Last edited on Friday, October 01, 2021, at 1:21 PM.
Welcome to The Blanch Law Firm’s weekly digest of New New York Criminal Cases. Our goal is to keep the public informed as to recent events in federal courts around the country.
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Friday, October 01, 2021
I. Manhattan U.S. Attorney Brings Criminal Charges Against Apparel Company CEO For Customs Fraud
On September 24, 2021, the U.S. Attorney for the Southern District of New York, Audrey Strauss, along with several prominent New York City, state, and federal law enforcement officials, announced the filing of criminal and civil charges against George Iloulian, a/k/a “George Illulian,” the CEO of an apparel company located in New York City.
Iloulian was charged, in an indictment unsealed yesterday, with participating in a years-long scheme to defraud CBP by submitting invoices to CBP that falsely understated the true value of the goods his company imported into the United States. By doing so, he evaded the obligation to pay hundreds of thousands of dollars in customs duties.
Iloulian was arrested Sept. 23 and he was presented before U.S. Magistrate Judge James L. Cott in Manhattan federal court. The criminal case has been assigned to U.S. District Judge Paul G. Gardephe. In addition, a civil fraud lawsuit against Iloulian and his company, Delta Uniforms, Inc. (Delta), which is also assigned to Judge Gardephe, was unsealed in Manhattan federal court on Sept. 24.
The civil complaint asserts that Iloulian and Delta violated the False Claims Act by misrepresenting the true value and nature of the goods they imported into the United States on entry documents submitted to CBP. The conduct in this matter was first brought to the attention of federal law enforcement by a whistleblower who filed a lawsuit under the False Claims Act.
II. Utica Man Arrested on Child Pornography Charges
John Seiselmyer, 49, of Utica, New York, was arrested September 27, 2021, and charged with possessing child pornography. The announcement was made by the Acting U.S. Attorney for the Northern District of New York, Antoinette T. Bacon, along with Janeen DiGuiseppi, Special Agent in Charge of the FBBI’s Albany Field Office and New York State Police (NYSP) Superintendent Kevin P. Bruen.
According to the criminal complaint in this case, Seiselmyer possessed videos of child pornography on his home computer. Seiselmyer is a registered sex offender who was convicted in 2007 of Criminal Sexual Act in the First Degree with a victim who was less than 11 years old. The charge in the complaint is merely an accusation. If he is convicted, Seiselmyer faces at least ten years and up to 20 years in prison for each count, a post-release term of supervised release of between 5 years and life, and a fine of up to $250,000.
III. “R. Kelly” Convicted of All Counts by a Brooklyn Federal Jury
Robert Sylvester Kelly, the R&B singer also known as “R. Kelly,” was convicted September 27, 2021, by a federal jury in Brooklyn of all nine counts of a superseding indictment charging him with racketeering predicated on criminal conduct including sexual exploitation of children, forced labor and Mann Act violations involving the coercion and transportation of women and girls in interstate commerce to engage in illegal sexual activity. The verdict followed six weeks of trial before United States District Judge Ann M. Donnelly.
As proven at trial, for nearly three decades, Kelly was the leader of a criminal enterprise (“the Enterprise”) consisting of himself and an entourage of individuals who served as managers, bodyguards, accountants, drivers, personal assistants and runners for the defendant. As the leader of the Enterprise, Kelly used his fame to recruit women and girls to engage in illegal sexual activity with him.
Kelly identified these girls and women at concerts, and then directed members of the Enterprise to escort them backstage following his musical performances. Kelly exchanged contact information with girls and women so that he and other members of the Enterprise could arrange travel and lodging for them to visit Kelly and engage in the charged illegal sexual conduct.
The evidence at trial included the testimony 45 government witnesses, including more than 10 victims, five of whom are named in the superseding indictment, testimony from employees of the defendant, text messages, video and audio recordings, photographs, phone and travel records, DNA evidence and expert witnesses.
IV. Troy Felon Charged with Unlawful Possession of a Firearm
On September 24, 2021, Justin Smith, 21, of Troy, New York, was ordered detained pending trial on a charge that he unlawfully possessed a firearm as a felon. The announcement was made by the Acting U.S. Attorney for the Northern District of New York, Antoinette T. Bacon, along with Janeen DiGuiseppi, Special Agent in Charge of the FBI’s Albany Field Office of the Federal Bureau of Investigation (FBI).
The complaint in this case alleges that Smith, a felon, possessed a handgun in Troy on or about March 5, 2021. If Smith is convicted in a court of law, he faces up to ten years in prison, a fine of up to $250,000, and a term of supervised release of up to 3 years.
V. Six Physical Therapists, Two Acupuncturists Charged In Health Care Fraud Scheme
On September 28, 2021, the U.S. Attorney for the Southern District of New York, Audrey Strauss, announced the unsealing of an indictment charging acupuncturists Junyi Liu, a/k/a “Jenny,” and Hongxing Wang, as well as physical therapists Gleen Anciro, Noemi Algodon, Mohammed Elmandouh, Gerard Estrella, Ramon Garcia III, and Henler Datu Tahil, and cashier Zihao Chen, with operating a health care fraud scheme that collected over $20 million from fraudulent medical offices in Manhattan, Brooklyn, and Queens.
As part of the fraud scheme, Chen and other of the defendants’ co-conspirators paid cash kickbacks to patients (Paid Patients) who were insured by Medicare and/or other insurance providers (collectively, the Insurance Providers), and the defendants and their co-conspirators then billed Medicare and the insurance providers for physical therapy and acupuncture services related to the Paid Patients that were unnecessary or never performed. Liu was additionally charged with unlawfully enriching herself and a family member through a COVID-19 unemployment benefit scheme.
According to the Indictment, between 2018 and 2021, Liu, a licensed acupuncturist, operated medical offices (the Offices) from which she and her partners fraudulently billed the Insurance Providers for physical therapy and acupuncture services that were not rendered in the manner represented or not rendered at all. During the scheme, LIU partnered with other licensed medical professionals, including Anciro, Algodon, Elmandouh, Estrella, Garcia, and Tahil, all of whom were licensed physical therapists, and Wang, who was a licensed acupuncturist (collectively, the “Partners”).
VI. Indictment Charges Six, Plus One Corporate Entity with Tax Fraud Conspiracy
On September 28, 2021, the U.S. Attorney for the Southern District of New York, Audrey Strauss, along with several law enforcement officials, announced the unsealing of an Indictment charging six foreign individuals and a Swiss financial services company with conspiring to defraud the IRS by helping three high-value U.S. taxpayer-clients conceal more than $60 million in income and assets held in undeclared, offshore bank accounts from the IRS and to evade U.S. income taxes. One of the charged defendants was recently arrested in Spain.
According to the allegations in the Indictment unsealed Sept. 28, from in or about 2009 to in or about 2014, Ivo Bechtiger, Bernhard Lampert, Peter Rüegg, Roderic Sage, Rolf Schnellmann, Daniel Wälchli, and Allied Finance Trust AG of Zurich, Switzerland (Allied Finance), the defendants, defrauded the IRS by concealing income and assets of certain U.S. taxpayer-clients with undeclared bank accounts located at Privatbank IHAG Zurich AG (IHAG), a Swiss private bank in Zurich, Switzerland and elsewhere.
To assist the U.S. taxpayer-clients, the defendants and others devised and implemented a scheme dubbed the “Singapore Solution” to fraudulently conceal the bank accounts of the U.S. taxpayer-clients, their assets, and their income from U.S. authorities. In furtherance of the fraudulent scheme, the defendants and others conspired to transfer more than $60 million from undeclared IHAG bank accounts of three U.S. taxpayer-clients through a series of nominee bank accounts in Hong Kong and other locations before returning the funds to newly opened accounts at IHAG in the name of a Singapore-based asset-management firm.
VII. Longtime New York City Contractor Indicted for $1 Million Insurance Fraud
On September 28, 2021, the Manhattan District Attorney Cyrus R. Vance, Jr., and New York City Department of Investigation (“DOI”) Commissioner Margaret Garnett announced the indictment of Dragonetti Brothers Landscaping Nursery & Florist (DBLNF), and D.B. Demolition, Inc. (DB Demo), as well as their respective presidents Nicholas Dragonetti, 48, and Vito Dragonetti, 52, for evading more than $1 million in insurance premiums while working on New York City contracts for sidewalk and road repair.
The defendants are charged in a New York State Supreme Court indictment with various counts of Insurance Fraud, Offering a False Instrument for Filing in the First Degree, and Penalties for Fraudulent Practices under New York State’s Workers’ Compensation Law. The indictment follows a joint investigation led by the Manhattan District Attorney’s Office’s Construction Fraud Task Force and the federal Department of Labor (DOI), with assistance from the New York City Business Integrity Commission (BIC).
VIII. Former NYC DOE Senior Official, Three Others Charged with Extortion Conspiracy and Bribery
On September 29, 2021, the Acting U,S. Attorney for the Eastern District of New York, Jacquelyn M. Kasulis, announced that a criminal complaint had been unsealed that day in Brooklynn federal court, charging Eric Goldstein, the former CEO of the New York City Department of Education’s )NYC DOE) Office of School Support Services (OSS), as well as Blaine Iler, Michael Turley and Brian Twomey, with conspiring to commit extortion under color of official right and solicitation and the giving of bribes relating to programs receiving federal funds.
Goldstein was arrested Sept. 29, and he made his initial appearance the same day before U.S. Magistrate Judge Lois M. Bloom. He was then released on a $150,000 bond. Turley was arrested in Arkansas on Sept. 29 and made his initial appearance in the Western District of Arkansas Sept. 30. Iler and Twomey made their initial appearances in the Northern District of Texas Sept. 29.
As alleged in the complaint, from 2008 to 2018, Goldstein was the CEO of OSS, where he was the NYC DOE’s senior executive in charge of overseeing the management, budget, and operations of several NYC DOE departments, including the Office of Food and Nutrition Services, a/k/a SchoolFood, which is responsible for managing the food service operations for all New York City public schools.
Iler, Turley and Twomey were the founders and operators of a food services company (the “Food Service Company”) that sold food products to retail and food service markets, including schools. Between 2015 and 2016, Goldstein, together with Iler, Turley and Twome, formed and operated a grass-fed beef importation business called Range Meats Supply Co., LLC (RMSCO). At about the same time, between 2015 and 2016, Goldstein used his official position within SchoolFood to ensure that the food products promoted and sold by the Food Service Company would be purchased by SchoolFood and served in New York City public schools.
In exchange, Iler, Turley and Twomey transferred tens of thousands of dollars to RMSCO for Goldstein’s benefit, including a payment of $7,000 to Goldstein’s personal divorce lawyer and a $3,000 wire transfer to a close relative of Goldstein.