Manhattan U.S. Attorney Announces Extradition Of Alleged Russian Hacker

Responsible For Massive Network Intrusions At U.S. Financial Institutions, Brokerage Firms, A Major News Publication, And Other Companies

  Geoffrey S. Berman, the United States Attorney for the Southern District of New York, William F. Sweeney, Jr., the Assistant Director-in-Charge of the New York Field Office of the Federal Bureau of Investigation (“FBI”), and David E. Beach, Special Agent in Charge of the U.S. Secret Service New York Field Office (“USSS”) announced today that ANDREI TYURIN, a/k/a “Andrei Tiurin,” was extradited from the country of Georgia.  TYURIN was arrested by Georgian authorities at the request of the United States for charges arising from his participation in a massive computer hacking campaign targeting U.S. financial institutions, brokerage firms, financial news publishers, and other American companies.  These hacks included the largest theft of customer data from a U.S. financial institution in history.  TYURIN is charged with committing these crimes with Gery Shalon, a/k/a “Garri Shalelashvili,” a/k/a “Gabriel,” a/k/a “Gabi,” a/k/a “Phillipe Mousset,” a/k/a “Christopher Engeham”; Joshua Samuel Aaron, a/k/a “Mike Shields”; and Ziv Orenstein, a/k/a “Aviv Stein,” a/k/a “John Avery,” in furtherance of securities market manipulation, illegal online gambling, and payment processing fraud schemes perpetrated by Shalon, Aaron, Orenstein, and their co-conspirators. 

TYURIN, a Russian citizen, arrived in the Southern District of New York earlier today, and will be presented this afternoon in Manhattan federal court before United States Magistrate Judge Henry B. Pitman.  TYURIN is expected to appear before United States District Judge Laura Taylor Swain on September 25, 2018, at 2:00 PM. 

Manhattan U.S. Attorney Geoffrey S. Berman said:  “Andrei Tyurin, a Russian national, is alleged to have participated in a global hacking campaign that targeted major financial institutions, brokerage firms, news agencies, and other companies.  Tyurin’s alleged hacking activities were so prolific, they lay claim to the largest theft of U.S. customer data from a single financial institution in history, accounting for a staggering 80 million-plus victims.  As Americans increasingly turn to online banking, theft of online personal information can cause devastating effects on their financial wellbeing, sometimes taking years to recover.  Today’s extradition marks a significant milestone for law enforcement in the fight against cyber intrusions targeting our critical financial institutions.”

FBI Assistant Director William F. Sweeney Jr. said:  “Andrei Tyurin allegedly engaged in a long-running effort to hack into the systems of U.S. based financial institutions, brokerage firms and financial news publishers, all from the perceived safety of operating outside our borders.  As alleged, his illegal acts included the historically largest theft of customer data from a U.S. financial institution.  Today’s charges and extradition should serve as a lesson to all those who would conspire to engage in similar activity that the FBI and our partners will continue to bring these hackers to justice, regardless of where they may hide.  I’d like to specifically thank our partners with the United States Secret Service, whose collaboration was crucial to seeing this case to fruition.”

U.S. Secret Service Special Agent in Charge David E. Beach said:  “This case represents the core of the U.S. Secret Service’s integrated mission to secure our nation’s cyber related financial infrastructure and protect our nation’s leadership.  The collaboration between the Secret Service New York Field Office Electronic Crimes Task Force, FBI New York Office Cyber Division and our global law enforcement partners demonstrates the commitment to combating cyber-enabled financial crimes and ensuring those responsible are held accountable.”

According to the allegations contained in the superseding indictments unsealed today in Manhattan federal court[1], other filings in this case, and statements made during court proceedings:

From approximately 2012 to mid-2015, TYURIN engaged in an extensive computer hacking campaign targeting financial institutions, brokerage firms, and financial news publishers in the United States, including the theft of personal information of over 100 million customers of the victim companies.  TYURIN’s hack of one financial institution headquartered in Manhattan resulted in the theft of personal information of over 80 million customers, making it the largest theft of customer data from a U.S. financial institution in history.  TYURIN engaged in these crimes at the direction of Shalon and in furtherance of other criminal schemes overseen and operated by Shalon and his co-conspirators, including securities fraud schemes in the United States.  For example, in an effort artificially to inflate the price of certain stocks publicly traded in the United States, Shalon and his co-conspirators marketed the stocks in a deceptive and misleading manner to customers of the victim companies whose contact information TYURIN stole in the intrusions.

In addition to the U.S. financial sector hacks, TYURIN also conducted cyberattacks against numerous U.S. and foreign companies in furtherance of various criminal enterprises operated by Shalon and his co-conspirators, including unlawful internet gambling businesses and international payment processors.  Nearly all of these illegal businesses, like the securities market manipulation schemes, exploited the fruits of TYURIN’s computer hacking campaigns.  Through these various criminal schemes, TYURIN, Shalon, and their co-conspirators obtained hundreds of millions of dollars in illicit proceeds.

TYURIN, 35, of Moscow, Russia, is charged with one count of conspiracy to commit computer hacking, which carries a maximum prison term of five years; one count of wire fraud, which carries a maximum prison term of 30 years; four counts of computer hacking, each of which carries a maximum prison term of five years; one count of conspiracy to commit securities fraud, which carries a maximum prison term of five years; one count of conspiracy to violate the Unlawful Internet Gambling Enforcement Act, which carries a maximum prison term of five years; one count of conspiracy to commit wire fraud and bank fraud, which carries a maximum prison term of 30 years; and aggravated identity theft, which carries a mandatory consecutive term of imprisonment of two years. 

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

Mr. Berman praised the investigative work of the Federal Bureau of Investigation and the U.S. Secret Service, and expressed his sincere gratitude to the Chief Prosecutor’s Office of Georgia and the Ministry of Justice of Georgia for their support and assistance with the extradition proceedings.  He also thanked the Securities and Exchange Commission, Homeland Security Investigations, the Financial Industry Regulatory Authority, the Office of International Affairs of the U.S. Department of Justice for its assistance with the extradition, and the Financial Services Information Sharing and Analysis Center, which significantly aided the investigation by facilitating information-sharing among the victim institutions.

The charges contained in the indictments are merely accusations and TYURIN is presumed innocent unless and until proven guilty.

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

DOI Commissioner Mark G. Peters Issued the Following Statement on a Matter at the New York City Housing Authority’s Throggs Neck Houses

  “DOI is opening an investigation into possible employee misconduct in the New York City Housing Authority’s (NYCHA) Throggs Neck development after further reviewing the allegations, including two complaints it received this summer about improper behavior by staff at the Throggs Neck development. This investigation will build on the internal investigation conducted by NYCHA. As this is an ongoing investigation, DOI will not comment further at this time.”

RAIN OR SHINE: Join Bronx Dems Chairman Marcos Crespo for Our Annual BBQ

  The annual Bronx Democratic County Committee Softball game may have been rained out, but as you see in the photo above the rain did not stop the Annual BDCC Barbecue. There was more than just hot dogs and hamburgers this year as there were about a dozen different main dishes, and as many side dishes to be had. A huge fruit platter, and an almost endless variety of desert cookies and mini muffins were all on hand. An abundance of different refreshments were also in the house. 

Above - The early group photo of the elected officials that were on hand.

Below - Former 80th A.D. Male District Leader Marcos Sierra (L.) with future (?) Councilman Brian Meadows. Mr. Meadows boss Andy King will be term limited out of office in 2021.

Above - The latter group photo with the second wave of elected officials.

Below - We were glad to see our good friend Assemblyman Jose Rivera, and had a nice lively three way conversation with Assemblyman Rivera and Assemblyman Jeffrey Dinowitz.

The rain may have cancelled the annual BDCC Softball game,  but it could not damper the spirit of those who attended this years BDCC Barbecue. 

Street Renaming For Will Madonna Does Not Go As Planned

  It didn't go as planned for the Street Renaming of the corner of Morris Park and Bogart Avenues to 'Wil Madonna Way'. The family, the elected officials, and close friends were there, but the official street sign did not arrive in time for the ceremony. Councilman Mark Gjonaj said in his most apologetic way, but also a humorous way that Wil must still be here in spirit because this is something he might have done. Councilman Gjonaj and others who spoke gave revealing thoughts of how William (Wil) Madonna touched their lives, with Gjonaj sadly remembering all the many things that Wil did for him. Assemblywoman Nathalia Fernandez said that Will taught her many things while he always said after wards that she had done a good job in the assignment she was given. She had to stop at one point, while she wiped away the tears, but almost everyone was teary eyed. Assemblyman Michael Benedetto, Wil's sister, his son , and others spoke of all the good things that William Madonna had done for the community and his friends, not wanting anything really in return. 

Above - Assemblywoman Nathalia Fernandez speaks as tears are coming to her eyes, as next to her is a somber Councilman Mark Gjonaj.

Below - Wil's good friend Sonny Vitaj told a few stories of the great times with Wil.

Above - Wil's sister spoke of how committed he was to his community.

Below - Wil's sons echoed the comment their aunt made about Wil's devotion to his friends and community.

As the official  street sign  did not arrive on  time for the  ceremony, a dignified temporary sign was put up until the official street sign 'Wil Madonna Way' arrives in a few days.

Bronx Man Convicted In White Plains Federal Court In Connection With Fatal Carjackings Of Two Livery Cab Drivers

  Geoffrey S. Berman, the United States Attorney for the Southern District of New York, announced that TYRONE FELDER, a/k/a “Man Man,” was found guilty of participating in the fatal carjackings of two livery cab drivers: Maodo Kane, who was killed in the Bronx on August 5, 2014, and Aboubacar Bah, who was killed in the Bronx on August 12, 2014.  FELDER was also found guilty of participating in two armed robberies in Yonkers on August 5, 2014, as well as firearms offenses related to the carjackings and the robberies.  The jury convicted FELDER yesterday on all nine counts of the Indictment following a two-week trial before U.S. District Judge Vincent L. Briccetti.

U.S. Attorney Geoffrey S. Berman said:  “Tyrone Felder’s days of reckless and deadly violence are over.  This unanimous verdict means that Felder will spend the rest of his life in prison, but it will not bring back the two men that Felder murdered.”

According to the allegations contained in the Indictment and the evidence presented in court during the trial:

On August 5, 2014, FELDER participated in the armed carjacking of Maodo Kane.  During the course of the carjacking, FELDER shot and killed Mr. Kane in the vicinity of Hunter Avenue, in the Bronx.  FELDER then used the stolen car to participate in two gunpoint robberies of businesses in Yonkers.  Subsequently, on August 12, 2014, FELDER participated in the carjacking of Aboubacar Bah.  During the course of the carjacking, FELDER shot and killed Mr. Bah in the vicinity of Bryant Avenue, in the Bronx.

FELDER, 29, was found guilty of two counts of carjacking resulting in death, two counts of robbery, four counts of firearms possession, and one count of conspiracy to commit robbery.  FELDER faces a maximum potential sentence of life in prison and a mandatory minimum sentence of 100 years in prison, which must run consecutively to any other term of imprisonment imposed.  FELDER is scheduled to be sentenced by Judge Briccetti on January 18, 2019.

FELDER’s co-defendants, Kareem Martin, a/k/a “Jamal Walker,” Takiem Ewing, a/k/a “Mulla,” and Tommy Smalls, a/k/a “Tommy Guns,” previously pled guilty to participating in the fatal carjackings described above. 

Mr. Berman praised the outstanding investigative work of the New York City Police Department, the City of Yonkers Police Department, and the Federal Bureau of Investigation’s Westchester County Safe Streets Task Force.

New York Attorney Pleads Guilty To Tax Fraud Related To Multimillion-Dollar Embezzlement From Deceased Client’s Estate

  Geoffrey S. Berman, the United States Attorney for the Southern District of New York, and Richard E. Zuckerman, the Principal Deputy Assistant Attorney General for the Tax Division of the Department of Justice, announced that STEVEN M. ETKIND, a New York-licensed attorney and a Certified Public Accountant, pled guilty today to conspiracy to defraud the United States and tax evasion arising from a scheme to embezzle millions of dollars from a deceased client’s estate.  ETKIND pled guilty before United States District Judge John G. Koeltl.

Manhattan U.S. Attorney Berman said:  “As he admitted in court today, Steven Etkind violated the law, the canons of his profession, and the trust of his client by stealing more than $3.5 million from the client’s estate.  Etkind now awaits sentencing for his crimes.”

Principal DAAG Zuckerman said:  “The fiduciary duty that a lawyer owes to a client is paramount to the practice of law.  The Justice Department will prosecute and seek just punishment against any attorney who victimizes their clients for their own personal gain.”

According to the allegations contained in the Indictment to which ETKIND pled guilty and statements made in court:

ETKIND was a partner at a New York law firm and served as head of the law firm’s Tax, Trusts, and Estates practice group.  ETKIND performed legal work for a successful entrepreneur client who, prior to his death in 2008, named ETKIND as co-executor of his $35 million estate.

The client’s will directed the creation of two charitable trust private foundations, funded with assets from the client’s estate, for the sole purpose of donating to 501(c)(3) charitable organizations, including those aimed at assisting Jewish-sponsored organizations.  ETKIND was named co-trustee of these trusts. 

Beginning in 2009, ETKIND and his co-conspirator set up a phony charitable organization, the United Jewish Education Foundation (“UJEF”), and used it to steal more than $3.5 million from these charitable trusts.  As part of the conspiracy, ETKIND directed that donations from the trusts be first made to legitimate Jewish charitable organizations in order to give the disbursements the appearance of legitimate donations.  ETKIND and his co-conspirator then redirected the funds to accounts of UJEF, the phony charity that his co-conspirator controlled. 

ETKIND subsequently directed his co-conspirator to write checks, totaling $327,500, to a bank account in the name of JE Capital Holding Corp., a nominee corporate entity that ETKIND controlled exclusively.  ETKIND further directed more than $3 million to be used in 2010 to purchase a 6,300 square-foot home with a swimming pool in Southampton, New York.  The Southampton property was purchased for the use and enjoyment of ETKIND and his family.  ETKIND later transferred title of the property to JE Trust, a nominee trust he controlled. 

To conceal his embezzlement, ETKIND filed, and caused to be filed, fraudulent personal, corporate, and charitable trust returns with the Internal Revenue Service (“IRS”).  During the course of a subsequent audit of UJEF by the IRS Tax Exempt & Government Entities Division, ETKIND and his co-conspirator made several false and misleading statements, including about the true ownership of the Southampton Property.          

ETKIND, 56, of New York, New York, pled guilty to one count of conspiracy to defraud the United States and one count of tax evasion, each of which carries a maximum sentence of five years in prison.  As part of the plea agreement, ETKIND agreed to pay restitution in the amount of $1,208,245 to the IRS, which represents the additional tax due and owing as a result of ETKIND’s filing of false individual income tax returns for the 2009 and 2010 calendar years.  Sentencing is scheduled for January 18, 2019, before Judge Koeltl.

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

Mr. Berman and Mr. Zuckerman praised the outstanding efforts by special agents of IRS Criminal Investigation.  Mr. Berman also thanked the U.S. Department of Justice’s Tax Division and the IRS’s Tax Exempt & Government Entities Division for their assistance in the investigation. 

Additional information about the Tax Division and its enforcement efforts may be found on the division’s website, https://www.justice.gov/tax.

Former World Boxing Champion Sentenced In Manhattan Federal Court To 10 Years In Prison

Avtandil Khurtsidze Previously Convicted at Trial of Racketeering Conspiracy and Fraud in Connection with his Role as an Enforcer for the Shulaya Enterprise

  Geoffrey S. Berman, the United States Attorney for the Southern District of New York, announced that AVTANDIL KHURTSIDZE, a former world boxing champion and the chief enforcer for Razhden Shulaya, was sentenced to 10 years in prison by United States District Judge Katherine B. Forrest, following KHURTSIDZE’s conviction in June on charges of racketeering and fraud conspiracy.   

Manhattan U.S. Attorney Geoffrey S. Berman said:  “Avtandil Khurtsidze, a former middleweight boxing champion and heavyweight enforcer for the Shulaya Enterprise – a massive ‘elite’ criminal enterprise of the former Soviet Union – was convicted of intimidating and punishing associates of the organization.  Thanks to our dedicated law enforcement partners around the globe, Khurtzide’s reign of extortion and violence has been halted, as he is now sentenced to 10 years in federal prison.”

According to the Indictments filed in Manhattan federal court, previous court filings, and statements made at public court proceedings:

The Shulaya Enterprise was an organized criminal group operating under the direction and protection of Razhden Shulaya, a/k/a “Brother,” a/k/a “Roma,” a “vor v zakone” or “vor,” which are Russian phrases translated roughly as “Thief-in-Law” or “Thief,” and which refer to an order of elite criminals from the former Soviet Union who receive tribute from other criminals, offer protection, and use their recognized status as vor to adjudicate disputes among lower-level criminals.  As a vor, Shulaya had substantial influence in the criminal underworld and offered assistance to and protection of the members and associates of the Shulaya Enterprise.  Those members and associates, and Shulaya himself, engaged in widespread criminal activities, including acts of violence, extortion, the operation of illegal gambling businesses, fraud on various casinos, identity theft, credit card frauds, trafficking in large quantities of stolen goods, money laundering through a fraudulently established vodka import-export company, payment of bribes to local law enforcement officers, and the operation of a Brooklyn-based brothel.

The Shulaya Enterprise operated through groups of individuals, often with overlapping members or associates, dedicated to particular criminal tasks.  While many of these crews were based in New York City, the Shulaya Enterprise had operations in various locations throughout the United States (including in New Jersey, Pennsylvania, Florida, and Nevada) and abroad.  Most members and associates of the Shulaya Enterprise were born in the former Soviet Union and many maintained substantial ties to Georgia, Ukraine, and the Russian Federation, including regular travel to those countries, communication with associates in those countries, and the transfer of criminal proceeds to individuals in those countries.

AVTANDIL KHURTSIDZE, formerly a middleweight boxing champion, acted as Shulaya’s chief enforcer and, as such, engaged in multiple acts of extortion and violence.  KHURTSIDZE was captured on video twice assaulting others in service of the Shulaya Enterprise, participated in recorded acts of extortion of gambling debts, and planned additional acts of violence with Shulaya targeting associates of the Shulaya Enterprise whom KHURTSIDZE and Shulaya perceived as having disrespected Shulaya’s status as a vor.

KHURTSIDZE also participated in a scheme to defraud casinos by targeting particular models of electronic slot machines using a complicated algorithm designed to predict the behavior of those machines.  Shulaya and other members of the Enterprise obtained the technology used to commit that fraud through violence, including through the 2014 kidnapping of a software engineer in Las Vegas.  KHURTSIDZE, working at Shulaya’s direction, then assisted in refining that technology by training lower-level members of the Shulaya Enterprise to execute this casino scam using smartphones and software developed by the Shulaya Enterprise.

Following a two-week trial before the Honorable Katherine B. Forrest, KHURTSIDZE was found guilty of one count of racketeering conspiracy and one count of wire fraud conspiracy.      

In addition to the prison term, KHURTSIDZE, 38, of Kutaisi, Republic of Georgia, was sentenced to two years of supervised release

Mr. Berman praised the outstanding work of the Federal Bureau of Investigation and its Eurasian Organized Crime Squad, as well as U.S. Customs and Border Protection, and the New York City Police Department for their investigative efforts and ongoing support and assistance with the case.

Gary Hirst Sentenced To 8 Years In Prison For Defrauding Tribal Entity And Pension Funds Of Tens Of Millions Of Dollars

  Robert Khuzami, Attorney for the United States, Acting Under Authority Conferred by 28 U.S.C. § 515, announced that GARY HIRST was sentenced today by U.S. District Judge Ronnie Abrams to 8 years imprisonment for defrauding a Native American tribal entity and numerous pension fund investors of tens of millions of dollars in connection with the issuance of bonds by the tribal entity.  HIRST pled guilty May 15, 2018, to conspiracy to commit securities fraud, securities fraud, investment adviser fraud, and conspiracy to commit investment adviser fraud before U.S. Magistrate Judge Barbara Moses. 

Attorney for the United States Robert Khuzami said:  “This complex and brazen securities fraud scheme lined the pockets of Gary Hirst and his co-defendants but left the Native American tribal entity, the Wakpamni Lake Community Corporation $60 million in debt.  Hirst, who is already in prison for a separate securities scheme prosecuted by this Office, now faces additional time behind bars for this criminal conspiracy.”

According to the allegations contained in the Indictment filed against HIRST and statements made in related court filings and proceedings, including the trial of co-defendants John Galanis, Devon Archer, and Bevan Cooney:

From March 2014 through April 2016, HIRST, Jason Galanis, John Galanis, Devon Archer, Bevan Cooney, Michelle Morton, and Hugh Dunkerley, engaged in a fraudulent scheme to misappropriate the proceeds of bonds issued by the Wakpamni Lake Community Corporation (“WLCC”), a Native American tribal entity (the “Tribal Bonds”), and to use funds in the accounts of clients of asset management firms controlled by HIRST, Morton, and others to purchase the Tribal Bonds, which the clients were then unable to redeem or sell because the bonds were illiquid and lacked a ready secondary market.

The WLCC was convinced to issue the Tribal Bonds through false and fraudulent representations by John Galanis.  Simultaneously, Jason Galanis, with the backing of Archer and Cooney, worked to acquire Hughes Capital Management (“Hughes”), a registered investment adviser.  HIRST and Morton were installed as Hughes’s chief investment officer and chief executive officer, respectively.  Within weeks of taking control of Hughes, HIRST and Morton placed the entire $28 million first series of Tribal Bonds with Hughes clients but failed to disclose material facts about the Tribal Bonds, including that the Tribal Bonds fell outside the investment parameters set forth in the investment advisory contracts of certain Hughes clients.  Indeed, HIRST himself signed the trade tickets to purchase the bonds after other employees of Hughes refused to do so.  In addition, Hughes’s clients were not told about substantial conflicts of interest with respect to the issuance and placement of the Tribal Bonds before the Tribal Bonds were purchased on these clients’ behalf. 

The defendants and their co-conspirators then misappropriated the proceeds of the first Tribal Bond issuance.  Specifically, although the Tribal Bonds were supposed to be invested in an annuity, the proceeds were deposited into an account opened by HIRST and over which both HIRST and Dunkerley had signatory authority.  HIRST and Dunkerley, at the direction of Jason Galanis, then transferred significant amounts of the bond proceeds from that account to support the defendants’ business and personal interests.  Jason Galanis, for example, used a portion of the proceeds of the first Tribal Bond issuance to finance the purchase of a $10 million luxury apartment in Tribeca.  John Galanis, similarly, secretly received $2.35 million in proceeds of the first bond issuance, which he spent on a variety of personal expenses and luxury items, including cars, jewelry, and hotel expenses. 

In addition, after John Galanis induced the WLCC to issue a second round of Tribal Bonds, Archer and Cooney used $20 million of bond proceeds from the first issuance to buy the entirety of the second issuance.  As a result of the use of recycled proceeds to purchase additional issuances of Tribal Bonds, the face amount of Tribal Bonds outstanding increased and the amount of interest payable by the WLCC increased, but the actual bond proceeds available for investment on behalf of the WLCC did not increase.  The bonds purchased by Archer and Cooney were then used to meet net capital requirements at two broker dealers in which Archer and Cooney had interests.  Cooney also obtained a $1.2 million loan based on his purported ownership of the bonds, which he subsequently failed to repay.  In addition, millions of dollars in bond proceeds from the bond issuances were used to finance the acquisition of companies that the defendants and their co-conspirators acquired as part of a strategy to build a financial conglomerate.

In the spring of 2015, John Galanis induced the WLCC to issue an additional $16 million worth of Tribal Bonds.  Simultaneously, Jason Galanis, Archer, and others – in consultation with HIRST – purchased a second investment adviser, Atlantic Asset Management (“Atlantic”), and installed Morton as the chief executive officer.  Within days of obtaining control of Atlantic, Morton placed the entirety of the $16 million Tribal Bond with an Atlantic client, without the client’s consent and without disclosing the fact that the Tribal Bonds were outside the client’s investment parameters and that numerous conflicts of interest existed.  The proceeds of the $16 million issuance were again not invested in an annuity as promised, but instead were diverted, among other things, to finance the defendants’ acquisition of another company in furtherance of their plan to build a financial conglomerate and to make payments to one of the broker dealers in which Archer and Cooney had interests.  HIRST also directed that significant portions of the bond proceeds be funneled through other secret accounts and used to purchase significant portions of a technology stock’s IPO – which was itself secretly controlled by several of the defendants.

In addition to the prison term, GARY HIRST, 66, was sentenced to 3 years of supervised release.  HIRST was also ordered to forfeit $1.3 million and to make restitution in the amount of $43,785,176.

Jason Galanis, who pled guilty to conspiracy to commit securities fraud, securities fraud, and investment adviser fraud, was sentenced to a term of 173 months in prison on August 11, 2017.  Michelle Morton, who pled guilty to conspiracy to commit securities fraud and investment adviser fraud, is scheduled to be sentenced on November 30, 2018.  John Galanis, who was convicted at trial of conspiracy to commit securities fraud and securities fraud, is scheduled to be sentenced on November 2, 2018.  Devon Archer and Bevan Cooney, who were convicted at trial of conspiracy to commit securities fraud and securities fraud, are scheduled to be sentenced on November 9, 2018.  Hugh Dunkerley, who pled guilty to conspiracy to commit securities fraud, two counts of securities fraud, bankruptcy fraud, and falsification of records with the intent to obstruct a government investigation, is scheduled to be sentenced on March 8, 2019.

This conviction represents HIRST’s second conviction in this District in a little more than a year.  On August 3, 2017, following his conviction at trial, HIRST was sentenced by U.S. District Judge P. Kevin Castel to 78 months in prison in connection with his participation in a scheme to manipulate the market for Gerova Financial Group, Ltd., a publicly traded company listed on the New York Stock Exchange, and to defraud the shareholders of that company. 

Mr. Khuzami praised the work of the U.S. Postal Inspection Service and the Federal Bureau of Investigation, and thanked the Securities and Exchange Commission.