25 Members And Associates Of Bronx Drug-Distribution Organizations Charged With Narcotics, Robbery, And Firearms Offenses

  Joon Kim, the Acting United States Attorney for the Southern District of New York, Darcel Clark, the Bronx County District Attorney, Ashan Benedict, Special Agent-in-Charge of the New York Field Office of the Bureau of Alcohol, Tobacco, Firearms and Explosives (“ATF”), Angel M. Melendez, Special Agent in Charge of U.S. Immigration and Customs Enforcement’s (ICE) Homeland Security Investigations (“HSI”) New York, and James P. O’Neill, the Commissioner of the New York City Police Department (“NYPD”), today announced the unsealing of two Indictments charging 25 defendants with a variety of narcotics, firearms, and robbery-related offenses. 

Of the 25 defendants, 21 are associated with a drug-distribution organization operating primarily in the Hunts Point neighborhood in the Bronx and are charged in United States v. Hector Palermo, et al. (the “Palermo Indictment”), which has been assigned to U.S. District Judge Gregory H. Woods.  Of those defendants, 14 were taken into federal custody today and were presented before Magistrate Judges Barbara C. Moses today.  One defendant, FREDERICK BURGOS, was presented in the Eastern District of Pennsylvania.  MIGUEL RAMIREZ, FELIX CORDERO SR., KHAALIQ HARRIS, ANGEL BERMUDEZ, ELVIN MALDONADO, AND STEVEN VEGA remain at large.

The remaining four defendants are charged in United States v. Lattine Clark, et al. (the “Clark Indictment”), which has been assigned to U.S. District Judge Vernon S. Broderick.  Of those defendants, three were taken into federal custody today and were presented before Magistrate Judges Barbara C. Moses today.  One defendant, TREVON NEDD, is currently detained in federal custody on unrelated charges and will be brought into federal custody on a writ.

Manhattan Acting U.S. Attorney Joon Kim said:  “One by one, our office, along with our law enforcement partners, is identifying and prosecuting the violent gangs and drug dealing crews operating in the Bronx. These alleged gangs and drug crews – including the ones charged today – bring narcotics, guns, and violence to our neighborhoods. The residents of the communities they harm deserve better.”

ATF Special Agent-in-Charge Ashan Benedict said:  “Today's arrests are the culmination of a nearly two-year long investigation by ATF's Joint Firearms Task Force, NYPD, and HSI into alleged narcotics trafficking, armed robberies, and the illicit possession of firearms by criminal elements operating in the Hunts Point area of the Bronx. Through the cooperative efforts of law enforcement, these individuals are off the streets and will face justice in federal court for their alleged crimes. Today it is a better day to be a resident of Hunts Point, and all of us will continue our efforts to ensure it stays that way. I would like to extend my gratitude to the ATF and HSI Special Agents, NYPD Detectives, and Assistant United States Attorneys for their hard work and dedication throughout this investigation.”

HSI Special Agent-in-Charge Angel M. Melendez, said:  “It’s a good day when more than two dozen alleged gun-wielding drug pushers are taken off the street. These individuals are alleged to deal crack cocaine and heroin in their own backyards and commit robberies at gunpoint.  Today’s arrests are another great example of law enforcement working together in the interest of justice and making our communities safer.”

NYPD Commissioner James P. O’Neill said:  “We will continue to pursue those who commit violence in our streets.  This morning’s arrest of 25 defendants in the Bronx is just the latest example.  I’m thankful to the help and cooperation from our many law enforcement partners in this takedown and many others.”

The Indictments arise from a joint investigation by the NYPD, ATF, and HSI into several drug trafficking organizations operating in the Hunts Point area of the Bronx, New York.  As alleged in the Palermo Indictment, the 21 defendants charged in that case are responsible for the distribution of large amounts of crack cocaine and heroin, and used, carried, and possessed firearms in connection with that drug trafficking. 

As alleged in the Clark Indictment, LATTINE CLARK, MICHAEL PATTERSON, and TREVON NEDD participated in a conspiracy to distribute crack cocaine in the Hunts Point area, and RUBEN VIZCARRANDO participated in another conspiracy to distribute crack cocaine in Hunts Point.  As further alleged, CLARK was a participant in a shootout, during which he fired a gun, in the vicinity of Coster Street and Spofford Avenue, on October 16, 2016.  PATTERSON, NEDD, and VIZCARRANDO are all alleged to have participated in a Hobbs Act robbery conspiracy, and a gunpoint Hobbs Act robbery of suspected narcotics traffickers in the Marble Hill area on June 22, 2016, during which robbery PATTERSON and another unnamed co-conspirator fired their weapons.         

Count One of the Palermo Indictment unsealed today in Manhattan federal court,[1] charges HECTOR PALERMO, MIGUEL GUZMAN, MIGUEL RAMIREZ, FELIX CORDERO SR.,  MATTHEW PRESTOL, CHRIS ALICEA, KHAALIQ HARRIS, ADRIAN QUINONES, FREDERICK BURGOS, RAFAEL GONZALEZ, ANGEL BERMUDEZ, JUAN CARLOS RODRIGUEZ, JESUS ANDINO, ELVIN MALDONADO, JOSE AYALA, ESTEBAN MARTINEZ, CHRISTIAN RIVERA, STEVEN VEGA, DENISE ORTIZ, CARMEN ROMAN, and ASHLEY RODRIGUEZ with conspiring to distribute and possess with intent to distribute crack cocaine and heroin.    

Count Two charges GUZMAN, RAMIREZ, CORDERO SR., PRESTOL, ALICEA, BURGOS, GONZALEZ, RODRIGUEZ, and VEGA, with using, possessing, and carrying firearms in furtherance of the drug conspiracy charged in Count One.

Count Three charges RAMIREZ with possessing ammunition, which had previously been shipped in interstate commerce, after a prior felony conviction.

Count One of the Clark Indictment unsealed today in Manhattan federal court,[2] charges LATTINE CLARK, TREVON NEDD, and MICHAEL PATTERSON with conspiring to distribute and possess with intent to distribute crack cocaine.

Count Two charges CLARK with using, possessing, and carrying firearms in furtherance of the drug conspiracy charged in Count One. 

Count Three charges RUBEN VIZCARRONDO with conspiring to distribute and possess with intent to distribute crack cocaine.

Count Four charges NEDD, PATTERSON, and VIZCARRONDO with participating in a conspiracy to commit Hobbs Act Robbery between 2015 and May 2017.  Count Four charges that this conspiracy involved armed robberies of suspected narcotics traffickers and others involved in commercial activities that affected interstate commerce.

Count Five charges NEDD, PATTERSON, and VIZCARRONDO with committing a robbery of suspected narcotics traffickers on June 22, 2016, in the vicinity of Marble Hill, New York.

Charts containing the names, ages, residences, charges, and maximum penalties for the defendants are set forth below.  The maximum potential sentences in this case are prescribed by Congress and are provided here for informational purposes only, as any sentencing of the defendants will be determined by the judge.

Mr. Kim praised the outstanding investigative work of the NYPD, ATF, and HSI, and expressed gratitude for the coordinated efforts of the NYPD’s Violent Crime Squad and 41st Precinct.

This case is being handled by the Office’s Violent and Organized Crime Unit.  Assistant United States Attorneys Sarah Krissoff and Jason A. Richman are in charge of the prosecution.

The charges contained in the Indictments are merely accusations, and the defendants are presumed innocent unless and until proven guilty.

United States v. Hector Palermo, et al.

COUNT	CHARGE	DEFENDANTS	MAX. PENALTIES
1	Narcotics conspiracy   21 U.S.C. § 846	HECTOR PALERMO MIGUEL GUZMAN MIGUEL RAMIREZ FELIX CORDERO SR.  MATTHEW PRESTOL CHRIS ALICEA KHAALIQ HARRIS ADRIAN QUINONES FREDERICK BURGOS RAFAEL GONZALEZ ANGEL BERMUDEZ JUAN CARLOS RODRIGUEZ JESUS ANDINO ELVIN MALDONADO JOSE AYALA ESTEBAN MARTINEZ CHRISTIAN RIVERA STEVEN VEGA DENISE ORTIZ CARMEN ROMAN ASHLEY RODRIGUEZ	Life in prison   Mandatory minimum of 10 years in prison
2	Using, carrying, possessing firearms in furtherance of narcotics conspiracy   18 U.S.C. §§ 924(c) and 2	MIGUEL GUZMAN MIGUEL RAMIREZ FELIX CORDERO SR. MATTHEW PRESTOL CHRIS ALICEA FREDERICK BURGOS RAFAEL GONZALEZ JUAN CARLOS RODRIGUEZ STEVEN VEGA	Life in prison   Mandatory minimum of 5 years in prison
3	Felon in possession of ammunition   18 U.S.C. §§ 922(g) and 2	MIGUEL RAMIREZ	10 years’ imprisonment

DEFENDANT	AGE	RESIDENCE
HECTOR PALERMO, a/k/a “Hec”	35	Newark, New Jersey
MIGUEL GUZMAN	29	Bronx, New York
MIGUEL RAMIREZ, a/k/a “Mickey”	27	Bronx, New York
FELIX CORDERO SR., a/k/a “Pops”	50	Bronx, New York
MATTHEW PRESTOL, a/k/a “Wiz”	19	Bronx, New York
CHRIS ALICEA	18	Bronx, New York
KHAALIQ HARRIS, a/k/a “Rooster”	21	Bronx, New York
ADRIAN QUINONES, a/k/a “Five”	24	Bronx, New York
FREDERICK BURGOS, a/k/a “Flee,” a/k/a “Lee”	37	Bethlehem, Pennsylvania
RAFAEL GONZALEZ, a/k/a June”	45	Bronx, New York
ANGEL BERMUDEZ, a/k/a “Para”	21	Bronx, New York
JUAN CARLOS RODRIGUEZ, a/k/a “J.C.”	20	Bronx, New York
JESUS ANDINO, a/k/a “Chico”	32	Bronx, New York
ELVIN MALDONADO, a/k/a “LV”	30	Bronx, New York
JOSE AYALA	49	Bronx, New York
ESTEBAN MARTINEZ, a/k/a “Esco”	34	Bronx, New York
CHRISTIAN RIVERA, a/k/a “Rico”	23	Bronx, New York
STEVEN VEGA, a/k/a “Nene”	25	Bronx, New York
DENISE ORTIZ	36	Bronx, New York
CARMEN ROMAN	56	Bronx, New York
ASHLEY RODRIGUEZ	20	Bronx, New York

United States v. Lattine Clark, et al.

COUNT	CHARGE	DEFENDANTS	MAX. PENALTIES
1	Narcotics conspiracy   21 U.S.C. § 846	LATTINE CLARK TREVON NEDD MICHAEL PATTERSON	Life in prison   Mandatory minimum of 10 years in prison
2	Using, carrying, possessing, brandishing, and discharging firearms   18 U.S.C. §§ 924(c)(1)(A)(i), (ii), and (iii), 2	LATTINE CLARK	Life in prison   Mandatory minimum of 10 years in prison
3	Narcotics conspiracy   21 U.S.C. § 846	RUBEN VIZCARRONDO	Life in prison   Mandatory minimum of 10 years in prison
4	Robbery Conspiracy   18 U.S.C. § 1951	TREVON NEDD MICHAEL PATTERSON RUBEN VIZCARRONDO	20 years in prison
5	Robbery   18 U.S.C. § 1951	TREVON NEDD MICHAEL PATTERSON RUBEN VIZCARRONDO	20 years in prison

DEFENDANT	AGE	RESIDENCE
LATTINE CLARK, a/k/a “Dutts”	20	Bronx, New York
TREVON NEDD, a/k/a “Hat Boy”	31	Federal Custody
MICHAEL PATTERSON	22	Bronx, New York
RUBEN VIZCARRONDO	26	Bronx, New York

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

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

Alleged Street Boss And Underboss Of La Cosa Nostra Family Charged With Murder And Racketering Offenses In White Plains Federal Court

Charges Filed Against Entire Administration of the Luchese Family (Boss, Underboss, and Consigliere), As Well As Four Captains, Five Soldiers, and Seven Associates.

 Joon H. Kim, the Acting United States Attorney for the Southern District of New York, William F. Sweeney Jr., Assistant Director in Charge of the New York Field Office of the Federal Bureau of Investigation (“FBI”), Angel M. Melendez, Special Agent in Charge of U.S. Immigration and Customs Enforcement’s Homeland Security Investigations (“HSI”), James P. O’Neill, Commissioner of the New York City Police Department (“NYPD”), and Walter M. Arsenault, Executive Director of the Waterfront Commission of New York Harbor, announced today the filing of a Superseding Indictment charging 19 members and associates of the Luchese Family of La Cosa Nostra with racketeering, murder, narcotics, and firearms offenses.

The Superseding Indictment builds on charges previously filed against Luchese soldier CHRISTOPHER LONDONIO and Luchese associate TERRENCE CALDWELL, who were charged in February 2017 with racketeering offenses, including the murder of Michael Meldish, a Luchese associate who was killed in the Bronx on November 15, 2013.

The Superseding Indictment charges MATTHEW MADONNA, the alleged street boss of the Luchese Family, STEVEN CREA SR., the alleged underboss of the Family, and STEVEN CREA JR., LONDONIO’s alleged captain in the Family, with ordering the murder of Meldish. The Superseding Indictment also contains additional racketeering charges against MADONNA, CREA SR., and CREA JR., as well as the alleged consigliere of the Luchese Family, JOSEPH DiNAPOLI, and numerous other members and associates of La Cosa Nostra.

Fifteen of the defendants charged were taken into custody today. CHRISTOPHER LONDONIO, TERRENCE CALDWELL, and VINCENT BRUNO were already in federal custody on other charges. MATTHEW MADONNA was already in custody on state charges and was transferred today to federal custody. All defendants arrested today will be presented in White Plains federal court before U.S. Magistrate Judge Judith C. McCarthy this afternoon. The case is assigned to United States District Judge Cathy Seibel, who will hold an initial conference on Thursday, June 1, 2017, at 2:00 p.m.

Acting U.S. Attorney Joon H. Kim said: “As today’s charges demonstrate, La Cosa Nostra remains alive and active in New York City, but so does our commitment to eradicate the mob’s parasitic presence. We have charged 19 members and associates of the Luchese Crime Family, including its entire administration – the street boss, underboss and consigliere – with serious racketeering offenses. The defendants allegedly used violence and threats of violence, as the mob always has, to make illegal money, to enforce discipline in the ranks, and to silence witnesses. The mob members and associates charged today will answer for their alleged misdeeds in a court of law.”

FBI Assistant Director-in-Charge William F. Sweeney Jr. said: “Organized crime families believe their way of life is acceptable and continue to show through their criminal behavior that they don’t plan to stop. Their crimes aren’t victimless, and this case proves they’re willing to use murder and many other violent tactics to enforce their dominance. The FBI/NYPD Joint Organized Crime Task Force and our other law enforcement partners, who have done exceptional work in this case, don’t plan to stop our pursuit of these crime families because they have a direct negative impact on communities and neighborhoods where they operate.”

HSI Special Agent in Charge Angel M. Melendez said: “The Luchese Family and its associates are alleged to be linked to guns, drugs, racketeering, and murder. They are also alleged to have used their criminal enterprise to launder money, tamper with witnesses and extortion. It is clear that this ‘family’ business is of no benefit to its community or to this great city. HSI will continue to strengthen its partnership with the FBI and NYPD to ensure that alleged criminals like the Luchese Family face the consequences of their actions.”

NYPD Commissioner James P. O’Neill said: “The allegations and extent of the criminal behavior are extraordinary. The Luchese Family operated with seeming impunity, allegedly carrying out murder, robberies, extortion, among a myriad of other charges unsealed today. We will not stop until violence has been eradicated – be it from a street gang or the mob.”

Waterfront Commission Executive Director Walter M. Arsenault said: “The Waterfront Commission will continue to work with all of its law enforcement partners to eliminate Organized Crime wherever it is found.”

According to the allegations in the Superseding Indictment[1], which was filed in White Plains federal court on May 24, 2017, and was unsealed today:

La Cosa Nostra or “the Mafia” is a criminal organization composed of leaders, members, and associates who work together and coordinate to engage in criminal activities.

La Cosa Nostra operates through entities known as “Families.” In the New York City area, those families include the Genovese, Gambino, Luchese, Bonanno, Colombo, and Decavalcante Families. Each Family operates through groups of individuals known as “crews” and “regimes.” Each “crew” has as its leader a person known as a “Caporegime,” “Capo,” “Captain,” or “Skipper,” who is responsible for supervising the criminal activities of his crew and providing “Soldiers” and associates with support and protection. In return, the Capo typically receives a share of the illegal earnings of each of his crew’s Soldiers and associates, which is sometimes referred to as Atribute.@

Each crew consists of “made” members, sometimes known as “Soldiers,” “wiseguys,” “friends of ours,” and “good fellows.” Soldiers are aided in their criminal endeavors by other trusted individuals, known as “associates,” who sometimes are referred to as “connected” or identified as “with” a Soldier or other member of the Family. Associates participate in the various activities of the crew and its members. In order for an associate to become a made member of the Family, the associate must first be of Italian descent and typically needs to demonstrate the ability to generate income for the Family and/or the willingness to commit acts of violence.

At most times relevant to the charges in the Superseding Indictment, MATTHEW MADONNA was the street boss of the family – that is, the individual who managed the affairs of the Family on behalf of the formal boss, who is serving a life sentence in federal prison. STEVEN CREA SR., a/k/a “Wonder Boy,” was the Underboss of the Luchese Family, and JOSEPH DINAPOLI was the Consigliere of the Luchese Family. Additionally, STEVEN CREA JR., DOMINIC TRUSCELLO, JOHN CASTELUCCI, a/k/a “Big John,” and TINDARO CORSO, a/k/a “Tino,” were Captains or Acting Captains in the Luchese Family. JOSEPH VENICE, JAMES MAFFUCCI, a/k/a “Jimmy the Jew,” JOSEPH DATELLO, a/k/a “Big Joe,” a/k/a “Joey Glasses,” PAUL CASSANO, a/k/a “Paulie Roast Beef,” and CHRISTOPHER LONDONIO were Soldiers in the Luchese Family.

The Superseding Indictment alleges that from at least in or about 2000 up to and including in or about 2017, MATTHEW MADONNA, STEVEN CREA SR., JOSEPH DINAPOLI, STEVEN CREA JR., DOMINIC TRUSCELLO, JOHN CASTELUCCI, TINDARO CORSO, JOSEPH VENICE, JAMES MAFFUCCI, JOSEPH DATELLO, PAUL CASSANO, CHRISTOPHER LONDONIO, TERRENCE CALDWELL, a/k/a “T,” VINCENT BRUNO, BRIAN VAUGHAN, CARMINE GARCIA, a/k/a “Spanish Carmine,” RICHARD O’CONNOR, ROBERT CAMILLI, and JOHN INCATASCIATO, along with other members and associates of La Cosa Nostra, committed a wide array of crimes in connection with their association with the mafia, including murder, attempted murder, assault, robbery, extortion, gambling, narcotics trafficking, witness tampering, fraud, money laundering, and trafficking in contraband cigarettes.

Of particular significance, on or about November 15, 2013, MADONNA, CREA SR. CREA JR., LONDONIO, and CALDWELL murdered and procured the murder of Michael Meldish in order to maintain or increase their status in La Cosa Nostra.

The Superseding Indictment also alleges the following additional violent incidents:

In late 2012, PAUL CASSANO and VINCENT BRUNO, acting at the direction of CREA SR. and CREA JR., attempted to murder a mafia associate who had shown disrespect toward CREA SR.

As charged in the initial Indictment, on May 29, 2013, TERRENCE CALDWELL attempted to murder a Bonanno Soldier in the vicinity of First Avenue and 111th Street, in Manhattan.

In or about October 2016, STEVEN CREA SR. and JOSEPH DATELLO attempted to murder a witness who had previously provided information regarding the activities of La Cosa Nostra to state and federal law enforcement.

A chart containing the ages, residency information, and charges against the defendants, as well as the maximum penalties they face, is attached.

Mr. Kim praised the outstanding investigative work of the FBI’s Organized Crime Task Force, which comprises agents and detectives of the FBI, NYPD, Homeland Security Investigations, and the Waterfront Commission of New York Harbor. He also thanked the Bronx County District Attorney’s Office, the New York County District Attorney’s Office, the Queens County District Attorney’s Office, the New York State Inspector General's Office, the Chesterfield County (VA) Police Department, and the Guardia Civil (Spain). He added that the investigation is continuing.

Assistant U.S. Attorneys Scott Hartman, Hagan Scotten, and Jacqueline Kelly are in charge of the prosecution. The case is being handled by the Office’s Violent and Organized Crime Unit and White Plains Division.

The charges contained in the Superseding Indictment are merely accusations, and the defendants are presumed innocent unless and until proven guilty.

United States v. Mathew Madonna, et al., S1 17 Cr. 89 (CS)

DEFENDANT	AGE	CITY OF RESIDENCE	CHARGES	MAX SENT.
Madonna, Matthew	81	Incarcerated	18 U.S.C. § 924(c) 18 U.S.C. § 924(j) 18 U.S.C. § 1959(a)(1) 18 U.S.C. § 1959(a)(5) 18 U.S.C. § 1962(d)	Life
Crea, Sr., Steven	69	Crestwood, NY	18 U.S.C. § 924(c) 18 U.S.C. § 924(j) 18 U.S.C. § 1959(a)(1) 18 U.S.C. § 1959(a)(3) 18 U.S.C. § 1959(a)(5) 18 U.S.C. § 1962(d)	Life
DiNapoli, Joseph	81	Bronx, NY	18 U.S.C. § 924(c) 18 U.S.C. § 1962(d)	Life
Crea, Jr., Steven	45	New Rochelle, NY	18 U.S.C. § 924(c) 18 U.S.C. § 924(j) 18 U.S.C. § 1959(a)(1) 18 U.S.C. § 1959(a)(3) 18 U.S.C. § 1959(a)(5) 18 U.S.C. § 1962(d)	Life
Truscello, Dominic	83	Staten Island, NY	18 U.S.C. § 924(c) 18 U.S.C. § 1962(d)	Life
Castelucci, John	57	Staten Island, NY	18 U.S.C. § 924(c) 18 U.S.C. § 1962(d)	Life
Corso, Tindaro	56	Staten Island, NY	18 U.S.C. § 924(c) 18 U.S.C. § 1962(d)	Life
Venice, Joseph	56	Yonkers, NY	18 U.S.C. § 924(c) 18 U.S.C. § 1962(d)	Life
Maffucci, James	69	Manhattan, NY	18 U.S.C. § 924(c) 18 U.S.C. § 1962(d) 21 U.S.C. § 846	Life
Datello, Joseph	66	Staten Island, NY	18 U.S.C. § 924(c) 18 U.S.C. § 1959(a)(3) 18 U.S.C. § 1962(d) 21 U.S.C. § 846	Life
Londonio, Christopher	43	Incarcerated	18 U.S.C. § 924(c) 18 U.S.C. § 924(j) 18 U.S.C. § 1959(a)(1) 18 U.S.C. § 1959(a)(5) 18 U.S.C. § 1962(d) 21 U.S.C. § 846	Life
Cassano, Paul	38	Yonkers, NY	18 U.S.C. § 924(c) 18 U.S.C. § 1959(a)(3) 18 U.S.C. § 1962(d)	Life
Caldwell, Terrence	59	Incarcerated	18 U.S.C. § 924(c) 18 U.S.C. § 924(j) 18 U.S.C. § 1959(a)(1) 18 U.S.C. § 1959(a)(3) 18 U.S.C. § 1959(a)(5) 18 U.S.C. § 1962(d)	Life
Bruno, Vincent	33	Incarcerated	18 U.S.C. § 924(c) 18 U.S.C. § 1959(a)(3) 18 U.S.C. § 1962(d)	Life
Vaughan, Brian	51	Matawan, NJ	18 U.S.C. § 924(c) 18 U.S.C. § 1962(d) 21 U.S.C. § 846	Life
Garcia, Carmine	65	Hawthorne, NJ	18 U.S.C. § 924(c) 18 U.S.C. § 1962(d) 21 U.S.C. § 846	Life
O’Connor, Richard	63	Staten Island, NY	18 U.S.C. § 924(c) 18 U.S.C. § 1962(d) 21 U.S.C. § 846	Life
Camilli, Robert	60	Briarcliff Manor, NY	18 U.S.C. § 1962(d)	20 Years
Incatasciato, John	42	Elmsford, NY	18 U.S.C. § 1962(d)	20 Years

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

CEO And President Of Premium Ticket Resale Business Charged With Engaging In A Multimillion-Dollar Ponzi Scheme Resulting In Losses Of At Least $70 Million

Jason Nissen Is Alleged to Have Told Investors He Was Financing Large Purchases of Premium Tickets to Events Such As the Super Bowl, the World Cup, and “Hamilton,” and Instead He Used Investors’ Money on Himself and to Pay Back Other Investors

   Joon H. Kim, the Acting United States Attorney for the Southern District of New York, and William F. Sweeny Jr., Assistant Director-in-Charge of the New York Field Office of the Federal Bureau of Investigation (“FBI”), announced today that JASON NISSEN was arrested and charged in Manhattan federal court today with defrauding victims of at least $70 million by falsely representing that he was using the victims’ money to further a profitable, multimillion-dollar wholesale ticket business.  NISSEN was arrested this morning and will be presented in Manhattan federal court later today. 

Acting Manhattan U.S. Attorney Kim said:  “Jason Nissen claimed he was investing in premium tickets for events like the Super Bowl, the World Cup and the Broadway hit ‘Hamilton,’ but as alleged, Nissen was actually cheating his investors out of over $70 million and spending it on himself. The veneer of a successful and interesting business was allegedly just that, an alleged cover for a massive Ponzi scheme.”      

FBI Assistant Director-in-Charge William F. Sweeney Jr. said:   “As charged today, Nissen represented his business as an investment opportunity for those willing to finance the purchase of large quantities of premium tickets to a number of sporting events and entertainment venues.  The tickets were supposed to be sold for profit, but they weren’t.  As alleged, Nissen eventually defrauded his victims out of at least $70 million collectively, all of which he used in furtherance of his scheme and for his own personal gain.  For Nissen, the final quarter didn’t prove as profitable as anticipated; he must now face the penalty for his actions.”

According to the Complaint filed in Manhattan federal court:[1]

Since 2012, NISSEN has operated a ticket resale business (the “Ticket Company”) located in Manhattan, New York, through which NISSEN purchased large quantities of premium tickets for sporting and entertainment events, and then resold such tickets for a profit.  NISSEN was the Ticket Company’s chief executive officer and president.  

The Ticket Company’s website states that “[The Ticket Company] is an industry leader in providing VIP access and premium tickets to all concerts, Broadway theatre, red carpet premieres and sporting events worldwide . . . the Ticket Company stocks one of the largest revolving inventories for sports, concerts, and theatre worldwide.”

From 2015 to May 2017, NISSEN defrauded multiple victims of tens of millions of dollars through the Ticket Company.  NISSEN represented to victims that he would use money lent to him and his ticket business by victims to purchase bulk quantities of premium tickets to sporting and entertainment events such as the Super Bowl, the World Cup, the U.S. Open, and “Hamilton,” and then resell the tickets at a profit.  However, in truth and in fact, NISSEN used the victims’ money in large part to repay other victims and to enrich himself. 

For example, one victim, referred to as “Victim-2” in the Complaint, gave NISSEN and his ticket business more than $1.9 million to be used for the bulk purchase of tickets to a UFC fight in New York to be resold by NISSEN.  Instead of purchasing tickets, NISSEN used the money as follows: (i) he made two cash withdrawals – one for $20,000 and the other for $23,250; (ii) he transferred $383,000 to the bank account of another company he controlled to bring that company’s account balance out of a negativebalance of about $382,000 to a positive balance of about $578; and (iii) he transferred $1,500,050 to his personal bank account, which had a balance of $88 at the time, and then that same day, NISSEN transferred $1,500,025 from his personal account to another victim to whom he owed money. 

To further perpetuate his fraudulent scheme and to raise additional sums from victims, NISSEN falsified financial documents and inflated accounts receivable ledgers, which NISSEN presented to certain victims as purported proof that their money was being used to purchase premium tickets for resale. 

On May 7, 2017, unable to obtain more financing to continue the scheme through existing or new victims, NISSEN admitted to an executive of Victim-2 that he had been operating a Ponzi scheme.  When the CFO of Victim-2 asked NISSEN the next day whether a bank document that NISSEN had previously provided to Victim-2 was forged, NISSEN admitted he had fabricated the bank document.  When asked how he had done so, NISSEN replied: “Photoshop.  Ever hear of it?”  

Two days later, on May 10, 2017, NISSEN told another victim, referred to in the Complaint as “Victim-1,” that he had been committing a fraud and that he had fabricated the income numbers of the Ticket Company that he had been reporting to Victim-1.

In total, JASON NISSEN defrauded victims of at least $70 million.     

NISSEN, 44, of Roslyn, New York, has been charged with one count of 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.

Mr. Kim praised the investigative work of the FBI and noted that the investigation is continuing. 

The charges contained in the Complaint 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 Complaint and the description of the Complaint set forth herein constitute only allegations, and every fact described should be treated as an allegation.

NYPD SERGEANT INDICTED FOR MURDER AND OTHER CHARGES IN DEATH OF DEBORAH DANNER

Sgt. Hugh Barry Charged with Fatally Shooting Bronx Woman in Her Home

  Bronx District Attorney Darcel D. Clark today announced that a New York City Police Department sergeant has been indicted for second-degree Murder, first and second-degree Manslaughter and Criminally Negligent Homicide in the fatal shooting of Deborah Danner in her Bronx apartment on October 18, 2016, when he and other police officers responded to a call of an emotionally disturbed person. 

  District Attorney Clark said, “A special grand jury investigated this case for more than two months. After a thorough, deliberate investigation, they have indicted NYPD Sergeant Hugh Barry for causing the death of Ms. Danner. When I asked last December that a special grand jury be impaneled, I said there would be no timetable, and that a fair investigation would take place and go wherever the evidence takes it. I commend the grand jurors for their painstaking work and for giving so much time away from their families. 

  “I want to express my condolences again to the Danner family for the heartbreaking loss they have suffered. I thank them for their cooperation and patience throughout these last seven months. 

  “The men and women of the NYPD protect and serve us, and face the possibility of danger every time they respond to calls of emotionally disturbed persons, domestic violence incidents and other crises. They answer thousands of these calls each year without incident. I hope that measures will be taken to prevent another tragedy such as this.”

  District Attorney Clark said the defendant, Hugh Barry, 31, a sergeant in the New York City Police Department assigned to the 43rd Precinct in the Bronx, was arraigned today before Bronx Supreme Court Justice Robert Neary and released on $100,000 bond. He is due back in court on July 7, 2017.

  Barry was indicted on charges of second-degree Murder, first and second-degree Manslaughter and Criminally Negligent Homicide. If convicted of the top charge, he could face up to life in prison. 

  According to the investigation, at about 6 p.m. on October 18, 2016, police officers from the 43rd Precinct responded to 66-year-old Ms. Danner’s seventh-floor apartment at 630 Pugsley Avenue in the Castle Hill section of the Bronx for a 911 call for an emotionally disturbed woman who was screaming in the hallway. Barry arrived after police and Emergency Medical Service EMTs. While they attempted to take Ms. Danner into custody to be evaluated at a hospital, Ms. Danner is alleged to have refused to go to the hospital, at one point holding a pair of scissors and then holding a wooden bat toward Barry before he shot her two times.

  The investigation revealed that, based on these circumstances and his training, Barry did not avail himself of other options before using deadly physical force.

  District Attorney Clark thanked Chief Appellate Attorney Peter D. Coddington and Senior Appellate Attorney Matthew B. White of the Appeals Bureau and Christine Scaccia, Chief of the Homicide Bureau, for their assistance in the case.

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

Comptroller Stringer Audit: Department of Finance Gave $4 Million in Veterans’ and School Tax Reductions to 1,500 Ineligible Property Owners

An additional $2 million may have been lost to ineligible owners of 571 co-ops and other properties.

  The Department of Finance (DOF) improperly gave away over $4 million in property tax reductions that are intended to benefit veterans and individual homeowners, a new audit from New York City Comptroller Scott M. Stringer shows. The audit report shows that DOF improperly granted or continued Veterans’ Exemptions to over 1,500 ineligible property owners.  In more than 1,000 of those cases, DOF failed to remove the tax breaks after the eligible veteran or family member moved or passed away, and the agency also allowed 60 corporations and LLC’s to receive the exemptions inappropriately.  In some cases, the eligible veterans had moved away in the 1960s, in other cases, the veteran had died in the early 2000s, yet DOF allowed the properties to continue receiving Veterans’ Exemptions through at least July 1, 2016.

 The Comptroller’s audit analyzed records regarding property owners who have received Veterans’ Exemptions over a six-year period beginning July 1, 2011 and calculated the losses from improperly-continued exemptions through June 30, 2017. In total, the Comptroller’s Office identified over $4 million lost to the City from tax reductions improperly given to ineligible property owners through Veterans’ and School Tax exemptions.

 In addition, DOF allowed Veterans’ Exemptions and resulting tax deductions to continue for 571 properties—456 cooperative properties and 115 others—after the eligible veteran died, where no other eligible recipient was named in DOF’s records. Those cases may have cost the city nearly $2 million more in improper tax reductions.

 “This is just wrong. When city government stops minding the store, city taxpayers lose. As Memorial Day approaches, we’re finding out that our city government is handing over millions of dollars that are supposed to help our veterans—to those who aren’t veterans. It’s incredible,” said New York City Comptroller Scott M. Stringer. “Our veterans mean so much to our city and our country. With 1,500 property owners getting veterans’ tax breaks they haven’t earned, it’s time for our Department of Finance to correct the inequity and recover the funds that should be supporting essential City services.” 

Key findings from the audit include:

• DOF failed to remove Veterans’ Exemptions from 740 ineligible properties that were transferred to owners who were not authorized exemption-recipients, costing the City at least $1,654,869 in uncollected revenue. 

• DOF failed to remove Veterans’ Exemptions from at least 341 properties after the eligible homeowners died, which resulted in the loss of at least $798,346.

• DOF may have inappropriately applied Veterans’ Exemptions and resulting tax reductions totaling $1,804,979 to 456 cooperative properties and 115 other properties after the eligible veteran’s death. 

• DOF allowed 162 homeowners to receive multiple Veterans’ Exemptions simultaneously, which is not allowed.

• DOF allowed at least 60 properties owned by ineligible corporations and limited liability companies (LLCs) to improperly receive Veterans’ Exemptions. As to those 60 instances, the audit covered a seven-year period dating back to July 1, 2010.

The Comptroller’s audit laid out a series of 18 recommendations for DOF to correct the tax rolls, recoup lost revenue, and prevent recurrence of these costly errors going forward.

Those recommendations include: 

• Remove Veterans’ Exemptions from properties that were transferred from eligible to ineligible owners, retroactive to the date of transfer. 

• Implement controls to remove Veterans’ Exemptions retroactively to the date of transfer when new owners who do not demonstrate eligibility for them.

• Recover the $1,654,869 in unwarranted tax reductions that resulted from the improper continuation of Veterans’ Exemptions after the properties were transferred to new, presumptively-ineligible owners.

• Verify whether homeowners eligible for Veterans’ Exemptions are deceased as reported by the Social Security Administration (SSA) and this audit report, and determine whether the current property owners are eligible for the exemption as qualified recipients.

• Implement controls to remove the exemptions from properties whose eligible owners are deceased, retroactive to the date of death. 

• Recover the $798,346 in unwarranted tax reductions that resulted from the improper continuation of Veterans’ Exemptions after the qualifying homeowners died.

• Investigate whether the 456 cooperative units and 115 other properties that have continued to receive Veterans’ Exemptions following the death of the eligible veteran-homeowner are currently owned by eligible individuals.

• Recover the $915,173 in unwarranted tax reductions improperly granted to properties containing four or more units. 

• Remove the unwarranted Veterans’ Exemptions from properties owned by either corporations or LLCs. 

• Implement adequate controls to prevent properties owned by corporations or LLCs from receiving Veterans’ Exemptions and school tax exemptions.

• Implement computer edit checks that will automatically:
  • Reject Veterans’ Exemptions for properties owned by corporations and LLCs;
  • Prorate Veterans’ Exemptions for properties that contain more than four units; and
  • Reject multiple Veterans’ Exemptions for each on property owned by an individual veteran or other eligible owner.

To read the full audit, click here.

A.G. Schneiderman Announces Criminal Guilty Plea And Multi-Million Dollar Civil Settlement With Narco Freedom

Narco Freedom Defrauded Medicaid And Exploited Its Patients By Forcing Them To Attend Excessive And Medically Unnecessary Substance Abuse Treatment Services

  Attorney General Eric T. Schneiderman announced today the guilty plea and a multi-million dollar civil settlement with Narco Freedom Inc., a Bronx-based not-for-profit provider of substance abuse treatment, for its participation in a criminal enterprise.  At the time of its indictment in 2015, Narco Freedom was an enrolled Medicaid provider that received nearly $40 million annually in taxpayer-funded reimbursement.  In its plea and a parallel State civil settlement agreement, Narco Freedom admitted today to stealing millions of dollars from the Medicaid program through the actions of its former chief executive officer Alan Brand and subsequent chief executive officer Gerald Bethea. In New York State Supreme Court, Bronx County, Narco Freedom, pled guilty to one count of Enterprise Corruption, a class B felony, three counts of Grand Larceny in the First Degree, a class B felony, and two counts of Offering a False Instrument for Filing the First Degree, a class E felony. 

“Narco Freedom operated a years-long criminal enterprise that ripped off taxpayers and took advantage of New Yorkers in need of substance abuse treatment,” said Attorney General Schneiderman. “Using Medicaid to further one’s bottom line at the expense of those who are struggling with abuse or addiction is shameful.”

The long-term investigation by the Attorney General’s Medicaid Fraud Control Unit (“MFCU”) culminated in a March 2015 indictment charging Narco Freedom and numerous executives with operating a criminal organization that defrauded Medicaid and syphoned funds meant for its patients for the enrichment of their own lifestyles.  That indictment included charges against Narco Freedom, the former chief executive Alan Brand, his son Jason Brand, Gerald Bethea, the chief executive at the time, and the controller Richard Gross.  The Attorney General also filed a civil action seeking asset forfeiture and other remedies, including treble damages and penalties under the New York State False Claims Act.  The indictment and civil action alleged that Narco Freedom stole at least $27 million from the Medicaid program by violating patients’ rights, submitting claims for excessive services, and by operating an unregulated residential treatment program.  The arrests and civil action stopped the illegal business practices of Narco Freedom that exploited the Medicaid program and thousands of Medicaid recipients, resulting in many millions of dollars in savings to Medicaid. 

As part of its plea and civil agreements, Narco Freedom acknowledged that it stole from Medicaid by seeking reimbursement for excessive and medically unnecessary services that it had required its patients to receive.  In addition to operating substance abuse treatment programs, Narco Freedom provided transitional housing.  Today, Narco Freedom acknowledged that it violated the rights of its residents and illegally conditioned residency on attendance at its own substance abuse treatment program.  Narco Freedom further admitted to filing false statements with various state agencies, including the New York State Department of Health and the Office of the New York State Attorney General, Charities Bureau, in efforts to deceive and defraud these agencies.  These filings were filed and signed by Alan Brand and the controller of Narco Freedom, Richard Gross. Prosecutions against Narco Freedom’s former executives remain pending.

Soon after Narco Freedom was indicted, a federal district court judge appointed a temporary receiver to take control of its finances and run the organization.  In September 2015, Narco Freedom ceased treating patients and transferred their care to other substance abuse treatment providers.  Narco Freedom filed for bankruptcy in January 2016. A bankruptcy trustee will take steps to dissolve Narco Freedom pursuant to the State’s not-for-profit corporation laws.  Earlier this month, the bankruptcy court approved a $118 million settlement to settle Narco Freedom’s outstanding government claims, including those of New York State and the federal government, though the precise amount to be distributed to the State in the bankruptcy proceeding is yet to be determined.

In court today, Supreme Court Justice Steven L. Barrett sentenced Narco Freedom to a conditional discharge. 

The Attorney General’s office has worked closely with various state agencies to ensure the continuity of care for all of the patients who used Narco Freedom’s services.  In particular, the Attorney General would like to thank the New York State Office of Alcoholism and Substance Abuse Services, the Office of the New York State Medicaid Inspector General, the New York State Department of Health, the Human Resources Administration of the City of New York, and the Civil Division of the United States Attorney’s Office for the Southern District of New York.

Please report suspected Medicaid fraud in New York State to the Attorney General’s Office at 800-771-7755.