Cryptocurrency Founder “Bruno Block” Pleads Guilty To Tax Crimes

 

 Damian Williams, the United States Attorney for the Southern District of New York, announced that AMIR BRUNO ELMAANI, a/k/a “Bruno Block,” the founder of the cryptocurrency “Oyster Pearl,” pled guilty yesterday to tax offenses.  In connection with his guilty plea, ELMAANI admitted that he had secretly minted and sold for his own gain Pearl cryptocurrency tokens, which caused the price of Pearl tokens to plummet, and that he did not pay income tax on certain cryptocurrency profits.  ELMAANI agreed that he caused a tax loss of over $5.5 million.  ELMAANI pled guilty before United States District Judge Colleen McMahon.  

U.S. Attorney Damian Williams said: “Amir Elmaani violated the duty he owed to pay taxes on millions of dollars of cryptocurrency profits.  As he admitted, he also violated the trust of investors in the cryptocurrency he founded.  Our Office will continue to bring groundbreaking cases, like this one, to ensure participants in cryptocurrency markets play by the rules.” 

Based on the allegations in the Indictment, in the Superseding Information to which ELMAANI pled guilty, the plea agreement, and other statements made and documents filed in court:

In September and October 2017, ELMAANI began promoting online a new cryptocurrency known as Pearl tokens.  Using a variation of his online pseudonym “Bruno Block,” ELMAANI stated that he planned to develop an online data-storage platform, known as Oyster Protocol, which would allow users to purchase online data storage with Pearl tokens.  Instead of using his real name, ELMAANI operated almost exclusively online under the pseudonym “Bruno Block.”  ELMAANI concealed his true identity from his prospective employees and business associates and never met them in person.

In late October 2018, although the number of Pearl tokens was purportedly fixed, ELMAANI used his access to the blockchain technology used to create Pearl tokens to mint new tokens, which he took for his own personal use (the “Exit Scheme”).  ELMAANI thereby increased the total volume of Pearl tokens.  Shortly after creating the new tokens, ELMAANI converted the Pearl tokens he had obtained to other types of cryptocurrency on an online marketplace or exchange.  As a result of ELMAANI’s conduct, trading in Pearl tokens halted on that exchange and the price of Pearl tokens held by investors dropped substantially.  Pearl tokens were subsequently de-listed from the primary exchange where they were traded.  Subsequent to the Exit Scheme, ELMAANI used his friends and family to receive cryptocurrency and to transfer funds to a bank account in his name. 

While ELMAANI initially attempted to hide even “Bruno Block’s” involvement in the Exit Scheme, he later effectively admitted to the conduct online under his “Bruno Block” pseudonym.  In a recorded call with the then-chief executive officer (“CEO”) of Oyster Protocol Inc., after the Exit Scheme, the CEO asked ELMAANI why he had to take the additional new Pearl tokens if he had already cashed out millions of dollars’ worth of Pearl tokens in the past.  ELMAANI responded, in part, that “taxes are pretty nasty.”  ELMAANI carried out the Exit Scheme only days before the exchange he had used to cash out his Pearl tokens was set to require “know your customer” personal identifying information from its users. 

In connection with his plea, ELMAANI admitted in the plea agreement that:In or about 2017, using the alias “Bruno Block,” I began an online project called the “Oyster Protocol.”  In support of this project, an initial coin offering (“ICO”) was held in or about October 2017, in which a token named “Pearl” (“PRL”) was issued.  I stated in public forums that after the ICO, the supply of PRL would not increase, and that the smart contract that created PRL would be “locked.”  Contrary to these statements, on or about October 29, 2018, I used the smart contract to mint new PRL, without telling anyone, including others who worked on the Oyster Protocol project.  I then sold these newly minted PRL on a digital trading platform.  I was aware that the counterparties who were buying these newly minted PRL likely were not aware of my reopening of the smart contract, and did not know that I had just substantially increased the total supply of PRL.  After Oyster management learned of my reopening of the smart contract and alerted the public, the price of PRL plummeted.       

ELMAANI filed a false 2017 tax return stating that he had only approximately $15,000 of income from a “patent design” business, and he filed no return and reported no income to the Internal Revenue Service (“IRS”) in 2018.  Nevertheless, ELMAANI spent, in 2018, over $10 million for the purchase of multiple yachts, $1.6 million at a carbon-fiber composite company, hundreds of thousands of dollars at a home improvement store, and over $700,000 for the purchase of two homes, one of which was titled in the name of a shell company and the other in the name of two of his associates.  The tax loss to the United States from ELMAANI’s conduct was approximately $5,523,794.

ELMAANI, 31, of Martinsburg, West Virginia, pled guilty to one count of subscribing to a false tax return for the year 2017, which carries a maximum sentence of three years in prison, and one count of failure to file a tax return for the year 2018, which carries a maximum sentence of one year in prison.  ELMAANI also agreed to pay restitution in the amount of at least $5,523,794. 

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

Mr. Williams praised the investigative work of the Federal Bureau of Investigation and the IRS and also thanked the Securities and Exchange Commission and the Commodity Futures Trading Commission for its assistance. 

Statement from Governor Kathy Hochul on Parole Revocation Process for Tyresse Minter

 

"My top priority is public safety. Earlier today, the Department of Corrections and Community Supervision issued a warrant for Tyresse Minter, and he is now in custody. DOCCS is initiating the parole revocation process due to his indictment for criminal negligent homicide and manslaughter. We will continue working closely with the Bronx District Attorney's office throughout this process as it prosecutes the charges, and we will continue coordinating with our partners in law enforcement to strengthen public safety across the State."

BRONX MAN INDICTED FOR KILLING 15-YEAR-OLD STEPSON

 

Defendant Allegedly Compressed Boy’s Neck Until He Lost Consciousness

 Bronx District Attorney Darcel D. Clark today announced that a Bronx man has been indicted for Manslaughter and Criminally Negligent Homicide in the death of his 15-year-old stepson.

 District Attorney Clark said, “The defendant allegedly got into a dispute with his stepson, and restrained him by grabbing his neck, causing a lack of oxygen which led to the boy’s death. It is horrific that his life was taken at such a young age.”

 District Attorney Clark said the defendant, Tyresse Minter, 28, was arraigned today on second-degree Manslaughter and Criminally Negligent Homicide before Bronx Supreme Court Justice Naita Semaj-Williams. The people asked for remand, but the defendant was released and is due back in court on June 20, 2023.

 According to the investigation, on January 23, 2023, the defendant—who was released from prison a month earlier and was on parole--allegedly got into a dispute with his 15-year-old stepson, Corde Scott in their home on Doris Street in the Parkchester area. Minter allegedly put Corde in a neck hold to restrain him causing his neck to be compressed and cutting off his oxygen supply. The defendant then allegedly wrapped his legs around the boy to secure him. The boy lost consciousness. He died at the scene. The defendant did not call 911 to report the victim’s death until approximately 20 minutes after the restraint.

 District Attorney Clark thanked Detective Robert Cintron of the Bronx Homicide Task Force, as well as Detectives Paula Aguero and Airam Cruz-Sheppard of the 45th Precinct Detective Squad for their assistance in the case.

 District Attorney Clark also thanked Brenda Guzman of Safe Horizon for her support.

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

District Attorney Bragg Announces 34-Count Felony Indictment of Former President Donald J. Trump

 

Manhattan District Attorney Alvin L. Bragg, Jr. announced the indictment of DONALD J. TRUMP, 76, for falsifying New York business records in order to conceal damaging information and unlawful activity from American voters before and after the 2016 election. During the election, TRUMP and others employed a “catch and kill” scheme to identify, purchase, and bury negative information about him and boost his electoral prospects. TRUMP then went to great lengths to hide this conduct, causing dozens of false entries in business records to conceal criminal activity, including attempts to violate state and federal election laws. 

TRUMP is charged in a New York State Supreme Court indictment with 34 counts of Falsifying Business Records in the First Degree.[]   

“The People of the State of New York allege that Donald J. Trump repeatedly and fraudulently falsified New York business records to conceal crimes that hid damaging information from the voting public during the 2016 presidential election,” said District Attorney Bragg. “Manhattan is home to the country’s most significant business market. We cannot allow New York businesses to manipulate their records to cover up criminal conduct. As the Statement of Facts describes, the trail of money and lies exposes a pattern that, the People allege, violates one of New York’s basic and fundamental business laws. As this office has done time and time again, we today uphold our solemn responsibility to ensure that everyone stands equal before the law.” 

According to court documents and statements made on the record in court, from August 2015 to December 2017, TRUMP orchestrated his “catch and kill” scheme through a series of payments that he then concealed through months of false business entries.  

In one instance, American Media Inc. (“AMI”), paid $30,000 to a former Trump Tower doorman, who claimed to have a story about a child TRUMP had out of wedlock.  

In a second instance, AMI paid $150,000 to a woman who alleged she had a sexual relationship with TRUMP. When TRUMP explicitly directed a lawyer who then worked for the Trump Organization as TRUMP’s Special Counsel (“Special Counsel”) to reimburse AMI in cash, the Special Counsel indicated to TRUMP that the payment should be made via a shell company and not by cash. AMI ultimately declined to accept reimbursement after consulting their counsel. AMI, which later admitted its conduct was unlawful in an agreement with federal prosecutors, made false entries in its business records concerning the true purpose of the $150,000 payment. 

In a third instance – 12 days before the presidential general election – the Special Counsel wired $130,000 to an attorney for an adult film actress. The Special Counsel, who has since pleaded guilty and served time in prison for making the illegal campaign contribution, made the payment through a shell corporation funded through a bank in Manhattan.

After winning the election, TRUMP reimbursed the Special Counsel through a series of monthly checks, first from the Donald J. Trump Revocable Trust – created in New York to hold the Trump Organization’s assets during TRUMP’s presidency – and later from TRUMP’s bank account. In total, 11 checks were issued for a phony purpose. Nine of those checks were signed by TRUMP. Each check was processed by the Trump Organization and illegally disguised as a payment for legal services rendered pursuant to a non-existent retainer agreement. In total, 34 false entries were made in New York business records to conceal the initial covert $130,000 payment. Further, participants in the scheme took steps that mischaracterized, for tax purposes, the true nature of the reimbursements.
 
Assistant D.A.s Catherine McCaw (Counsel to the Investigation Division), Katherine Ellis (Major Economic Crimes Bureau), Rebecca Mangold (Major Economic Crimes Bureau), Christopher Conroy (Senior Advisor to the Investigation Division), Susan Hoffinger (Chief of the Investigation Division), and Matthew Colangelo (Senior Counsel to the District Attorney) are handling the prosecution of this case with the assistance of Peter Pope (Executive Assistant D.A.), Steven Wu (Executive Assistant D.A. and Chief of the Appeals Division), and Alan Gadlin (Deputy Chief of the Appeals Division).

Defendant Information:

DONALD J. TRUMP
Palm Beach, FL

Charges:

•   Falsifying Business Records in the First Degree, a class E felony, 34 counts

[1] The charges contained in the indictment are merely allegations, and the defendant is presumed innocent unless and until proven guilty. All factual recitations are derived from documents filed in court and statements made on the record in court.

Belize Real Estate Developer Charged With Embezzling Investor Funds

 

 Damian Williams, the United States Attorney for the Southern District of New York, and Michael J. Driscoll, the Assistant Director in Charge of the New York Field Office of the Federal Bureau of Investigation (“FBI”), announced the unsealing of an Indictment in Manhattan federal court charging ANDRIS PUKKE with wire fraud and with engaging in unlawful monetary transactions in connection with his embezzlement of more than $13 million from Sanctuary Belize, a real estate development in Belize that he directed and controlled.  PUKKE was arrested in Los Angeles and will be presented in the Central District of California. 

U.S. Attorney Damian Williams said: “Andris Pukke sold residential lots in Belize with a promise to build out an affordable vacation and retirement community in a tropical paradise.  Instead, Pukke’s planned paradise turned out to be just a mirage, as he allegedly stole the very funds the development needed to pay for roads, utilities, and other infrastructure, leaving the lot buyers with nothing but land they cannot access or use.  This Office will continue to aggressively pursue consumer fraud to ensure that businesses deliver on their promises to their customers.”

FBI Assistant Director Michael J. Driscoll said: “The defendant, as alleged, sold his victims dreams of a tropical haven, instead he used their money for his own interests.  Investigating and holding financial fraudsters like Mr. Pukke accountable in the criminal justice system remains a top priority for the FBI.”

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

PUKKE directed and controlled Sanctuary Belize, which was a vacation and retirement community under development in Belize.  PUKKE marketed and sold residential lots in the development to U.S. residents with promises that the development, when finished, would be near an international airport and hospital and would include a marina, a wildlife reserve, a beach club, and an equestrian center, among other amenities.  Lot buyers could construct homes on their lots once the infrastructure, such as roads and electricity, was built out by Sanctuary Belize.

PUKKE and his salespeople falsely represented to lot buyers that Sanctuary Belize was free of debt and that all income from lot sales would go to the development of Sanctuary Belize's infrastructure.  In fact, Sanctuary Belize had more than $12 million in debt, and PUKKE stole more than $13 million of the $124 million that Sanctuary Belize received from sales of residential lots.  PUKKE stole the money by directing Sanctuary Belize employees to transfer the funds to recipients he designated.  These transfers of funds were concealed on the books and records of Sanctuary Belize as business expenses, such as professional fees, legal fees, consulting fees, loans receivable, and online advertising expenses.

PUKKE used the embezzled funds for his personal benefit, including the renovation of his home in Newport Beach, California; investments in various entities unrelated to Sanctuary Belize; investments in unrelated real estate developments; repayment of personal debt; and payments to PUKKE's family members. 

PUKKE, 54, of Newport Bach, California, is charged with one count of wire fraud, which carries a maximum sentence of 20 years in prison, and one count of engaging in unlawful monetary transactions, 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.

Mr. Williams praised the investigative work of the FBI.  Mr. Williams also thanked the Federal Trade Commission for their assistance with the case.

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 Indictment and the description of the Indictment set forth below constitute only allegations, and every fact described herein should be treated as an allegation.

NYS Office of the Comptroller DiNapoli: Inconsistent Oversight and Guidance Left New York’s Group Home Residents at Risk During Pandemic

 

Better Emergency Management Preparation Needed by OPWDD Before Next Public Health Crisis, Audit Finds

The Office for People With Developmental Disabilities’ (OPWDD) inadequate emergency management coordination left people living in group homes at risk during the onset of the COVID-19 pandemic, according to a new audit released today by New York State Comptroller Thomas P. DiNapoli. OPWDD reported 657 people died from COVID-19, and more than 13,000 contracted the virus in its residential programs from March 2020 to April 2022.

“Group homes are supposed to offer people with developmental disabilities safe places to live as independently as possible,” DiNapoli said. “Our audit found the Office for People With Developmental Disabilities did not issue timely, consistent guidance to the vast majority of their certified group homes. Inconsistent emergency management coordination and oversight put residents, families and staff in harm’s way. I urge OPWDD to implement our recommendations before the next public health emergency.”

DiNapoli’s audit found OPWDD did not provide consistent guidance to some 6,929 group homes across the state during the first wave of the deadly pandemic, though the audit did not establish a causal relationship between OPWDD’s actions and COVID cases. As explained by the department, certified facilities run by nonprofits (6,921), as opposed to those that are state-run (eight), are required to have their own emergency policies and procedures in place, even though they are home to 99% of the state’s 34,117 group home residents. In September 2020 and November 2021, OPWDD developed additional guidance, which covered COVID-19 emergency planning and response, but restricted their distribution to the eight state-run facilities, excluding the others.

While OPWDD’s emergency management and overarching emergency planning documents considered pandemics as a risk even before the COVID-19 pandemic, OPWDD did not take steps to ensure all group homes followed suit. The audit found that while many group homes had emergency response plans, they did not account for pandemics or emerging infectious diseases, while others referred staff to follow OPWDD’s guidance. This lack of effective emergency response plans at the onset of the pandemic led to difficulties in securing personal protective equipment (PPE), dealing with staff shortages and confusion and delays over how to isolate or quarantine individuals during the worst waves of COVID-19.

The audit noted OPWDD’s stockpile of PPE was exhausted early in the pandemic, and group homes had trouble getting masks and gowns on their own due to overwhelming demand. Masks were crucial to stopping the spread of COVID-19 and especially important in group homes settings, where clients often have multiple medical issues and staff typically cannot socially distance when helping individuals with bathing, dressing or eating. Staff at three of 16 group homes visited said they had to resort to reusing face masks and gowns at early stages of the pandemic.

The pandemic further led to staffing shortages at many group homes. To maintain minimum staffing levels, some frontline employees had to work across multiple group homes or work longer than normal shifts, risking increased physical and emotional fatigue, mental distress, and contracting COVID-19. Between March 2020 and November 2021, 81 group homes were closed or temporarily closed due to staffing shortages.

OPWDD recertifies group homes every three years, but according to the audit, their oversight needs improvement. While review of emergency response plans are part of the recertification process, OPWDD inspectors did not review plans for infection control practices or public health emergency response.

In May of 2020, OPWDD began COVID-19 surveys of group homes to better assess their response to the pandemic, but the audit found investigators only visited 22% of homes. Further, surveys often lacked meaningful observations, and staff at certified group homes were not required to take refresher trainings on infection controls.

DiNapoli’s audit recommends OPWDD:

• Review and update the Emergency Management Operations Protocol and supplemental documents to ensure all group homes implement current policies and procedures in the event of another public health emergency.
• Develop procedures to ensure that group homes’ emergency plans encompass planning for and responding to public health emergencies.
• Ensure that monitoring and review protocols address well-developed infection control practices and are consistently applied when conducting reviews at homes.
• Establish effective communication with staff responsible for infection control policies and procedures when deficiencies are identified.

While OPWDD expressed concern with the audit’s methodology, it agreed with many of the recommendations.

Audit

Pandemic Planning and Care for Vulnerable Populations

MAYOR ADAMS AND NYPD COMMISSIONER SEWELL VISIT NYPD OFFICER WHO WAS SHOT

 

Police Commissioner Keechant Sewell: Thank you for being here. We began our day today by honoring three of our members who performed in a heroic manner, injured in Times Square on New Year's Eve, and now less than 10 hours later, we are back in a hospital with another officer injured. This time shot by another subject armed with a firearm on our streets. This officer, a 22-year-old, who took this job to protect our city, began his assignment at the 103 Precinct, which covers Jamaica, Queens three months ago today. He was where our communities tell us they want their officers to be, standing a foot post. He was flagged down by a community member who needed help. He was taking police action. Then he was shot. Before I turn it over to Chief of Detectives James Essig, he's going to brief you on the incident and the investigation so far. I want to thank the staff here at Jamaica Hospital, Dr. Katherine McKenzie and the team here for their excellent care of our officers.

 

I also want to thank the officer's partner. He too has less than a year with his department. He did not take a moment to take action in this case. He did not hesitate to come to the aid of his fellow officer. I also want to thank the members of the 103 Precinct for continuing to work hard to keep our community safe. The mayor and I, as well as our fellow New Yorkers, are with the 103 and our officers tonight. New Yorkers, you are our force multiplier. We are going to need your assistance in identifying and apprehending this offender. He should be considered armed and dangerous. Here is his picture. Please look at it. I'm going to turn it over now to Mayor Adams.

 

Mayor Eric Adams: Thank you, commissioner. And the commissioner laid out at the beginning of the day, we honored those officers who were attacked on New Year's Eve. Now, at this part of the day, we're here in the hospital speaking to the heroes who performed well. But we also did something in the middle of the day. In the middle of the day, we signed a contract. We signed a contract that signified how much respect we have for the men and women who protect the city. And during that contract sign in, I stated that our officers run towards gunshots when others run away. That is what happened today.

 

And I also spoke with the parents. One of them is a member of the department. The other, the mom, whispered in my ear. She stated, "I recalled at the graduation ceremony how you talked about your mother exhaled for the first time after you retired." She's still holding her breath. Her child was on our street to protect the children of our cities and their families. We cannot thank them enough. And that question mark that some people have when you talk about ensuring we provide for our offices, today that gunshot straightened it to an exclamation point. This is why they place their lives on the line for us. Chief Essig.

 

James Essig, Chief of Detectives, Police Department: Thank you. I'd like to update you on the investigation. At approximately 3:20 PM at 161st Street in Jamaica Avenue, an MTA bus driver traveling eastbound on Jamaica Avenue flagged down two police officers assigned to the 103rd Field Training Unit. The bus driver informed the officers that a male was disputing with another passenger over a seat. When the officers approached the bus, the male exited through the front door. A slight struggle ensued. That male wearing a black bubble jacket, black mask, an orange sweatshirt, pushed the officers and fled northbound on 161st Street.

 

In front of 90-23 161st Street, one of the police officers caught up with the perpetrator. A brief struggle occurred. The perpetrator fired one shot striking our officer in the right hip. The second police officer returned fire two times. Recovered at that scene is two discharged shell casings consistent with the Police Department ammo and one shell casing of yet undetermined caliber. The perp flees northbound on 161st Street and westbound on 88th Avenue into a parking garage. Recovered in that parking garage is the black bubble jacket, the mask and the orange sweatshirt. Video shows that male exiting the garage. He is in a white T-shirt and black pants shown here. He is last seen at 161st Street and Hillside Avenue. We are asking for anyone's help. Anyone who is on that bus, anyone who knows this perpetrator to call 1-800-COP-SHOT. There is a $10,000 reward for any information.

Dealer Of Fentanyl-Laced Heroin That Resulted In The Overdose Death Of Actor Michael K. Williams Pleads Guilty

 

 Damian Williams, the United States Attorney for the Southern District of New York, announced that IRVIN CARTAGENA, a/k/a “Green Eyes,” pled guilty today to conspiring to distribute heroin, fentanyl, and fentanyl analogue.  As part of the conspiracy, CARTAGENA distributed the fentanyl-laced heroin that resulted in the death of Michael K. Williams.  CARTAGENA pled guilty earlier today before U.S. District Judge Ronnie Abrams.

U.S. Attorney Damian Williams said: “Irvin Cartagena sold fentanyl-laced heroin in broad daylight in New York City, feeding addiction and causing tragedy.  In doing so, he dealt the fatal dose that killed Michael K. Williams.  This Office and our law enforcement partners will continue to hold accountable the dealers who push this poison, exploit addiction, and cause senseless death in our community.”

According to the allegations in the complaints, court filings, and statements made in Court:

Between at least in or about August 2020 and February 2022, a drug trafficking organization (the “DTO”) was operating in the vicinity of 224 South 3rd Street in the Williamsburg neighborhood of Brooklyn, New York.  The DTO sold heroin laced with fentanyl and a fentanyl analogue on the street in front of, and from an apartment inside of, the apartment building located at 224 South 3rd Street, among other places.  On or about September 5, 2021, members of the DTO sold Michael K. Williams heroin, which was laced with fentanyl and a fentanyl analogue, with CARTAGENA executing the hand-to-hand transaction.  Williams died as a result of using that fentanyl-laced heroin.  Despite knowing that Williams died after being sold the DTO’s product, CARTAGENA and his co-conspirators continued to sell fentanyl-laced heroin in broad daylight amidst residential apartment buildings in Brooklyn and Manhattan.           

CARTAGENA, 39, of Brooklyn, New York, pled guilty to one count of conspiracy to distribute and possess with intent to distribute fentanyl analogue, fentanyl, and heroin, which carries a mandatory minimum sentence of five years in prison and a maximum sentence of 40 years in prison.  As part of his guilty plea, CARTAGENA stipulated that the substances he conspired to distribute and possess with intent to distribute resulted in the death of Michael K. Williams.

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

Mr. Williams praised the outstanding work of the New York City Police Department and the New York/New Jersey High Intensity Drug Trafficking Area Intelligence Analysts.  Mr. Williams also thanked the Organized Crime Drug Enforcement Task Forces New York Strike Force, the United States Marshals Service, the New York/New Jersey Regional Fugitive Task Force, and the New York Division of the Drug Enforcement Administration for their assistance in this case.