100PercentBronx

Monday, October 9, 2023

Former Soldier Indicted for Attempting to Pass National Defense Information to People’s Republic of China

Defendant Arrested Upon Arrival in San Francisco on Flight from Hong Kong

A former U.S. Army Sergeant whose last duty post was Joint Base Lewis-McChord (JBLM) in western Washington was arrested today on an indictment charging him with two federal felonies: attempt to deliver national defense information and retention of national defense information. Joseph Daniel Schmidt, 29, will appear in U.S. District Court for the Northern District of California later today and will be brought to the Western District of Washington for further court proceedings.

“Individuals entrusted with national defense information have a continuing duty to protect that information beyond their government service and certainly beyond our borders,” said Assistant Attorney General for National Security Matthew G. Olsen. “The National Security Division is committed to identifying and holding accountable those who violate that duty.”

“Joseph Daniel Schmidt was once a trusted guardian of our nation’s secrets and swore an oath to defend and protect U.S. national security,” said Assistant Director Suzanne Turner of the FBI’s Counterintelligence Division. “As alleged by the government, Schmidt betrayed his promise and potentially placed our nation at risk in his attempts to pass national defense information to Chinese security services. The FBI and our partners remain steadfast in our commitment to protecting the American people and U.S. national security."

“Members of our military take a sworn oath to defend our country and the Constitution. In that context the alleged actions of this former military member are shocking – not only attempting to provide national defense information, but also information that would assist a foreign adversary to gain access to Department of Defense secure computer networks,” said Acting U.S. Attorney Tessa M. Gorman for the Western District of Washington. “I commend the FBI for their diligent work to end his alleged efforts to betray our country.”

According to records filed in the case, Schmidt was an active-duty soldier from January 2015 to January 2020. His primary assignment was at JBLM in the 109th Military Intelligence Battalion. In his role, Schmidt had access to SECRET and TOP SECRET information. After his separation from the military, Schmidt allegedly reached out to the Chinese Consulate in Turkey and later, the Chinese security services via email offering information about national defense information.

In March 2020, Schmidt traveled to Hong Kong and allegedly continued his efforts to provide Chinese intelligence with classified information he obtained from his military service. He allegedly retained a device that allows for access to secure military computer networks and offered the device to Chinese authorities to assist them in efforts to gain access to such networks.

Schmidt remained in China, primarily Hong Kong, until this week when he scheduled to fly to San Francisco. He was arrested at the airport.

Attempt to deliver national defense information and retention of national defense information are both punishable by up to 10 years in prison and a $250,000 fine.

The FBI is investigating the case, with valuable assistance provided by the U.S. Army Counterintelligence Command.

Assistant U.S. Attorney Todd Greenberg for the Western District of Washington and Deputy Chief Matthew J. McKenzie of the National Security Division’s Counterintelligence and Export Control Section are prosecuting the case.

An indictment is merely an allegation. All defendants are presumed innocent until proven guilty beyond a reasonable doubt in a court of law.

One Of The Largest-Ever Fentanyl Seizures In New York City Results In Four Charged For Operating Fentanyl Mill In Bronx Residence

200,000 Pills and 24 Kilograms of Suspected Fentanyl, Four Commercial Pill Presses, and a Kilo Press Were Recovered from the Fentanyl Mill

Damian Williams, the United States Attorney for the Southern District of New York, Frank A. Tarentino III, the Special Agent in Charge of the New York Field Office of the Drug Enforcement Administration (“DEA”), and Ivan J. Arvelo, the Special Agent in Charge of the New York Field Office of Homeland Security Investigations (“HSI”), announced the filing of a Complaint in Manhattan federal court charging WELLINGTON EUSTATE ESPINAL, a/k/a “Ronny,” CRISTIAN EUSTATE ESPINAL, HERIBERTO EUSTATE ESPINAL, a/k/a “Daulin,” and ROBERTO JOSE VARGAS-PAULINO with conspiracy to distribute narcotics and distribution of narcotics. The defendants were arrested yesterday afternoon in the Belmont neighborhood of the Bronx. The defendants were presented today before U.S. Magistrate Judge Stewart D. Aaron.

U.S. Attorney Damian Williams said: “While conducting a Court-authorized search of a residence in the Bronx, law enforcement made one of the largest-ever seizures of fentanyl in New York City’s history — apparently more than 50 pounds of the poisonous drug. And now four defendants are in federal custody for allegedly operating a pill mill. The thought of the potential damage this stunning amount of fentanyl could have inflicted on New Yorkers is terrifying. I express deep gratitude to our law enforcement partners and the career prosecutors of this Office for their continued vigilance in keeping fentanyl off of our streets.”

DEA Special Agent in Charge Frank Tarantino said: “This is one of the largest fentanyl pill mills we have seen in New York City. The DEA recently announced that 7 out of 10 pills tested by the DEA laboratories across the county contain a lethal dose of fentanyl. Allegedly, this industrial pill mill, located in the heart of the Bronx, had enough lethal fentanyl to dispense well over a million lethal doses. Fentanyl pills are being manufactured in these clandestine pill mills right here, in our neighborhoods, and unleashed into our communities. They are then marketed and sold to many who have no idea the pills — many of which are purposefully made to look like other prescription or party drugs — contain fentanyl. With the growing increase of fentanyl-related poisonings, this toxic operation is unacceptable and law enforcement, at all levels, is vigilantly tracking down drug trafficking organizations responsible for bringing the most harm to our communities.”

HSI Special Agent in Charge Ivan J. Arvelo said: “The HSI New York El Dorado Task Force, in conjunction with our dedicated partners, has dismantled yet another clandestine lab, suspected to have operated within a residential building, dangerously close to where families reside and children innocently play. These areas were designated as 'drug-free zones,' emphasizing the severity of the situation. In recent months, we have witnessed a devastating pattern, with multiple instances of deadly activities occurring mere feet away from places we entrust our children's safety. This alarming reality underscores the urgency of our commitment to collaborate with our partners in the relentless fight of safeguarding our communities. HSI New York remains steadfast in our vow to disrupt and dismantle criminal organizations who seek to poison our communities in the ongoing lethal epidemic of fentanyl poisoning.”

As alleged in the Complaint filed today in Manhattan federal court:[1]

Since at least in or about September 2023, members of law enforcement have been investigating a network of drug traffickers who, among other things, appear to have converted an apartment within a two-family house in a residential neighborhood in the Bronx, New York, to be utilized for the purpose of packaging large quantities of fentanyl into portions for wholesale distribution. In particular, the traffickers used the apartment (the “Fentanyl Mill”) to store kilogram-quantities of fentanyl, combine the fentanyl with other fillers, use dyes to color the combined powders, and use large industrial-scale pill presses to create hundreds of thousands of deadly fentanyl pills at a time.

On or about October 5, 2023, members of law enforcement searched the Fentanyl Mill and found all four defendants inside. During their search, investigators found, among other things, approximately 24 kilograms of suspected fentanyl in powder form — comprised of approximately 14 kilograms of compressed powder in brick-shapes members of law enforcement believe to contain fentanyl and approximately 10 kilograms of loose powder members of law enforcement believe to contain fentanyl — as well as over 200,000 suspected fentanyl pills already packaged and ready for distribution to other traffickers for further sale. Some of the pills appear to have been manufactured to mimic prescription drugs, and others were pressed into colorful shapes to resemble party drugs such as ecstasy. A photograph of narcotics and other items recovered during the search is below:

Photo of narcotics and other items recovered during the search of the fentanyl mill

Members of law enforcement also found three commercial pill presses and another disassembled pill press; one kilogram press; and various manufacturing and distribution paraphernalia including blenders, dyes, and jars of calcium citrate, that are used in connection with pressing narcotics into pill form and packaging narcotics for further distribution, as well as what appear to be industrial-grade protective face masks. Two of the pill presses found are pictured below.

Photo of two of the pill presses found in the fentanyl mill

Law enforcement further found that the interior of the Fentanyl Mill appeared to have been converted for dedicated use as a fentanyl repackaging and redistribution facility. For example, in an apparent effort to conceal the narcotics operation occurring in the Fentanyl Mill, the first-floor windows were covered with black trash bags and dark fabric, preventing outside observers from a view of what was occurring inside. The Fentanyl Mill also had a surveillance system, including a television screen mounted in the basement displaying a live feed of camera footage from outside the Fentanyl Mill.

Although lab testing is pending for the pills and powders discovered during the search, preliminary field tests reveal that the powders have tested positive for fentanyl.

WELLINGTON EUSTATE ESPINAL, 41, of New York, New York; CRISTIAN EUSTATE ESPINAL, 20, of the Bronx, New York; HERIBERTO EUSTATE ESPINAL, 27, of New York, New York; and ROBERTO JOSE VARGAS-PAULINO, 31, of the Bronx, New York, are charged in Count One with conspiracy to distribute narcotics and in Count Two with narcotics distribution. Both Count One and Count Two carry a mandatory minimum sentence of 10 years in prison and a maximum sentence of life in prison.

The statutory minimum and maximum sentences 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. Williams praised the outstanding investigative work of the El Dorado Task Force International Narcotics and Money Laundering Unit, which is comprised of law enforcement officers from the DEA, the Department of Homeland Security, HSI, and the New York City Police Department, as well as the work of the New York State Police and the United States Postal Service. Mr. Williams also thanked the New York State Police Contaminated Response Team and the DEA Chemist Team for their processing of the scene.

This case is being handled by the Office’s Narcotics Unit. Assistant U.S. Attorney Maggie Lynaugh is in charge of the prosecution.

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 herein constitute only allegations, and every fact described should be treated as an allegation.

Sunday, October 8, 2023

NYC Comptroller Lander Bars Charan Electrical from Public Works Contracts and Orders Company to Pay Over $200,000 for Labor Violations

New York City Comptroller Brad Lander signed an order against Charan Electrical Enterprise, Inc. (Charan Electrical) forcing the company to pay over $200,000 in back-wages, benefits, interest, and civil penalties and barring both the company and owner from bidding for City contracts for five years after a judge found Charan Electrical guilty of multiple labor violations.

These violations spanned two public works projects at various public schools across New York City and included the deliberate withholding of prevailing wages and supplements. The investigation began when two workers reported facing extensive working hours with minimal or no breaks, receiving their wages exclusively in cash, and being provided with counterfeit company identifications and Occupational Safety and Health Administration (OSHA) cards. The investigation also found that Charan Electrical falsified payroll records. After a fact-finding trial, the administrative law judge concurred with the Comptroller’s Bureau of Labor Law that Charan Electrical willfully violated prevailing wage laws.

“When our office cracks down on wage theft, the City reaffirms its commitment to worker rights and promotes a thriving, equitable work environment for all New Yorkers. This is not just a victory in the courtroom—it’s a triumph for every worker who has come forward and risked potential retaliation from their employers to advocate for the fair treatment of themselves and those around them,” said Comptroller Brad Lander.

“We cannot allow companies to operate above the law. Our office will continue to hold those who engage in willful violations of labor laws accountable, ensuring that all workers receive the compensation they rightfully deserve for their hard work and dedication to public projects,” said Claudia Henriquez, Director of Worker Rights.

Following a rigorous investigation, the Comptroller’s Office determined that the underpayment to the workers amounted to $103,606.60. With accrued interest, this amount increased to $160,404.58. Additionally, after receiving the maximum civil penalty, Charan Electrical Enterprises, Inc. is required to pay a total of $200,505.73. 

Charan Electrical is now ineligible to bid on or be awarded any public work contract or subcontract within the state of New York or any municipal corporation or public body within the state for five years.

Under New York State law, the New York City Comptroller sets and enforces prevailing wage laws for public works projects, including those at public schools and building service work on New York City government-funded work sites. Section 220 of New York State Labor Law sets out how prevailing wages shall be determined.

City Planning Commission Approves 970-Unit Affordable Housing Complex At 1460-1480 Sheridan Boulevard In The Bronx

Aerial rendering of 1460-1480 Sheridan Boulevard

The New York City Planning Commission has approved plans to construct a 970-unit affordable housing complex along the Bronx River waterfront. Located in the Crotona Park East neighborhood, the development is currently addressed as 1460-1480 Sheridan Boulevard and will include three 24-story buildings.

Simone Development, the Bronx-based developer behind the Sheridan Boulevard project, has owned the site for almost four decades. Representatives from the company say the decision to replace the auto shop that occupied the site was fueled by the ongoing transformation of the area into a pedestrian-friendly neighborhood with quality affordable housing and improved access to the Bronx River Greenway.

The project will also create more than 20,000 square feet of commercial space, over an acre of public outdoor space, and an amphitheater.

“As an organization that cares deeply about the borough that we have called home for decades, we are grateful for the opportunity to not only help address our housing crisis, but also connect our community to its beautiful waterfront,” said Patricia Simone, principal of Simone Development. “We applaud Chair Salamanca, Speaker Adams, members of the City Council, Mayor Adams, and Borough President Gibson for their leadership and action to create new, high-quality affordable homes for our neighbors.”

Rendering of outdoor promenade at 1460-1480 Sheridan Boulevard

Before construction can break ground, the proposals must be approved by City Council, one of the final steps of the requisite Uniform Land Use Review Procedure (ULURP).

When complete, it’s expected that a portion of the apartments will be deeply affordable for individuals earning up to $49,000 a year. Other units will be designated to households earning up to $108,000 a year.