Thirteen Defendants Charged In Manhattan Federal Court In Scheme To Take Over Ride-Sharing Driver Accounts

  Joon H. Kim, the Acting United States Attorney for the Southern District of New York, and David E. Beach, Special Agent in Charge of the U.S. Secret Service, New York Field Office (“USSS”), announced charges today against 13 individuals in connection with a scheme to defraud drivers of two ride-sharing companies (“Company-1” and “Company-2”) by accessing those drivers’ accounts without authorization in order to divert driver funds to bank accounts controlled by the defendants and other members of the scheme (the “Scheme”).  Through the course of the Scheme, the defendants compromised thousands of Company-1 and Company-2 driver accounts, and diverted millions of dollars from those accounts.  Defendants LOUIS PINA, MALIK GRAY, GEORGE JOSEPH, AKEEM KRUBALLY, THERESA OUTERBRIDGE, DEVON WILLIAMS, HAKEEM BALDEO, QUINTEEN LYNCH, KHALID NAZZAL, FRANCISCO VIRUET, JOHNNY SERRANO, THALIA CAQUIAS, and TANESHA FORD were charged in two Complaints (the “Complaints”) unsealed today in Manhattan federal court.  WILLIAMS, BALDEO, LYNCH, NAZZAL, VIRUET, CAQUIAS, and FORD were arrested today and presented this afternoon before U.S. Magistrate Judge Debra Freeman in Manhattan federal court. 

Acting Manhattan U.S. Attorney Joon H. Kim said:  “These 13 defendants allegedly developed a sophisticated scheme to swindle hard-working drivers out of their income.  Through elaborate identity theft and phishing, the defendants allegedly diverted millions of dollars from company accounts to line their own pockets.  Thanks to the skilled investigative work of the Criminal Investigators of the U.S. Attorney’s Office and the U.S. Secret Service, the defendants now will be held to account.”

David E. Beach, Special Agent in Charge of the USSS said:  “The success in this case demonstrates the investigative capabilities of the United States Secret Service and the collaborative efforts of our law enforcement partners, specifically the U.S. Attorney’s Office Southern District of NY, Federal Bureau of Investigation’s Westchester County Safe Streets Task Force, and Westchester County District Attorney’s Office.  The Secret Service will continue to develop innovative ways to protect the financial infrastructure of the United States and combat criminals who use emerging technologies to conduct business.”

According to allegations contained in the two Complaints[1]:

Overview of the Scheme

The charges in the Complaints result from a Scheme to defraud livery drivers and ride-sharing companies using mobile ride-sharing applications.  The Scheme targeted drivers associated with Company-1 and Company-2.  Scheme members called Company-1 and Company-2 drivers posing as Company-1 and Company-2 representatives, and deceived the drivers into providing unique personal identifiers and other information that was then used to obtain unauthorized access into the online Company-1 and Company-2 driver accounts.  Once members of the Scheme logged into Company-1 and Company-2 driver accounts without authorization, they altered information in those compromised accounts and diverted driver funds to bank accounts they controlled.

Overview of the Company-1 Scheme

With respect to the Scheme involving Company-1, members of the Scheme ordered rides on the Company-1 mobile application (“App-1”), which provided Scheme members with the driver’s name, picture, and an anonymized phone number so that the rider could communicate with the driver.  Scheme members canceled the rides shortly after receiving the driver’s anonymized phone number.  The Scheme members then called the driver on the driver’s anonymized telephone number impersonating a representative from Company-1.  During the call, the Scheme member would ask the driver for the driver’s true telephone number and, while remaining on the phone with the driver, the Scheme member would attempt to log into the driver’s Company-1 account.  The driver then received a text message from Company-1 containing a unique code on the driver’s cellphone, and the Scheme member impersonating a Company-1 representative then requested that the driver provide this unique code to the Scheme member.  In addition, during the call, Scheme members would request that the driver provide the driver’s license number. 

Using the victim driver’s telephone number, driver’s license number, and the unique code, Scheme members thereafter logged into the victim driver’s Company-1 account through App-1 or the Company-1 web interface without the driver’s authorization.  After Scheme members obtained unauthorized access to the victim driver’s account, they changed the bank account information associated with the account to a bank account that either they or another Scheme member controlled.  Once the victim driver’s account had been compromised and the bank account information altered, funds that the victim driver earned from Company-1 were diverted to Scheme members’ bank accounts.

Overview of the Company-2 Scheme

With respect to the Scheme involving Company-2, members of the Scheme ordered rides on the Company-2 mobile application (“App-2”), which provided Scheme members with the driver’s name, picture, and an anonymized phone number so that the rider could communicate with the driver.  Scheme members canceled the rides shortly after receiving the driver’s anonymized phone number.  The Scheme members then called the driver on the driver’s anonymized telephone number impersonating a representative from Company-2.  During the call, the Scheme member would ask the driver for the driver’s true telephone number.  The Scheme member would then tell the victim driver that Company-2 would be sending the driver a link to a website that the driver must use to verify the driver’s information in order to obtain a bonus from Company-2. 

Thereafter, the Scheme member sent the victim driver a link to a malicious website (the “Fraudulent Company-2 Website”), that was controlled by Scheme members.  The Fraudulent Company-2 Website was designed to appear as if it were a website maintained by Company-2, and requested, among other information, the driver’s login credentials, including the driver’s phone number, email address, and unique Company-2 password.  Once the victim driver had entered this information on the Fraudulent Company-2 Website, Scheme members used the driver’s login credentials to log into the driver’s account through App-2 or the Company-2 web interface without the driver’s authorization.  Once Scheme members logged into the victim driver’s Company-2 account, Scheme members changed the bank account information associated with the account to a bank account that either they or another Scheme member controlled.  Once the victim driver’s account had been compromised and the bank account information altered, funds that the victim driver earned from Company-2 were diverted to Scheme members’ bank accounts.

The Defendants' Participation in the Scheme

Through the course of the Scheme, the defendants compromised thousands of Company-1 and Company-2 driver accounts, and stole millions of dollars from Company-1 and Company-2 driver accounts.  After receiving unauthorized transfers from Company-1 and Company-2, Scheme members withdrew the fraudulent proceeds from bank accounts, typically through large cash withdrawals or large purchases. 

Scheme members played different, and, at times, multiple roles in the Scheme.  “Recruiters” – including LOUIS PINA, MALIK GRAY, GEORGE JOSEPH, and DEVON WILLIAMS – used social media, including Snapchat, to bring new people into the Scheme and to coordinate the Scheme. 

“Callers” – including LOUIS PINA, MALIK GRAY, GEORGE JOSEPH, DEVON WILLIAMS and HAKEEN BALDEO – made calls to drivers impersonating Company-1 and Company-2 representatives using either their personal phones or a service that allows users to mask the number they use to make phone calls to victim drivers, during which they tricked drivers into providing personal information to allow them to obtain unauthorized access to their driver accounts.

“Account Hackers” – including LOUIS PINA, AKEEM KRUBALLY, DEVON WILLIAMS, and JOHNNY SERRANO – logged into Company-1 and Company-2 driver accounts without authorization to change bank account information. 

“Money Receivers” – including LOUIS PINA, MALIK GRAY, GEORGE JOSEPH, AKEEM KRUBALLY, THERESA OUTERBRIDGE, HAKEEM BALDEO, QUINTEEN LYNCH, KHALID NAZZAL, FRANCISCO VIRUET, JOHNNY SERRANO, THALIA CAQUIAS, and TANESHA FORD – received unauthorized transfers into their bank accounts from Company-1 and Company-2 as a result of the Scheme, and then withdrew large amounts of cash from those accounts shortly following these unauthorized transfers. 

PINA, 23, of Bronx, NY; GRAY, 21, of Mount Vernon, NY; JOSEPH, 22, of Mount Vernon, NY; KRUBALLY, 21, of Mount Vernon, NY; OUTERBRIDGE, 27, of Mount Vernon, NY; WILLIAMS, 22, of Mount Vernon, NY; BALDEO, 20, of Rye Brook, NY; LYNCH, 27, of Mount Vernon, NY; NAZZAL, 22, of Yonkers, NY; VIRUET, 19, of Bronx, NY; SERRANO, 25, of Bronx, NY; CAQUIAS, 20, of Bronx, NY; and FORD, 21, of Mount Vernon, NY, are each charged with one count of conspiring to commit wire fraud, which carries a maximum sentence of 20 years in prison, one count of conspiracy to commit access device fraud, which carries a maximum sentence of seven-and-a-half years in prison, and one count of aggravated identity theft, which carries a mandatory sentence of two years in prison that must be imposed consecutively to any other sentence.  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 Criminal Investigators of the United States Attorney’s Office for the Southern District of New York and the USSS.  Mr. Kim further thanked the Westchester County District Attorney’s Office for their assistance and cooperation throughout this investigation, and also thanked the FBI’s Westchester County Safe Streets Task Force for their assistance. 

 

[1] As the introductory phrase signifies, the entirety of the texts of the Complaints and the descriptions of the Complaints set forth below constitute only allegations and every fact described should be treated as an allegation.

Correction Officer Sentenced To 16 Months In Connection With Cover-Up Of Inmate Assault

Officer Rodiny Calypso Lied Repeatedly on a Use of Force Report After Beating a Handcuffed Inmate in a Shower Stall

  Joon H. Kim, Acting United States Attorney for the Southern District of New York, announced today that RODINY CALYPSO, a former New York City Correction Officer, was sentenced today in Manhattan federal court to 16 months in prison for filing a false “Use of Force” report in connection with his beating of a handcuffed inmate at Rikers Island.  CALYPSO was found guilty of filing the false report on August 16, 2017, following a five-day jury trial at which he was also acquitted of one count of violating the civil rights of an inmate and one count of obstruction of justice.  U.S. District Judge Valerie E. Caproni imposed today’s sentence.

Acting Manhattan U.S. Attorney Joon H. Kim said:  “Today, Rodiny Calypso received the prison term that his cover-up deserved.  A day after being caught on videotape beating a handcuffed man at Rikers Island, Rodiny Calypso undermined the ensuing investigation by repeatedly lying on a report.  The integrity of investigations into Constitutional violations at New York’s jails and prisons is critically important, and lying to interfere with them can lead to a federal conviction, as well as time in prison.” 

In sentencing CALYPSO, Judge Caproni said:  “Make no mistake about it, this is a serious offense.  Other correction officers should think long and hard about telling the truth on the Use of Force forms.  It is important that they know that it’s not just that use of force that will get you in trouble, but lying to cover it up will, too.”  Judge Caproni added that “the message has to be that you will pay dearly, not just with the loss of your job, but with the loss of your liberty” if a correction officer files a false report.

According to the Complaint, Indictment, other documents filed in Manhattan federal court, and evidence presented at trial:

Rikers Island is a jail complex located in the Bronx, New York, maintained by the New York City Department of Correction.  At the time of his assault, the inmate (“Inmate-1”) was a pretrial detainee in the Otis Bantum Correctional Center (“OBCC”), a facility that houses, among other inmates, inmates in need of maximum security.  Inmate-1 was housed in 5 North, a dormitory area within the OBCC in which inmates were generally kept in solitary confinement in individual cells for 23 hours per day.  The shower facilities within 5 North were individual stalls, to be occupied by one inmate at a time, and to which inmates were brought handcuffed, then uncuffed through a port in the shower stall door, and then handcuffed again through the port before being brought out of the stalls by correction officers.

The Assault and Cover-Up

 Shortly before noon on February 27, 2014, CALYPSO relieved another correction officer at 5 North while Inmate-1 was in the shower.  Inmate-1 and CALYPSO had an extended and heated verbal exchange, during which CALYPSO picked up some personal items Inmate-1 had dropped outside the door through the port.  At one point, CALYPSO stepped away from the door and spoke to a fellow correction officer one level down within the dorm area.  That person left the dorm area and returned with another officer (“Officer-1”), who looked up at the shower area.

CALYPSO rear-cuffed Inmate-1 for removal and briefly looked down in the direction of the other officer.  CALYPSO then opened the door to the shower stall and, within seconds, sucker-punched Inmate-1 several times in the face.  He followed Inmate-1 into the shower area, where he put Inmate-1 into a headlock and punched him several more times in the head.  CALYPSO then began to lose his footing, and clung to Inmate-1’s side.  Officer-1 arrived in the stall at this point.  As Officer-1 restrained Inmate-1, CALYPSO regained his footing and elbowed Inmate-1 repeatedly – approximately five times – in the head.  As a result of the assault, Inmate-1 suffered lacerations to his face and the back of his head.  The entire assault was captured on surveillance video and witnessed by multiple inmates whose cells were positioned opposite the shower area.

The New York City Department of Correction issues directives governing the circumstances under which the use of force against inmates is appropriate.  Under these directives, force is to be used as a last resort, when an inmate in restraints is still dangerous to himself and others.  The directives also dictate how incidents in which force is used are to be reported – on a “Use of Force” report to be filled out truthfully and promptly.

A full day after the assault, in violation of the directives, CALYPSO filled out a “Use of Force Report” form on which he was supposed to report truthfully the circumstances of that assault.  Over multiple pages and numerous answer fields within the report, CALYPSO attempted to justify his conduct by lying about whether and how Inmate-1 had acted aggressively toward him and whether his violent response was necessary.  He also mischaracterized and misstated portions of the assault, omitting the punches he delivered while holding Inmate-1 in a headlock and claiming that he had hit CALYPSO only in the “upper torso” area.

CALYPSO was terminated from his job as a correction officer following his criminal conviction.

              

Mr. Kim praised the investigative work of the FBI.  Mr. Kim also thanked the New York City Department of Investigation, the New York City Department of Correction, Investigative Division, and the Bronx District Attorney’s Office for their assistance in the investigation.

A.G. Schneiderman Launches Webpage For New Yorkers To Report Misused Identities In FCC Net Neutrality Comment Process

Preliminary Investigation By AG’s Office and Public Reports Indicate FCC Comment Process Was Corrupted By Fake Comments

AG’s Office Encourages New Yorkers to Check if Their Identity Was Misused to Submit Fake Comments in Net Neutrality Debate

Federal Communications Commission—and Dozens of Other Federal Agencies—Rely On Public Comments to Help Determine Sweeping Federal Policies That Affect All New Yorkers

  New York Attorney General Schneiderman announced the launch of a new webpage for New Yorkers at ag.ny.gov/fakecomments to check whether their identities were wrongfully used without their consent during the FCC’s public comment process on net neutrality – and to report that misuse to the Attorney General’s office.

“Everyone should be concerned about potential corruption of the federal policy making process,” said Attorney General Schneiderman. “The FCC is refusing to help us—or anyone else—conduct a serious investigation, so we’re asking New Yorkers to help us get to the bottom of what happened. New Yorkers deserve a fair and transparent process – not only here where the future of their internet access hangs in the balance, but in every case where the government is considering a policy that affects Americans’ daily lives.”

The webpage launches after Attorney General Schneiderman announced last week, in an open letter to the FCC, that his office has for six months been investigating the submission of enormous numbers of fake comments on the possible repeal of net neutrality rules using real Americans’ identities. An analysis by the Attorney General’s office found that tens of thousands of these comments may have misused the real names and addresses of New Yorkers; in all, hundreds of thousands of Americans likely were victimized in the same way, including tens of thousands per state in California, Georgia, Missouri, Ohio, Pennsylvania, Texas, and possibly others. Impersonation and other misuse of a person’s identity violates New York law.

Before releasing Attorney General Schneiderman’s open letter, the Office of the Attorney General contacted the FCC and its top officials—including Chairman Ajit Pai, three successive acting FCC General Counsels, and the FCC’s Inspector General—at least nine times to request assistance in its investigation. The FCC has been unwilling to provide records related to its public comment system that are necessary to investigate which bad actor or actors are behind the misconduct. This marks a departure from past practice where the FCC has cooperated with the Office of the Attorney General on confidential investigations into practices that had harmed New Yorkers and residents of other states.

New Yorkers can search whether their identities have been misused and assist in Attorney General Schneiderman’s investigation by heading to ag.ny.gov/fakecomments and taking the following steps:

Go to the FCC comment system webpage where you can search for filed comments.

Search for comments that may have misused your identity:

1. Locate the “Search Full Text” field at the top of the search form and enter your first and last name (no initial). (The search page does not allow you to use the “Name of Filer” field to search on your first and last name, so make sure you use the “Search Full Text” field.)
2. Click the "Search" button at the bottom of the web page.
3. If results appear, click on any comment that uses your name, and when the comment appears review the name, the address, and the comment text.  (If no results appear, your identity most likely was not misused.)

If any comment you review uses your name in combination with your current or past address without your permission, locate the ID number on the upper left of the comment page and fill out the form at ag.ny.gov/fakecomments.

Comptroller Stringer Releases Fact Sheet Outlining 20 Ways the GOP Tax Plans Hurt New Yorkers

The Republican tax plans give corporations and the very top tax breaks — and pays for them by cutting healthcare and increasing taxes on working families

“It doesn’t matter if you’re a Democrat or a Republican — if you’re a New Yorker, these bills go after you.” — NYC Comptroller Stringer

   Just days after Republicans in the House of Representatives passed their tax reform plan, and as the full Senate begins to debate its own tax bill, New York City Comptroller Scott M. Stringer today released a fact sheet outlining 20 ways the GOP tax plans affects New Yorkers.

The fact sheet highlights the effects of eliminating state and local tax (SALT) deductions, repealing Obamacare, boosting taxes on low-income and middle-class families, and cutting investment in affordable housing that will make it harder for working New Yorkers to get ahead. In addition, the fact sheet shows how the GOP plans to permanently lower corporate taxes, slash taxes for the top one percent of earners in New York City, and even give private jet owners a tax break — helping wealthy Americans at the expense of everyday families.

“The GOP tax plans would make robber barons blush. Republicans might talk about fighting for the middle class, but they’re working to strip healthcare from millions and pickpocket working families to pay for giant breaks for big corporations,” New York City Comptroller Scott M. Stringer said. “Slashing SALT is a direct assault on New York City. It doesn’t matter if you’re a Democrat or a Republican — if you’re a New Yorker, these bills target you. They’re economically backwards and morally wrong. That’s why my office is going to keep crunching the numbers that New Yorkers need to fight back against these bills.”

To view the fact sheet as a PDF, click here.

The 20 ways the GOP tax plans hurt New Yorkers include:

1 - The GOP Tax Plans are first and foremost a tax cut for big corporations and the very wealthy that is paid for through increased taxes on hardworking, low- and moderate-income New Yorkers.

2 - Many New York City residents could see higher taxes as a result of the elimination or curtailment of state and local tax deductibility for individuals, which currently benefits 1.3 million city residents.

3 - The House plan would result in almost 700,000 New York City residents paying more in taxes. Almost half of those who would pay more are families and individuals with incomes below $100,000, who would see their taxes rise by an average $800, primarily as a result of the elimination of state and local tax deductibility.

4 - Eliminating or limiting the deduction for local property taxes will lower home values – usually the single biggest source of retirement savings for middle-class households.

5 - But while individuals would lose the valuable benefit from deducting state and local taxes, corporations would still be able to do so.

6 - Under the House version, the highest income earners in New York (the top 1%) would see average tax cuts of over $100,000 – far in excess of the average 1 percent cut for families with incomes under $100,000.

7 - The Tax Plans make permanent cuts to corporate tax rates but phase out tax cuts that benefit working people and families. A decade from now, while large corporations will still be paying less, the tax benefits seen by everyday New Yorkers will be gone.

8 - The Plans favor some types of businesses over others: individuals with income from real estate and oil businesses would get significantly bigger tax breaks than the doctors, lawyers, architects and other service professionals that are central to New York City’s economy.

9 - The Tax Plans are an assault on New York City’s knowledge economy: they would tax university endowments, tax graduate fellowships, raise the cost of capital for non-profit hospitals, universities, social service and cultural institutions, and eliminate the deduction for student loans – worth $309 million to 279,000 New Yorkers in 2015.

10 - The House Plan threatens affordable housing by eliminating Private Activity Bonds and their associated Low Income Housing Tax Credits, which finance over $1 billion in affordable housing development in New York City annually.

11 - The Senate Tax Plan would repeal Obamacare, resulting in 843,000 New Yorkers becoming uninsured and cutting Medicare by $1.7 billion across the state.

12 - Moreover, under the House Tax Plan, taxpayers with large medical expenses will be prohibited from deducting those expenses.  In 2015, 125,000 New York City residents deducted $1.2 billion in medical expenses from their taxes.

13 - The Plans would curtail charitable contributions, since many individuals would no longer deduct these from their income. In 2015, 26 percent of New York City filers took advantage of the deduction, averaging almost $10,000 in charitable giving per filer.  That’s over $10 billion in support to food pantries, domestic violence victims, museums and cultural institutions, and much more.

14 - Under the House Tax Plan, when one of the 92,000 New York City public school teachers buys supplies for their classroom, they will no longer be able to deduct that expense.

15 - The Tax Plan passed by the House raises costs for state and local governments: it would tax certain earnings of public pension funds, and limit the refinancing of bonds, further raising costs for local taxpayers.

16 - The House Plan would trigger federal budget cuts that could result in elimination of over $190 million per year in promised federal interest subsidies for City bonds issued under the 2009 stimulus act.

17 - Under the House plan, starting in 2024, the estate tax will disappear completely. This amounts to a $150 billion tax break for the Mar-A-Lago set.

18 - The Senate Plan provides a tax break for owners of private jets.

19 - The House Tax Plan eliminates the Work Opportunity Tax Credit, which encourages businesses to hire, among others, unemployed veterans and people with disabilities.

20 - The Tax Plans would explode the federal deficit by $1.5 trillion over a ten year period.

Recording Artist And Performer DMX Pleads Guilty In Manhattan Federal Court To Tax Fraud Violation

  Joon H. Kim, the Acting United States Attorney for the Southern District of New York, and James D. Robnett, Special Agent in Charge of the Internal Revenue Service, Criminal Investigation (“IRS-CI”), announced that EARL SIMMONS, an internationally known recording artist, performer, and actor known professionally as “DMX” and “X,” pled guilty today in Manhattan federal court to one count of tax fraud for evading the payment of income taxes in the period from 2010 through 2016.  In total, during that time period, SIMMONS engaged in a scheme to conceal millions of dollars of income from the IRS and to avoid paying $1.7 million of tax liabilities.  SIMMONS pled guilty before U.S. District Judge Jed S. Rakoff.

Acting U.S. Attorney Joon H. Kim said:  “Today, Earl Simmons, the actor, producer and recording artist known as DMX, admitted to systematically cheating on his taxes.  By insisting to be paid in cash whenever possible and having royalty payments diverted to the accounts of financial surrogates, Simmons concealed hundreds of thousands of dollars of income from the IRS.  Today, Simmons made a choice between ‘Right or Wrong,’ and did the right thing, admitting his guilt, and agreeing to pay his tax liabilities.  No matter who you are or whatever fame you may have achieved, the law applies equally to all, and no one is exempt from the shared obligation to pay our taxes.”

IRS-CI Special Agent in Charge James D. Robnett said:  “Mr. Simmons skirted his responsibilities when he chose to ignore his duty to pay his taxes. We should not forget that the ultimate victims in tax fraud cases are the honest US taxpayers who file and pay their taxes. This guilty plea shows that IRS-Criminal Investigation is working to ensure all taxpayers file and pay their fair share.”

According to the Indictment and statements made at today’s plea proceeding:

SIMMONS, known professionally as “DMX” or “X,” worked as a recording artist, performer, and actor.  Beginning in 1997, SIMMONS released a series of hip-hop albums that sold millions of records.  Many of his albums went platinum and occupied the top positions on musical charts.  During his career, SIMMONS has performed at venues across the United States and around the world, and has acted in motion pictures.

As a result of the income SIMMONS earned from sources including musical recordings and performances, from 2002 through 2005 he incurred federal income tax liabilities of approximately $1.7 million.  Those liabilities went unpaid, and in 2005, the IRS began efforts to collect SIMMONS’s unpaid tax liabilities. 

During the period from 2010 through 2015, SIMMONS earned over $2.3 million, but SIMMONS did not file personal income tax returns during that time period.  Instead, he orchestrated a scheme to evade payment of his outstanding tax liabilities, largely by maintaining a cash lifestyle, avoiding the use of a personal bank account, and using the bank accounts of nominees, including his business managers, to pay personal expenses.  For example, SIMMONS received hundreds of thousands of dollars of royalty income from his music recordings.  SIMMONS caused that income to be deposited into the bank accounts of his managers, who then disbursed it to him in cash or used it to pay his personal expenses.  SIMMONS also participated in the “Celebrity Couples Therapy” television show in 2011 and 2012 and was paid $125,000 for his participation.  When taxes were withheld from the check for the first installment of that fee by the producer, SIMMONS refused to tape the remainder of the television show until the check was reissued without withholding taxes.

SIMMONS took other steps to conceal his income from the IRS and others, including by filing a false affidavit in U.S. Bankruptcy Court that listed his income as “unknown” for 2011 and 2012, and as $10,000 for 2013.  In fact, SIMMONS received hundreds of thousands of dollars of income in each of those years.

SIMMONS, 46, of Yonkers, New York, faces a maximum sentence of five years in prison.  As part of his plea agreement, SIMMONS is also required to pay restitution to the IRS.  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.  SIMMONS is scheduled to be sentenced by Judge Rakoff on March 29, 2018, at 4:00 P.M.

Mr. Kim praised the work of the Internal Revenue Service, Criminal Investigation.

Dentist And Others Charged In Medicaid Health Care Fraud Scheme At Upper Manhattan Dental Clinic

  Joon H. Kim, the Acting United States Attorney for the Southern District of New York, and Scott J. Lampert, the Special Agent in Charge of the New York Regional Office of the United States Department of Health and Human Services Office of Inspector General (“HHS-OIG”), announced the arrests of MEHMET DIKENGIL, ANNA JONES, and LUIS OMAR VARGAS for their participation in a scheme to defraud Medicaid of more than $400,000.  DIKENGIL, the owner of Dental Express Broadway, P.C., a dental clinic located in upper Manhattan, employed JONES, an officer manager, and VARGAS, an unlicensed dental provider, in furtherance of the health care fraud, which involved billing Medicaid for dental services that were not provided to patients.  DIKENGIL and VARGAS were arrested this morning in New Jersey.  JONES was arrested this morning in Queens, New York.  The defendants will be presented later today in Manhattan federal court before Chief Magistrate Judge Debra Freeman.

Acting Manhattan U.S. Attorney Joon H. Kim said:  “As alleged, these defendants, including a licensed dentist, defrauded Medicaid time and again by billing for services that were never provided.  Together with our law enforcement partners, we will aggressively prosecute those who defraud federal programs that provide care for low income New Yorkers.”

HHS-OIG Special Agent-in-Charge Scott J. Lampert:  “Health providers, including an unqualified ‘dentist,’ allegedly siphoned money from the vital Medicaid program to pay for services not needed or never delivered. Patients and taxpayers need to know that suspected government health program fraud will be investigated and prosecuted.”    

According to the Complaint[1] unsealed in federal court:

From at least January 2017, up to and including November 2017, DIKENGIL, a licensed dentist and owner of Dental Express Broadway, P.C. (the “Dental Clinic”), JONES, the office manager at the Dental Clinic, and VARGAS, an unlicensed dental provider at the Dental Clinic, engaged in a health care fraud conspiracy.  In furtherance of the fraud, the defendants submitted numerous reimbursement claims to Medicaid for having provided Medicaid patients with dental services, when, in fact, they did not provide such services.  Patients were recruited to the Dental Clinic where they were paid kickbacks of $25 to undergo minimal dental procedures.  The Dental Clinic then billed Medicaid for any dental services provided to the patients, as well as for additional dental services that were not provided.  In addition, VARGAS, although not licensed as a dentist, performed dental work and then billed Medicaid under DIKENGIL’s name.  In total, the Dental Clinic submitted fraudulent Medicaid claims totaling more than $400,000.

The Complaint charges MEHMET DIKENGIL, 69, of Chester, New Jersey, ANNA JONES, 59, of Queens, New York, and LUIS OMAR VARGAS, 45, of Roselle, New Jersey, with conspiracy to commit health care fraud and health care fraud.  The maximum sentence on each count is 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 defendants will be determined by the judge.

Mr. Kim praised the investigative work of HHS-OIG.  Mr. Kim also thanked the New York City Human Resources Administration for their assistance during the investigation.

The charges contained in the Complaint are merely accusations, and the defendants are 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 below constitute only allegations and every fact described should be treated as an allegation.

NYPD Officer Charged With Narcotics, Weapons, Fraud, Identity Theft, And Counterfeit Currency Offenses

  Joon H. Kim, the Acting United States Attorney for the Southern District of New York, William F. Sweeney Jr., the Assistant Director-in-Charge of the New York Office of the Federal Bureau of Investigation (“FBI”), and James P. O’Neill, the Police Commissioner of the City of New York (“NYPD”), announced the unsealing of a criminal complaint charging REYNALDO LOPEZ with attempting to traffic narcotics and using a firearm in furtherance of that offense, access device fraud, conspiracy to commit access device fraud, aggravated identity theft, and passing counterfeit obligations.  LOPEZ is a police officer with the NYPD, assigned to the Anti-Terrorism Unit in the Transit Bureau.  LOPEZ was presented yesterday before U.S. Magistrate Judge Debra Freeman.

Acting U.S. Attorney Joon H. Kim said:  “Reynaldo Lopez, a police officer sworn to serve and protect his community, instead allegedly engaged in a shocking crime spree.  Lopez allegedly attempted to traffic nearly three kilograms of heroin, stole people’s identities to create and use credit cards for his own use, and knowingly used counterfeit money.  Police officers who violate their oath and break the laws betray not only the public, but their fellow officers who have nobly committed themselves serving and protecting our communities.”

FBI Assistant Director William F. Sweeney Jr. said:  “The list of allegations Officer Lopez faces is troubling on many levels. Not only is Lopez accused of participating in a fraudulent credit card operation and a counterfeit money scheme, he’s also accused of misusing his position as a police officer to engage in the trafficking into our city of what he believed to be heroin.  The NYPD works diligently day in and day out to protect the public from those who engage in these types of crimes. As evidenced by the charges today, nobody is exempt from that practice.”

NYPD Police Commissioner James P. O'Neill said:  “Police officers are sworn to protect and serve the public.  As alleged, the defendant violated our oath, breaking the law, repeatedly, to traffic narcotics or steal others' identities.  Today he finds himself under arrest and charged criminally in federal court after eroding the trust we work on building every day with the public.”

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

LOPEZ is an NYPD police officer assigned to the Transit Bureau’s Anti-Terrorism Unit. 

On November 29, 2017, LOPEZ attempted to traffic approximately three kilograms of heroin from a location in New Jersey to the Bronx, New York.  LOPEZ agreed with another undercover police officer (“UC-2”) to transport what LOPEZ believed were three kilograms of heroin to a drug dealer located in the Bronx, New York, under LOPEZ’s protection as an NYPD police officer, and was arrested when he attempted to make the delivery.  LOPEZ also possessed a firearm in furtherance of this attempted narcotics trafficking.

From May 2017 to the present, LOPEZ engaged in a scheme to create and utilize fraudulent credit cards, including by using identity information stolen from his victims.  He was part of a counterfeit credit card operation whose participants used stolen or otherwise illicitly obtained personal identifying information to create fraudulent credit cards, and then used the fraudulent credit cards to purchase merchandise for themselves.  As part of his participation in these crimes, LOPEZ also possessed and used a device that applies electronic data to blank physical credit cards.

From October 2017 to the present, LOPEZ possessed, passed, and used counterfeit United States currency.  In multiple recorded conversations with an undercover NYPD officer (“UC-1”), LOPEZ discussed his possession of counterfeit money, stating that he previously had successfully used some of the counterfeit currency.  LOPEZ also showed UC-1 a stack of currency that LOPEZ claimed was counterfeit, and provided UC-1 with a counterfeit $100 bill.

LOPEZ, 26, of Brooklyn, New York, was arrested yesterday in the Bronx, New York.  LOPEZ is charged with one count of access device fraud, which carries a maximum sentence of 15 years in prison; one count of conspiracy to commit access device fraud, which carries a maximum sentence of five years in prison; one count of aggravated identity theft, which carries a mandatory sentence of two years in prison; one count of passing counterfeit obligations, which carries a maximum sentence of 20 years in prison; attempted possession of one kilogram and more of mixtures and substances containing heroin, which carries a mandatory minimum sentence of 10 years in prison and a maximum of life in prison; and firearms use, carrying, and possession in connection with a narcotics trafficking offense, which carries a mandatory sentence of five years in prison.

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

Mr. Kim praised the FBI and the NYPD for their outstanding work on the investigation.  He added that the investigation is continuing.

 

[1] The charges contained in the Complaint are merely accusations, and LOPEZ is presumed innocent unless and until proven guilty.

NYC DEPARTMENT OF CORRECTION CAPTAIN INDICTED FOR ASSAULT ON RIKERS ISLAND INMATE; FOUR OFFICERS CHARGED WITH COVERUP

  Bronx District Attorney Darcel D. Clark and Department of Investigation Commissioner Mark G. Peters today announced the indictment of a New York City Department of Correction Captain for beating an 18-year-old inmate in a Rikers Island jail and four Correction Officers for aiding the captain in covering up the incident. 

  District Attorney Clark said, “A veteran, ranking member of the Department of Correction allegedly beat and kicked an inmate who had not assaulted him, and then enlisted his subordinates to file false reports to hide his crime. The culture of cover-up must end if we are to rid Rikers Island of violence. Any correction officer who conceals a crime to protect a fellow officer will be prosecuted to the fullest extent of the law.”

 Commissioner Peters said, “These correction officers allegedly engaged in the ultimate abuse of power: beating an inmate and doctoring forms to cover-up the crime. It’s a vicious and deceitful scenario we’ve seen too many times over the course of our years-long investigations of DOC. DOI thanks the Bronx District Attorney’s office for its continued partnership in this and many cases investigating violence and corruption on Rikers Island.” 

 District Attorney Clark said DOC Captain Sandy Arkhurst, 42, was indicted on second degree Assault and third-degree Assault; and Captain Arkhurst, Correction Officers John Penafiel, 29, Christopher Squillaro, 31, Orlando Rivera, 58, and Michael Nicholson, 42, were indicted on seven counts of first-degree Falsifying Business Records. They were arraigned today before Bronx Supreme Court Justice Robert Neary and bail was set at $10,000 for Captain Arkhurst and $5,000 for the officers. They are due back in court on February 28, 2018. If convicted on the top charge, Captain Arkhurst could face two to seven years in prison, and the other defendants could face up to 1 1/3 to four years in prison.

 According to the investigation, on June 3, 2016, the defendants, who are part of a DOC PROBE team, responded to the Eric M. Taylor Center where inmate Rodolfo Rodriguez, 18 years old at the time, was refusing to enter his housing area. CO Nicholson then peppersprayed Rodriguez, and cuffed the inmate’s hands behind his back. COs Nicholson, Penafiel and Squillaro then escorted Rodriguez to a shower area to wash off the pepper spray.

 According to the investigation, Captain Arkhurst allegedly hit Rodriguez using his fists and a wooden baton, and kicked the inmate. He suffered multiple bruises and several broken teeth. Audio of the incident captured Rodriguez screaming and saying “No…Chill.”

 The defendants filed DOC Use of Force reports that said Rodriguez banged his head on the wall, and that he attacked the Captain while trying to run out of the room, and other allegedly false statements.

 District Attorney Clark thanked DOI, specifically Assistant Inspector General Mercedes Bayon, under the supervision of Deputy Inspector General Whitney Ferguson, Associate Commissioner Paul Cronin, Deputy Commissioner/Chief of Investigations Michael Carroll and First Deputy Commissioner Lesley Brovner, as well as DOC Investigation Division Investigators Damon Storer and Santiago Cornejo for their assistance.

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