Acting Manhattan U.S. Attorney Announces Compensation Program For Absolute Poker Victim Players

Also Announces Payments to Date of Over $118 Million to Full Tilt Poker Victim Players

   Joon H. Kim, the Acting United States Attorney for the Southern District of New York, announced today that the United States has retained the Garden City Group (“GCG”) to oversee a process for compensating eligible victims of a fraud committed by Absolute Poker against United States players who were unable to withdraw funds from Absolute Poker following the Office’s filing in 2011 of a civil money laundering and forfeiture action against Absolute Poker and others in United States v. PokerStars, et al. 

GCG is already overseeing the claims process for eligible victims of the fraud committed by Full Tilt Poker against United States players, as described in both United States v. PokerStars, et al., and the indictment in the parallel criminal case, United States v. Bitar, et. al.  To date, approximately $118 million has been paid to Full Tilt Poker fraud victims through that process. 

Background

In July 2012, the United States entered into settlement agreements with Full Tilt Poker and PokerStars – two of the three online poker companies named as defendants in a civil forfeiture action brought by the United States alleging bank fraud, wire fraud, money laundering, and illegal gambling offenses.  On July 16, 2013, the third online poker company named in the complaint, Absolute Poker, along with certain of its affiliates, entered into a settlement agreement in which they also agreed to the forfeiture of their assets.  Under the terms of the July 2012 settlement with Full Tilt Poker, the company agreed to forfeit virtually all of its assets to the United States (the “Forfeited Full Tilt Assets”) in order to fully resolve the action. The amended complaint filed in that action alleged that Full Tilt Poker defrauded its players by misrepresenting to the public that player funds held by Full Tilt Poker were safe, secure, and available for withdrawal at any time.  In reality, the company did not maintain funds sufficient to repay all of its players and instead used player funds to finance more than $400 million in dividend payments to Full Tilt Poker’s owners.

Under the terms of the settlement with PokerStars (the “PokerStars Settlement”), the company agreed, among other things, to forfeit $547 million to the United States (the “Forfeited Poker Funds”) and to assume Full Tilt Poker’s liability for the approximately $184 million owed by Full Tilt to foreign players.  The PokerStars Settlement also provided that PokerStars will acquire the Forfeited Full Tilt Assets from the Government and also precludes PokerStars from offering online poker for real money in the United States unless and until it becomes permissible to do so under relevant law.

The Full Tilt Poker Claims Process

Pursuant to the regulations governing remission, the Department of Justice may use forfeited funds to compensate victims of a charged criminal offense or a related offense that was the underlying basis for forfeiture.   

Using a portion of the Forfeited Poker Funds, the Department of Justice established a process (the “FTP Claims Process”) by which eligible U.S. victims of Full Tilt Poker were able to seek compensation for their losses.  GCG was selected as Claims Administrator by the United States to process claims submitted by the U.S. Full Tilt fraud victims.

GCG is a class action settlement and bankruptcy administration company that has provided comprehensive legal administration services for nearly 30 years.  GCG has worked on numerous complex administrations, including the U.S. Victims of State-Sponsored Terrorism Fund; the Gulf Coast Claims Facility; the Deepwater Horizon Economic and Property Damage Settlement; the Visa Check/MasterMoney Antitrust Litigation; the WorldCom Securities Litigation; and the IPO Securities Litigation.

The FTP Claims Process was announced in March 2013 and is winding down.  GCG received and reviewed 53,220 claims submitted by U.S. Full Tilt fraud victims during the claims period.  To date, 44,320 claims have been approved for payment and approximately $118,116,918.04 has been paid to U.S. Full Tilt fraud victims. 

The Absolute Poker Claims Process

As alleged in the operative forfeiture complaints and indictments in this case, the three online poker companies, including Absolute Poker, and their principals, conspired with one another, and others, such as payment processors who worked with multiple poker companies, to carry out the offense conduct that served as the basis for the forfeiture of the Forfeited Poker Funds. 

Additionally, the Department of Justice has concluded that players of Absolute Poker who were unable to recover their funds from Absolute Poker are similarly situated to the eligible victims of Full Tilt Poker, in that Absolute Poker, like Full Tilt Poker, did not maintain funds sufficient to repay all of its players.

Accordingly, remaining Forfeited Poker Funds will be used to fund a claims process for eligible Absolute Poker victims. 

That victim claims process will begin shortly.  Information about the claims administration will be posted on the dedicated website GCG has established in connection with the victim compensation process, www.AbsolutePokerClaims.com

(link is external)

.  Information is also available from the toll-free hotline number at (855) 907-3254.

This aspect of the matter is being handled by the Office’s Money Laundering and Asset Forfeiture Unit. 

Statement from IDC Director of Communications Candice Giove on hostile amendments

   Once again the Senate minority Democrats are grandstanding on the floor. Single-payer health care has 30 co-sponsors, including all members of the Independent Democratic Conference, and requires two more to pass. While this bill will benefit New Yorkers, without careful planning within the entirety of the budget it could have serious fiscal implications for our state and its taxpayers. It would also derail a progressive budget that includes Raise the Age, a $10 million immigrant legal fund and the continuation of the millionaire’s tax.

The LGBT memorial is an IDC priority which was included in our one-house that the entire minority Democratic conference voted against. This funding is included in this year’s budget and it’s absurd to use this tragedy as a talking point.

EDITOR'S NOTE:

Not only were comments about Governor Cuomo leaked out from Assembly Speaker Carl Heastie, but also leaked out from the Heastie Camp is that the Democratic Assembly will be working with State Senate Democrats to either force the IDC members to align with the Mainline Senate Democrats or face challenges supported by Mainline Senate Democrats and the State Assembly Democrats.

IDC delivers Raise the Age & historic immigrant legal aid fund in this year’s budget

State Budget Changes New York for the Better with higher wages, increased education funding & college affordability plans

Members of the Independent Democratic Conference delivered for all New Yorkers in this year’s state budget — with a measure to Raise the Age of criminal responsibility to end the cycle of mass incarceration of 16- and 17-year-olds and meeting the urgent need of New York’s immigrant communities with a historic $10 million commitment to legal services.

The eight-member conference, who rolled out their Changing New York agenda in January, highlighted other key achievements they fought for including raised wages for direct care workers, a record investment in education funding and college affordability measures.

Major budget victories include:

• Raise the Age: Most 16- and 17-year-olds will wind up in Family Court where they will receive the services they need to set their lives on the right track. This major reform includes moving teens out of Rikers Island by 2018.

• Immigrant Legal Services: A record $10 million legal aid fund will be established to help immigrants with legal services, green card application processing, job training and more.
• A Record $1.1 Billion in Education Aid: The state increases Foundation Aid by $700 million this year, bringing it up to $1.1 billion, and that’s money that our public schools deserve. The IDC fought for $50 million for community schools, and those funds can be used for dual language programs, more mental health services and after school programs. The funds will also create new community schools.
• A Raise for Direct Care workers: The state dedicates $55 million for the state’s nonprofits to give our direct care workers a raise. Direct care workers take care of New York’s most vulnerable citizens and deserve higher wages.
• Preservation of the Millionaire’s Tax: The state’s highest earners will continue to pay their fair share in taxes with a raised tax bracket to help fund New York’s most vital programs that help all residents.
• College Affordability: The state provides first year funding of $86 million, $125 million when fully phased, for the implementation of the Excelsior Scholarship for SUNY and CUNY students. Students receive $5,500 including TAP, with a fully phased in income eligibility of $125,000. The state also provides enhanced tuition awards for independent colleges and universities, with students receiving up to $6,000 including TAP.
• NYCHA funding: $200 million will go towards making critical repairs at NYCHA buildings, which provide critical affordable housing for New York City residents.
• Middle Income Housing: $150 million will help preserve Mitchell-Lama buildings and other middle income buildings which provide affordable housing to individuals like teachers, bus drivers and firemen.

• Improving Water Infrastructure: The state appropriates $2.5 billion for water infrastructure and clean water initiatives to ensure that what happened Hoosick Falls does not happen again.

• Enhances Child and Dependent Care Tax Credit: lowers the out-of-pocket expenses of childcare for even more hardworking families.
• Manufacturer’s Apprenticeship Program Expansion: After a successful launch in Syracuse, this IDC created program will branch out with a $750,000 award to help cut red tape on training programs for small- and medium-sized manufacturing companies.
• Pre-K consolidation
• Protecting Consumers Utilizing Reverse Mortgages: Often utilized by seniors, protections include settlement conferences in cases where the default was triggered by the death of the last surviving borrower and allowing the last surviving borrower’s spouse or successor who has a claim to ownership to engage in settlement conference.
• Revitalizing Our Communities: $1 million for the establishment of community land trusts, nonprofits that buy land to convert to affordable housing, to increase homeownership and affordable rentals in reach for those frozen out of the market. The state also provides $500,000 towards lead abatement efforts for land banks to rehabilitate foreclosed and abandoned properties.
• $10 million for Foreclosure Prevention Programs: Funding for these crucial services that keep people in their homes were about to run dry. With $10 million, these important services can continue.

“When the IDC announced our Changing New York agenda in January, we committed to making the lives of all New Yorkers better. With the passage of this budget we honor that commitment. We have Raised the Age to move the vast majority of 16- and 17-year-olds to Family Court and keep them out of adult prisons. We stand behind our immigrant communities with crucial funding for legal services so that they are protected from deportation and receive assistance in applying for citizenship. And we have created a college affordability program to help all of our young people continue their education. I am proud to have worked with Senator Flanagan, Assembly Speaker Carl Heastie and Governor Cuomo to continue to move our state forward,” IDC Leader Jeff Klein.

Senator Diaz Lecturing Senate Members About How Important It is to Keep Their Word

  Here is a link to a video made by State Senator Ruben Diaz Sr. lecturing senate members just in time as he is a candidate for the18th City Council term-limited seat.

What You Should Know 
By Senator Rev. Rubén Díaz 

32nd Senatorial District

You should know that on Sunday, April 9, 2017, I stood on the Floor of the Senate Chamber and lectured my colleagues in the Senate about how important it is to keep their word. 

Here is a video clip of that speech: https://youtu.be/b9D3NEZyyDY. 

I am Senator Rev. Rubén Díaz, and this is what you should know.

STATEMENT FROM MAYOR BILL DE BLASIO ON PASSOVER

   “Tonight, New Yorkers will once again gather at the table to sing, eat, drink wine and fulfill the scriptural commandment to tell the story of a people’s liberation from slavery. Passover calls us to consider the meaning of freedom, the value of inviting the stranger into your home and the need to leave no one behind.  Like so many generations before us, let us all be inspired by this timeless story that has so much to say to our time and fight for justice, reach our hand out to those who need help and offer our neighbor kindness and hospitality. On behalf of my family and 8.5 million New Yorkers, I would like to wish a happy Passover to all who celebrate here and around the world. Chag Sameach.”

DE BLASIO ADMINISTRATION AND THE NEW YORK CITY POLICE DEPARTMENT ANNOUNCE PRELIMINARY PROGRESS REPORT ON NEIGHBORHOOD POLICING

  Mayor Bill de Blasio and Chief of Patrol Terrence Monahan today announced figures from a preliminary progress report on citywide neighborhood policing efforts at the 123^rd police precinct in the Tottenville neighborhood of Staten Island. The 123^rd precinct is the latest command set to become a Neighborhood Policing Command (NPC).

“Neighborhood policing has ushered in a new era of law enforcement built on mutual trust, understanding and cooperation. When New Yorkers know their local officers and trust their local officers, we are all safer as a city. Coupled with the retraining of the entire department and the introduction of body cameras, we’re giving officers the tools they need to do their jobs effectively and strengthening the bonds between police and community to make the safest city in the nation even safer,” said Mayor de Blasio.

“It's a great day for the South Shore of Staten Island, as we introduce Neighborhood Policing to the 123 Precinct,” said Police Commissioner James P. O'Neill. “In addition, the release of this report demonstrates the substantial progress we have made in reducing crime and building trust in neighborhood policing commands. This new philosophy will enable us, by working collectively with the public, to further reduce crime and keep New York the safest city in America.”

In May 2015, the de Blasio Administration and the New York City Police Department began the next phase in making the safest big city in America even safer by introducing a new way of fighting crime: neighborhood policing.

Neighborhood policing is now in place in more than fifty percent of the city’s precincts. In those precincts, the sectors – zones where police officers are assigned – have been re-drawn to reflect natural neighborhood borders. Officers are assigned week after week to the same sectors on the same shifts. When officers are consistently assigned to the same sector, they develop a profound understanding of the community they serve: the people, the problems, and the persistent issues. In addition to the officers assigned to patrol, each sector has two Neighborhood Coordination Officers (NCOs), whose entire focus is on learning the neighborhood and advising the officers on patrol. All of that means more officers and sector cars are available to respond to calls from the public than at any time before.

The preliminary results are in: Neighborhood policing works.

The Model

The neighborhood policing philosophy is based on the simple concept that communities and cops will be safer if they know and trust each other. Each neighborhood policing command, comprised of three to five sectors, has two specifically trained NCOs assigned to each sector.

NCOs spend time in the community, building relationships, understanding the issues, handing out cards and phone numbers, and getting to know as many people as they can. Over time, they develop a granular sense of where crimes are being committed and who is committing them. As the officers deepen relationships and build trust with residents, the public begins to know the officers, coming to them with concerns, often allowing the NYPD to prevent crime before it occurs.  

Precincts with NCO commands are carefully re-drawn, so the sectors reflect the neighborhood, with dedicated patrol officers assigned to the same sectors on the same shifts. With more police officers responding to calls in their sectors, NCOs are able to engage in long-term crime fighting strategies. They use time away from the radio to follow-up on recurring crime or quality of life issues, attend community meetings, and visit with residents or business owners in the neighborhood.

Recently, in the north Bronx in the 52nd Precinct, the NCOs met with residents who told them about a series of car break-ins occurring on a residential block. The NCOs worked with detectives in the command, analyzed the historical data on the car break-ins and were able to pinpoint the precise time, day, and location where the break-ins were most likely to occur next. The NCOs shared this intelligence with officers working the midnight shift. The NCOs changed their tours and, with the sector officers, conducted directed patrols in the area. During a directed patrol, the NCOs and sector cops observed a suspicious male and carefully followed him until he committed a car break-in. After a foot pursuit, the suspect was caught. Later, detectives would tie the same suspect to five other break-ins.

A Big Change

Neighborhood policing represents a fundamental change in how the NYPD operates.

In the past, officers concentrated on specific types of crime, or responded to a backlog of 911 calls. With re-drawn sectors and more officers on patrol to answer radio runs, coupled with the training they need to successfully handle most situations, NCOs can take a holistic approach to the crime and conditions a community faces. Before neighborhood policing, officers on patrol typically would not have the time or training to address many problems neighborhoods face. Today, NCOs have the know-how to work with other agencies and engage in advanced problem solving.

For example, in October 2016, Neighborhood Coordination Officers from the 120th precinct on the North Shore of Staten Island collaborated with the Department of Buildings and a local bank to move squatters out of an unoccupied building owned by that bank. The NYPD secured the building, prevented future squatting, and addressed a long-standing quality of life condition for nearby residents. All of this was made possible by the advanced training NCOs receive and by the time they take to work with the neighborhood to identify and solve local problems.

Preliminary Results from Neighborhood Policing Commands for the First Quarter of 2017 and 2016

7 Major Crimes	2017	2016	Change
NCO Commands	12013	12814	-6.20%
Non-NCO Commands	10516	10967	-4.11%
City Wide	22529	23781	-5.20%
Shooting Incidents	2017	2016	Change
NCO Commands	115	163	-29.45%
Non-NCO Commands	34	31	9.68%
City Wide	149	194	-23.20%
Murders	2017	2016	Change
NCO Commands	43	47	-8.51
Non-NCO Commands	20	23	-13.04%
City Wide	63	70	-10.00%
Robbery	2017	2016	Change
NCO Commands	2036	2388	-14.74%
Non-NCO Commands	1206	1310	-7.94%
City Wide	3242	3698	-12.33%

Reductions in Shooting Incidents and Murders

Communities with neighborhood policing commands experienced 30 percent fewer shooting incidents in the first quarter of 2017 when compared to the same period in 2016. It is likely that 48 fewer shooting incidents in the area contributed to the 8.5 percent reduction in homicides there. Non-neighborhood policing commands experienced an increase of three shooting incidents in the same time frame, but had three fewer murders.    

Reductions in the 7 Major Crimes

For the first quarter of 2017, neighborhood policing commands experienced a in the seven major felony offenses (murder and non-negligent manslaughter, rape, robbery, felony assault, burglary, grand larceny and grand larceny of a motor vehicle) when compared to the first quarter of 2016. This means there were approximately 800 fewer major crimes committed in the neighborhood policing commands – and more people in these communities were protected from the pain and disruption caused by violent crime victimization. Non-neighborhood policing commands also experienced reductions in serious felony crimes, but at a lower rate with 450 fewer of the seven major felony offenses committed in the first quarter of 2017 as compared to 2016.

The de Blasio Administration and the NYPD look forward to the continued rollout of this innovative approach to keeping New Yorkers safe and making the safest big city in America even safer.    

Computer Engineer Arrested For Theft Of Proprietary Trading Code From His Employer

   Joon H. Kim, 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 Field Office of the Federal Bureau of Investigation (“FBI”), announced today that ZHENGQUAN ZHANG, a/k/a “Zheng Quan Zhang,” a/k/a “Jim Z. Zhang,” was charged with theft of trade secrets for his alleged theft of proprietary computer code concerning algorithmic trading models and trading platforms from his employer, a global financial services firm headquartered in New York, New York, that engages in the trading of publicly traded securities and other financial products (“Firm-1”).  ZHANG was arrested this morning in Santa Clara, California, and was presented this afternoon in federal court in San Jose, California.

Acting U.S. Attorney Joon H. Kim said: “As alleged, Zhengquan Zhang went to great lengths to surreptitiously steal confidential computer code from his employer. Zhang allegedly installed code designed to steal his employer’s proprietary information and illegally accessed colleagues’ computer systems to further his theft. The theft charged here can happen to even the most sophisticated companies, but this arrest was made possible by the exemplary cooperation between the FBI and the victim company, which came forward promptly and alerted law enforcement of this alleged crime.”

FBI Assistant Director-in-Charge William F. Sweeney Jr. said:  “Proprietary computer code may not be a tangible asset that people can observe, but it is indeed one of the most critical assets that companies possess. Significant investments are made to develop code, safeguard it and use it to generate revenue. As we allege, Zhang misused his access to an employer’s computer system and proceeded to download and remove over three million files of data and computer code. The FBI is committed to enforcing laws that protect U.S. companies from the theft of trade secrets.”

According to the allegations contained in the Complaint unsealed today[1]:

Firm-1 uses proprietary algorithmic trading models to help it predict market movements and make trading decisions.  In addition, Firm-1 uses proprietary trading platforms to create orders, automatically submit those orders to an exchange or market center, and execute orders.  These trading models and trading platforms contribute substantially to Firm-1’s market share and profits, and their economic value depends, in part, on remaining undisclosed.  Firm-1 accordingly has put in place substantial measures designed to protect the computer source code underlying its trading models and trading platforms (the “Source Code”), including the use of encryption keys to encrypt and decrypt portions of the Source Code, limits on employee access to the Source Code, and restrictions on employee use of file sharing websites and portable storage devices.

Beginning in March 2010, ZHANG was employed in technical roles within Firm-1 for which he was granted access to certain parts of Firm-1’s computer system.  From December 2016 through March 2017, ZHANG took various steps to steal the Source Code.  For example, ZHANG installed on Firm-1’s system computer code designed to look for encryption keys to gain access to portions of the Source Code.  ZHANG also installed computer code designed to send data from Firm-1’s system to an external third-party software development site, which ZHANG accessed thousands of times from Firm-1’s system.  ZHANG used an area of Firm-1’s computer system to store over 3 million files of data, including unencrypted portions of the Source Code, before sending it to the external site.

In addition, in late March 2017, ZHANG accessed parts of Firm-1’s computer system that he was not authorized to access.  For example, ZHANG remotely accessed the computer desktops of certain quantitative analysts employed by Firm-1.  ZHANG subsequently admitted to a supervisor that he did so without authorization, using software that he had modified in order to capture individuals’ usernames and passwords.

ZHANG, 31, of Santa Clara, California, is charged with one count of theft of trade secrets, which carries a maximum sentence of 10 years in prison and a maximum fine of $250,000 or twice the gross gain or loss from the offense.  The maximum potential sentence in this case is prescribed by Congress and is provided here for informational purposes only, as any sentencing of the defendant will be determined by the judge.

Mr. Kim praised the outstanding investigative work of the FBI.  He also thanked the San Jose office of the FBI as well as the Santa Clara and Palo Alto Police Departments for their assistance.

The charges contained in the Complaint are merely accusations, and the defendant is presumed innocent unless and until proven guilty.

[1] As the introductory phase signifies, the entirety of the text of the Complaint, and the description of the Complaint set forth herein, constitute only allegations, and every fact described should be treated as an allegation.

Pakistani Man Pleads Guilty In Axact Diploma Mill Scam

   Joon H. Kim, the Acting United States Attorney for the Southern District of New York, announced that UMAIR HAMID, a/k/a “Shah Khan,” a/k/a the “Shah,” pled guilty yesterday before U.S. District Judge Ronnie Abrams to conspiracy to commit wire fraud in connection with an international “diploma mill” scheme that collected tens of millions of dollars from thousands of customers.  As alleged in the Indictment to which HAMID pled guilty and the related criminal Complaint, HAMID and his co-conspirators made false and fraudulent representations to consumers on websites and over the phone to trick them into enrolling in purported colleges and high schools, and issued fake diplomas upon receipt of upfront fees from consumers.  

Acting U.S. Attorney Joon H. Kim said: “Operating from Pakistan, Umair Hamid helped fraudulently rake in millions of dollars from unwitting American consumers who paid to enroll in, and get degrees from, high schools and colleges that did not exist. As a result of his fraud, people who thought they were investing in an education received nothing more than worthless diplomas and a harsh lesson in the worldwide reach of deceit. Together with our partners at the FBI and the Postal Service, we will continue to work to protect consumers from scams that victimize our citizens.”

According to the allegations contained in the Indictment and the Complaint against HAMID, as well as other court filings in this matter:

The Axact Scheme

HAMID, using the aliases “Shah Khan” and the “Shah,” and others operated a massive education “diploma mill” through the Pakistani company “Axact,” which has described itself as one of the world’s leading information technology (“IT”) providers.  Working on behalf of Axact, HAMID and others made misrepresentations to individuals across the world, including throughout the United States and in the Southern District of New York, in order to dupe these individuals into enrolling in supposed high schools, colleges, and other educational institutions.  Consumers paid upfront fees to HAMID and his co-conspirators, believing that in return they would be enrolled in real educational courses and, eventually, receive legitimate degrees.  Instead, after paying the upfront fees, consumers did not receive any legitimate instruction and were provided fake and worthless diplomas. 

Axact promoted and claimed to have an affiliation with approximately 350 fictitious high schools and universities, which Axact advertised online to consumers as genuine schools.  During certain time periods since 2014, Axact received approximately 5,000 phone calls per day from individuals seeking to purchase Axact products or enroll in educational institutions supposedly affiliated with Axact.  At least some of those consumers appeared to believe that they were calling phone numbers associated with the respective schools.  When consumers asked where the schools were located, sales representatives were instructed to give fictitious addresses. 

Once a consumer paid for a school certificate or diploma that falsely reflected a completed course of study, Axact sales agents were trained to use sales techniques to persuade the consumer to purchase additional “accreditation” or “certifications” for such certificates or diplomas in order to make them appear more legitimate.  Axact, through HAMID and his co-conspirators, falsely “accredited” purported colleges and other educational institutions by arranging to have diplomas from these phony educational institutions affixed with fake stamps supposedly bearing the seal and signature of the U.S. Secretary of State, as well as various state agencies and federal and state officials. 

HAMID’s Role in the Scheme

HAMID served as Axact’s “Assistant Vice President of International Relations.”  Among other things, HAMID made various false and fraudulent representations to consumers in order to sell fake diplomas.  HAMID controlled websites of purported “schools” that (1) falsely represented that consumers who “enrolled” with the schools by paying tuition fees would receive online instruction and coursework, (2) sold bogus academic “accreditations” in exchange for additional fees, (3) falsely represented that the schools had been certified or accredited by various educational organizations, and (4) falsely represented that the schools’ degrees were valid and accepted by employers, including in the United States. 

As a further part of the scheme, HAMID and a co-conspirator (1) opened bank accounts in the United States in the names of shell entities, effectively controlled by HAMID, that received funds transferred by consumers in exchange for fake diplomas, (2) transferred funds from those bank accounts to bank accounts associated with other entities located elsewhere in the United States and abroad, at the direction of HAMID, and (3) opened and operated an account to collect and distribute consumer funds obtained in connection with their fraudulent scheme.

In May 2015, Axact was shut down by Pakistani law enforcement, and certain individuals associated with Axact were prosecuted in Pakistan.  Nevertheless, after May 2015, HAMID resumed his fraudulent business of selling fake diplomas to consumers in the United States for upfront fees based upon false and fraudulent representations.  Most recently, HAMID traveled to the United States in 2016 in order to open a bank account used to collect money from defrauded consumers.

HAMID, 31, of Karachi, Pakistan, pled guilty to one count of conspiracy to commit wire fraud, which carries a maximum sentence of 20 years in prison.  The maximum potential sentence is prescribed by Congress and is provided here for informational purposes only, as any sentencing of the defendant will be determined by the judge.  HAMID is scheduled to be sentenced by Judge Abrams on July 21, 2017, at 3:00 p.m. 

Mr. Kim praised the outstanding investigative work of the Federal Bureau of Investigation and the U.S. Postal Inspection Service.

If you believe you were a victim of this crime, including a victim entitled to restitution, and you wish to provide information to law enforcement and/or receive notice of future developments in the case or additional information, please contact the Victim/Witness Unit at the United States Attorney’s Office for the Southern District of New York, at (866) 874-8900.  For additional information, go to http://www.usdoj.gov/usao/nys/victimwitness.html.