A.G. Schneiderman Announces Indictments Of Construction Contractors For Failing To Pay More Than $280,000 In Wages To Workers On Public Work Projects

Vickram, Gayatri, And Ravi Mangru—Operators Of  Vick Construction and AVM Construction Corp.—Allegedly Failed To Pay Prevailing Wages, Falsified Documents On Construction Work at Several NYC Public Schools

To Date, Attorney General Schneiderman Has Won Back Nearly $30 Million in Stolen Wages for Over 21,000 Workers Across New York

   Attorney General Eric T. Schneiderman today announced an eight-count indictment of Vickram Mangru, his wife Gayatri Mangru, and son Ravi Mangru, of Valley Stream, NY, for allegedly failing to pay proper prevailing wages to workers and falsifying business records related to a publicly-funded New York City construction project.

Between 2012 and 2015, the New York City Department of Education Division of School Facilities contracted Vick Construction and AVM Construction Corp. for a development and repair project at several Bronx public schools. Vickram Mangru owned and operated Vick Construction between 2012 and 2014 and Gayatri Mangru and Ravi Mangru owned AVM Construction Corp. between 2014 and 2015. However, Vickram Mangru ran the day-to-day operations of both companies. 

As alleged in the indictment, Vickram Mangru created AVM Construction Corp. as an extension of Vick Construction—which had previously been debarred and banned for a five-year period from performing public work projects by the New York City Comptroller’s Office for failing to pay proper prevailing wages to workers. As today’s indictment alleges, an investigation conducted by the Attorney General uncovered that the pervasive non-payment of prevailing wages and falsification of business records continued uninterrupted between both companies, resulting in the combined underpayment of $281,630.09 to several former employees of both companies.

“The law is clear: employers must pay their staff the prevailing wage on any publicly-funded project,” said Attorney General Schneiderman. “These defendants allegedly underpaid their employees for years — and tried to evade the law by closing down one sham business and opening up another. We have zero tolerance for this sort of behavior, and will continue to ensure all New Yorkers are paid a fair wage for a fair day’s work.”

The indictment further alleges that between December 22, 2012 and April 12, 2014, Vickram Mangru—as owner of Vick Construction—failed to pay several of his employees’ proper prevailing wages for construction and repair work on several public schools in the Bronx. State law requires that on certain construction projects designated as “public works,” workers must be paid a pre-determined industry minimum wage per hour, plus a benefit rate, collectively known as a “prevailing wage rate.” Instead of paying this prevailing wage rate, the investigation revealed that Vickram Mangru allegedly paid his workers between $120 and $160/day for 40-50 hours worked per week – an amount far less than what his employees were owed under the prevailing wage rate. To cover up the crime, Vickram Mangru falsified Certified Payroll Records and Reports submitted to the New York City Department of Education by claiming that he did pay workers the proper prevailing wage rate. However, bank checks subpoenaed by the Attorney General revealed that Vickram Mangru was lying about those payments to his workers. As a result, Vickram Mangru and Vick Construction were debarred by the New York City Comptroller’s Office from bidding on or being awarded any public works projects for five years in 2013. Undeterred, Vickram Mangru continued operating Vick Construction and allegedly continued failing to pay prevailing wages at the same Bronx, NY public schools. 

In April 2014, Vick Construction ceased operation and AVM Construction Corp. was formed by Gayatri and Ravi Mangru. However, the Attorney General’s investigation showed that Vickram Mangru allegedly continued to run the day-to-day operations that included the same type of construction work on the same Bronx public schools with the same employees. It is alleged that between April 13, 2014 and February 14, 2015, Vickram, Gayatri and Ravi Mangru continued to pay AVM Construction Corp. employees daily rates well below the proper prevailing wage rate, and that Gayatri Mangru falsified Certified Payroll Records and Reports to cover up the crime. 

The eight-count indictment filed in Bronx Supreme Court, Criminal Division, charges Vickram Mangru with one count of Failure to Pay Prevailing Wages and Benefits, a class “D” felony; three counts of Falsifying Business Records in the First Degree (in connection with Vick Construction), a class “E” felony. Vickram, Gayatri, and Ravi Mangru, as well as AVM Construction Corp., are charged with one count of Failure to Pay Prevailing Wages and Benefits (in connection with AVM Construction Corp.),  a class “D” felony. Additionally, Gayatri Mangru and AVM Construction Corp. are charged with three counts of Falsifying Business Records in the First Degree (in connection with AVM Construction Corp.),  a class “E” felony . All defendants face 2 1/3 to 7 years in prison if convicted of the top count. Vickram Mangru was previously arrested in May in connection with these charges and upon this indictment, Vickram Mangru, Gayatri Mangru, and Ravi Mangru were formally arraigned in Bronx Supreme Court on November 6, 2017.  The defendants are due back in court on February 7, 2018. 

To date, Attorney General Schneiderman has won back nearly $30 million in stolen wages for over 21,000 workers across New York. This case represents the latest in the Attorney General’s enforcement efforts to stop wage crimes throughout the state. Most recently, the Attorney General has:

• Convicted the owner of Mical Home Health Care Agency in Peekskill, NY of defrauding 67 employees out of over $135,000 in wages. The defendant was sentenced to 1 year in jail.
• Arrested and indicted the owners of J&D Painting in Westchester, NY for allegedly failing to pay six workers nearly $20,000 in wages.
• Arrested and indicted the owner of Southampton Princess Diner for allegedly stealing over $82,000 in wages from 13 employees. 

The Attorney General thanks the New York City Comptroller’s Office, specifically Constantine Kokkoris Chief of the Bureau of Labor and the Comptroller’s Office’s Bureau of Labor Law Supervising Attorney Michael Turilli, Agency Attorney Caroline Friedman, Management Auditor Ilona Stadnicka, as well as the Comptroller’s Office Director of Investigations Francisco Gonzalez and Investigator Dwayne Gibson.  The Attorney General also thanks the New York City Department of Education Division of School Facilities Deputy Director of Procurement Kimberly De Vine as well as Labor Law Investigator David Coles.   

The investigation was handled for the Attorney General’s Office by Investigators Frank Tirri and Ray Almodovar and Supervising Investigator Sylvia Rivera, under the supervision of Deputy Chief Investigator John McManus and Chief Dominick Zarrella.

The charges are merely accusations and all defendants are presumed innocent unless and until proven guilty in a court of law.

100 PERCENT

100 PERCENT

By Robert Press

What Happened?

  I have been asked what happened to my political column in the Bronx Voice. It was not my choice, and I will leave it at that. I have made it a policy not to say anything bad about previous connections, but I was not given a reason why the column was halted. Yes I was getting information that was turning out to be factual, Yes I did call the winning percentage of the Democratic primary in the 13th City Council race to the percentage point 39%, Yes the I was in the middle of several hot stories, and Yes I did not pull any punches in the column. 

  It seems when you are trying to be as objective as possible there are those who see it as a threat. Maybe it was the fact that after winning races by over 90% every time, when you criticize some one for winning an open seat with only 42 %, certain people don't like it. Since the 32nd State Senate seat will soon be an open seat now that State Senator Ruben Diaz Sr. has become Councilman Elect Ruben Diaz Sr. there should be a special election to fill his soon to be vacant state senate seat. I know that is what current Assemblyman Luis Sepulveda is hoping for, and the reason is that he can run for the state senate while still being an Assemblyman. If there was to be no special election Assemblyman Sepulveda would have to decide which seat in Albany he would go for, while leaving the other seat for someone else. However in a special election any registered voter can run, as long as you move into the district (within thirty days) should they win. 

  Then there is the 80th Assembly District which will also be vacant soon, and may have a special election called to fill that vacancy. The reason many people say there will be a special election is that there is another vacant State Senate seat in Westchester County. Both vacant State Senate seats were held by Mainline Democrats, and should be won by Democrats that is unless the person who wins the vacant 32nd district joins the IDC, and the person who wins the vacant Westchester seat is a Republican. 

  The Independent Democratic Conference or IDC is now an eight member group of elected Democrats who instead of blindly listening to Democratic State Senate bosses, have become a conference that is trying to push Democratic values, while working the other side of the isle. This has paid off for the IDC members who have climbed the ladder of success for their districts. Any IDC member who would leave the IDC would find themselves back at the bottom of the ladder, and their districts would suffer. 

  As for the political column 100 PERCENT, here and on my facebook page 100 PERCENT is where you will be able to find this column, that is unless I find a new home for it (which is already in the works). As for me I will continue to do my job, but I am also looking into doing consulting work on campaigns like I should have done this past year. I am already speaking to more than one serious candidate, and I am open to listening to others. The coming year features races for Congress, State Senate, and State Assembly, not to mention all the party positions. 

  In future columns I will get back to the usual summary of events. If you have any comments you can e-mail me at 100percentbronxnews@gmail.com or call me at 718-644-4199.  

STATEMENT FROM BOROUGH PRESIDENT DIAZ RE: Senate Passage of the Trump Tax Bill

  “The Trump administration and the Republican-led Congress have partnered to pass a new tax law that is a disaster for the people of New York City.

 

“This new law eliminates local deductions and the ability to deduct medical expenses, both of which will only increase the burden on those who are struggling to get by.

 

“A rushed, hyper-partisan tax plan that benefits the super rich at the expense of the sick is not what this city and this nation deserve,” said Bronx Borough President Ruben Diaz Jr.

EDITOR'S NOTE:

It is interesting that Bronx Borough President Ruben Diaz Jr. cares for the people of New York City over the people of the Bronx who he is currently suppose to represent. 

Are we looking at another Bill de Blasio who is looking at his possible future aspirations over his current job?

Borough President Diaz just how many residents of the Bronx use form 1040 or 1040A to itemize deductions, and how many use 1040EZ where the taxpayer can not itemize deduction? Just how many residents of the Bronx will actually be hurt from the new tax code that Democrats are trying to sabotage?

When you can come up with exact numbers, then say so. At least Comptroller Scott Stringer came up with 20 reasons, and projected numbers, as small as they are for a city of 8.5 million people.

A.G. Schneiderman Announces Grand Jury Indictment Of Steve Pigeon, Kristy Mazurek, And David Pfaff

Western New York Political Operatives Charged With Knowingly and Willfully Engaging In Illegal Campaign Coordination 

  Attorney General Eric T. Schneiderman announced a grand jury indictment charging G. Steven Pigeon, 56, Kristy Mazurek, 46, and David Pfaff, 58, each with two class E felonies in violation of Election Law section 14-126 (5), related to unlawful coordination with candidates for the Erie County Legislature. The three defendants were previously arraigned on a felony complaint regarding the same charges on April 19, 2017 before the Hon. Donald F. Cerio, Jr., in New York State Supreme Court, Erie County. 

According to the indictment, Pigeon, Mazurek, and Pfaff are alleged to have knowingly and willfully engaged in illegal campaign coordination while acting on behalf of the Western New York Progressive Caucus (“WNYPC”) and Western New York Freedom (“WNYF”), “unauthorized political committees,” regarding the nomination for election of two political candidates in the September 10, 2013 Democratic primary. Each defendant faces a maximum sentence of four years if convicted on either count. The indictment stems from a joint investigation conducted by the Office of the Attorney General, the New York State Police, the Federal Bureau of Investigation (FBI), and the New York State Board of Elections.

The full indictment can be read here.

“Today’s indictment sends a clear message that we’ll continue to aggressively enforce our state’s election and campaign finance laws,” said Attorney General Eric Schneiderman. “As we allege, the defendants illegally coordinated with their own handpicked candidates for office, using a political committee to circumvent the law and undermine the integrity of our elections. These actions aren’t just illegal – they erode the public trust, and we intend to hold them accountable.”

According to the original felony complaint, Pigeon and Mazurek are alleged to have created WNYPC for the purpose of electing their preferred candidates and so that many of the candidates funded by WNYPC were relying almost entirely on the political committee for all campaign-related expenditures. In fact, as the felony complaint detailed, very little money was raised by the candidates themselves. For example, one candidate raised just $125 between July 27, 2013 and September 10, 2013, while WNYPC received approximately $283,000 in contributions and spent extensively in support of the candidate’s campaign – resulting in the vast majority of the candidate’s campaign-related costs being borne by WNYPC rather than the candidate’s committee.

As the original felony complaint also alleged, the defendants – on behalf of WNYPC – sought input from two candidates regarding campaign literature and arranged for them to appear at a photo shoot paid for by WNYPC. WNYPC also paid other expenses on behalf of one of the candidates that exceeded the $1,476.50 contribution limit of that race by over $15,000; and paid nearly $12,000 worth of expenses over the $2,192.70 contribution limit for the second candidate’s race. 

An unauthorized political committee is a political committee that is not specifically authorized by one candidate or a group of candidates to raise or spend money on their behalf for their election.  

Campaign coordination is a crime under the Election Law that is committed when a person knowingly and willfully solicits, organizes, or coordinates the activities of an unauthorized committee with the activities of a candidate or the candidate’s agents for the purpose of making expenditures on behalf of the candidate that exceed the contribution limit for that candidate’s race.

In addition to the new charges filed today, Pigeon is currently under indictment for the crimes of Bribery in the Second Degree, Bribery in the Third Degree, six counts of Rewarding Official Misconduct in the Second Degree, and Grand Larceny in the Third Degree. The charges arise from conduct involving former State Supreme Court Justice John A. Michalek, who resigned from the bench after pleading guilty to the felony charges of Bribe Receiving in the Third Degree and Offering a False Instrument for Filing in the First Degree on June 29, 2016. Pigeon is also under federal indictment for Conspiracy, Wire Fraud, Bribery, and Travel Act charges; that case is pending before Federal Magistrate Michael J. Roemer.

Assistant Attorney General Susan H. Sadinsky of the Attorney General’s Public Integrity Bureau and Assistant Attorney General Diane M. LaVallee of the Attorney General’s Criminal Enforcement and Financial Crimes Bureau are prosecuting this case under the supervision of Public Integrity Bureau Chief Daniel Cort and Deputy Bureau Chief Stacy Aronowitz. The investigation was handled by Supervising Investigator Richard Doyle and Investigator Brian G. Ross of the Investigators Bureau, which is led by Deputy Chief Antoine Karan and Chief Dominick Zarrella, and Special Agent Brian A. Burns of the Federal Bureau of Investigation. Senior Analyst Robert Vanwey of the Attorney General’s Office also worked on the investigation. The Attorney General thanks Chief Enforcement Counsel Risa Sugarman and the New York State Board of Elections for their vital work on the case.

The charges are merely accusations and the defendants are presumed innocent unless and until proven guilty in a court of law.

A.G. Schneiderman Announces Indictment Charging Rensselaer County DA Joel Abelove With Official Misconduct And Perjury

  New York Attorney General Eric T. Schneiderman announced a grand jury indictment charging Rensselaer County District Attorney Joel Abelove with two counts of official misconduct and one count of perjury in the first degree. The charges stem from Abelove’s handling of the April 2016 death of Edson Thevenin, a civilian who was shot and killed during an encounter with Troy police.

In July 2015, Governor Cuomo signed Executive Order No. 147, appointing the Attorney General as special prosecutor in cases where a law enforcement officer causes the death of an unarmed civilian or where there is a significant question as to whether the civilian was armed and dangerous. Following the death of Edson Thevenin during an interaction with Troy Sergeant Randall French, the Attorney General’s Special Investigations and Prosecutions Unit informed Abelove that it needed further information to determine whether the death fell within the Attorney General’s jurisdiction, pursuant to the Executive Order.However, as the Attorney General’s office has alleged, instead of providing that information, Abelove quickly and surreptitiously presented the case to a grand jury.

In violation of both his legal and ethical obligations, Abelove allegedly withheld material evidence from the grand jury, effectively coopting its ability to make an informed decision about the matter – with the inevitable and intended result that no charges were brought against French. Furthermore, Abelove allegedly took the extraordinary step of conferring immunity upon French before the grand jury even took a vote, seeking to protect French from any potential future prosecution in the Thevenin shooting.

On April 29, 2016, Governor Cuomo issued Executive Order No. 147.4, empowering the Attorney General to investigate any “unlawful acts or omissions” by Abelove or any other law enforcement officer involved in the Thevenin grand jury presentation. Abelove then testified during the grand jury investigation into his handling of the Thevenin matter, and allegedly, in an effort to legitimize his own conduct, made a materially false claim about the granting of immunity by another prosecutor during the grand jury investigation of a prior police shooting handled by his office.

The indictment charges Abelove with two counts of official misconduct, a class A misdemeanor, for knowingly withholding evidence from a grand jury investigating the death of Edson Thevenin and knowingly failing to secure a waiver of immunity from French as a condition of his testifying before the grand jury; and one count of perjury in the first degree, a class D felony, for making a false statement under oath to a Rensselaer County grand jury investigating Abelove’s conduct.

“As we allege, District Attorney Abelove’s actions violated the law and undermined a criminal investigation,” said Attorney General Schneiderman. “The Governor’s Executive Order was designed to restore public confidence in our criminal justice system – yet the actions we detail today only served to further erode that confidence. My office will continue to work collaboratively with law enforcement agencies across the state, including district attorneys, to ensure fair, comprehensive, and independent investigations of every case within our jurisdiction, so that families like the Thevenins get the answers they deserve.”

In March 2017, Abelove – in an attempt to stop the Attorney General’s investigation – filed suit against the Attorney General, arguing that Executive Order No. 147 was unconstitutional. The New York Supreme Court rejected Abelove’s claims and dismissed the suit in full in an August 2017 ruling.

The charges are merely accusations and the defendant is presumed innocent unless and until proven guilty in a court of law.

Bronx Defendant Found Guilty In Manhattan Federal Court Of Sex Trafficking Offenses

  Joon H. Kim, the Acting United States Attorney for the Southern District of New York, announced that a federal jury today found MARIA SOLY ALMONTE, a/k/a “Soly Almonte,” a/k/a “Soly La Fuerte,” a/k/a “SoSo,” a/k/a “SoSo Wavy,” a/k/a “Soly Montana,” guilty of sex trafficking of minors, sex trafficking conspiracy, and use of interstate commerce to promote illegal activity.  ALMONTE was convicted following a two-week jury trial before U.S. District Judge Kimba M. Wood.     

Acting Manhattan U.S. Attorney Joon H. Kim said:  “As a jury unanimously found, Maria Soly Almonte was the ringleader of a sex trafficking conspiracy that exploited children as young as 13.  Her predatory conduct shocks the conscience.  Protecting children is one of our most important missions, and I thank the FBI and the NYPD for their outstanding work to that end.  Almonte now awaits sentencing for her heinous crimes.”

According to allegations contained in the Complaint, Indictment, and evidence presented during the trial in Manhattan federal court:

Since at least 2015, MARIA SOLY ALMONTE operated a brothel in New York City, which trafficked minors as young as 13 years old.  The brothel operated at various locations throughout New York, including apartments in the Bronx and Harlem.

ALMONTE served as the brothel’s proprietor.  The brothel’s sex workers were required to pay ALMONTE a fee for prostitution services they rendered at the brothel.  The brothel advertised its services on the internet and communicated with clients by telephone.  During the time period of the conspiracy, at least six minors provided prostitution services at one or more of the brothel’s locations. 

  

ALMONTE, 33, was convicted of one count of conspiring to commit sex trafficking, which carries a maximum sentence of life in prison; one count of sex trafficking a minor under the age of 14, which carries a mandatory minimum sentence of 15 years in prison and a maximum sentence of life in prison; one count of sex trafficking a minor under the age of 18, which carries a mandatory minimum sentence of 10 years in prison and a maximum sentence of life in prison; one count of using facilities of interstate commerce to promote illegal activity, which carries a maximum sentence of five years in prison; and one count of conspiring to use facilities of interstate commerce to promote illegal activity, which carries a maximum sentence of five years in prison.  The maximum potential sentences in this case are prescribed by Congress and are provided here for informational purposes only, as any sentencing of the defendant will be determined by the judge.

Mr. Kim thanked the FBI and NYPD for their outstanding investigative work in this matter.

Two Men Plead Guilty To Defrauding Investors Of Over $7 Million In Fuel Cell Company Investor Fraud Scheme

  Joon H. Kim, the Acting United States Attorney for the Southern District of New York, announced that GEORGE DOUMANIS and EMANUEL PANTELAKIS, a/k/a “Manny,” each pled guilty today to defrauding investors in Terminus Energy, Inc., a publicly traded penny stock.  DOUMANIS and PANTELAKIS each pled guilty to conspiracy to commit securities fraud before U.S. Magistrate Judge Debra Freeman.  They will be sentenced before U.S. District Judge Andrew L. Carter on April 9, 2018.

Acting U.S. Attorney Joon H. Kim said:  “Today, George Doumanis and Emanuel Pantelakis both admitted to operating an investment scheme by luring investors in a supposed fuel cell technology which they knew to be fictitious.  In furtherance of their scheme, the two used misleading documents to dupe investors into contributing over $7 million into their phony penny stock – which they eventually used to pay their own personal expenses. This Office and our law enforcement partners will continue to keep a watchful eye on the investment markets and prosecute those who mislead the investing public.”

According to the allegations contained in the Indictment filed against DOUMANIS, PANTELAKIS and their co-conspirator, and statements made in related court filings and proceedings[1]:

From at least February 2008 until at least 2014, DOUMANIS and PANTELAKIS, along with their co-conspirator Danny Pratte, engaged in a scheme to defraud investors in the publicly traded company Terminus Energy, Inc. (“Terminus”), by inducing victims to invest in Terminus stock through material misrepresentations and omissions and by misappropriating investor funds for their own purposes. 

Terminus was purportedly producing and marketing a commercially viable “fuel cell” as an alternative energy source.  DOUMANIS, PANTELAKIS, and Pratte sold shares of Terminus to investors through private offerings.  In connection with such sales, DOUMANIS, PANTELAKIS, and Pratte provided investors with private placement memorandums (“PPMs”) that contained materially false and misleading statements.  For example, the PPMs falsely stated that (i) Terminus had completed its goal of developing a working fuel cell in mid-2008; (ii) Terminus would use specified investors’ funds to make payment on third-party development contracts designed to manufacture a working fuel cell; and (iii) Terminus would pay no more than 10 percent in sales commissions.  In truth, and as DOUMANIS, PANTELAKIS, and Pratte well knew, (i) there was no working fuel cell; (ii) the third party contracts had been cancelled after Terminus failed to make payment to the third parties; and (iii) unregistered salesmen were receiving commissions far in excess of 10 percent.  The PPMs also failed to accurately disclose the involvement of either DOUMANIS, who was barred from involvement in penny stocks as a result of a 2003 conviction for conspiracy to commit securities fraud, wire fraud, and mail fraud, or PANTELAKIS, who had been permanently barred by the Financial Industry Regulatory Authority (“FINRA”) following allegations that he had made fraudulent misrepresentations to customers in connection with the sale of securities.  DOUMANIS, PANTELAKIS, and Pratte also caused similar misrepresentations to be made in business plans, executive summaries, and presentations shared with potential investors, as well as in publicly available press releases.  Through these false and misleading statements, DOUMANIS, PANTELAKIS, and Pratte fraudulently induced investors to purchase nearly $8 million of Terminus stock.

Rather than use the investor money as promised, DOUMANIS, PANTELAKIS, and Pratte misappropriated the funds for their own use and for use by their co-conspirators.  For example, DOUMANIS, entities affiliated with DOUMANIS, and certain of his family members received at least $570,000, including payments to personal credit cards and toward DOUMANIS’s residential mortgage.  PANTELAKIS and certain of his family members received at least $420,000, including payments to personal credit cards and to pay for PANTELAKIS’s wife’s Mercedes-Benz.  Pratte personally received approximately $1 million.  In addition, the unregistered salespeople collectively received undisclosed commissions of more than $1.5 million. 

GEORGE DOUMANIS, 59, and EMANUEL PANTELAKIS, a/k/a “Manny,” 42, each pled guilty to one count of conspiracy to commit securities fraud, which carries a maximum sentence of five years in prison and a maximum fine of $250,000 or twice the gross gain or loss from the offense. 

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 Court.           

Trial against defendant Danny Pratte is scheduled to commence on May 1, 2018, on charges of conspiracy to commit securities fraud, securities fraud, conspiracy to commit wire and mail fraud, and wire fraud.  The allegations contained in the Indictment as to Pratte are merely accusations, and he is presumed innocent unless and until proven guilty.

Mr. Kim praised the work of the Federal Bureau of Investigation, and thanked the SEC.

                       

 [1]  As for the defendant who has not pled guilty, Danny Pratte, the description of the charges set forth herein constitute only allegations.

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.