentencing of the defendant will be determined by the judge.  Sentencing has been scheduled for September 24, 2015, at 4:00 p.m., before U.S. District Judge Analisa Torres.

            Mr. Bharara praised the outstanding work of the U.S. Department of Labor’s Office of Labor-Management Standards and its Office of Inspector General’s Office of Labor Racketeering and Fraud Investigations.  Mr. Bharara also thanked the Amtrak Police Department’s Office of Internal Affairs for its assistance.

            The case is being handled by the Office’s Public Corruption Unit.  Assistant U.S. Attorney Daniel C. Richenthal is in charge of the prosecution.

Preet Bharara, the United States Attorney for the Southern District of New York announced that IRA RICHARDS, a/k/a “Shyne,” of the Bronx, New York, was sentenced yesterday in Manhattan federal court to 20 years in prison for conspiring to commit sex trafficking of a woman by force, fraud, and coercion (“Victim-1”), and for sex trafficking of a minor female (“Victim-2”).  RICHARDS was also ordered to pay a total of $22,500 in restitution:  $9,000 to Victim-1, and $13,500 to Victim-2.  RICHARDS’ sentence was imposed yesterday by United States District Judge Lewis A. Kaplan.  RICHARDS was arrested in October 2013 by the FBI and NYPD, after Victim-1 and Victim-2 reported RICHARDS to law enforcement, and RICHARDS has been in federal custody since his arrest.

Manhattan U.S. Attorney Preet Bharara said:  “Ira Richards not only exploited vulnerable victims as part of his sex trafficking crimes, but also demeaned and brutalized them with senseless acts of violence.  Now he will be held to account with a lengthy term in federal prison.”

According to the Complaint, the Superseding Indictment, other documents filed in Manhattan federal court, and statements made at various proceedings in this case:

RICHARDS was a violent pimp who exploited Victim-1 and Victim-2 by causing them to engage in prostitution for RICHARDS’ own personal financial gain, RICHARDS demeaned Victim-1 and Victim-2 by commanding them to call him “Daddy” and follow other dehumanizing rules imposed by him, and RICHARDS repeatedly brutalized them with beatings, rape, and other acts of violence for not following his mandates.

Victim-1

In or around 2012, RICHARDS convinced Victim-1, who was then in her mid-twenties, to work for him as a prostitute.  RICHARDS recruited Victim-1 by promising to provide a place for Victim-1 to live with her infant, child care for her infant, and other basic necessities.

From at least in or about July through August 2012, RICHARDS managed Victim-1’s prostitution activities along with an uncharged co-conspirator (“CC-1”) who also worked for RICHARDS as a prostitute.  RICHARDS and CC-1 caused Victim-1 to engage in prostitution at locations in the New York City area, including at Hunts Point in the Bronx.  Almost all of the proceeds earned from Victim-1’s prostitution went to RICHARDS.  RICHARDS caused advertisements to be posted on classified websites such as Backpage.com offering Victim-1 for commercial sex under her street nickname.  The advertisements typically featured photographs of women (other than Victim-1) wearing little clothing, and a telephone number to call.

RICHARDS imposed a strict code of conduct on Victim-1 requiring that she call him “Daddy,” refrain from acknowledging or even looking at another pimp, and meet earnings quotas he set, among other mandates.  RICHARDS punished violations of his code with brutality such as beatings and rape.

For example, on at least three or four occasions in or about July and August 2012, RICHARDS forcibly sodomized Victim-1 for displeasing him.

Similarly, in or about July or August 2012, RICHARDS assaulted Victim-1 for attempting to escape from him.  At the time, Victim-1, her infant, and a 19-year-old woman who also worked as a prostitute for RICHARDS, lived in an apartment maintained by RICHARDS.  In or about July or August 2012, Victim-1 tried to flee from RICHARDS to a different pimp.  Shortly thereafter, RICHARDS found Victim-1 and brought her back to the apartment, where RICHARDS beat Victim-1 in the presence of her infant, among others.  During the beating, RICHARDS made Victim-1 strip naked and kneel, and then RICHARDS continually hit Victim-1 in her head and body with an umbrella until the umbrella broke.  After the beating, Victim-1 asked RICHARDS to take her to the hospital.  RICHARDS refused, and instead forced Victim-1 to engage in prostitution with a swollen eye and other injuries he had caused.

Victim-2

In or about 2010, when Victim-2 was 17 years old, RICHARDS convinced Victim-2 to work for him as a prostitute.  At the time, RICHARDS was almost ten years older than Victim-2.  While Victim-2 was 17 years old, RICHARDS caused Victim-2 to engage in prostitution at locations in the Bronx and elsewhere in the New York City area.  Almost all of the proceeds earned from Victim-2’s prostitution went to RICHARDS.

Victim-2 continued to work as a prostitute for RICHARDS during several periods after she had turned 18.  Like Victim-1, Victim-2 was subjected to violence by RICHARDS as punishment for disobedience or for displeasing him.  For example, on or about November 4, 2011, when Victim-2 was 18 years old,  RICHARDS engaged in an argument with Victim-2 in an apartment in the Bronx where she was living with RICHARDS, after RICHARDS became angry that Victim-2 had made only about $100 from prostitution that day.  Victim-2 decided to leave RICHARDS and called her mother to arrange to go live with her mother.  After RICHARDS saw that Victim-2 had packed bags to leave, RICHARDS began to choke Victim-2 and dragged her away from the front door to a separate room in the apartment.  RICHARDS turned on a stereo to play loud music, tore Victim-2’s clothing from her body, and struck her with a studded belt numerous times about her body and head.  Victim-2 begged RICHARDS to stop, but he refused and did not stop beating her until the belt broke.  While Victim-2 was still in pain from injuries suffered as a result of this beating, RICHARDS ordered Victim-2 to service prostitution clients.  Victim-2 took prostitution clients at the apartment for the next few days because she initially had difficulty walking after the beating.

*          *          *

Mr. Bharara praised the outstanding investigative work of the FBI and the NYPD in investigating this case.

The prosecution of this case is being overseen by the Office’s General Crimes Unit.  Assistant United States Attorneys Samson Enzer and Rebecca Mermelstein are in charge of the prosecution.

Preet Bharara, the United States Attorney for the Southern District of New York, and Diego Rodriguez, the Assistant Director in Charge of the New York Field Office of the Federal Bureau of Investigation (“FBI”), announced that EMANUEL COHEN, the former chief executive officer of a Florida-based company that was a wholesaler and distributor of beauty products (the “Company”), pled guilty yesterday in Manhattan federal court before U.S. Magistrate Judge Sarah Netburn to orchestrating a fraudulent scheme to obtain millions of dollars in loans by making false statements and providing false and fraudulent documents concerning the Company’s financial condition to a commercial bank based in New York (the “Bank”).  JAY SOSONKO, the former chief operating officer of the Company, was arrested this morning in Boca Raton, Florida, on a criminal complaint (the “Complaint”) for his role in the scheme.  SOSONKO was presented today in federal court in West Palm Beach, Florida. 

Manhattan U.S. Attorney Preet Bharara said: “As he has now admitted in court, Emanuel Cohen, the CEO of a cosmetics company, defrauded a bank of nearly $5 million by lying and fabricating key financial documents he needed to get loans.  Cohen’s alleged cohort, Jay Sosonko, the CFO of the company, was arrested today and will face criminal charges for his alleged involvement in the scheme.  We thank the FBI for their tireless efforts to ensure that those who cheat and exploit financial institutions are held accountable.”

FBI Assistant Director in Charge Diego Rodriguez said: “The plea by Cohen for his role in the scheme and the arrest of Sosonko for his alleged role should serve as a reminder that this type of creative accounting ends with handcuffs. The FBI is committed to working with our partners to investigate and bring to justice those who seek to profit illegally from our financial systems.”

According to the allegations contained in the Information to which COHEN pled guilty, statements made during COHEN’s plea proceeding, and the Complaint against SOSONKO unsealed today[1]:

From 2012 through March 2014, COHEN and SOSONKO engaged in a scheme to fraudulently induce the Bank to lend millions of dollars to the Company.  Among other things, COHEN and SOSONKO knowingly made false representations to the Bank, concealed material facts from the Bank, and submitted false and fraudulent documents to the Bank, including fabricated borrowing base certificates.  Specifically, COHEN and SOSONKO falsely inflated the Company’s sales and accounts receivable on borrowing base certificates that were provided to the Bank pursuant to loan agreements between the Bank and the Company.  COHEN and SOSONKO used those falsely inflated sales and accounts receivable to mislead the Bank about the Company’s true financial performance so that the Company could secure and draw down millions of dollars in loans from the Bank that the Company would not otherwise have been entitled to receive.

The Company ultimately defaulted on its loans from the Bank in about March 2014.  At that time, the outstanding balance on the loans was approximately $4.8 million.                                             

*                *                *

COHEN, 71, of Boca Raton, Florida, pled guilty to one count of conspiracy to commit bank fraud and one count of bank fraud, each of which carries a maximum sentence of 30 years in prison. COHEN is scheduled to be sentenced on November 4, 2015, before U.S. District Judge Lewis A. Kaplan.

SOSONKO, 68, of Boca Raton, Florida, is charged with one count of conspiracy to commit bank fraud, one count of bank fraud, and one count of making a false statement to influence bank action, each of which carries a maximum sentence 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 defendants will be determined by the judge.

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

The case is being prosecuted by the Office’s Complex Frauds and Cybercrime Unit. Assistant U.S. Attorney Edward A. Imperatore is in charge of the prosecution.

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

 

---

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

            Preet Bharara, the United States Attorney for the Southern District of New York, announced that RICKY PATRICK HESTER, 25, of Granger, Indiana, was found guilty on both counts of a two-count Indictment that charged him with receipt, distribution, and possession of child pornography. The verdict came following a five-day jury trial in White Plains federal court before U.S. District Judge Vincent L. Briccetti.    

            U.S. Attorney Preet Bharara said:  “Ricky Patrick Hester received, distributed, and saved child pornography.  In collecting and sharing these appalling videos, he contributed to the victimization of the most vulnerable members of our society, our children.  Thanks to the efforts of the Department of Homeland Security, Hester’s conduct was brought to light and he will now be punished for his serious crimes.”

            According to the Indictment and the evidence at trial:

            From at least as early as November 2012, HESTER used a Yahoo! email account, a file-sharing account on Dropbox.com, as well as his personal cellphone, to collect and share images of children being forced into sexual activity.

            On December 18, 2013, HESTER was interviewed by agents with Homeland Security Investigations (“HSI”) and he admitted that he had used his Yahoo! email account to send child pornography, that his preference was for boys as young as four years old, that he had used Dropbox to trade child pornography with others, and that he stored child pornography on his cellphone.

            HESTER’s cellphone, which was seized by HSI on December 18, 2013, during a search warrant of HESTER’s dorm room at West Point, contained approximately 1,200 images and videos of children engaging in sexual activity.

            Evidence at trial included approximately 100 emails sent or received by HESTER.  In many of these emails, HESTER requested videos and images of “kids being forced to do stuff,” “boys being tied up and peed on,” and “man boy hardcore.”  In numerous emails, he indicated a preference for boys aged four to 10 years old.

            HESTER entered the United States Military Academy at West Point as a cadet in August 2009.  He took a sabbatical from West Point from August 2011 through August 2012.  He returned to West Point in the fall of 2012.  At the time of his arrest, on December 19, 2013, HESTER was one semester away from graduation.

             HESTER faces a maximum sentence of 20 years in prison on each of the two counts in the Indictment and a mandatory minimum term of five years in prison.

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

             HESTER lived in Granger, Indiana, from his arrest until his conviction today.  Judge Briccetti remanded him following his conviction.  In remanding the defendant, Judge Briccetti underscored that the videos that HESTER sought out and shared depicted children being tortured.

             Mr. Bharara praised the outstanding investigative work of the Department of Homeland Security.  He also thanked the Army Criminal Investigation Command for their assistance with the investigation.

            This prosecution is being handled by the White Plains Division.  Assistant United States Attorneys Lauren Schorr, Marcia S. Cohen, and Daniel Filor are in charge of the prosecution.

Preet Bharara, the United States Attorney for the Southern District of New York, announced that ALEX YÜCEL, the owner of an organization known as “Blackshades” that since 2010 sold and distributed to thousands of people in more than 100 countries a sophisticated and pernicious form of malicious software, or “malware,” known as the Blackshades Remote Access Tool, or “RAT,” was sentenced today in Manhattan federal court to 57 months in prison.  The sentence was imposed by U.S. District Judge P. Kevin Castel.  YÜCEL pled guilty to computer hacking on February 18, 2015.

Manhattan U.S. Attorney Preet Bharara said:  “Alex Yucel created, marketed, and sold software that was designed to accomplish just one thing – gain control of a computer, and with it, a victim’s identity and other important information. This malware victimized thousands of people across the globe and invaded their lives.  But Yucel’s computer hacking days are now over.”

According to the allegations in documents filed in Manhattan federal court, and statements made at today’s sentencing and other court proceedings:

Beginning in 2010, the “Blackshades” organization, which YÜCEL owned and controlled, sold and distributed malware to thousands of cybercriminals throughout the world.  Blackshades’ flagship product was the RAT – a sophisticated piece of malware that enabled cybercriminals secretly and remotely to gain control over a victim’s computer.  After installing the RAT on a victim’s computer, a user of the RAT had free rein to, among other things, access and view documents, photographs, and other files on the victim’s computer, record all of the keystrokes entered on the victim’s keyboard, steal the passwords to the victim’s online accounts, and even activate the victim’s web camera to spy on the victim – all of which could be done without the victim’s knowledge.  A Blackshades user could also exploit victims’ computers for Distributed Denial of Service (“DDoS”) attacks by commanding Blackshades-infected computers to repeatedly send requests to targeted websites in an effort to disable those websites and deny service from those websites to legitimate visitors.

The RAT was typically advertised on forums for computer hackers and marketed as a product that conveniently combined the features of several different types of hacking tools. Copies of the Blackshades RAT were available for sale, typically for $40 each, on a website maintained by Blackshades.  After purchasing a copy of the RAT, a user had to install the RAT on a victim’s computer – i.e., “infect” a victim’s computer.  The infection of a victim’s computer could be accomplished in several ways, including by tricking victims into clicking on malicious links or by hiring others to install the RAT on victims’ computers.

The RAT contained tools known as “spreaders” that helped users of the RAT maximize the number of infections.  The spreader tools generally worked by using computers that had already been infected to help spread the RAT further to other computers.  For instance, to lure additional victims to click on malicious links that would install the RAT on their computers, the RAT allowed cybercriminals to send those malicious links to others via the initial victim’s social media service, making it appear as if the message had come from the initial victim.  For example, a RAT user could send an instant message, or IM, to potential victims that appeared to come from the initial victim, inviting them to click on a link that appeared to lead to a legitimate website, but would instead install the RAT on the potential victim’s computer.

YÜCEL co-created the Blackshades RAT with Michael Hogue and operated the Blackshades organization with the help of several employees whom YÜCEL paid to advertise the RAT on various Internet forums and to provide customer support.  The RAT was purchased by several thousand users in more than 100 countries and used to infect more than half a million computers worldwide.  Blackshades generated sales of more than $350,000 between September 2010 and April 2014.

*                      *                      *

YÜCEL, 25, a Swedish national, was arrested in Moldova in November 2013.  He was the first defendant ever to be extradited from Moldova to the United States.  In addition to the prison term, YÜCEL was sentenced to three years supervised release, and forfeiture of $200,000 and the computer equipment used.

Brendan Johnston, an administrator for the Blackshades organization, pled guilty in November 2014, before U.S. District Judge Jesse M. Furman to conspiracy to commit computer hacking.  On June 19, 2015, Johnston was sentenced to one year and one day in prison.    

Marlen Rappa, a customer of Blackshades who purchased the RAT and used it to infect victims’ computers, spy on those victims using their web cameras, and steal personal files from their computers, pled guilty in October 2014, before U.S. District Judge Valerie E. Caproni.  On April 22, 2015, Rappa was sentenced to one year and one day in prison.

Kyle Fedorek, a customer of Blackshades who purchased the RAT and used it to steal financial and other account information from more than 400 victims, pled guilty in August 2014 before U.S. Magistrate Judge Gabriel W. Gorenstein.  On February 19, 2015, Fedorek was sentenced by U.S. District Judge Vernon S. Broderick to two years in prison.

Michael Hogue, the co-creator of the RAT, pled guilty before Judge Castel in January 2013, and is awaiting sentencing.

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

The case is being prosecuted by the Office’s Complex Frauds and Cybercrime Unit.  Assistant U.S. Attorneys Daniel Noble and Sarah Lai are in charge of the prosecution. Assistant U.S. Attorney Paul Monteleoni is in charge of the forfeiture aspects of the case.

Principal Deputy Assistant Attorney General Vanita Gupta, Head of the Civil Rights Division, issued the following statement today in connection with the agreement in principle in Nunez v. City of New York embodied in the attached letter filed today with the court:

“The Civil Rights Division is committed to transformative reform at Rikers Island.  We are deeply encouraged by this agreement in principle.  We are also grateful to have worked with the U.S. Attorney’s Office in this landmark civil rights case, a model for corrections reform throughout the country.”

U.S. Attorney Preet Bharara of the Southern District of New York issued the following statement in connection with the agreement in principle among the parties in Nunez v. City of New York:

“I have repeatedly made clear our unwavering commitment to enduring and enforceable reform at Rikers Island.  Today, we have reached a groundbreaking agreement in principle with city officials, subject to ultimate approval by the court.  This comprehensive framework requires the city to implement sweeping operational changes to fix a broken system and dismantle a decades-long culture of violence.  Its ongoing implementation will be overseen by the court and an independent federal monitor.  Federal prosecutors will remain vigilant to ensure that the Constitution protects each and every person within the walls of Rikers Island.” 

Manhattan U.S. Attorney Preet Bharara issued the following statement today in connection with the agreement in principle among the parties in Nunez v. City of New York embodied in the attached letter filed today with the court:

“I have repeatedly made clear our unwavering commitment to enduring and enforceable reform at Rikers Island.  Today, we have reached a groundbreaking agreement in principle with City officials, subject to ultimate approval by the Court.  This comprehensive framework requires the City to implement sweeping operational changes to fix a broken system and dismantle a decades-long culture of violence.   Its ongoing implementation will be overseen by the Court and an independent federal monitor.  Federal prosecutors will remain vigilant to ensure that the Constitution protects each and every person within the walls of Rikers Island.”   

Principal Deputy Assistant Attorney General Vanita Gupta, Head of the Civil Rights Division, issued the following statement today:

“The Civil Rights Division is committed to transformative reform at Rikers Island.  We are deeply encouraged by this agreement in principle.  We are also grateful to have worked with the U.S. Attorney’s Office on this landmark civil rights case, a model for corrections reform throughout the country.”

Preet Bharara, the United States Attorney for the Southern District of New York, and Andriana Vamvakas, the New York District Director of the U.S. Department of Labor’s Office of Labor‑Management Standards (“DOL-OLMS”), announced today that JOHN EARVIN, the former president of the United Federation of Law Enforcement Officers (“UFLEO” or the “Union”), pled guilty to an Indictment charging him with wire fraud.  The UFLEO represents Special Inspectors employed by the Metropolitan Transportation Authority of New York (“MTA”).  EARVIN pled guilty before U.S. District Judge Paul A. Engelmayer.

According to the allegations in the Indictment and statements made in court:

From February 2007 through April 2010, EARVIN was the Union’s president, supervising the affairs of the Union and managing the Union’s finances, including through sole control of the Union’s bank account (the “Account”).  Through his presidency, EARVIN perpetrated a scheme to defraud the Union by diverting Union dues payments deposited into the Account for his own benefit, principally by making hundreds of ATM withdrawals at off-track betting facilities and other locations and making personal use of the funds.  In perpetuating the scheme and preventing its discovery, EARVIN repeatedly lied to Union members about the Account by, for example, claiming that he could not provide an accounting of funds to Union members because an independent auditor was reviewing the Union’s finances.  As a result of the scheme, EARVIN defrauded the Union and its members of approximately $28,012.
 

*          *          *

EARVIN, 67, of New Rochelle, New York pled guilty to one count of wire fraud, which carries a maximum sentence of 20 years in prison.  The Indictment also seeks forfeiture of crime proceeds.  The maximum potential sentence is prescribed by Congress and is provided here for informational purposes only, as any sentencing of the defendant will be determined by the judge.

EARVIN is scheduled to be sentenced before Judge Engelmayer on October 22 at 10 a.m.

U.S. Attorney Preet Bharara thanked the DOL-OLMS for its work in the investigation.

The case is being prosecuted by the Office’s Public Corruption Unit.  Assistant U.S. Attorneys Carrie H. Cohen and Jennifer Gachiri are in charge of the prosecution.

            Preet Bharara, the United States Attorney for the Southern District of New York, announced that JOSEPH DESMARET was sentenced yesterday in White Plains federal court to three years in prison for his participation in a scheme in which he accepted over $10,000 in cash bribes in exchange for his votes, as a member of the Spring Valley Board of Trustees, to sell Village land and steer a state-funded transportation contract to a real estate development company.  DESMARET was sentenced before U.S. District Judge Kenneth M. Karas, before whom DESMARET pled guilty on January 29, 2014.

            Manhattan U.S. Attorney Bharara stated:  “Joseph Desmaret’s sentence is a reminder that every politician, no matter how high the office he holds, must act only in the interest of the public he serves.”

            According to the Indictment and other documents filed in this case:

            DESMARET accepted approximately $10,500 in cash bribes from an undercover FBI agent (“UC”) and a cooperating witness in exchange for his vote in favor of a sale of land owned by Spring Valley to a company he believed was controlled by the UC.  In addition, DESMARET agreed to steer to the UC’s company New York State funding for road work associated with the project that he believed the UC’s company was developing.

*                *                *

            In addition to the prison term, DESMARET, 57, formerly of Monsey, New York, was also sentenced to two years of supervised release, and ordered to forfeit $10,500.  Noramie Jasmin, DESMARET’s co-defendant and the then-mayor of Spring Valley, New York, was convicted for her role in the bribery scheme in April 2015 and is currently scheduled to be sentenced by Judge Colleen McMahon on August 7, 2015.

            Mr. Bharara praised the outstanding efforts of the Federal Bureau of Investigation and Rockland County District Attorney’s Office.

            This case is being handled by the Office’s White Plains Division and Public Corruption Unit.  Assistant U.S. Attorneys Douglas B. Bloom and Justin Anderson are in charge of the prosecution.

15-152

           Preet Bharara, the United States Attorney for the Southern District of New York, James J. Hunt, Special Agent in Charge, New York Division of the Drug Enforcement Administration (“DEA”), and Joseph A. D’Amico, the Superintendent of the New York State Police (“NYSP”), announced the unsealing yesterday of an indictment and two complaints charging a total of 11 defendants with allegedly engaging in the distribution of cocaine in and around Orange, Rockland, and Bronx Counties, New York.  Ten defendants were taken into custody on June 17 and June 18, 2015, and were presented in White Plains federal court on June 18 and June 19, 2015, before U.S. Magistrate Judge Paul E. Davison.

            U.S. Attorney Preet Bharara stated:  “These arrests strike at the heart of an entrenched group of alleged drug dealers.  Their alleged sales of narcotics in public locations affected communities in Orange County and surrounding areas.  We thank the Drug Enforcement Administration, the New York State Police, and our many local law enforcement partners for their extraordinary efforts on this case.” 

            DEA Special Agent in Charge James J. Hunt stated: “Wherever this alleged drug trafficking crew went, drug addiction allegedly followed. By joining forces and using investigative resources, law enforcement has arrested those responsible for selling cocaine throughout Orange County and our neighboring towns.”         

            NYSP Superintendent Joseph A. D’Amico said: “The partnership between the Drug Enforcement Administration, New York State Police and U.S. Attorney's Office has resulted in the arrests of these allegedly dangerous individuals. For more than a decade, these people allegedly sold large quantities of cocaine in our New York communities – a crime that we won't tolerate. The dedication of these law enforcement agencies and our local partners, the City of Middletown and Town of Warwick Police Departments, resulted in these charges and the seizure of cocaine, crack cocaine, heroin, and cash. I applaud our partners for the hard work that brought this operation, and its supply of drugs, to an end.” 

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

 

United States v. Cheyenne Simpson, et al., 15 Cr. 370

            Between 2009 and 2015, CHEYENNE SIMPSON, MICHAEL BRANDS, LASHANTA MENDOZA, and EDWIN DELMORAL conspired to sell cocaine in Middletown, Goshen, and elsewhere.  During the course of the conspiracy, law enforcement officers observed the defendants selling cocaine to multiple buyers, some of whom were confidential informants working with the police.  Law enforcement officers using court-authorized wiretaps also recorded numerous conversations in which the defendants discussed trafficking in cocaine.

            Similarly, between 2013 and 2015, EDWIN DELMORAL, PEDRO BARBOSA, JAMES CHRISTIANO, GENNARO COSTAGLIOLA, JASON KEATING, and ROSA BARBOSA conspired to sell cocaine in Middletown and elsewhere.  During the course of the conspiracy, law enforcement also observed these defendants selling cocaine to multiple buyers, some of whom were confidential informants working with the police, and used court-authorized wiretaps to record numerous conversations in which these defendants discussed trafficking in cocaine.

United States v. Eliseo Llanos, 15 Mag. 2086

            Between 2012 and 2015, ELISEO LLANOS sold over five kilograms of cocaine operating out of Mountaindale, New York.  LLANOS sold as much as a quarter kilogram to a single buyer every two to four weeks.  Law enforcement officers using court-authorized wiretaps also recorded conversations in which Llanos agreed to supply another cocaine trafficker who supplied street-level cocaine dealers.

United States v. Thomas Garcia, 15 Mag. ___

            Since in or about 2001, THOMAS GARCIA sold over five kilograms of cocaine in Bronx and Rockland Counties.  On or about June 18, 2015, DEA agents and NYSP investigators seized approximately 1.5 kilograms of cocaine, over one kilogram of heroin, and a loaded firearm from GARCIA’s car and apartment in the Bronx.

•  

            The defendants in United States v. Simpson, et al. face maximum terms of life in prison and mandatory minimum terms of 10 years in prison.  The defendant in United States v. Llanos also faces a maximum term of life in prison and a mandatory minimum term of 10 years in prison.  The defendant in United States v. Garcia faces a maximum term of life in prison and a mandatory minimum term of 15 years in prison.

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

            A chart containing the names of the defendants who were arrested today, and the charges and maximum penalties they face, is attached.      

            Mr. Bharara praised the outstanding investigative work of the Drug Enforcement Administration, the New York State Police, the City of Middletown Police Department, the New Jersey State Police, and the Town of Warwick Police Department.

            This investigation was conducted by the DEA’s Westchester Task Force, the New York State Police CNET Campbell Hall, and the U.S. Marshals Service.  Assistance was provided by Town of Warwick Police Department, the Vernon Police Department, the New Jersey State Police, Sussex County Drug Trask Force, City of Middletown Police Department, Sullivan County District Attorney's Office, and Fallsburgh Police Department.   The DEA’s Westchester Resident Office comprises agents and officers of the DEA, Westchester Police Department, New Rochelle Police Department, Yonkers Police Department, Mount Vernon Police Department, White Plains Police Department and Port Chester Police Department..

            The prosecution is being handled by the Office’s White Plains Division.  Assistant U.S. Attorneys Jessica K. Feinstein and Hagan Scotten are in charge of the prosecution.

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

 

CHARGE(S)

DEFENDANTS

MAXIMUM PENALTIES

Narcotics conspiracy

(Conspiracy to distribute and possess with intent to distribute five kilograms or more of cocaine.)

CHEYENNE SIMPSON MICHAEL BRANDS

LASHANTA MENDOZA a/k/a “LA,” a/k/a “Lynn,” EDWIN DELMORAL

PEDRO BARBOSA a/k/a “Pete,” a/k/a “P,”

JAMES CHRISTIANO, a/k/a “Jimmy,”

GENNARO COSTAGLIOLA

a/k/a “Gerry,” a/k/a “Big Nose,”

JASON KEATING

ROSA BARBOSA

Life in prison

 

Mandatory minimum: 10 years in prison

Distribution and possession with intent to distribute over five kilograms of cocaine

ELISEO LLANOS, a/k/a “Eli,”

THOMAS GARCIA, a/k/a “Biggz”

Life in prison

 

Mandatory minimum: 10 years in prison

Distribution and possession with intent to distribute over one kilogram of heroin

THOMAS GARCIA, a/k/a “Biggz”

Life in prison

 

Mandatory minimum: 10 years in prison

Possession of a firearm in furtherance of a narcotics trafficking offense

THOMAS GARCIA, a/k/a “Biggz”

Life in prison

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

 

 

 

 

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[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, Diego Rodriguez, the Assistant Director-In-Charge of the New York Office of the Federal Bureau of Investigation (“FBI”), and George N. Longworth, the Commissioner of the Westchester County  Department of Public Safety, on behalf of the Westchester County Northern Narcotics Initiative, announced the filing of a Superseding Indictment charging LAKUAN RHYNE, 23, of Peekskill, New York, with distributing heroin and fentanyl, the use of which caused the overdose death of an individual.  The Superseding Indictment also charges RHYNE and 11 other defendants with conspiring to distribute heroin, crack cocaine, and powder cocaine in and around Westchester County from at least 2014 up to and including January 2015.

All of the 12 defendants were charged in the original Indictment, filed in January 2015, and have previously been taken into custody.  The Superseding Indictment adds the charge against RHYNE for distributing narcotics that caused the death of an individual.  The case is assigned to U.S. District Judge Nelson S. Román.

U.S. Attorney Bharara stated: “Overdose deaths from heroin and fentanyl have become an epidemic in many communities north of New York City.  Another young person from one of those communities died, the tragic victim of heroin and fentanyl allegedly peddled by the defendant Lakuan Rhyne.  The charge brought against that defendant in the Superseding Indictment serves as a reminder that the sale of such poison cannot be tolerated, and that behind every overdose death, law enforcement is looking for the drug dealer responsible.”

FBI Assistant Director-in-Charge Rodriguez stated:  “Drug distribution puts profits above life.  In this case, it is alleged Lakuan Rhyne and his associates distributed or conspired to distribute heroin, crack cocaine, and powder cocaine out of cars, residences, and on the streets of Westchester County, New York.  It is also alleged that Ryne’s distribution of heroin laced with fentanyl led to the death of Thomas Coogan.  Although we cannot always protect people from themselves, we can hold people accountable for their actions.  We will continue to work with our partners to investigate these offenses in order to protect our communities.”

Commissioner Longworth stated: “The Westchester County Department of Public Safety remains committed to working with federal and local law enforcement to combat the distribution and sale of heroin in our county. I am grateful to the FBI Violent Crimes Task Force and the U.S. Attorney’s Office for the valuable partnership they have forged with Westchester’s law enforcement community.”

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

The defendants were members of drug trafficking conspiracies operating in the area of Westchester County, New York.  LAKUAN RHYNE, a/k/a “Rico,” was a leader of the drug distribution rings.  From at least early 2014 through January 2015, RHYNE and his associates conspired to distribute significant quantities of heroin, crack cocaine, and powder cocaine in and around Westchester County.  RHYNE and his associates sold their drugs out of cars, residences, and on the streets.  At least some of the heroin distributed by RHYNE was laced with fentanyl, a synthetic opioid that is significantly stronger than both ordinary heroin and morphine.

On January 26, 2014, RHYNE sold some of his fentanyl-laced heroin to Thomas Coogan, a 23-year-old resident of Buchanan, New York.  Later that day, after using the heroin supplied by RHYNE, Coogan died.  The Westchester County Medical Examiner’s report indicates that Coogan died of “acute mixed drug intoxication (heroin, fentanyl, and alprazolam).”  If convicted of the offense of distributing narcotics the use of which resulted in Coogan’s death, as charged in Count Four of the Superseding Indictment, RHYNE faces a mandatory minimum sentence of 20 years in prison, and a maximum sentence of life in prison.

The four-count Superseding Indictment also charges RHYNE and varying combinations of his associates with conspiring to distribute and possess with intent to distribute (i) one kilogram or more of heroin, in violation of Title 21, United States Code, Sections 846, 841(a)(1), and 841(b)(1)(A) (Count One); (ii) 280 grams or more of crack cocaine, in violation of Title 21, United States Code, Sections 846, 841(a)(1), and 841(b)(1)(A) (Count Two); and (iii) 500 grams or more of cocaine, in violation of Title 21, United States Code, Sections 846, 841(a)(1), and 841(b)(1)(B) (Count Three).

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, the Westchester County Northern Narcotics Initiative, which comprises officers of the Westchester County Department of Public Safety and the police departments of Peekskill, Croton-on-Hudson, Buchanan, Bedford, Yorktown, Mount Kisco, and Ossining, New York, as well as the FBI Violent Crimes Task Force.  He also thanked the Westchester County District Attorney’s Office for its participation.

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

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

15-150                                                             ###

 

CHARGE

DEFENDANTS

MAXIMUM PENALTIES

Count One

Narcotics conspiracy – Heroin

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

LAKUAN RHYNE

            a/k/a “Rico”

JESSE DABBS

DAIVON PRYOR

JONATHAN THORNTON             a/k/a “Staxx”

JOHNSON VANIYAPURAKAL

Life in prison

Mandatory minimum: 10 years in prison

Count Two

Narcotics conspiracy – Crack

(Conspiracy to distribute and possess with intent to distribute 280 grams or more of crack cocaine, in violation of 21 U.S.C. §§ 846, 841(a)(1) & 841(b)(1)(A))

LAKUAN RHYNE

            a/k/a “Rico”

JESSE DABBS

MICHAEL DOUSE

MICHAEL GRAY

KEVIN HERBIN

ROBERT MILLER

DWAYNE MOUNTAIN

JONATHAN THORNTON

            a/k/a “Staxx”

Life in prison

Mandatory minimum: 10 years in prison

Count Three

Narcotics conspiracy – Cocaine

(Conspiracy to distribute and possess with intent to distribute 500 grams or more of cocaine, in violation of 21 U.S.C. §§ 846, 841(a)(1) & 841(b)(1)(B))

LAKUAN RHYNE

            a/k/a “Rico”

JESSE DABBS

CURTIS DIMMIE

MICHAEL DOUSE

MICHAEL GRAY

MICHAEL HARRINGTON

ROBERT MILLER

JONATHAN THORNTON

            a/k/a “Staxx”

JOHNSON VANIYAPURAKAL

40 yrs. in prison

Mandatory minimum: five years in prison

Count Four

Narcotics distribution resulting in death

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

LAKUAN RHYNE

            a/k/a “Rico”

Life in prison

Mandatory minimum: 20 years in prison

Defendant

Age

Residence

LAKUAN RHYNE

23

Peekskill, NY

JESSE DABBS

24

Peekskill, NY

CURTIS DIMMIE

47

Mohegan Lake, NY

MICHAEL DOUSE

39

Flushing, NY

MICHAEL GRAY

48

Ossining, NY

MICHAEL HARRINGTON

36

Mahopac, NY

KEVIN HERBIN

24

Cortlandt Manor, NY

ROBERT MILLER

36

Cortlandt Manor, NY

DWAYNE MOUNTAIN

28

Putnam Valley, NY

DAIVON PRYOR

20

Poughkeepsie, NY

JONATHAN THORNTON

29

Peekskill, NY

JOHNSON VANIYAPURAKAL

26

Mahopac, NY

 

---

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

Preet Bharara, the United States Attorney for the Southern District of New York, and Deputy Special Agent in Charge Michael Shea of U.S. Immigration and Customs Enforcement’s (“ICE”) Homeland Security Investigations New England, announced today that a painting by Jean-Michel Basquiat called “Hannibal” (the “Basquiat”), as well as a Roman Togatus statue, were returned to Brazil at a repatriation ceremony at the United States Attorney’s Office in Manhattan, New York.  The painting and the statue were smuggled into the United States in violation of customs law and were forfeited to the government as a result of civil forfeiture action brought by the United States.

Manhattan U.S. Attorney Preet Bharara stated:  “Art and antiquities have special value and meaning that cannot readily be quantified.  As a result, they have long been the subject of theft and deception, as well as a means to launder illicit proceeds.  Art should serve to inspire the mind and nourish the soul, and not be allowed to become a conduit for crime.”

HSI Deputy Special Agent in Charge Michael Shea stated: "It is always a pleasure to return cultural artifacts to the people of another nation.  I would like to thank our special agents and partners at INTERPOL for their diligence in this investigation. ICE will do everything in its power to help preserve and safeguard a nation's history by identifying, locating, and recovering stolen antiquities."

In related repatriation ceremonies held on September 21, 2010, and May 9, 2014, the U.S. Attorney’s Office for the Southern District of New York returned to Brazil three paintings – “Modern Painting with Yellow Interweave” by Roy Lichtenstein (the “Lichtenstein”), “Figures dans une structure” by Joaquin Torres-Garcia (the “Torres-Garcia”), and “Composition abstraite” by Serge Poliakoff (the “Poliakoff”) – that were smuggled into the United States.

The Basquiat and the Togatus once belonged to Brazilian banker Edemar Cid Ferreira.  Ferreira, the founder and former president of Banco Santos, S.A. (“Banco Santos”), was convicted in Brazil of crimes against the national financial system and money laundering.  In December 2006, Ferreira was sentenced in Brazil to 21 years in prison.

As part of the case, a Sao Paulo Court judge also ordered the search, seizure, and confiscation of assets that Ferreira, his associates, and members of his family had acquired with unlawfully obtained funds from Banco Santos.  Those assets included the Basquiat, the Togatus, the Lichtenstein, the Torres-Garcia, the Poliakoff, and other artwork valued at $20 million to $30 million.  The artwork was kept in several locations, including Ferreira’s home in the Morumbi neighborhood of Sao Paulo, the main offices of Banco Santos, and at a holding facility.  When Brazilian authorities searched these locations, they found that several of the most valuable works of art were missing, including the Basquiat and the Togatus.

The Sao Paulo Court sought INTERPOL’s assistance after searching museums and institutions in Brazil for the missing artwork.  In October and November 2007, INTERPOL and the Government of Brazil sought the assistance of the United States to locate and seize the missing works on behalf of the Brazilian government.  The ensuing Southern District of New York and HSI investigation revealed that the Basquiat and the Togatus were shipped from the Netherlands to a secure storage facility in New York on August 21, 2007, and September 11, 2007, respectively.  The invoices, however, failed to comply with U.S. customs laws in a number of respects.  For example, the shipping invoices did not identify the pieces and falsely claimed that their value was $100 each.  In fact, the Basquiat alone was recently appraised at $8 million.

HSI special agents based in New Haven, Connecticut, located and seized the Basquiat in November 2007, and the U.S. Attorney’s Office for the Southern District of New York filed a civil forfeiture Complaint alleging that the Basquiat had been brought into the United States illegally.  Since the filing of the original Complaint in February 2008, the United States seized additional works of art and filed two amended Complaints seeking the forfeiture of the Lichtenstein, the Torres-Garcia, the Poliakoff, and the Togatus.

After extensive litigation, United States District Court Judge Richard J. Sullivan granted the government’s motion for summary judgment and entered an order forfeiting the Basquiat and the Togatus on May 10, 2013.  The Second Circuit Court of Appeals affirmed Judge Sullivan’s order on September 9, 2014.

*                *                *

Mr. Bharara praised the investigative work of HSI in helping to locate and seize the painting.  He was grateful for the assistance of the Department of Justice’s Office of International Affairs.  Mr. Bharara thanked Brazilian authorities for their assistance in the case.  He also acknowledged the assistance of the U.S. Department of State and the U.S. Embassy in Brazil for its assistance in the investigation.

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

Preet Bharara, the United States Attorney for the Southern District of New York, announced that LEON FENNER pled guilty yesterday to the armed robbery of a store in the Diamond District of Manhattan on November 11, 2014.  FENNER pled guilty before United States District Judge William H. Pauley III.

According to the allegations contained in court documents previously filed in federal court, and statements made in Court during the plea of FENNER:

On November 11, 2014, FENNER carried out an armed commercial robbery of a jewelry store (the “Store”) on the 8th floor of a building on 47th Street in the Diamond District of Manhattan.  The Store is not open to the public but is a space where clients can view and purchase jewelry.  At the time of the robbery, the owner of the store (the “Owner”) and three other individuals were present inside the Store.  At approximately 2:20 in the afternoon – in broad daylight as the Veteran’s Day Parade proceeded nearby – LEON FENNER, the defendant, dressed in a suit, carrying a bag, and appearing to be a messenger, came to the door of the Store.  After entering, FENNER first said that he was there to serve the Owner of the Store with papers, and took two envelopes out of his bag before placing them on a desk.  FENNER then took out a weapon that appeared to be a gun and pointed it at the Owner and the others present and demanded that they give him all the jewelry in the Store.  As the robbery was occurring, a relative of the Owner arrived and was let into the Store.  FENNER hit the Owner’s relative, using the weapon, as he entered the Store.  The Owner and the others present in the Store emptied more than $600,000 worth of jewelry from a safe and other locations and placed it into FENNER’s bag, before he left the scene.

FENNER was identified based on fingerprint analysis of the envelopes left in the store and surveillance images.

FENNER, 58, of New York, New York, pled guilty to one count of Hobbs Act robbery, which carries a maximum sentence of 20 years in prison.  The statutory maximum sentences are prescribed by Congress and are provided here for informational purposes only, as any sentencing of the defendant would be determined by the judge.

FENNER is scheduled to be sentenced October 16, 2015, before Judge Pauley.

Mr. Bharara praised the investigative work of the New York City Police Department (“NYPD”) and the Joint Robbery Task Force, consisting of members of the NYPD, Bureau of Alcohol, Tobacco, Firearms and Explosives, and the United States Marshals Service.

This case is being handled by the Office’s Violent and Organized Crime Unit.  Assistant United States Attorneys Russell Capone and Gina Castellano are in charge of the prosecution.

Preet Bharara, the United States Attorney for the Southern District of New York, announced that TERRENCE PENDERGRASS, a former correction officer and captain, was sentenced today in federal court to five years in prison for deliberately ignoring the urgent medical needs of a Rikers Island inmate who had ingested a corrosive disinfectant and later died, in violation of the inmate’s rights under the United States Constitution.  The sentence was imposed by U.S. District Judge Ronnie Abrams.  PENDERGRASS was convicted of one count of deprivation of rights under color of law in Manhattan federal court on December 17, 2014, after a one-week trial.

U.S. Attorney Bharara said: “Even as we seek to reform and transform Rikers Island –and ensure an environment that protects the constitutional rights of its inmates – it is important that individuals who cruelly trample on those rights be held responsible. Terrence Pendergrass was the Captain on duty, responsible for the well-being of the inmates under his charge, but he stood deaf to Jason Echevarria’s pleas for help as he was succumbing to a toxic chemical, unwilling to help or let others help Echevarria, who died painfully, alone in his cell. Today’s sentence is an important step in our sustained efforts to change the culture on Rikers Island.  The sentence is an appropriate punishment for Pendergrass’s crime.  Pendergrass now himself will be an inmate and will expect, and be entitled to, better treatment than what he gave Mr. Echevarria.”

According to the Complaint, Indictment, evidence presented at trial, and information presented in connection with sentencing:

Rikers Island is a jail complex, located in the Bronx, New York, maintained by the New York City Department of Correction.  At the time of his death, Jason Echevarria was an inmate incarcerated on Rikers Island in the Mental Health Assessment Unit for Infracted Inmates (known as “MHAUII”), a unit housing inmates who had committed infractions while incarcerated and who were identified as needing mental health treatment.

On the afternoon of August 18, 2012, Echevarria swallowed a powerful disinfectant/detergent combination in powder form, commonly referred to as a “soap ball,” used to clean and disinfect cells.  Echevarria had been given the soap ball by a new correction officer for the purpose of cleaning Echevarria’s cell following a sewage backup.  The soap ball contained, among other things, ammonium chloride, a corrosive chemical that is life-threatening if ingested.

After Echevarria swallowed the soap ball, he began banging on his cell door and asking for help.  Echevarria also told a correction officer that he had swallowed a soap ball and needed help.  That correction officer in turn informed PENDERGRASS, the captain on duty at that time.  As the captain on duty, PENDERGRASS was responsible for arranging for medical treatment for the inmates in his unit.  Rather than arrange for that care, however, PENDERGRASS responded that the correction officer should only call on PENDERGRASS if he needed help with the extraction of an inmate from a cell or if there was a dead body.  A short time later, the same correction officer told PENDERGRASS that he saw vomit in Echevarria’s cell, and PENDERGRASS responded that Echevarria should be told to “hold it.”  Soon after, another correction officer told PENDERGRASS that Echevarria had swallowed a soap ball and that a pharmacy technician had told that officer that Echevarria needed a doctor.  Despite what he had been told, and despite going to Echevarria’s cell himself after Echevarria had vomited, PENDERGRASS did not call for medical help.  He also ordered an officer who was trying to call for help to hang up the phone.

*                      *                      *

PENDERGRASS, 51, of Howard Beach, New York, was convicted after trial of one count of deprivation of rights under color of law.  In addition to his prison term, PENDERGRASS was sentenced to one year supervised release, and fined $5,000.  He was ordered to surrender by August 18, 2015.

United States Attorney Bharara praised the work of the Federal Bureau of Investigation, and expressed his appreciation for the assistance of the New York City Department of Correction, Investigation Division, the Bronx County District Attorney’s Office, and the New York City Department of Investigation in the investigation of this matter.

This case is being prosecuted jointly by the Office’s Civil Rights Unit and Public Corruption Unit.  Assistant U.S. Attorneys Lara K. Eshkenazi and Daniel C. Richenthal are in charge of the prosecution.

Richard Zabel, the Deputy 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”), announced today the return of two antique books that were stolen from the National Library of Sweden in the 1990s.

Deputy U.S. Attorney Richard Zabel said: “For hundreds of years, the National Library of Sweden’s collection of books, maps, and manuscripts was treasured by the kings and queens of Sweden.  In many ways, the Library contains the cultural memory of Sweden.  The theft of pieces of a nation’s memory and heritage creates holes in its intellectual soul.  There is no repair for such holes without the recovery of what was taken.  I’m proud that this Office has been at the forefront of recovering what has been taken from many different nations’ cultural histories, including Sweden today.”

FBI Assistant Director-in-Charge Diego Rodriguez said:  “We are honored to be part of reparation ceremonies, like the one we are holding here today, because we are able to return a piece of missing history to a country. The books returned today are a significant part of Sweden’s history. The FBI will continue to work with our law enforcement partners to investigate and hopefully return stolen artifacts and cultural items to their home countries.”

The two books being returned are part of a group of at least 56 rare or one-of-a-kind books that were stolen from the National Library of Sweden’s collection by Anders Burius (“Burius”), a former employee of the Library, between 1995 and 2004.  After stealing the books, Burius consigned or sold the books to Ketterer Kunst (“Ketterer”), an auction house in Germany.  In 2004, Burius confessed to the book thefts and admitted to Swedish law enforcement officials that he had sold and/or consigned the books to Ketterer under the alias “Carl/Karl Fields.”  Shortly after confessing to the thefts, Burius committed suicide.  Swedish authorities subsequently received information that 13 of the stolen books had been sold by Ketterer to individuals and/or entities in the United States.

The books being returned today are a Christopher Scheiner book entitled “Oculus, hoc est: fundamentum opticum, in quo ex accurate oculi anatome, abstrusarum experientiarum sedula pervestigatione,” printed in 1619 by Danielem Agricolam Oeniponti (the “Scheiner book”), and a Nicolo Sabbattini book entitled “Practica di fabricar scene, e machine ne’teatri.  Ristampata di nouo coll’ Aggiunta del secondo libro,” printed in 1638 by Battista Giouannelli Pietro de’Paoli e Gio (the “Sabbatini book”).  The Scheiner book, which is a famous work in the history of optics, was purchased on May 28, 1999, by bookseller Jonathan A. Hill, who had no knowledge of the book’s theft.  Mr. Hill subsequently sold the Scheiner book to Cornell University, which also had no knowledge of the book’s theft, and which, after being contacted by the FBI about the theft, voluntarily agreed to return the book to the Library.  The Sabbatini book, an important work concerning stagecraft and theater machinery, was purchased on November 19, 2001, by Richard Lan, a gallery owner in New York.  Lan had no knowledge of the Sabbatini book’s theft and, after being contacted by the FBI about the theft, voluntarily agreed to return the book to the Library.

The United States Attorney’s Office for the Southern District of New York entered into stipulations with Cornell University and the gallery owner, in which both Cornell University and Lan consented to tender their respective books to the FBI, to allow for the return of these books to the National Library of Sweden.  The stipulations were so ordered by the United States District Court on June 1, 2015.  The Scheiner book and the Sabbatini book were returned to representatives of the National Library of Sweden earlier today at a repatriation ceremony held at the United States Attorney’s Office in New York.  

A list of missing books stolen from the National Library of Sweden between 1995 and 2004 can be found here.

Mr. Zabel praised the investigative work of the FBI in this matter, and its ongoing efforts to find and repatriate stolen property.

This matter is being handled by the Office’s Money Laundering and Asset Forfeiture Unit.  Assistant U.S. Attorneys Christine I. Magdo and Sarah E. Paul are in charge of the case.

Preet Bharara, the United States Attorney for the Southern District of New York, and Scott J. Lampert, Special Agent in Charge of the U.S. Department of Health and Human Services, Office of Inspector General’s (“HHS-OIG”) New York Region, announced today that the United States has settled civil fraud claims under the False Claims Act and common law against INSPIRE PHARMACEUTICALS, INC. (“INSPIRE”).  According to the allegations of the complaint, although the Food and Drug Administration (“FDA”) had approved AzaSite only for the treatment of bacterial conjunctivitis, a bacterial infection of the eye more commonly known as pink eye, INSPIRE sought to generate more revenue by aggressively marketing the drug for the non-FDA-approved treatment of blepharitis, a different eye condition involving inflammation of the eyelids.  The complaint alleges that INSPIRE’s marketing efforts from 2008 through May of 2011 misleadingly focused on purported anti-inflammatory properties of AzaSite that were unsupported by substantial evidence or substantial clinical experience in order to cause doctors to prescribe AzaSite for uses not covered by federal healthcare programs, which resulted in federal healthcare programs paying millions of dollars in false claims.  In connection with the settlement, which was approved by U.S. District Judge Loretta A. Preska on June 15, 2015, INSPIRE agreed to pay the United States and state governments $5,960,163.28, and made admissions as to its conduct.

Manhattan U.S. Attorney Preet Bharara said:  “As demonstrated by today’s settlement, we are committed to ensuring that drug companies do not undermine the FDA’s approval process by deliberately marketing drugs for uses that are unsupported by substantial evidence or clinical experience, while profiting at taxpayers’ expense.”

HHS-OIG Special Agent in Charge Scott J. Lampert said:  “Marketing pharmaceuticals for other than FDA approved uses by making misleading statements can expose patients to questionable drug treatments while asking taxpayers to pick up the Medicare bill.  Investigations of such misconduct will continue to be a priority for this office.”

According to the complaint-in-intervention filed in Manhattan federal court:

On April 27, 2007, the FDA approved AzaSite to treat pink eye.  The FDA never approved AzaSite as safe and effective to treat blepharitis.  INSPIRE initially based its advertising on treating children for pink eye by prominently displaying a child in its advertisements and emphasizing the ease of administering AzaSite with only nine drops.  INSPIRE also marketed its product to pediatricians and primary care physicians likely to treat pink eye.  By the beginning of 2008, INSPIRE began a promotional effort to encourage physicians to prescribe AzaSite to treat blepharitis, a condition characterized by inflammation of the eyelids, even though the FDA had not approved AzaSite to treat blepharitis.  INSPIRE changed its marketing strategy by highlighting the purported anti-inflammatory characteristics of AzaSite, not including a child in its advertisements, and substantially reducing its marketing toward pediatricians and primary care physicians while instead targeting doctors likely to treat blepharitis.  The FDA sent a letter to INSPIRE dated April 14, 2011, informing the company that its then-prominent advertisement improperly suggested that AzaSite had anti-inflammatory effects, even though this had not been demonstrated by substantial evidence or substantial clinical experience.  FDA advised INSPIRE that its advertisement was “false or misleading because it broadens the indication, makes unsubstantiated claims, and omits and minimizes important risks associated with the use of AzaSite.”

The Government further alleged that INSPIRE trained its sales force on the purported anti-inflammatory effects of AzaSite, and advised its sales force that every call needed to emphasize, among other things, the purported anti-inflammatory properties of AzaSite.  INSPIRE gave its sales force marketing material targeting blepharitis, and had a nationwide speaker program geared toward promoting AzaSite to treat blepharitis.  INSPIRE did this to drive prescriptions for the non-FDA approved treatment of blepharitis.

As part of today’s settlement, INSPIRE admitted that starting in January 2008, INSPIRE commenced an advertising campaign designed to broaden the customer base for AzaSite by focusing on, among other things, AzaSite’s claimed anti-inflammatory effects, which were not approved by the FDA, and were not demonstrated by substantial evidence or substantial clinical experience.  INSPIRE further admitted that AzaSite was prescribed for blepharitis, and that claims to treat blepharitis were submitted to federal healthcare programs for payment.

The case was initially brought by a whistleblower under the False Claims Act, and the Government intervened in the case.  The Government alleged in its Complaint-In-Intervention that Inspire’s marketing of AzaSite for the treatment of blepharitis, a use not approved by the FDA or covered by federal healthcare programs, resulted in the submission of false claims to federal healthcare programs in violation of the False Claims Act.

*                      *                      *

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

The case is being handled by the Office’s Civil Frauds Unit.  Assistant United States Attorney Lawrence H. Fogelman is in charge of the case.

Preet Bharara, the United States Attorney for the Southern District of New York, James J. Hunt, Special Agent in Charge of the New York Field Division of the Drug Enforcement Administration (“DEA”),  and William J. Bratton, the Commissioner of the New York City Police Department (“NYPD”), today announced the unsealing of five Indictments charging a total of 11 defendants with allegedly engaging in the distribution of crack cocaine and heroin in the vicinity of the Forest Houses housing project in the 42nd Precinct, in the Bronx, New York.  Seven defendants were taken into custody today and an eighth defendant is currently in state custody on another charge.  The seven defendants who were arrested today will be presented and arraigned before U.S. Magistrate Judge Gabriel W. Gorenstein later today.  Four defendants remain at large.        

Manhattan U.S. Attorney Preet Bharara said: “Crack cocaine and heroin wreak devastation in the community.  The hardworking people living in and around the Forest Houses deserve better – they deserve a safe environment to call home.  Investigating and prosecuting the kind of drug trafficking conduct alleged of these defendants is a significant step toward protecting Forest Houses residents and achieving that goal.”

DEA Special Agent in Charge James J. Hunt stated, “For two years, a multi-agency operation targeted those responsible for littering the Forest Housing Development and surrounding areas with drugs. This operation was focused not only on making these arrests and dismantling a drug trafficking ring, but it was focused on reclaiming this neighborhood for the hard working residents who are exposed to drug trafficking and the perils associated.”

Police Commissioner William J. Bratton said: “The NYPD remains committed to protecting the residents of public housing as demonstrated by these arrests and indictments. I would like to thank the investigators of Narcotic Borough Bronx, the U.S. Attorney’s Office, Southern District and our law enforcement partners for their efforts to stop the sale of illegal narcotics in the Forrest Houses and to improve the quality of life of the families who live there.”

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

 

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

United States v. Antwoine Williams, et al., 15 Cr. 356 (PAC)

Between July 2013 and September 2014, ANTWOINE WILLIAMS, ELVIS ARIAS, GEORGE MONSANTO, JESUS BENEDITH, MICHAEL CABAN, and THEODORE WILLIAMS conspired to sell crack cocaine in the vicinity of the Forest Houses in the Bronx.  During the course of the conspiracy, the defendants sold crack cocaine to undercover law enforcement officers on numerous occasions.  Certain defendants also sold crack cocaine to the undercover officers on behalf of their co-conspirators or worked together to complete the sales to the undercover officers.

United States v. James Jacobs and Moses Bermudez, 15 Cr. 357 (JSR)

Similarly, between July 2013 and September 2014, JAMES JACOBS and MOSES BERMUDEZ conspired to sell heroin in the vicinity of the Forest Houses in the Bronx.  During the course of the conspiracy, the defendants sold heroin to undercover law enforcement officers on numerous occasions.

United States v. Percy Kearney, 15 Cr. 352 (RA)

United States v. Raheem Barber, 15 Cr. 353 (KBF)

United States v. Steven Jude, 15 Cr. 355 (JFK)

Between July 2013 and September 2014, each of the defendants charged in these three indictments sold crack cocaine to undercover officers in the vicinity of the Forest Houses in the Bronx.  Each defendant sold crack cocaine to undercover officers on multiple occasions.

*                      *                     *

The defendants in United States v. Williams, et al. face maximum terms of life in prison and mandatory minimum terms of 10 years in prison.  The defendants in United States v. Jacobs and Bermudez face maximum terms of 40 years in prison and mandatory minimum terms of five years in prison.  KEARNEY, BARBER, and JUDE each face a maximum term of 20 years in prison.

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

A chart containing the names, ages, narcotics type, and residence information of the defendants who were arrested today is attached.

Mr. Bharara praised the outstanding investigative work of the DEA and the NYPD, and also thanked the Department of Homeland Security, Homeland Security Investigations, and the NYC Department of Investigation's Office of the Inspector General for NYCHA for their assistance.

These cases are being handled by the Office’s Violence and Organized Crime Unit.  Assistant United States Attorneys Jessica Lonergan and Jessica Fender 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. Antwoine Williams, et al.

                                                                                                        

NAME

AGE

NARCOTIC

RESIDENCE

Antwoine Williams, a/k/a “Ace”

27

Crack Cocaine

Bronx

Elvis Arias, a/k/a “J,” a/k/a “Ex”

25

Crack Cocaine

Bronx

Jesus Benedith, a/k/a “Shorty,” a/k/a “Mike”

21

Crack Cocaine

Bronx

Michael Caban, a/k/a “Baretta”

27

Crack Cocaine

Bronx

 

United States v. James Jacobs and Moses Bermudez

 

NAME

AGE

NARCOTIC

RESIDENCE

Moses Bermudez, a/k/a “Moreno”

52

Heroin

Bronx

 

United States v. Percy Kearney

United States v. Raheem Barber

United States v. Steven Jude

 

NAME

AGE

NARCOTIC

RESIDENCE

Percy Kearney, a/k/a “Boogie”

32

Crack Cocaine

Bronx

Raheem Barber, a/k/a “Grey”

38

Crack Cocaine

Bronx

Steven Jude, a/k/a “Paunch”

45

Crack Cocaine

Bronx

Preet Bharara, the United States Attorney for the Southern District of New York, and Diego Rodriguez, the Assistant Director-in-Charge of the New York Field Office of the Federal Bureau of Investigation (“FBI”), unsealed today charges against JAMES J. SHEA and EUGENE FALLON on wire fraud charges stemming from a scheme to embezzle approximately $2.6 million from a large international insurance company where both worked.  In perpetrating the scheme, SHEA, an executive at the company, forged the signature of his supervisor to authorize numerous payments to bogus consulting companies that FALLON controlled.  FALLON then returned more than two-thirds of the proceeds of the fraud to SHEA, who used the money to purchase a multi-million dollar house and luxury automobiles.  SHEA was arrested this morning and is expected to be presented today before United States Magistrate Judge Gabriel Gorenstein. FALLON remains at large.

U.S. Attorney Preet Bharara said:  “Together, James Shea and Eugene Fallon allegedly developed a scheme to defraud the company for which Shea worked, and Fallon consulted. Both allegedly exploited their positions and their relationship for pecuniary gain, netting some $2.6 million in the process.  Such alleged illegal siphoning of a company’s money has no place in any industry, and our office is committed to holding these individuals accountable for their alleged actions.”

FBI Assistant Director-in-Charge Diego Rodriguez said:  “As alleged, Shea and Fallon conspired to created fake contracts for payouts from a legitimate company and split the proceeds. Today, they face charges for their alleged fraudulent activities.  The FBI will continue to work with our law enforcement partners to investigate and bring to justice those who seek to profit from deceptive actions.”

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

From January 2012 through December 2013, SHEA and FALLON engaged in a scheme to embezzle approximately $2.6 million from SHEA’s employer, the North American subsidiary of an international insurance company (“Company-1”).  SHEA, who rose to the title of Executive Vice President at Company-1, was responsible for the integration of the information technology systems of subsidiaries of Company-1.  In that capacity, SHEA oversaw the use of third-party consultants, one of whom was FALLON beginning in or about 2010. According to Company-1’s policies and practices, the CFO of Company-1 could personally authorize and approve any third-party vendor contracts up to $1.5 million.

In 2012, SHEA forged the signature of Company-1’s CFO on contracts between Company-1 and two purported consulting companies controlled by FALLON (the “Consulting Companies”).  According to the contracts that outlined the sham engagement between Company-1 and the Consulting Companies, the Consulting Companies were primarily tasked with providing Company-1 with assistance in integrating the technology systems of Company-1.  For a total of 17 months of work, the agreements required Company-1 to pay the Consulting Companies more than $2.6 million.  In fact, the Consulting Companies did no work for Company-1.

Beginning in August 2012, and continuing through February 2013, FALLON submitted fraudulent invoices on behalf of the Consulting Companies to Company-1 for consulting work that was not performed.  On behalf of Company-1, SHEA then authorized payment for the invoices in the amount of approximately $2.6 million to bank accounts that were controlled by FALLON.  Of the approximately $2.6 million that SHEA and FALLON embezzled, more than $1.8 million was routed back to SHEA, while FALLON kept the remainder.  SHEA used the majority of his fraudulent proceeds to purchase a multi-million dollar house and two luxury cars.

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SHEA, 49, of Paramus, New Jersey, and FALLON, 51, of Nanuet, New York, are both charged with one count of conspiracy to commit wire fraud and one count of wire fraud.  Both counts carry a maximum sentence of 20 years in prison, and a maximum fine of $250,000, or twice the gross gain or loss from the offense.  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.

Today’s announcement is part of efforts underway by President Obama’s Financial Fraud Enforcement Task Force (FFETF) which was created in November 2009 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 the inception of FFETF in November 2009, the Justice Department has filed more than 12,841 financial fraud cases against nearly 18,737 defendants including nearly 3,500 mortgage fraud defendants. For more information on the task force, visit www.stopfraud.gov.

This case is being handled by the Office’s Securities and Commodities Fraud Task Force.  Assistant U.S. Attorneys Daniel S. Goldman and Michael Ferrara are in charge of the prosecution, and Edward Diskant is in charge of the forfeiture aspects of the case.

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

 

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

Preet Bharara, the United States Attorney for the Southern District of New York, and Diego Rodriguez, the Assistant Director-in-Charge of the New York Office of the Federal Bureau of Investigation (“FBI”), announced today the unsealing of criminal charges against three New York City Correction Officers in the death of Ronald Spear, a pre-trial detainee at Rikers Island.  BRIAN COLL, then a correction officer on Rikers Island, was charged with repeatedly kicking Mr. Spear in the head while he was fully restrained and lying prone on the floor, in violation of his rights under the United States Constitution.  The two other officers involved in the incident, BYRON TAYLOR and ANTHONY TORRES, are, together with COLL, charged with obstruction of justice related offenses for covering up COLL’s assault, which resulted in the death of Mr. Spear.  COLL and TAYLOR were arrested this morning on charges contained in a Criminal Complaint and are expected to be presented in federal court later today.  TORRES ultimately disclosed the attempted cover-up to federal investigators and pled guilty earlier this week to a Criminal Information charging obstruction of justice offenses, pursuant to a cooperation agreement with the Government.

Manhattan U.S. Attorney Preet Bharara said:  “Today, we announce more sad news out of Rikers Island.  Specifically, we unseal charges against three correction officers alleging a killing and a cover-up.  Both relate to the untimely death of Ronald Spear, a Rikers Island inmate who died in the early morning hours of December 19, 2012, after receiving a brutal beating.  As I have said before, Rikers inmates, although walled off from the rest of society, are not walled off from the protections of our Constitution.”

Assistant Director-in-Charge Diego Rodriguez said:  “The vast majority of law enforcement officials serve their communities with honor and integrity.  But when an officer’s conduct exceeds the permissible use of force and violates a person’s civil rights, the foundation of our democracy is threatened.  Today, we hear the call of Spear and other victims whose constitutionally protected rights have been abused and violated.  We remember their collective plea for justice.  And we vow never to forget our obligation to remove from the criminal justice system those who do not uphold the tenets of the legal system.”  

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

Rikers Island is a jail complex, located in the Bronx, New York, maintained by the New York City Department of Correction.  At the time of his death, Ronald Spear was a pretrial detainee incarcerated on Rikers Island in the North Infirmary Command, a facility housing detainees who have serious or chronic medical needs.  Mr. Spear was suffering from end-stage renal disease, which required him to receive dialysis treatments.  Mr. Spear wore a bracelet indicating that he was at “Risk of Fall” and typically walked with a cane.

The Assault

In the early morning hours of December 19, 2012, Mr. Spear left the housing area in the infirmary unit in an attempt to see the on-duty doctor.  Mr. Spear was stopped outside the doctor’s office by COLL.  When Mr. Spear was informed that the doctor was not available to see him at that time, an altercation ensued.  COLL punched Mr. Spear several times in the face and stomach, and Mr. Spear was then restrained by two other correction officers, ANTHONY TORRES and BYRON TAYLOR.  While Mr. Spear was lying prone on the ground and was still restrained, COLL repeatedly kicked Spear in the head, even after TORRES attempted to shield the inmate’s head with his hand and shouted to COLL to stop.  After COLL stopped kicking Mr. Spear, COLL lifted Mr. Spear’s head up, told him in substance not to forget who had done this to him, and then dropped Spear’s head to the ground.  Mr. Spear was pronounced dead at the scene shortly after the assault.      

Spear’s autopsy was conducted at the Bronx Office of the Chief Medical Examiner.  The autopsy revealed that Spear had three recent contusions on his head.  At least two of those contusions were what the Medical Examiner described as “above the hat line,” and were thus inconsistent with being sustained as part of a fall.  One of the contusions involved what the Medical Examiner described as a “brain bleed” caused by the blunt force of the impact.  The Medical Examiner confirmed that the placement of Spear’s head injuries was consistent with Spear being kicked in the head while he was lying prone on the ground.

The Cover-Up

After Spear’s death, COLL, TAYLOR, TORRES, and others covered up the true cause of Mr. Spear’s death by concocting a false story that turned Mr. Spear into the aggressor.  Specifically, COLL falsely claimed that Mr. Spear had attacked him with a cane, and TORRES and an additional correction officer referred to in the Complaint as CW-1 agreed to support this false version of events and not to tell investigators of evidence that COLL had repeatedly kicked Mr. Spear in the head.  Additionally – at the request of TAYLOR – COLL, TORRES, and CW-1 agreed to falsely claim that TAYLOR was not present for the incident.  Consistent with their agreement, the conspirators filed false use of force reports with the Department of Correction and lied repeatedly to Department of Correction investigators, to the Bronx District Attorney, and, in TAYLOR’s case, to a federal grand jury.

The conspirators propagated this false version of events after being repeatedly advised by a Rikers captain and by representatives of the correction officers’ union to be “consistent” in the use of force reports the officers were required to submit following Spear’s death.   The first draft of a use of force report by CW-1 was rejected by a captain because it did not match the version of events contained in reports by COLL and TORRES, and CW-1 was required to submit a revised report that was “consistent.”  Additionally, when no cane was recovered from the crime scene – potentially calling into doubt COLL’s claim that Mr. Spear had attacked him with a cane – a Rikers captain simply directed a correction officer to take a cane from the supply area and pass  it off to investigators as the cane used in the incident.

In his guilty plea yesterday before the Honorable Chief Judge Loretta A. Preska to obstruction of justice offenses, TORRES admitted that he had conspired with others to cover up the facts surrounding the death of Mr. Spear.  TORRES was not charged with violating the civil rights of Mr. Spear and at one point sought to shield Mr. Spear from the attack.       

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BRIAN COLL, 45, of Smithtown, New York, is charged with one count of deprivation of rights under color of law, which carries a maximum penalty of 10 years in prison, one count of conspiracy to obstruct justice, which carries a maximum penalty of 20 years in prison, one count of obstruction of justice, which carries a maximum penalty of 20 years in prison, one count of filing false forms, which carries a maximum penalty of 20 years in prison, and one count of conspiracy to file false forms, which carries a maximum sentence of five years in prison.

BYRON TAYLOR, 31, of Brentwood, New York, is charged with one count of obstruction of justice by lying to a federal grand jury, which carries a maximum sentence of 20 years in prison, one count of conspiracy to obstruct justice, which carries a maximum sentence of 20 years in prison, and one count of conspiracy to file false forms, which carries a maximum sentence of five years in prison.

ANTHONY TORRES, 49, of New Rochelle, New York, pled guilty to one count of conspiracy to obstruct justice and file false reports, which carries a maximum penalty of five years in prison, and one count of filing a false report, which carries a maximum sentence of 20 years in prison.

The statutory maximum penalties are prescribed by Congress and are provided here for informational purposes only, as any sentencings of the defendants would be determined by the judge.

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

This case is being handled by the Office’s Civil Rights and Public Corruption Units.  Assistant U.S. Attorneys Brooke E. Cucinella and Jeannette A. Vargas are in charge of the prosecution.

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

 

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

Preet Bharara, the United States Attorney for the Southern District of New York, announced that KHALIL MOUGHAWECH was sentenced yesterday in White Plains federal court to a term of 24 months in prison and ordered to pay $1 million in restitution and $1 million in forfeiture for committing food stamp fraud from September 2010 to August 2013 at the Peso Value Plus store in Yonkers, New York.  MOUGHAWECH was found guilty at a jury trial in February 2015.  United States District Judge Vincent L. Briccetti imposed the sentence yesterday.

According to the Superseding Indictment and the evidence presented at trial:

MOUGHAWECH was the manager of the Peso Value Plus store between 2010 and August 2013, and often operated the store’s cash register.  Peso Value Plus participated in the Supplemental Nutrition Assistance Program (“SNAP”), also known as the Food Stamp Program, where food stamp recipients could redeem their SNAP benefits using an electronic benefits transfer card to purchase eligible food items.  Between approximately September 2010 and August 2013, MOUGHAWECH conspired with others to exchange SNAP benefits for cash illegally.  The fraud resulted in a loss of $1 million to the SNAP Program.

*                *                *

In addition to the prison sentence, MOUGHAWECH, 42, of the Bronx, New York, was ordered to pay $1,000,000 in restitution to the United States Department of Agriculture and to forfeit $1,000,000.

Mr. Bharara praised the outstanding investigative work of the Department of Agriculture’s Office of Inspector General and the Yonkers Police Department.

The prosecution is being handled by the Office’s White Plains Division.  Assistant United States Attorneys Daniel Filor and Benjamin Allee are in charge of the prosecution.

Preet Bharara, the United States Attorney for the Southern District of New York, announced that TARIQ TAHIR, the owner and operator of DNS Construction Corporation, was sentenced today in Manhattan federal court to a term of five years of probation and $883,730.52 in restitution for committing two counts of tax fraud by failing to pay over $800,000 in income taxes and payroll taxes from 2006 to 2008.  TAHIR pled guilty in March 2015 before United States District Judge Andrew L. Carter, Jr., who imposed today’s sentence.

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

TAHIR owned and operated a Yonkers-based construction company named DNS Construction Corporation (“DNS”).  From 2006 through 2008, TAHIR engaged in two tax fraud schemes in order to avoid paying over $800,000 in income taxes and payroll taxes that were due and owing by DNS.  To execute the first scheme, TAHIR cashed checks at multiple check-cashing businesses in Manhattan and Brooklyn, rather than depositing those checks into the bank accounts of DNS, so that he could conceal DNS’s true revenues from state and federal tax authorities.  To carry out the second scheme, TAHIR paid DNS’s employees primarily in cash so that he would be able to omit these salary payments from DNS’s federal tax returns without detection by tax authorities.  By failing to report these payments, TAHIR underpaid the federal payroll taxes due and owing by DNS during this period.

*                *                *

In addition to the term of probation, TAHIR, 67, of Yonkers, New York, was ordered to pay $771,710.32 in restitution to the IRS and $112,020.20 in restitution to the New York State Department of Taxation and Finance.

Mr. Bharara praised the work of the Internal Revenue Service, Criminal Investigation Division.  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 United States Attorney Jonathan Cohen is in charge of the prosecution.

 

PREET BHARARA, the United States Attorney for the Southern District of New York, announced that the Department of Justice held its 31st annual Executive Office for United States Attorneys (EOUSA) Director’s Awards Ceremony yesterday, during which 160 award recipients from 31 districts were recognized for their dedication to carrying out the mission of the Department of Justice.  Among the award recipients were Assistant U.S. Attorneys Howard S. Master, Andrew D. Goldstein, Robert W. Yalen, Tara M. La Morte, and Arastu K. Chaudhury from the U.S. Attorney’s Office for the Southern District of New York.  Attorney General Loretta Lynch and Executive Office for U.S. Attorneys (EOUSA) Director Monty Wilkinson presided at yesterday’s ceremony in the Great Hall at the Robert F. Kennedy Department of Justice Building in Washington, D.C.

In her prepared remarks, Attorney General Lynch told the attendees: “Our honorees include career executives and supervisors; Assistant U.S. Attorneys and Special Assistant U.S. Attorneys; appellate attorneys and law enforcement officials; administrators, paralegals, and public affairs officers.  These individuals, and so many others, have faced daunting and sometimes dangerous challenges.  They have dedicated their leadership and their expertise, their time and their energy, to the service of their mission.  And they have remained devoted, at all times, to the high ideals and deeply-held values that animate our country and our cause.”

Manhattan U.S. Attorney Preet Bharara said: “This year’s Director’s Award winners were recognized for their commitment to justice.  They spearheaded cases that recouped hundreds of millions of dollars defrauded from New York City, protected the nation’s environment by holding a major polluter financially liable, and secured legally guaranteed pension benefits for City employees who served in the nation’s armed forces.  Their efforts exemplify the tradition of excellence of this Office, and I congratulate them for these well-deserved honors.”

Howard S. Master and Andrew D. Goldstein are recognized for their investigation and prosecution of the CityTime case, the largest municipal fraud and kickback scheme in history.  Through a dogged investigation that involved tracing payments through more than 150 foreign and domestic accounts, poring through hundreds of thousands of emails and project documents, interviewing more than 100 witnesses, and securing cooperation from two key insiders, Mr. Master and Mr. Goldstein were able to prove that the City of New York’s project manager and an executive of one of the nation’s largest government contractors defrauded the City, collected tens of millions of dollars in kickbacks, and laundered their proceeds through an intricate web of corrupt subcontractors and shell accounts. The prosecution resulted in eight convictions, a deferred prosecution agreement with the contractor, and record forfeitures of over $550 million.

Robert W. Yalen is recognized for his outstanding work representing the United States in the bankruptcy proceeding of Tronox, Inc., which resulted in two extraordinary environmental settlement agreements, including one for $5.15 billion that constitutes the largest recovery of funds for environmental clean-up ever by the Department of Justice.  Through these settlement agreements, the Kerr-McGee Corporation was compelled to pay for 85 years of environmental contamination across the nation, a legacy that Kerr-McGee had attempted to evade though a fraudulent conveyance of assets.  Mr. Yalen showed extraordinary negotiation, litigation, and case management skills by overseeing the creation of five environmental clean-up trusts; serving as lead counsel for the United States in a complex fraudulent conveyance matter; coordinating with the Environment and Natural Resources Division, seven client agencies, 22 states, and the Navajo Nation; and representing the United States in negotiations with the defendants and the Tronox estate.

Tara M. La Morte and Arastu K. Chaudhury are recognized for their extraordinary performance in a class-action lawsuit against the City of New York, culminating in a settlement providing monetary and injunctive relief to all employees of the City who have served their country in the armed forces.  In the wake of 9/11, thousands of City service-member employees were deployed around the world, often multiple times and for substantial duration.  However, the City refused to calculate the service members’ pensionable earnings in accordance with USERRA, the law designed to protect against discrimination on account of military service.  The City’s policies caused these service members to receive fewer pension benefits than they would have received but for serving their country.  Beating back the defendants’ numerous aggressive attempts to avoid any liability, Ms. La Morte and Mr. Chaudhury obtained full monetary recovery for all service-member employees, as well as significant policy changes to ensure that the City acts lawfully going forward.

*                *                *

EOUSA provides oversight, general executive assistance, and direction to the 94 United States Attorneys’ offices around the country. For more information on EOUSA and its mission, visit http://www.justice.gov/usao.

Preet Bharara, the United States Attorney for the Southern District of New York, and Acting Assistant Attorney General Caroline D. Ciraolo, of the Department of Justice’s Tax Division, announced that WILBUR ANTHONY HUFF, a Kentucky businessman, was sentenced today to 12 years in prison and over $108 million in restitution for committing various tax crimes that caused more than $50 million in losses to the Internal Revenue Service (“IRS”), and a massive fraud that involved the bribery of bank officials, the fraudulent purchase of an insurance company, and the defrauding of insurance regulators and an investment bank.  HUFF pled guilty in December 2014 before U.S. District Judge Naomi Reice Buchwald, who imposed today’s sentence.

Manhattan U.S. Attorney Preet Bharara said:  “Anthony Huff and his co-conspirators stole millions of dollars from taxpayers and engaged in extensive frauds, all in the pursuit of additional property, luxury cars, and the like.  His crimes have earned him 12 years in prison.  I would like to thank our law enforcement partners for their assistance on this case.”

Acting Assistant Attorney General Caroline D. Ciraolo said: “The department is committed to vigorously pursuing and prosecuting those individuals who violate the employment tax laws of the United States,” said Acting Assistant Attorney General Ciraolo.  “Today’s significant prison sentence sends a loud and clear message to those engaged in such criminal conduct, including owners and operators of Professional Employer Organizations like Mr. Huff, who steal employment taxes collected from their business clients to line their own pockets, instead of paying over those funds to the IRS.”

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

Background

HUFF was a businessman who controlled numerous entities located throughout the United States (“HUFF-Controlled Entities”).  HUFF controlled the companies and their finances, using them to orchestrate a $53 million fraud on the IRS and other schemes, spanning four states, involving tax violations, bank bribery, fraud on bank regulators, and the fraudulent purchase of an insurance company.  As part of his crimes, HUFF concealed his control of the HUFF-Controlled Entities by installing other individuals to oversee the companies’ day-to-day functions and to serve as the companies’ titular owners, directors, or officers.  HUFF also maintained a corrupt relationship with Park Avenue Bank and its executives, Charles J. Antonucci, Sr., the president and chief executive officer, and Matthew L. Morris, the senior vice president.

Tax Crimes

From 2008 to 2010, HUFF controlled O2HR, a professional employer organization (“PEO”) located in Tampa, Florida.  Like other PEOs, O2HR was paid to manage the payroll, tax, and workers’ compensation insurance obligations of its client companies.  However, instead of paying $53 million in taxes that O2HR’s clients owed the IRS, and instead of paying $5 million to Providence Property and Casualty Insurance Company (“Providence P&C”) – an Oklahoma-based insurance company – for workers’ compensation coverage expenses for O2HR clients, HUFF stole the money that his client companies had paid O2HR for those purposes.  Among other things, HUFF diverted millions of dollars from O2HR to fund his investments in unrelated business ventures, and to pay his family members’ personal expenses.  The expenses included mortgages on HUFF’s homes, rent payments for his children’s apartments, staff and equipment for HUFF’s farm, designer clothing, jewelry, and luxury cars.

Conspiracy to Commit Bank Bribery, Defraud Bank Regulators, and Fraudulently Purchase an Oklahoma Insurance Company

From 2007 through 2010, HUFF engaged in a massive multifaceted conspiracy, in which he schemed to (i) bribe executives of Park Avenue Bank, (ii) defraud bank regulators and the board and shareholders of a publicly traded company, and (iii) fraudulently purchase an Oklahoma insurance company.  As described in more detail below, HUFF paid bribes totaling hundreds of thousands of dollars in cash and other items to Morris and Antonucci in exchange for their favorable treatment at Park Avenue Bank.

As part of the corrupt relationship between HUFF and the bank executives, HUFF, Morris, Antonucci, and others conspired to defraud various entities and regulators during the relevant time period.  Specifically, Huff conspired with Morris and Antonucci to falsely bolster Park Avenue Bank’s capital by orchestrating a series of fraudulent transactions to make it appear that Park Avenue Bank had received an outside infusion of $6.5 million, and engaged in a series of further fraudulent actions to conceal from bank regulators the true source of the funds.

HUFF further conspired with Morris, Antonucci, and others to defraud Oklahoma insurance regulators and others by making material misrepresentations and omissions regarding the source of $37.5 million used to purchase Providence Property and Casualty Insurance Company, an Oklahoma insurance company that provided workers’ compensation insurance for O2HR’s clients, and to whom O2HR owed a significant debt.

Bribery of Park Avenue Bank Executives

From 2007 to 2009, HUFF paid Morris and Antonucci at least $400,000 in exchange for which they: (i) provided HUFF with fraudulent letters of credit obligating Park Avenue 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 the HUFF-Controlled Entities to accrue $9 million in overdrafts; (iii) facilitated intra-bank transfers in furtherance of HUFF’s frauds; and (iv) fraudulently caused Park Avenue Bank to issue at least $4.5 million in loans to the HUFF-Controlled Entities.

Fraud on Bank Regulators and a Publicly Traded Company

From 2008 to 2009, HUFF, Morris, and Antonucci engaged in a scheme to prevent Park Avenue 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.  HUFF, Morris, and Antonucci 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 Troubled Asset Relief Program.  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 bogus transaction involving another company Antonucci owned.  HUFF, Morris, and Antonucci further concealed their scheme by stealing $2.3 million from General Employment Enterprises, Inc., a publicly traded temporary staffing company, in order to pay Park Avenue Bank back for monies used in connection with the $6.5 million transaction.

Fraud on Insurance Regulators and the Investment Firm

From July 2008 to November 2009, HUFF, Morris, Antonucci, and Allen Reichman, an executive 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 that was owed $5 million by O2HR), and (ii) defraud the Investment firm into providing a $30 million loan to finance the purchase.  Specifically, HUFF and Antonucci 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, HUFF, Morris, Antonucci, 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 HUFF, Morris, and Antonucci conspired to falsely represent to Oklahoma insurance regulators that Park Avenue 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, which he used to continue the scheme to defraud O2HR’s clients.  Ultimately, in November 2009, the insurance company became insolvent and was placed in receivership after HUFF, Morris, and Antonucci had pilfered its remaining assets.

*                *                *

In addition to the prison sentence, HUFF, 53, of Caneyville and Louisville, Kentucky, was sentenced to 3 years of supervised release, and ordered to forfeit $10.8 million to the United States and pay a total of more than $108 million in restitution to victims of his crimes, including, among others, the Federal Deposit Insurance Corporation (“FDIC”) and the IRS.

In imposing today’s sentence, Judge Buchwald said Huff’s crimes were “truly staggering” and “eye popping.”  Judge Buchwald described Huff’s conduct, which was preceded by a federal conviction and failure to pay millions in civil judgments, as “a living example” of “chutzpah,” which she defined as “shameless audacity and unmitigated gall.”

Matthew L. Morris and Allen Reichman pled guilty for their roles in the above-described offenses on October 17, 2013, and February 20, 2015, respectively.  Reichman is scheduled to be sentenced before Judge Buchwald on July 15, 2015.  Morris is scheduled to be sentenced before Judge Buchwald on August 19, 2015.

Charles Antonucci pled guilty on October 8, 2010, to his role in the crimes described above and is scheduled to be sentenced on August 20, 2015, also before Judge Buchwald.

Mr. Bharara praised the investigative work of the Special Inspector General for the Troubled Asset Relief Program, the Federal Bureau of Investigation, IRS Criminal Investigation, 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.

Today’s announcement is part of efforts underway by 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 and Special Assistant U.S. Attorney Tino Lisella of the Tax Division are in charge of the criminal case.

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Preet Bharara, the United States Attorney for the Southern District of New York, Vanita Gupta, Principal Deputy Assistant Attorney General for the Civil Rights Division of the United States Department of Justice, and Gustavo Velasquez, the U.S. Department of Housing and Urban Development Assistant Secretary for Fair Housing and Equal Opportunity (“HUD”), announced today that the United States has simultaneously filed and settled a civil rights lawsuit against RIVERBAY Corporation (“RIVERBAY”), otherwise known as “Co-op City,” the largest affordable housing cooperative in the United States, alleging that RIVERBAY failed to provide reasonable accommodations to people who require service or assistance animals.  Specifically, the lawsuit alleges that RIVERBAY maintains and employs an overly burdensome and intrusive policy governing waivers to its no-pets rule, which has deterred and prevented persons with disabilities from obtaining reasonable accommodations, in violation of the federal Fair Housing Act (“FHA”). The consent decree was approved yesterday by U.S. District Court Judge Caproni.                      

U.S. Attorney Preet Bharara said: “Housing providers must allow for reasonable accommodations to qualified individuals with disabilities, including granting requests to keep assistance or service animals.  Today’s settlement benefits all those who require or may someday require a service or assistance animal, as it ensures that RiverBay will implement a reasonable accommodation policy consistent with the Fair Housing Act and that people who were unlawfully denied full use of their residences will be compensated appropriately.  We thank RiverBay for its cooperation in improving housing accessibility for all of its residents and in providing for a more caring and compassionate environment for Bronx residents.”

Deputy Assistant Attorney General Gupta said: “Assistance animals provide vital support and therapeutic benefits for persons with disabilities.  This significant settlement underscores the department’s commitment to ensuring that housing providers make reasonable accommodations for individuals who rely on assistance animals to use and enjoy their homes.”

Assistant Secretary Velasquez said: “Housing providers have a legal obligation to grant people with disabilities the reasonable accommodations they need.  Thanks to this settlement, RiverBay residents who need assistance animals or other accommodations will now be able to fully enjoy their homes.”

According to the complaint filed in federal court:

RIVERBAY, located in the Bronx, New York, is the owner and operator of the largest affordable housing cooperative in the United States, with approximately 15,372 residential units and 60,000 residents.  RIVERBAY has used an unlawful policy governing waivers to its no-pets rule to deny accommodation requests of persons with disabilities, and has engaged in a pattern or practice of discrimination toward persons with disabilities who request accommodations to its no-pets rule.  Specifically, until December 2011, when RIVERBAY amended its policy and application governing reasonable accommodations, RIVERBAY’s application for requesting a reasonable accommodation to its no-pets rule consisted of five forms (including one required to be completed only in blue ink and another required to be typewritten), prohibited certain breeds of dogs, required animals to be neutered or spayed, imposed annual renewal requirements and required the applicant to provide his or her medical records.  In December 2011 and again in July 2014, RIVERBAY amended its reasonable accommodation policy, but left in place many of the provisions in the first policy, including a prohibition against certain breeds of animals, a prohibition which RIVERBAY could waive based only on an applicant’s “medical need” for that particular breed.

Moreover, between 1995 and 2014, the Secretary of HUD, the New York State Division of Housing and Community Renewal and the New York City Commission on Human Rights received and investigated multiple complaints about RIVERBAY’s practices concerning reasonable accommodation requests.  HUD issued three separate charges of discrimination against RIVERBAY and participated in two administrative hearings before an administrative law judge (ALJ) concerning RIVERBAY’s reasonable accommodation policy.  In each proceeding, the ALJ determined that RIVERBAY had violated the FHA.  In addition, between January 2005 and November 2011, RIVERBAY denied 28 out of 42 requests for reasonable accommodations to its no-pets rule; another two individuals did not complete the application process.

Under the consent decree approved today, RIVERBAY will adopt the reasonable accommodation policy regarding assistance animals that is included in the consent decree.

In addition, RIVERBAY has agreed to pay a civil penalty of up to $50,000, and to dedicate as much as $600,000 to compensate people who have been harmed by inadequate accessibility at Co-op City.

Under the settlement, a person may be entitled to receive monetary compensation if he or she was a resident of RIVERBAY, or associated with a resident of RIVERBAY, and was:

• prevented or discouraged from requesting to keep an assistance animal;
• denied a request to keep an assistance animal; or
• harassed or otherwise interfered with after requesting to keep an assistance animal.

Individuals who wish to make a claim for discrimination concerning Co-op City on the basis of disability, or with any information about persons who may have such a claim, can contact the U.S. Attorney’s Office for the Southern District of New York by phone at (212) 637-2800, by fax at (212) 637-2702, online at www.justice.gov/usao/nys/civilrights, or write to:

United States Attorney’s Office, Southern District of New York

Attn: Civil Rights Unit

86 Chambers Street

New York, New York 10007

Individuals with a disability who believe that they are being discriminated against by their housing provider, may contact the Fair Housing and Equal Opportunity Office, Department of Housing & Urban Development, 26 Federal Plaza, Room 3532, New York, New York, 10278-0068 and at (800) 496-4294.

This case is being handled by the U.S. Attorney’s Office for the Southern District of New York’s Civil Rights Unit.  Assistant U.S. Attorney for the Southern District of New York Ellen Blain is in charge of the case.

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