Last edited on Friday, September 25, 2020, at 9:14 AM.
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Friday, September 25, 2020
I. NYPD Officer Charged with Acting as an Illegal Agent of the People’s Republic of China
A criminal complaint was unsealed on September 21, 2020 in Brooklyn federal court charging Baimadajie Angwang, a New York City Police Department officer and U.S. Army reservist, with acting as an illegal agent of the People’s Republic of China (PRC), as well as committing wire fraud, making false statements and obstructing an official proceeding. Angwang made his initial appearance before United States Magistrate Judge Roanne L. Mann later the same day.
Seth D. DuCharme, the Acting U.S. Attorney for the Eastern District of New York, along with several prominent law enforcement officials, announced the arrest and charges. According to the complaint, since at least 2014, Angwang allegedly acted at the direction and control of officials at the PRC Consulate in New York City. Specifically, Angwang reported on the activities of Chinese citizens in the New York area, spotted and assessed potential intelligence sources within the Tibetan community in New York and elsewhere, and provided PRC officials with access to senior NYPD officials through invitations to official events.
Angwang is also charged with committing wire fraud, making materially false statements and obstructing an official proceeding. As part of his employment with the U.S. Army Reserve, Angwang maintained a “Secret”-level security clearance. According to court documents, in 2019, Angwang completed and electronically submitted an SF-86C form for a background investigation.
On the form, Angwang allegedly lied by denying that he had contacts with a foreign government or its consulate and by denying that he had close and continuing contacts with foreign nationals, including his family members who live in the PRC, some of whom are affiliated with the People’s Liberation Army.
II. Queens Man Charged in Insider Trading Scheme
A criminal complaint was unsealed on September 21, 2020 in federal court in Brooklyn charging Yinghang Yang with securities fraud for his role in an insider trading scheme. Yang and a co-conspirator allegedly executed a series of securities transactions based on nonpublic information stolen from Yang’s employer, which resulted in profits of more than $900,000.
Yang was arrested that day and made his initial appearance September 22 via videoconference before United States Magistrate Judge Roanne L. Mann. Seth D. DuCharme, Acting United States Attorney for the Eastern District of New York, and William F. Sweeney, Jr., Assistant Director-in-Charge of the FBI’s New York Field Office (FBI), announced the charge and arrest.
According to the complaint, since September 2018, Yang has been employed by a publicly traded company (the Company) that specializes in financial information and analytics. The Company publishes several market indices, including American stock market indices based on the market capitalizations of groups of companies with shares listed on the New York Stock Exchange (NYSE) or the NASDAQ Stock Market (NASDAQ). Yang’s job at the Company includes managing American stock market indices with more than $60 billion in asset value tracking.
Between April and October 2019, Yang and a co-conspirator allegedly executed securities transactions in the co-conspirator’s brokerage account based, in whole or in part, on nonpublic information obtained by Yang through his employment at the Company, about issuers that were to be added or subtracted from market indexes published by the Company.
III. Antiquities Dealers Arrested For Fraud Scheme
On September 22, 2020, Audrey Strauss, the Acting United States Attorney for the Southern District of New York, and William F. Sweeney Jr., the Assistant Director-in-Charge of the New York Office of the FBI, announced the unsealing of an Indictment in Manhattan federal court charging Erdal Dere, the owner and operator of Manhattan-based antiquities gallery Fortuna Fine Arts Ltd. (“Fortuna”), and his longtime business associate and co-conspirator, Faisal Khan, with engaging in a years-long scheme to defraud buyers and brokers in the antiquities market by using false provenances to offer and sell antiquities.
Dere, 50, of New York City was charged in the Indictment with wire fraud conspiracy, wire fraud, and aggravated identity theft. If convicted, the conspiracy charge carries up to 20 years in prison, while the wire fraud charge carries up to another 20 years and the aggravated identity theft charge carries up to two years in prison. Khan, 47, of Flanders, New Jersey, was charged in the Indictment with wire fraud conspiracy and wire fraud. The wire fraud conspiracy charge carries up to 20 years in prison, while the wire fraud charge carries up to another 20 years.
Dere is also charged with aggravated identity theft for his misappropriation of the identities of deceased collectors who were falsely represented to be the prior owners of the antiquities. Federal law enforcement agents arrested Dere n Sept. 22 at his residence in New York City. Khan was also arrested the same day at his residence in New Jersey. Both Dere and Khan were presented the same day before U.S. Magistrate Judge Sarah Netburn.
According to the indictment, Dere communicated the false provenances featuring the names of deceased collectors to buyers and brokers. He also fabricated documents purporting to evidence the prior ownership of antiquities by the deceased collectors, and provided them to buyers and brokers, including to an auction house in New York, New York in connection with a December 2015 antiquities auction.
Khan assisted Fortuna in finding buyers for items from its pre-existing inventory and acquired new items, primarily in Asia, that Khan worked with Fortuna to sell to collectors in the United States and internationally.
With Khan’s knowledge, Dere provided false provenance information to potential buyers of items that Khan had personally located and acquired, listing deceased collectors as the long-time owners of items which Khan and Dere well knew had not been owned by those collectors.
IV. Four Charged with Manufacturing Meth in Clinton and Essex Counties
On September 23, 2020, Bradley W. Price, 44, of Ausable, Leah M. Cross, 30, of Ausable Forks, Carl J. Estes, 35, of Keeseville, and Andrew J. Barber, 28, of Plattsburgh, have been indicted for conspiring to manufacture methamphetamine and possessing pseudoephedrine with the intent to manufacture methamphetamine. The announcement was made by Acting U.S. Attorney for the Northern District of New York Antoinette T. Bacon, along with Special Agent in Charge Ray Donovan, of the DEA, New York Division; and Clinton County District Attorney Andrew J. Wylie.
The indictment alleges that between July 8, 2020 and July 22, 2020, in Essex County, Price, Cross and Estes conspired to manufacture methamphetamine. It also alleges that on August 19, 2020, in Clinton County, Price, Cross and Barber conspired to manufacture methamphetamine. Each of the four is also charged with possessing and distributing pseudoephedrine knowing it would be used to manufacture methamphetamine. The charges in the indictment are merely accusations. The defendants are presumed innocent unless and until proven guilty.
V. Ulster County Dentist Arrested for Illegally Dispensing Oxycodone
On September 22, 2020, Vivian Letizia, 62, of Stone Ridge, New York, was arrested on a criminal complaint charging her with illegally dispensing controlled substances outside the course of professional practice and for no legitimate medical purpose. The announcement was made by Acting U.S. Attorney for the Northern District of New York Antoinette T. Bacon, along with DEA Special Agent in Charge Ray Donovan, and Joshua Vinciguerra, Director of the New York State Department of Health, Bureau of Narcotic Enforcement (BNE).
The criminal complaint in this case alleges that Letizia, a dentist, wrote prescriptions for oxycodone for four individuals and filled those prescriptions herself at pharmacies in Ulster County. She also ordered oxycodone to her dental practice, all exclusively for her own personal consumption. Letizia appeared Sept. 22 in Albany before U.S. Magistrate Judge Daniel J. Stewart and was released with conditions.
If convicted, Letizia faces up to 20 years in prison, at least 3 years of post-imprisonment supervised release, and a maximum $1 million fine.
VI. Oil Trader Indicted in Bribery, Money Laundering Conspiracy Re Corrupt Payments to Ecuadorian Officials
On September 22, 2020, a federal grand jury in the Eastern District of New York returned an indictment against a trader at the U.S. subsidiary of a multinational oil distributor and trading company (Trading Company), for his alleged participation in a five-year international bribery and money laundering scheme involving corrupt payments to Ecuadorian officials. The announcement was made by Acting Attorney General Brian C. Rabbitt, Acting U.S. Attorney for the Eastern District of New York Seth D. DuCharme, and Special Agent in Charge George L. Piro of the FBI’s Miami Field Office.
The two-count indictment charges Javier Aguilar, 46, a citizen of Mexico and resident of the United States, with conspiracy to violate the Foreign Corrupt Practices Act (FCPA) and conspiracy to commit money laundering.
As alleged in the unsealed criminal complaint, between approximately 2015 and July 2020, Aguilar and others participated in a conspiracy to pay and conceal bribes to then-Ecuadorian officials, including at Empresa Publica de Hidrocarburos del Ecuador (Petroecuador) in order to obtain and retain business for Trading Company, in particular, a $300 million contract to purchase fuel oil that was awarded to a state-owned entity for the benefit of Trading Company.
To promote the bribery scheme and conceal its proceeds, Aguilar and his co-conspirators allegedly agreed to use sham consulting agreements between bribe paying intermediaries and offshore shell companies, into whose accounts Trading Company paid funds while knowing that they would be used to pay bribes to the Ecuadorian government officials.
According to the allegations, during the scheme, Aguilar and his co-conspirators caused the payment of approximately $870,000 in bribes that they had promised to then-Ecuadorian officials on behalf of Trading Company.
VII. Former Manager of Oil Trading Firm Charged in Money Laundering and Bribery Scheme
An indictment was unsealed on September 22, 2020 in Brooklyn federal court charging Javier Aguilar with conspiring to violate the anti-bribery provisions of the Foreign Corrupt Practices Act (FCPA) and money laundering conspiracy for his involvement in a scheme to pay approximately $870,000 in bribes to Ecuadorian government officials in exchange their assistance to help Aguilar’s employer secure a $300 million contract for fuel oil from Ecuador’s state-owned oil company.
Aguilar was previously arrested in Houston, Texas, and will be arraigned in the Eastern District of New York at a later date. The charges were announced by Seth D. DuCharme, Acting United States Attorney for the Eastern District of New York, Brian C. Rabbitt, Acting Assistant Attorney General of the Justice Department’s Criminal Division, and George L. Piro, Special Agent-in-Charge of the FBI’s Miami Field Office.
As alleged in the indictment and other court documents, Aguilar worked as a manager and oil trader in Houston for a U.S. subsidiary of a European energy trading company (Trading Company). Beginning in mid-2015 and continuing into 2020, Aguilar and others allegedly caused approximately $870,000 in bribes to be paid to Ecuadorian government officials for their assistance in obtaining and retaining business for the Trading Company.
Specifically, the Trading Company paid two intermediaries $1.4 million for their efforts to secretly bribe the government officials using bank accounts located in the United States and offshore, and $870,000 of those funds were used to pay the bribes to the Ecuadorian officials. In exchange for the bribes, the Trading Company secured contracts to purchase approximately $300 million in fuel oil from Petroecuador.
To conceal the proceeds of the bribery scheme, Aguilar caused fake and fraudulent consulting agreements to be executed with so-called consultants located in the United States who were actually bribe intermediaries.
VIII. Head of Financial Services Firm Charged in Manhattan Federal Court in Connection with Securities Fraud Scheme
On September 24, 2020, Audrey Strauss, the Acting United States Attorney for the Southern District of New York (SDNY), and Philip R. Bartlett, Inspector-in-Charge of the United States Postal Inspection Service’s New York Division (“USPIS”), announced that Craig Zabala, the chairman, CEO, and president of Concorde Group Holdings Inc. (Holdings), was arrested in New York City on securities fraud and wire fraud charges stemming from a scheme to defraud investors in Holdings, a purported financial services firm.
Among other illicit activity, Zabala fraudulently induced at least 18 investors to invest at least approximately $4.4 million based on false and misleading statements, by failing to use investors’ funds as promised, including to build Holdings’ purported business by investing in and buying other financial services companies, and by converting investors’ money to his own use, including to repay other investors in a Ponzi-like fashion.
According to the allegations in the Complaint unsealed in Manhattan federal court Sept. 24, Zabala and others falsely represented that the proceeds from the offerings would be used to grow Holdings’ purported business by investing in and buying other financial services companies. In truth and in fact, and as Zabala well knew, Holdings did not make any investments in or buy other companies.
Zabala and others falsely represented to Holdings investors that Holdings had raised nearly $25 million in the Holdings Offering. In truth and in fact, and as Zabala well knew, Holdings did not make any investments in or buy other companies. Holdings only raised a few million dollars. Zabala and others falsely represented to Holdings investors that the family office of a wealthy German family had invested millions of dollars in Holdings. In truth and in fact, and as Zabala well knew, this family office never invested in, and never committed to invest in, Holdings.
Zabala and others falsely represented to Holdings investors that Holdings would soon have an initial public offering (“IPO”), which would result in large profits to Holdings investors. In truth and in fact, and as Zabala well knew, Holdings was not close to an IPO. Zabala converted at least approximately 70 percent of the approximately $4.4 million in Holdings investor funds in the form of cash withdrawals and other transfers to himself, to his girlfriend, and payments of his personal credit card bills, and repayment of Group investors Ponzi-style.
Friday, September 18, 2020
I. International Fugitive and Disbarred Attorney Charged in Cryptocurrency Fraud
On September 14, 2020, the Acting U.S. Attorney for the Southern District of New York Audrey Strauss, along with William F. Sweeney Jr., the Assistant Director-in-Charge of the FBI’s New York Field Office, announced the unsealing of a Complaint in Manhattan federal court charging Randy Craig Levine, a/k/a “Viktor Lapin,” a/k/a “Andre Santiago Santos Galindo,” a/k/a “Alexander Martinez Lavrov,” a/k/a “Alexander Kozlov,” a/k/a “Hristo Danielov Marinov,” and Philip Reichenthal with commodities fraud, wire fraud, and money laundering offenses.
As alleged, Levine induced others to send millions of dollars to Reichenthal, who was at the time a licensed attorney, to fund the purchase of Bitcoin after falsely representing that he intended to sell large quantities of Bitcoin to buyers. Reichenthal, who was purportedly acting as an escrow agent for the transactions, then sent a substantial portion of the money to Levine, before any Bitcoin was provided by Levine to investors.
Neither Levine nor Reichenthal ever provided any Bitcoin or refunded the investors’ money. Levine, a U.S. citizen, fled the United States in or about 2005 after learning that he was under investigation for passport fraud and that his residence had been searched. On or about May 19, 2005, a federal grand jury sitting in the Southern District of Florida returned an indictment charging Levine with passport fraud and perjury.
In 2018, Levine was arrested in Guatemala with a Russian passport containing the alias “Viktor Lapin.” In June 2020, he was arrested in Austria with a Bulgarian passport containing the alias “Alexander Koslov.” Extradition proceedings are pending.
II. Grand Jury Indicts Buffalo Man For Brutally Beating, Raping, And Sex Trafficking Four Victims
The U.S. Attorney for the Western District of New York James P. Kennedy, Jr., announced on September 11, 2020 that a federal grand jury had returned an indictment charging Michael McDonald, a/k/a George Jackson, a/k/a Rabbit, 41, of Buffalo, NY, with four counts of sex trafficking. Assistant U.S. Meghan A. Tokash, who is handling that case, stated that according to the indictment and a previously filed complaint, in October 2017, the FBI began investigating the defendant for operating an illegal sex buying scheme by employing fraud, force and/or coercion.
According to the complaint, McDonald recruited Victim 1 to “dance” and “strip” in Florida using Facebook, telling her she would not have to engage in prostitution. However, once Victim 1 traveled from Buffalo to Florida, the defendant raped her and forced her into prostitution in both Florida and Buffalo. Victim continued to engage in sex acts for McDonald out of fear. The defendant also assaulted Victim 1 on numerous occasions.
In January 2018, the Plantation, Florida Police Department received a 911 call that an individual was being held against her will. Victim 2 was rescued from the house and told investigators that she met the defendant and flew from New York to Florida. Once in Florida, she said McDonald sexually assaulted her and forced her to perform sexual acts for money against her will. Victim 2 attempted to leave, but the defendant stopped her and threatened to beat her if she attempted to leave again.
In January 2017, Victim 3 was recruited on Snapchat with McDonald lied and claimed he could help her fulfill her dreams of becoming a singer and obtain custody of her children. Shortly after meeting McDonald, Victim 3 told investigators the defendant allowed another man to rape her and made her feel that all she could do was work as a prostitute for him.
McDonald controlled every aspect of her and life and isolated Victim 3 from her friends and family. The defendant also routinely beat, choked, and raped Victim 3. The defendant is accused of trafficking a total of four victims.
III. Third Defendant Charged with Civil Disorder for Attacking Police Officers with A Laser During Violent Rochester Protests
The U.S. Attorney for the Western District of New York James P. Kennedy, Jr. announced that Kyle Bradley Davis, 32, of Rochester, NY, was arrested and charged by complaint with civil disorder for his role in violent protests in the City of Rochester. If convicted, Davis faces up to five years in prison.
According to the criminal complaint, there were nights of violent protests in Rochester following the public disclosure on September 2, 2020, of Daniel Prude’s death on March 30, 2020. Those violent protests resulted in property damage and physical injury to several law enforcement officers.
On the evening of September 8, 2020, a group of approximately 400 protesters gathered in front of Rochester Police Department (RPD) headquarters, where they blocked all lanes of traffic on Exchange Boulevard between Court Street and the Interstate 490 overpass. RPD officers and NYSP Troopers staffed metal barricades, which were positioned in the driveway area of RPD headquarters.
At approximately 10:00 p.m., surveillance cameras captured the defendant pointing green lasers at three uniformed RPD officers and four uniformed New York State Police Troopers, who were positioned in the area to control the crowd and prevent a breach of the barricades. The victim officers experienced a temporary loss of sight as a result of being hit with the laser, which impeded and interfered with their ability to carry out their assigned duties.
IV. Two Charged with Fraudulently Filing for Unemployment Insurance
Audrey Strauss, the Acting U.S. Attorney for the Southern District of New York, announced on September 15, 2020, the unsealing of a Complaint charging Christopher Ferrera, 25, of the Bronx, and Ashley Bourdier, 27, of New York City, with operating a scheme to fraudulently file for unemployment insurance under the names of other people. Ferrera and Bourdier were arrested the morning of September 15 and were scheduled to be presented and arraigned later the same day before U.S. Magistrate Judge Katharine H. Parker.
As alleged in the unsealed complaint, Ferrera and Bourdier fraudulently applied for and received unemployment benefits by using the identities of other people. More specifically, from March 2020 through August 2020, Ferrera and Bourdier allegedly engaged in a scheme to obtain unemployment insurance by fraudulently filing for benefits using the names and social security numbers of more than 25 other people. As a result of their scheme, Ferrera and Bourdier received over $200,000 of unemployment insurance benefits from at least three different states.
If convicted, both defendants face up to 20 years in prison. Ferrara is also charged with aggravated identity theft, which carries a mandatory two-year consecutive sentence.
V. Seneca County Man Indicted for Defrauding Coast Guard
U.S. Attorney James P. Kennedy, Jr. announced on September 16, 2020 that a federal grand jury has returned an indictment charging Dennis Daniels, 69, of Romulus, NY, with two counts of mail fraud. The charges carry a maximum of penalty of 20 years in prison, and a $250,000 fine. Assistant U.S. Attorney Aaron J. Mango, who is handling the case, stated that according to the indictment, in January and February 2019, the defendant taught an approved U.S. Coast Guard (USCG) course for an Operator Uninspected Passenger Vessel license, with a Masters upgrade.
This license allows the individual to operate an uninspected vessel of up to six passengers, such as a fishing charter, and an inspected vessel with more than six passengers, such as a ferry.
Throughout the course, Daniels was required to teach for 80 hours, however, he only taught for 51 hours, and engaged in conduct not in compliance with USCG regulations. After reviewing the defendant’s records, it was determined that all 24 students in the course failed a chart-plotting test, and four of the students also failed the maritime rules of the road test.
Students are required successfully to pass those tests in order to obtain a course completion certificate, a prerequisite to applying for a Merchant Marine Credential issued by the USCG. Despite failing the tests, Daniels issued course completion certificates to his students.
VI. Founder and CEO of Cyberfraud Prevention Company Arrested and Charged with Securities Fraud Scheme
On September 17, 2020, Audrey Strauss, the Acting U.S. Attorney for the Southern District of New York, along with several law enforcement officials, announced today that Adam Rogas, the co-founder and former CEO, CFO, and member of the board of directors of Las Vegas-based cyberfraud prevention company NS8, Inc. (“NS8”), was charged in a Complaint in Manhattan federal court with securities fraud, fraud in the offer and sale of securities, and wire fraud.
Rogas used fraudulent financial data to obtain over $123 million in financing for NS8, of which he personally obtained approximately $17.5 million. Rogas was arrested the same day in the District of Nevada and should be presented before a judge there tomorrow. As alleged in the Complaint unsealed in Manhattan federal court, Rogas was a co-founder of NS8, and served as its CEO, CFO, and a member of its board of directors. Rogas was also primarily responsible for the company’s fundraising activities.
NS8, based in Las Vegas, Nevada, is a cyberfraud prevention company that developed and sold electronic tools to help online vendors assess the fraud risks of customer transactions. In the fall of 2019 and the spring of 2020, NS8 engaged in fundraising rounds through which it issued Series A Preferred Shares and obtained approximately $123 million in investor funds. Rogas maintained control over a bank account into which NS8 received revenue from its customers, and periodically provided monthly statements from that account to NS8’s finance department so that NS8’s financial statements could be created.
Rogas also maintained control over spreadsheets that purportedly tracked customer revenue, which were also used to generate NS8’s financial statements. Rogas altered the bank statements before providing them to NS8’s finance department to show tens of millions of dollars in both customer revenue and bank balances that did not exist. In the period from January 2019 through February 2020, between at least approximately 40% and 95% of the purported total assets on NS8’s balance sheet were fictitious.
In that same period, the bank statements that Rogas altered reflected over $40 million in fictitious revenue. Rogas used these materially misleading financial statements to raise approximately $123 million from investors in the fall of 2019 and the spring of 2020.
VII. Several Charged with Campaign Finance Violations, Wire Fraud
On September 17, 2020, Audrey Strauss, the Acting U.S. Attorney for the Southern District of New York, along with William F. Sweeney Jr., the Assistant Director in Charge of New York city’s FBI Field Office, announced that Lev Parnas and David Correa were charged in a Superseding Indictment with conspiring to commit wire fraud in connection with their efforts to raise funds ostensibly for their business, “Fraud Guarantee.”
The Superseding Indictment also includes additional campaign finance charges against the defendants. In October 2019, Parnas, Correia, Igor Fruman, and Andrey Kukushkin were charged in a four-count indictment alleging that each of the defendants conspired to violate the ban on political donations and contributions by foreign nationals.
In addition, Parnas and Fruman were charged with conspiring to make contributions in connection with federal elections in the names of others, and with making false statements to and falsifying records to obstruct the administration of a matter within the jurisdiction of the FEC.
The Superseding Indictment returned September 17, 2020 charges Parnas and Correia with conspiracy to commit wire fraud – charges Correia with making false statements to and falsifying records to obstruct the administration of a matter within the jurisdiction of the FEC; charges Parnas, Fruman, and Correia with soliciting a foreign national to make donations and contributions in connection with federal and state elections; and charges Parnas, Fruman, and Kukushkin with aiding and abetting the making of donations and contributions by a foreign national in connection with federal and state elections.
The case is assigned to U.S. District Judge J. Paul Oetken in the Southern District of New York. Trial is currently scheduled for February 1, 2021.
Friday, September 11, 2020
I. Former Ob/Gyn Charged with Sexually Abusing Patients
On September 9, 2020, Audrey Strauss, the Acting U.S. Attorney for the Southern District of New York, and William F. Sweeney Jr., the Assistant Director in Charge of the FBI’s New York Field Office, announced that Robert Hadden was arrested this morning and charged with enticing and inducing six victims to travel interstate to engage in illegal sexual activity.
The indictment unsealed today alleges that from at least in or about 1993, up to and including at least in or about 2012, Hadden enticed and induced dozens of victims, including minors, to travel to his medical offices in New York, New York, at least in part for the purpose of subjecting them to unlawful sexual abuse. Hadden is expected to be presented before U.S. Magistrate Judge Robert W. Lehrburger this afternoon. The case is assigned to U.S. District Judge Richard M. Berman.
As alleged, from at least 1993 through at least 2012, Hadden enticed and induced multiple victims to travel to his medical offices in New York, at least in part for the purpose of subjecting them to unlawful sexual abuse. As alleged, Hadden abused dozens of patients through a process that entailed developing a relationship with his victims and causing them to trust him, before engaging in a course of increasingly abusive conduct, which Hadden attempted to mask under the guise of legitimate medical care.
Hadden frequently created opportunities to be alone with his victims. Among other things, Hadden invited his victims to meet with him alone in his office, sent nurses and medical assistants out of the examination room for periods of time, and/or intentionally failed to tell nurses and medical assistants when he was going into examination rooms, so that he could be alone with his victims.
II. Mexican Drug Traffickers Charged Based on Seizure of More Than Three Tons of Cocaine
On September 9, 2020, Audrey Strauss, the Acting U.S. Attorney for the Southern District of New York, along with Raymond P. Donovan, Special Agent in Charge of the New York Division of the DEA, Keith M. Corlett, Superintendent of the New York State Police (NYS), Peter C. Fitzhugh, Special Agent in Charge of the New York Office of Homeland Security Investigations (HSI), and Dermot Shea, Commissioner of the New York City Police Department (NYPD), announced that Raymundo Montoya-Lopez, Abraham Garcia-Montoya, and Felizardo Diaz-Hernandez were charged in a criminal complaint in Manhattan federal court with conspiring to import almost three tons of cocaine into the United States.
The charge arises from a September 1, 2020, seizure by Mexico’s Secretaría de Marina (the “Mexican Navy”) of approximately 2,960 kilograms of cocaine off the coast of the Mexican state of Quintana Roo. As alleged in the Complaint unsealed in federal court, on or about September 1, 2020, aircraft from the Mexican Navy located and began tracking a boat traveling northwest through the Caribbean Sea toward the Mexican city of Chetumal and the village of Mahahual.
Shortly thereafter, the Mexican Navy intercepted the boat approximately 85 nautical miles off the coast of Quintana Roo and boarded and searched it. During the search, the Mexican Navy found and arrested Montoya-Lopez, Alfonso-Montoya, and Diaz-Hernandez. The Mexican Navy also found and seized approximately 2,960 kilograms of cocaine.
Montoya-Lopez, 45, Garcia-Montoya, 31, and Diaz-Hernandez, 39, all of Sinaloa, Mexico, are charged with conspiring to import cocaine into the United States, which carries a mandatory minimum sentence of 10 years in prison and a maximum sentence of life in prison.
III. Two Defendants Charged with Civil Disorder for Attacking Police During September 5th Violent Protests in Rochester
On September 9, 2020, the U.S. Attorney for the Western District of New York James P. Kennedy, Jr. announced today that two defendants have been arrested and charged in separate complaints with civil disorder for their roles in violent weekend protests in the City of Rochester. Adam Green, 20, of Dansville, NY, and Dallas Williams-Smothers, 20, of Rochester, NY, each face five years in prison if convicted.
As alleged, during the evening of September 5, 2020, a group of approximately 1,500 protesters gathered at the intersection of Broad Street and Exchange Boulevard, located a block north of RPD headquarters. The protestors blocked all lanes of traffic on Broad Street and all lanes of traffic on Exchange Boulevard between Broad Street and Main Street. The group extended from the intersection of Broad Street and Exchange Boulevard to the intersection of State Street and Main Street.
As a result, law enforcement officers shut down Exit 14 on Interstate 490 in Rochester for approximately eight hours and the State Street exit on the Inner Loop in the City of Rochester for approximately one hour. Protestors were repeatedly asked by an RPD sound truck to leave the area on the sidewalks or be subject to arrest for Disorderly Conduct for impeding traffic. Several members of the group disregarded those messages, remained in the streets, and continued to block the intersection.
Defendant Green – who was wearing a black helmet and carrying a makeshift wooden shield – was part of the group that refused to disperse. RPD then declared an unlawful assembly because of the criminal activity. As one officer approached defendant Green, he swung the wooden shield that he was carrying, striking the officer in the forehead portion of his helmet. After being told he was under arrest, Green resisted and fought with the officer and another officer who was assisting.
Green was eventually handcuffed and arrested. The officer suffered a cut and abrasion on the bridge of his nose from being struck in the head by the wooden shield.
IV. Bridgeport Police Chief, Personnel Director Charged with Fraud, False Statements in Hiring of Police Chief
On September 10, 2020, Audrey Strauss, Acting U.S. Attorney for the Southern District of New York, Acting Under Authority Conferred by 28 U.S.C. § 515, alng with David Sundberg, Special Agent-in-Charge of New Haven’s FBI office, announced the arrest of Armando J. Perez, the Chief of Police of the City of Bridgeport, Connecticut (the “City”), and David Dunn, Bridgeport’s acting personnel director, for defrauding the City by rigging the 2018 police chief examination, mandated by the City’s Charter, to ensure Perez would be selected for the position.
Perez and Dunn also were charged with making false statements to federal agents in the course of the investigation. Both defendants appeared before U.S. Magistrate Judge William I. Garfinkel in Bridgeport flater that afternoon.
Perez, 64, of Trumbull, Connecticut, and Dunn, 72, of Stratford, Connecticut, are each charged with one count of wire fraud and one count of conspiracy to commit wire fraud, each of which carries up to 20 years in prison. Perez is also charged with two counts of false statements to federal investigators, and Dunn is charged with one count of false statements to federal investigators, each of which carries a maximum penalty of five years in prison.
V. Brothers Charged with COVID Relief Fraud
On September 10, 2020, the U.S. Attorney for the Western District of New York James P. Kennedy, Jr. and Acting Assistant Attorney General Brian C. Rabbitt of the Justice Department’s Criminal Division announced that two brothers were arrested and charged by criminal complaint with wire fraud conspiracy for their alleged participation in a scheme to file fraudulent loan applications seeking nearly $7,000,000 in forgivable Paycheck Protection Program (PPP) loans guaranteed by the Small Business Administration (SBA) under the Coronavirus Aid, Relief, and Economic Security (CARES) Act. Larry Jordan, 42, of Lancaster, NY, and Sutukh El, a/k/a Curtis Jordan, a/k/a Hugo Hurt, 38, of Buffalo, NY, face up to 20 years in prison and a $250,000 fine if convicted.
The complaint alleges that Larry Jordan and Sutukh El conspired to and did submit at least eight fraudulent loan applications in an attempt to obtain nearly $7,000,000 for their company, 5 Stems Inc. In support of the fraudulent loan applications, Larry Jordan and Sutukh El allegedly made numerous false and misleading statements about the companies’ respective business operations and payroll expenses. The complaint also alleges that the fraudulent loan applications were supported by fake documents, including falsified federal tax filings.
For example, included in one application was a fraudulent IRS filing that appeared to be the company’s 2019 federal unemployment tax return (FUTA) showing that the company paid nearly $3,300,000 in employee wages that year. In reality, the IRS has no record of such a filing.
Friday, September 04, 2020
I. Acting U.S. Attorney Announces Extradition of British Citizen for Operating an International Money Laundering and Fraud Network
Audrey Strauss, the Acting U.S. Attorney for the Southern District of New York, along with William F. Sweeney Jr., the Assistant Director-in-Charge of the New York Field Office of the FBI, announced that Habeeb Audu, a/k/a “Dickson,” a dual citizen of the United Kingdom and Nigeria, was extradited from the United Kingdom on August 28, 2020. Audu was charged with participation in a series of fraud schemes from at least in or about 2013 until at least April 2019, involving the theft and laundering of more than $2 million.
Audu was arrested in London, England, on June 26, 2019, on a provisional arrest warrant, and is the fourth defendant charged in this case. Audu was presented on Monday, August 31, 2020, before U.S. Magistrate Judge James L. Cott. His case is assigned to U.S. District Judge Katherine Polk Failla.
According to the allegations in the indictment unsealed August 28, 2020, from at least 2013 through in or about 2018, Audu and various other conspirators (collectively, the “Conspirators”), located in countries including the United States, Canada, Italy, the United Kingdom, and the United Arab Emirates, were involved in a scheme to fraudulently access individuals’ and corporations’ bank accounts and to conduct financial transactions using those bank accounts without the knowledge or authority of the accounts’ legitimate owners (the Bank Scheme).
As part of the Bank Scheme, the Conspirators placed thousands of calls to various U.S. banks, holding themselves out as legitimate accountholders of particular targeted bank accounts and using the stolen personal identifying information belonging to those account holders. Using a telephone number “spoofing” service and voice-altering technology, the Conspirators would deceive bank representatives into believing that the Conspirators were actual account holders and they moved money from a victim’s savings account to the victim’s checking account, so they could more easily access the funds for unauthorized transactions.
They also had “replacement” credit cards mailed to international addresses controlled by the Conspirators and authorize foreign purchases made by the Conspirators.
II. Brooklyn Felon Arrested for Possession of Firearm and Ammunition Used in Deadly Gang-Related Shooting
Stanley Elianor, a member of the Folk Nation Street gang, was arrested on August 31, 2020 in connection with an indictment returned on August 27, 2020 charging him with being a felon in possession of a firearm and ammunition while having previously been convicted of a crime punishable by a term of imprisonment exceeding one year.
Elianor will be arraigned this afternoon via teleconference by United States Magistrate Judge Ramon E. Reyes, Jr. Seth D. DuCharme, Acting U.S. Attorney for the Eastern District of New York, along with William F. Sweeney, Jr., Assistant Director-in-Charge of the FBI’s New York Field Office, and Dermot F. Shea, Commissioner of the New York City Police Department (NYPD), announced the arrest and indictment.
As set forth in the indictment and detention memorandum, in the pre-dawn hours of September 7, 2015, Elianor was attending the J’ouvert cultural festival with other Folk Nation gang members and members of the Hood Starz, a group that was allied with Folk Nation, when they engaged in a shootout with members of the rival Crips street gang outside the Ebbets Field Houses in Crown Heights.
Carey Gabay, an aide to New York Governor Andrew Cuomo, was struck in the head by a stray bullet and died on September 15, 2015. During the gun battle, Elianor allegedly possessed a .45 caliber Masterpiece Arms handgun which was recovered by the NYPD. The firearm has a large capacity magazine and was loaded with 27 rounds of ammunition. Prior to possessing this firearm, Elianor had been convicted of two counts of attempted criminal possession of a weapon in New York state court in October 2009.
III. Former United Nations Employee Charged with Making False Statements to Cover Up Sexual Assaults
On September 2, 2020, Audrey Strauss, the Acting United States Attorney for the Southern District of New York, and William F. Sweeney Jr., Assistant Director-in-Charge of the New York Field Office of the FBI, announced today that Karim Elkorany, a former communications specialist with the United Nations in Iraq, was charged in an Indictment in Manhattan federal court with two counts of making false statements to special agents of the FBI in an effort to conceal his drugging and sexual assault of multiple women while he worked for the UN.
Elkorany was arrested in New Jersey the same day and is expected to be presented before Magistrate Judge James L. Cott that afternoon. The case is assigned to District Judge Naomi Reice Buchwald. According to the Indictment unsealed in Manhattan federal court and publicly available information, since at least in or about 2005 up to at least in or about April 2018, Elkorany worked in international aid, development, and/or foreign relations.
From in or about October 2013 up to in or about April 2016, Elkorany worked for the UN Children’s Fund in Iraq. From in or about July 2016 up to in or about April 2018, Elkorany worked as a Communications Specialist for the UN in Iraq. In or about November 2016, Elkorany drugged and sexually assaulted a woman (Victim-1) in Iraq, where he was stationed while working for the UN. Victim-1 had food and alcoholic beverages with Elkorany at a restaurant, after which Elkorany brought Victim-1 to his apartment.
While at Elkorany’s apartment, Victim-1 was rendered unconscious. Victim-1 regained consciousness for brief periods, during which she observed Elkorany sexually assaulting her but was physically unable to stop him. Elkorany, among other things, put his penis in Victim-1’s mouth and anally penetrated Victim-1. In or around December 2016, Victim-1 reported the sexual assault to the UN. The UN initiated an investigation, through which Elkorany was notified of the substance of Victim-1’s allegations against him.
Elkorany, 37, of West Orange, New Jersey, is charged with two counts of making false statements to federal law enforcement agents, each of which carries a maximum sentence of five years in prison.
IV. Acting U.S. Attorney Announces Extradition Of Dominican Citizen For Narcotics Trafficking Through Sham Internet Pharmacy
Audrey Strauss, the Acting United States Attorney for the Southern District of New York, along with several prominent law enforcement officials announced on September 2, 2020 that Jose Francisco Guzman-Cabrera, a citizen of the Dominican Republic, was extradited yesterday from the Dominican Republic. Guzman-Cabrera is charged with conspiracy to distribute controlled substances, including oxycodone, hydrocodone, the fentanyl analog p-fluoroisobutyryl fentanyl, and the synthetic opioid U-47700, distribution of controlled substances over the Internet, and conspiracy to commit money laundering, in connection with a large-scale drug distribution operation purporting to be an online pharmacy.
Guzman-Cabrera was arrested on July 3, 2020, in the Dominican Republic, and was presented today before U.S. Magistrate Judge James L. Cott. Guzman-Cabrera’s case is assigned to U.S. District Judge Sidney H. Stein. According to the indictment, other court filings, and statements made during court proceedings, law enforcement began investigating an online pharmacy website (Pharmacy Website) following an overdose death of a victim in Boise, Idaho, on or about March 17, 2017.
The victim’s death was caused by elevated levels of multiple prescription opioids, as well as fentanyl. The victim’s computer showed that he had repeatedly ordered painkillers from the Pharmacy Website, paying thousands of dollars for these drugs. As alleged, Guzman-Cabrera, from at least 2013 through 2018, was the head of the drug trafficking organization that operated the Pharmacy Website.
Guzman-Cabrera, who was based in the Dominican Republic, coordinated the purchase of pills and tablets from sources overseas, and shipped these drugs to co-conspirators who operated drug distribution centers located in the United States.
V. New York Hedge Fund Founder Charged with Fraud, Extortion, And Obstruction of Justice in Connection with Neiman Marcus Bankruptcy
On September 3, 2020, Audrey Strauss, the Acting U.S. Attorney for the Southern District of New York, and William F. Sweeney Jr., the Assistant Director-in-Charge of the New York FBI Field Office announced today that Daniel Kamensky, the founder and manager of New York-based hedge fund Marble Ridge Capital (“Marble Ridge”), was charged in a Complaint in Manhattan federal court with securities fraud, wire fraud, extortion, and obstruction of justice.
Kamensky’s alleged criminal acts occurred in connection with his scheme to pressure a rival bidder to abandon its higher bid for assets in connection with Neiman Marcus’s bankruptcy proceedings so that Marble Ridge could obtain those assets for a lower price. Kamensky then attempted to persuade the rival bidder to cover up the scheme. Kamensky was arrested today and is expected to be presented before Magistrate Judge James L. Cott this afternoon.
As alleged in the Complaint, Daniel Kamensky was the principal of Marble Ridge, a hedge fund with assets under management of more than $1 billion that invested in securities in distressed situations, including bankruptcies. Prior to opening Marble Ridge, Kamensky worked for many years as a bankruptcy attorney at a well-known international law firm, and as a distressed debt investor at prominent financial institutions. Neiman Marcus, an American chain of luxury department stores with stores located across the United States, filed for Chapter 11 bankruptcy protection in the United States Bankruptcy Court for the Southern District of Texas.
As a member of the Committee, Kamensky had a fiduciary duty to represent the interests of all unsecured creditors as a group. In July 2020, Kamenskly was negotiating with the Committee for Marble Ridge to offer 20 cents per share to purchase MYT Securities from any unsecured creditor who preferred to receive cash, rather than MYT Securities, as part of that settlement. On July 31, 2020, Kamensky learned that a diversified financial services company headquartered in New York, New York (the “Investment Bank”) had informed the Committee that it was interested in bidding a price between 30 and 40 cents per share – substantially higher than Kamensky’s bid – to purchase the MYT Securities from any unsecured creditor who was interested in receiving cash.
That afternoon, Kamensky sent messages to a senior trader at the Investment Bank, telling him not to place a bid, and followed those messages up with a phone call with IB Employee-1 and a senior analyst of the Investment Bank (IB Employee-2, and collectively the Employees). During that call, Kamensky asserted that Marble Ridge should have the exclusive right to purchase MYT Securities and threatened to use his official role as co-chair of the Committee to prevent the Investment Bank from acquiring the MYT Securities.
VI. Federal Grand Jury Indicts Buffalo Man on Felon in Possession Charge
On September 3, 2020, the U.S. Attorney for the Western District of New York James P. Kennedy, Jr. announced that a federal grand jury has returned an indictment charging Denzel Robinson, a/k/a Sparks, 26, of Buffalo, NY, with being a felon in possession of a firearm and ammunition. If convicted, Robinson faces up to 10 years in prison.
According to the indictment and a previously filed complaint, on April 28, 2020, the Buffalo Police Department executed a search warrant at the defendant’s Sun Street residence. During the search, investigators recovered quantities of suspected cocaine and marijuana; a .22 caliber rifle and ammunition; 9mm caliber ammunition; and 12 gauge ammunition. In April 2018, Robinson was convicted of Bail Jumping in the Second Degree in Erie County Court. As a result, the defendant is legally prohibited from possessing a firearm and ammunition.
VII. Dansville Man Arrested, Faces Child Pornography Charges
On September 3, 2020, the U.S. Attorney for the Western District f New York James P. Kennedy, Jr. announced that Cody Burgess, 29, of Dansville, NY, was arrested and charged by criminal complaint with production, receipt, and distribution of child pornography, and possession of child pornography involving prepubescent minors. The charges means Burgess faces from 15 years to 30 years in prison.
Assistant U.S. Attorney Meghan K. McGuire, who is handling the case, stated that according to the complaint, in July 2019, the National Center for Missing and Exploited Children (NCMEC) received a tip that an individual using his e-mail address and the username “cody428,” had uploaded two images of child pornography in June 2019. Subsequent investigation traced the e-mail address and username to the defendant.
VIII. Saratoga County Man Charged with Distribution of Child Porn
On September 3, 2020, Cameron Hennelly, 30, currently of Halfmoon, New York and formerly of Amsterdam, New York, appeared in court yesterday on a charge of distributing child pornography. The announcement was made by the Acting U.S. Attorney for the Northern District of New York Antoinette T. Bacon and Thomas F. Relford, Special Agent in Charge of the Albany FBI Field Office.
On August 28, 2020, Hennelly was charged by a criminal complaint with distributing child pornography. Hennelly appeared yesterday before United States Magistrate Judge Christian F. Hummel for a detention hearing and was ordered detained pending further proceedings. The complaint alleges that Hennelly used the Kik phone messaging application to distribute a video containing child pornography.
The charges in the complaint are merely accusations. The defendant is presumed innocent until proven guilty. If convicted, Hennelly faces at least 5 and up to 20 years in prison, a mandatory term of supervised release of 5 years to life, mandatory registration as a sex offender, and a maximum fine of $250,000.
IX. Disbarred Attorney Charged In White Plains Federal Court For Stealing 9/11 Victim Compensation Funds
On September 3, 2020, Audrey Strauss, Acting U.S. Attorney for the Southern District of New York, and Kenneth R. Dieffenbach, Special Agent in Charge of the Fraud Detection Office of the Department of Justice Office of the Inspector General (DOJ-OIG), announced the unsealing of a Complaint charging a disbarred attorney with theft of government funds. Gustavo L. Vila, the defendant, allegedly stole approximately $1 million that the Department of Justice’s 9/11 Victim Compensation Fund had awarded to the defendant’s client, a 9/11 first responder.
The defendant was arrested today and presented in White Plains federal court before United States Magistrate Judge Paul E. Davison. As alleged in the Complaint, in the wake of the September 11 terrorist attacks, Congress created the September 11th Victim Compensation Fund (VCF). The original VCF operated from 2001-2004. President Obama and President Trump reactivated the VCF, authorizing it to operate through October 2016, and December 2020, respectively.
Claimants seeking compensation from the VCF were authorized to work with an attorney and have the attorney, on the claimant’s behalf, submit a claim to, and receive the claimant’s award from, the VCF. An attorney’s fees were limited to 10% of a VCF award. From at least in or about 2012 through at least in or about 2019, Gustavo L. Vila, the defendant, represented a retired New York City Police Department Officer (Victim-1) in connection with Victim-1’s claim for compensation from VCF.
Victim-1 was diagnosed with, and suffered from, serious, life-threatening medical conditions, including cancer, as a result of rescue and recovery work he performed at Ground Zero. Throughout his representation of Victim-1, Vila held himself out as an attorney to Victim-1 and to VCF, despite the fact that he was disbarred.
On or about October 12, 2016, the VCF deposited the full amount of Victim-1’s award into Vila’s Bank Account and he was required to distribute all of that money, less 10% for his purported attorney’s fees, to Victim-1. Vila, however, did not distribute any of that money to Victim-1 or otherwise inform Victim-1 about this deposit.
X. Otsego County Woman Charged with Federal Program Theft for Stealing from School District
Kristina Hand, 47, of Morris, New York, was arrested on September 3, 2020 and charged with stealing thousands of dollars from her former employer, the Morris Central School District. The announcement was made by Acting U.S. Attorney Antoinette T. Bacon, with New York State Comptroller Thomas P. DiNapoli; Thomas F. Relford, Special Agent in Charge of the FBI Albany Field Office; and New York State Police Superintendent Keith M. Corlett.
The criminal complaint alleges that Hand, as the Treasurer for the Morris Central School District in Otsego County, diverted and stole at least $22,315.33 in checks made payable to the school district in 2018 and 2019 – years in which the district annually received more than $10,000 in federal funding. The school district terminated Hand’s employment in February 2020, upon discovering the theft.
Hand appeared the same day before U.S. Magistrate Judge Daniel J. Stewart and was released pending further proceedings. If convicted, she faces up to 10 years in prison, a maximum $250,000 fine, and up to 3 years of post-imprisonment supervised release.