Thursday, November 7, 2019

Dark Web Narcotics Trafficker Pleads Guilty To Laundering More Than $19 Million


  Geoffrey S. Berman, the United States Attorney for the Southern District of New York, announced that HUGH BRIAN HANEY pled guilty in Manhattan federal court today to money laundering charges, based on his attempt to launder the proceeds of a narcotics trafficking operation that HANEY ran on the Dark Web site known as “Silk Road.”  U.S. District Judge Jed S. Rakoff presided over the defendant’s guilty plea.

U.S. Attorney Geoffrey S. Berman said:  “Hugh Haney used Silk Road as a means to sell drugs to people all over the world.  Then he laundered more than $19 million in profits through cryptocurrency.  Peddling drugs on the Dark Web does not provide anonymity forever, as Hugh Haney can attest.”
As alleged in the underlying Complaint, Indictment and statements made in open court:
Silk Road was an online criminal marketplace designed to be outside the reach of law enforcement or governmental regulation.  All transactions on Silk Road could be completed only through use of the cryptocurrency Bitcoin.  During its two-and-a-half years in operation, Silk Road was used by several thousand drug dealers and other unlawful vendors to distribute hundreds of kilograms of illegal drugs and other illicit goods and services to well over 100,000 buyers, and to launder hundreds of millions of dollars deriving from these unlawful transactions.  Law enforcement shut down Silk Road in or about October 2013. 
One prominent narcotics vendor on Silk Road was called “Pharmville.”  The operators of Pharmville supplied a dedicated community of individuals who often traded illicit narcotics.  Pursuant to a judicially authorized warrant of HANEY’s house in Ohio in 2018, law enforcement agents found evidence that HANEY was a high-ranking member of Pharmville, involved in large-scale narcotics trafficking on Silk Road.  Among the documents found on a computer in HANEY’s house was a document entitled “HBH DAILY TO DO LIST,” which, among other things, referred to Silk Road, Pharmville, and large-scale narcotics trafficking, including of the deadly opioid fentanyl.
In 2017 and 2018, HANEY transferred Bitcoins representing narcotics proceeds that he had earned through his control of Pharmville from Bitcoin addresses connected to Silk Road to an account HANEY controlled at a company involved in the exchange of Bitcoins and other digital currency (“Company-1”).  In correspondence with Company-1, HANEY falsely claimed that he had legitimately earned these Bitcoins through cryptographically creating them and from fair transfers with others, while in reality the Bitcoin were derived from transfers from Silk Road.  After HANEY transferred the Bitcoins to cash worth more than $19 million through Company-1, law enforcement seized the money pursuant to a judicially authorized seizure warrant from a custodial account at a bank (“Bank-1”).
HANEY, 61, of Ohio, was arrested July 18, 2019, and has been in federal custody since.  HANEY pled guilty to one count of concealment money laundering, which carries a maximum sentence of 20 years in prison, and one count of engaging in a financial transaction in criminally derived property, which carries a maximum sentence of 10 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.
HANEY is scheduled to be sentenced by Judge Rakoff on is February 12, 2020.
Mr. Berman praised the outstanding investigative work of the Department of Homeland Security, Homeland Security Investigations. 

AG James Secures Court Order Against Donald J. Trump, Trump Children, And Trump Foundation


AG James Achieves Restitution of Misused Funds, Dissolution of Foundation, and Restrictions on Charitable Activity After Donald J. Trump’s Abuse of the Trump Foundation 
Trump to Pay $2 Million in Damages for Illegal Activity During 2016 Election 
  New York Attorney General Letitia James today announced that the New York Supreme Court ordered Donald J. Trump to pay $2 million in damages for improperly using charitable assets to intervene in the 2016 presidential primaries and further his own political interests. The award is part of Attorney General James’ lawsuit against the Donald J. Trump Foundation and its directors — Mr. Trump, Donald Trump Jr., Ivanka Trump, and Eric Trump.
As part of the settlement, Attorney General James also announced that her office entered into multiple stipulations with the Trump Foundation and its directors to resolve the remaining claims in the lawsuit. Chiefly, Mr. Trump admits to personally misusing funds at the Trump Foundation, and agrees to restrictions on future charitable service and ongoing reporting to the Office of the Attorney General in the event he creates a new charity. The settlements also include mandatory training requirements for Donald Trump Jr., Ivanka Trump, and Eric Trump. Finally, the settlements name the charities that will receive the remaining assets of the Trump Foundation as part of its dissolution.
“The Trump Foundation has shut down, funds that were illegally misused are being restored, the president will be subject to ongoing supervision by my office, and the Trump children had to undergo compulsory training to ensure this type of illegal activity never takes place again,” said Attorney General James. “The court’s decision, together with the settlements we negotiated, are a major victory in our efforts to protect charitable assets and hold accountable those who would abuse charities for personal gain. My office will continue to fight for accountability because no one is above the law — not a businessman, not a candidate for office, and not even the President of the United States.”
The lawsuit against the Donald J. Trump Foundation was filed in June 2018 — charging the Foundation’s directors with ignoring their oversight duties under New York’s charity laws and demonstrating how Mr. Trump repeatedly used Foundation money for his own personal, business, and political interests, including the unlawful coordination with his 2016 presidential campaign. In the first half of 2016 — at the height of the Republican primaries — Mr. Trump used Foundation money, raised from the public, to demonstrate his purported generosity and attract votes. Mr. Trump and his campaign doled out $500,000 at a campaign rally in the days leading up to the first primary election in the nation, the Iowa caucuses, then took credit for all $2.8 million in grants the Foundation made.
In her decision ordering Mr. Trump to pay $2 million, Justice Saliann Scarpulla said, “…Mr. Trump breached his fiduciary duty to the Foundation and that waste occurred to the Foundation. Mr. Trump’s fiduciary duty breaches included allowing his campaign to orchestrate the Fundraiser, allowing his campaign, instead of the Foundation, to direct distribution of the Funds, and using the Fundraiser and distribution of the Funds to further Mr. Trump’s political campaign.”
In total, the Office of the Attorney General has entered into four stipulation agreements as part of this settlement.
Last year, in December 2018, following a court decision in favor of the Attorney General’s Office, the first stipulation took effect when the Trump Foundation agreed to shutter its doors and dissolve under court supervision. In October 2019, the Office of the Attorney General entered three additional stipulations. One stipulation ensures that the Foundation’s remaining assets will go to reputable charities approved by Attorney General James and that have no connection to Mr. Trump or his family members. Another stipulation ensures that Donald Trump, Jr., Ivanka Trump, and Eric Trump received training on the duties of officers and directors of charities so that they cannot allow the illegal activity they oversaw at the Trump Foundation to take place again.    
The third stipulation includes 19 paragraphs of factual admissions by Mr. Trump and the Foundation of illegal activity. Mr. Trump admitted that the Foundation’s board of directors — of which he was chair — failed to meet, failed to provide oversight over the Foundation, and failed to adopt legally required policies and procedures. He also admitted that these failures “contributed to the Foundation’s participation” in seven related party transactions described in the settlement document and in the Attorney General’s lawsuit. 
Mr. Trump and the Foundation have admitted key facts about their illegal political coordination with the Trump campaign, including that a purported Foundation fundraiser in January 2016 was in fact a campaign event, and that Foundation gave the Trump campaign complete control over the timing, amounts, and recipients of the $2.8 million raised through that event. Mr. Trump further admits that he and his campaign took credit for the grants that the Foundation made with funds that had been raised from the public. Justice Scarpulla noted in her decision that “Mr. Trump’s campaign, rather than the Foundation: (1) ‘planned’ and ‘organized’ the Fundraiser; and (2) ‘directed the timing, amounts, and recipients of the Foundation’s grants to charitable organizations supporting military veterans.’”
Additionally, Mr. Trump admitted a number of key facts about the other self-dealing transactions he initiated as chair — specifically, that he used Foundation funds to settle legal obligations of companies he controlled, and that the Foundation paid for a portrait of Mr. Trump that cost $10,000. As separate piece of the settlement Donald Trump Jr. reimbursed the Foundation for the cost of the portrait. The settlement also requires the Foundation to be reimbursed $11,525 for sports paraphernalia and champagne purchased at a charity gala.
Finally, the settlement agreement imposes a regime of restrictions on any future service by Mr. Trump on a charity’s board of directors, including a total ban on any self-dealing. Any charity he joins as a director must have a majority of independent directors, must engage counsel with expertise in New York not-for-profit law, and must engage the services of an accounting firm to monitor and audit the organization’s grants and expenses. If Mr. Trump forms a new charity, such an organization must comply with these requirements, and also report to the Office of the Attorney General for five years.  
The $1.78 million in assets currently being held by the Trump Foundation, along with the $2 million in damages to be paid by Mr. Trump, will be disbursed equally to eight charities: Army Emergency Relief, the Children’s Aid Society, Citymeals-on-Wheels, Give an Hour, Martha’s Table, United Negro College Fund, United Way of National Capital Area, and the U.S. Holocaust Memorial Museum. The charities — which were required as part of the resolution to be entities that did not have any relationship with Mr. Trump or entities he controlled — were approved by the Office of the Attorney General and the court.

FORMER DOC CAPTAIN SENTENCED FOR BEATING RIKERS ISLAND INMATE AND FALSIFYING RECORDS


 Bronx District Attorney Darcel D. Clark today announced that a former Department of Correction Captain has been sentenced for beating a Rikers Island inmate in 2016, and for lying about the incident in official paperwork. 

 District Attorney Clark said, “The defendant, a former DOC Captain, severely beat an inmate in the Eric M. Taylor Center in Rikers Island, leaving him with multiple bruises and several broken teeth. The defendant then lied about the incident in paperwork, to cover up his actions.”

 District Attorney Clark said Sandy Arkhurst, 44, of Queens, pleaded guilty to seconddegree Assault, first-degree Falsifying Business Records and Official Misconduct on October 2, 2019. As part of the Court’s plea agreement, the defendant also resigned from DOC. Arkhurst was sentenced to five years’ probation and 200 hours of community service by Bronx Supreme Court Justice Robert Neary. The People had requested a sentence of one to three years in prison.

 According to the investigation, on June 3, 2016, the defendant, leader of the Probe Team, and other DOC Officers, responded to the Eric M. Taylor Center after the victim, Rodolfo Rodriguez, 18, an inmate at the time, refused to enter his housing area. Rodriguez was peppersprayed by another Officer and taken to the shower area to wash it off. While Rodriguez was rear-cuffed, Arkhurst punched and kicked him, and hit him with a wooden baton. After the beating, Arkhurst falsified information in a DOC Use of Force Report regarding the incident. He also failed to provide medical aid to the inmate, who had sustained multiple injuries.

 District Attorney Clark also thanked DOC Investigations Division Investigator Damon Storer; and the New York City Department of Investigation, specifically DOI Assistant Inspector General Mercedes Bayon and Assistant Inspector General Sony Fortune, under the supervision of Inspector General Dana A. Roth, Deputy Commissioner/Chief of Investigations Dominick Zarrella, and First Deputy Commissioner Daniel Cort.

BRONX MAN SENTENCED TO PRISON FOR SELLING 14 FIREARMS, INCLUDING TWO SEMI-AUTOMATIC RIFLES, TO UNDERCOVER COP IN THE BRONX


  Bronx District Attorney Darcel D. Clark today announced that a Bronx man has been sentenced to 10 years in prison for selling over a dozen firearms to an undercover NYPD detective in the Bronx. 

 District Attorney Clark said, “The defendant had in his possession multiple weapons that could have been used to injure or kill people in the Bronx. Throughout several occasions, the defendant sold the firearms to a brave, undercover NYPD Detective who was acting as a buyer. The defendant will now spend years in prison for promoting illegal guns in our communities. Public safety is a priority and my Office will continue to work to prosecute and hold accountable anyone who sells, possesses or shoots guns on Bronx streets.”

 District Attorney Clark said the defendant, Frankie Esperanza, 35, of 2816 Schley Avenue, was sentenced to 10 years in prison and five years’ post-release supervision today by Bronx Supreme Court Justice Robert Neary. The defendant pleaded guilty to first-degree Criminal Sale of a Firearm on October 2, 2019. 

 According to the investigation, Esperanza sold 14 firearms to an undercover NYPD detective on eight separate occasions between August 8, 2018 and January 28, 2019, at several locations in the Throgs Neck area of the Bronx. Among the weapons the defendant sold to the undercover detective were revolvers, pistols, two semi-automatic rifles, a high-capacity magazine and ammunition.

 District Attorney Clark also thanked NYPD Deputy Inspector Brian V. Gill, Commanding Officer of the Firearms Suppression Section; NYPD Captain Jonathan P. Korbell, Commanding Officer; NYPD Detective Jonathan Jordan and Detective Dennis Kenefick, all of the Firearms Investigation Unit, and NYPD Detective Douglas Lansing of the Drug Enforcement Task Force, formerly of the Firearms Investigation Unit, for their assistance in the investigation.

Cases from the Bronx District Attorney's Office


NYC DOC Officer, Two Others Indicted for Smuggling Contraband into Rikers Island

  Bronx District Attorney Darcel D. Clark and New York City Department of Investigation Commissioner Margaret Garnett today announced that a Department of Correction Officer, a former inmate and a Bronx resident have been indicted for smuggling heroin and tobacco into Rikers Island. 

 District Attorney Clark said, “The defendants allegedly fueled corruption and danger on Rikers Island by smuggling heroin and other contraband for sale or trade behind bars. The Correction Officer stands accused of tarnishing his badge and jeopardizing the safety of his fellow officers. We will continue to work with partners such as the Department of Investigation to halt crime in the jails, whether they are committed by staff or inmates.” 

 DOI Commissioner Margaret Garnett said, "Our City's jails are only safe if the officers working in them are free from corruption. This Correction Officer and his co-conspirators allegedly ferried in illegal contraband, including potentially deadly drugs and loose tobacco. In addition to the potential danger of the contraband itself, officers providing illegal favors for certain inmates is a threat to good order and discipline in the jails, making them less safe for inmates and officers alike. DOI thanks the Bronx District Attorney's Office for their partnership in this investigation."

 District Attorney Clark said the defendants, Jason Prieto, 40, a Correction Officer for three years; Anthony Rusielwicz, 41, of Brooklyn, who is an inmate; and Luz Pagan, 54, of the Bronx, were charged in an indictment with fourth-degree Conspiracy, third-degree Criminal Possession of a Controlled Substance, Attempted Criminal Sale of a Controlled Substance in the third degree, fifth-degree Conspiracy, first and second-degree Promoting Prison Contraband, third-degree Bribery, and seventh-degree Criminal Possession of a Controlled Substance. Prieto was additionally charged with third-degree Bribe Receiving and Official Misconduct.

 The defendants were arraigned today before Bronx Supreme Court Justice Margaret Clancy. Bail was continued at $2,000 for Prieto, Pagan was released on his own recognizance, and bail was set at $10,000 bond/$5,000 cash and 10% partially secured bond in the amount of $15,000 for Rusielwicz. The defendants are due back in court on December 5, 2019.

 According to the investigation, from February 2, 2018 through April 16, 2018 the three conspired to, and successfully brought in, dangerous contraband to the Eric M. Taylor Center Rikers Island. On April 16, 2018, Correction Officer Jason Prieto was caught with 11 glassines of heroin, loose tobacco and rolling papers by a narcotics-detecting canine.

 District Attorney Clark thanked BXDA Detective Investigator Matthew Cruz and BXDA Senior Detective Investigator Vincent Cantarella for their assistance in the case. District Attorney Clark thanked FBI Forensic Examiner Michael D’Angelis, Captain Vincent Fuca of DOC, and the DOI’s Office of the Inspector General for DOC, specifically, Investigator Brian Hilario, Captain Ali Fayad, Assistant Inspector General Carmelo Galarza and K-9 Gunner, under the supervision of Inspector General Dana A. Roth, Deputy Commissioner/Chief of Investigations Dominick Zarrella, and First Deputy Commissioner Daniel Cort. 

An indictment is an accusatory instrument and not proof of a defendant’s guilt.

Community Invite: NCB Paint Party!! Friday, November 15 - Help us paint NCB's Community Mural


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Wednesday, November 6, 2019

Bronx Gang Member Charged With 2015 Murder


  Geoffrey S. Berman, the United States Attorney for the Southern District of New York, Peter C. Fitzhugh, the Special Agent in Charge of the New York Field Office of Homeland Security Investigations (“HSI”), Raymond Donovan, the Special Agent in Charge of the New York Division of the U.S. Drug Enforcement Administration (“DEA”), and James P. O’Neill, Commissioner of the New York City Police Department (“NYPD”), announced today the unsealing of an indictment charging JOSE RODRIGUEZ, a/k/a “Hov,” a/k/a “Hov Goon,” with murder in aid of racketeering, conspiracy to commit murder in aid of racketeering, and firearms offenses in connection with the murder of Daquan Cooper on June 25, 2015, in the Bronx.  RODRIGUEZ was already in federal custody serving a sentence for other charges. RODRIGUEZ will be presented later today before U.S. Magistrate Judge Gabriel W. Gorenstein.  The case is assigned to U.S. District Judge Alvin K. Hellerstein.

Manhattan U.S. Attorney Geoffrey S. Berman said:  “As alleged in the indictment, Jose Rodriguez and others were responsible for the cold-blooded murder of Daquan Cooper in the Parkchester neighborhood of the Bronx in 2015.  We commend the extraordinary efforts of our law enforcement partners to bring this defendant to justice.”           
HSI Special Agent in Charge Peter C. Fitzhugh said:  “Rodriguez allegedly ran with a gang whose calling card was violence and drug trafficking, and he is now charged with murder in aid of racketeering for his involvement in a 2015 homicide.  As alleged, he may have thought he was in the clear four years later, but strong law enforcement partnerships ensure that no one will get away with murder.  You commit a crime, you will be arrested and you will be prosecuted.”
DEA Special Agent in Charge Raymond Donovan said:  “Too often we see murder as a byproduct of gang violence and drug trafficking.  This investigation is a result of combined law enforcement efforts to thwart violent crime and bring answers to victims’ families.” 
NYPD Commissioner James P. O’Neill said:  “Our obligation is not just to ensure that New Yorkers in every neighborhood are safe, but that they feel safe.  To that end, our work identifying and dismantling gangs and crews, and preventing the violence so often associated with their activities, continues to be of paramount importance.  I thank our NYPD investigators, and our law enforcement partners in the U.S. Attorney’s Office for the Southern District, HSI, and the DEA, for their dedication and vital work in this case.”
According to the allegations in the Indictment unsealed today in Manhattan federal court[1]:
RODRIGUEZ was a member or associate of a racketeering enterprise known as the Beach Avenue Crew, a criminal organization whose members and associates engaged in, among other things, murder, attempted murder, and narcotics trafficking. 
On June 25, 2015, RODRIGUEZ and others murdered Daquan Cooper in the vicinity of 1595 Unionport Road in the Parkchester neighborhood of the Bronx.                
RODRIGUEZ, 27, from the Bronx, New York, is charged with one count of murder in aid of racketeering, which carries a maximum sentence of death or life in prison, and a mandatory minimum sentence of life in prison; one count of conspiracy to commit murder in aid of racketeering, which carries a maximum sentence of 10 years in prison; one count of murder through use of a firearm, which carries a maximum sentence of death or life in prison, and a mandatory minimum sentence of five years in prison; and one count of being a felon in possession of ammunition, which carries a maximum sentence of 10 years in prison. 
Mr. Berman praised the investigative work of HSI, DEA, and the NYPD.  Mr. Berman added that the investigation is continuing.
The charges contained in the Indictment are merely accusations and the defendant is presumed innocent unless and until proven guilty.
 [1] As the introductory phrase signifies, the entirety of the text of the Superseding Indictment constitutes only allegations, and every fact described herein should be treated as an allegation.