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
Holding Company Officials to Answer for Customs Fraud
This week’s Roundup stats with charges announced by 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 on Sept. 24. The filing of criminal charges targeted George Iloulian, who was the CEO of an apparel company located in New York City.
Iloulian was charged in an indictment that was unsealed the day before, and he was charged with participating in a years-long scheme to defraud CBP by submitting phony invoices to CBP. Those invoices understated the true value of the goods his company was importing into the country, which allowed him to evade his and his company’s obligation to pay hundreds of thousands of dollars in customs duties.
Iloulian was arrested Sept. 23 and presented before U.S. Magistrate Judge James L. Cott in Manhattan federal court. In addition to the criminal charges, a civil fraud lawsuit against Iloulian and his company, Delta Uniforms, Inc. (Delta) 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.
A Case of Child Pornography
Also on the Roundup this week is the case of John Seiselmyer, 49, of Utica, New York, who was arrested Sept. 27 and charged with possession of child pornography. The Acting U.S. Attorney for the Northern District of New York, Antoinette T. Bacon, made the announcement, 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 against Seiselmyer, it is alleged that he was in possession of possessed videos of child pornography on his home computer. Seiselmyer is a registered sex offender, as a result of his 2007 conviction for a 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.
Famous Singer Convicted in Brooklyn
This week’s Roundup also includes the conviction of Robert Sylvester Kelly, the R&B singer who is best known as “R. Kelly,” who was convicted Sept. 27 by a federal jury in Brooklyn of all nine counts of a superseding indictment charging him with racketeering predicated on criminal conduct, which in this case included 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 Enterprise members to escort them backstage after each concert. The evidence at trial included the testimony of 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.
NYC Contractor Indicted for Insurance Fraud
Next on our New York countdown is a criminal case in which Manhattan District Attorney Cyrus R. Vance, Jr., and New York City Department of Investigation (DOI) Commissioner Margaret Garnett announced that two longtime contractors for the City of New York, Dragonetti Brothers Landscaping Nursery & Florist (DBLNF), and D.B. Demolition, Inc. (DB Demo), along with their respective corporate presidents, Nicholas Dragonetti, 48, and Vito Dragonetti, 52, were indicted for their part in evading insurance premiums worth more than $1 million while working on city sidewalk and road repair contracts,
The defendants face charges on a New York State Supreme Court indictment with various counts of Insurance Fraud, Offering a False Instrument for Filing in the First Degree, and they also face penalties for Fraudulent Practices under the state of New York’s Workers’ Compensation Law. The indictment came out of a joint investigation led by the Manhattan District Attorney’s Office’s Construction Fraud Task Force, working with the federal Department of Labor (DOI), with assistance from the New York City Business Integrity Commission (BIC).
Charges Against Six for Tax Fraud
Also this week, the U.S. Attorney for the Southern District of New York, Audrey Strauss, and several law enforcement officials announced the Sept. 28 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 newly-unsealed indictment, from about 2009 to about 2014, six people, including Ivo Bechtiger, Bernhard Lampert, Peter Rüegg, Roderic Sage, Rolf Schnellmann, Daniel Wälchli, and one company, Allied Finance Trust AG of Zurich, Switzerland (Allied Finance), allegedly defrauded the IRS by concealing income and assets of certain taxpayer-clients with undeclared bank accounts located at Privatbank IHAG Zurich AG (IHAG), a Swiss private bank in Zurich and elsewhere.
To assist the taxpayer-clients, the defendants and others devised a scheme, which they called the “Singapore Solution” to fraudulently conceal the taxpayer-clients’ bank accounts, as well as their assets, and their income from the IRS.
To move the scheme forward, 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.
Health Care Fraud Scheme Catches Six Physical Therapists, Two Acupuncturists, Others
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 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 upwards of $20 million from fraudulent medical offices in Manhattan, Brooklyn, and Queens.
As part of the fraud scheme, Chen and other co-conspirators paid cash kickbacks to patients who were insured by Medicare and/or other insurance providers. 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 either considered 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 about 2018 and about 2021, Liu, a licensed acupuncturist, operated the medical 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.
Former NYC Education Official Held Accountable
On Sept. 29, 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, charging Eric Goldstein, the former CEO of the New York City Department of Education’ (NYC DOE) Office of School Support Services (OSS), along with Blaine Iler, Michael Turley and Brian Twomey, with conspiring to commit extortion under color of official right and solicitation and for the giving of bribes relating to programs receiving federal funds.
Goldstein was arrested Sept. 29, and he made his initial appearance that 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 about 2008 to about 2018, Goldstein was the CEO of OSS, and 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, which is responsible for managing the food service operations for all NYC public schools.
Iler, Turley and Twomey served as the founders and operators of a food services company (Food Service Company), and between about 2015 and 2016, Goldstein Iler, Turley and Twome formed and operated a grass-fed beef importation business called Range Meats Supply Co., LLC. Goldstein used his official position within SchoolFood to ensure that many of the food products sold by the Food Service Company would be purchased by SchoolFood and served in New York City public schools.
Goldstein,, Iler, Turley and Twomey transferred tens of thousands of dollars to RMSCO for their own 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.
Court Used to Enforce Firearms Violations
For the last case we will look at this week, 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, who was already a felon, possessed a handgun in Troy on or about March 5, 2021. If Smith is convicted of these charges, he will face up to ten years in prison, a fine of up to $250,000, and a term of supervised release of up to 3 additional years after his sentence is complete.