MAYOR ADAMS, COMMISSIONER MAYUGA ANNOUNCE LAWSUIT AGAINST NATIONAL FLOORS DIRECT OVER DECEPTIVE BUSINESS PRACTICES

 

Following Investigation, Lawsuit Seeks Consumer Restitution, Civil Penalties, and Suspension or Revocation of National Floors Direct’s Home Improvement Contractor License

 

Lawsuit Alleges National Floors Direct Committed Nearly 2,500 Counts of Violations of Consumer Protection Laws After Receiving Frequent Complaints Detailing Regular Predatory and Deceptive Practices

New York City Mayor Eric Adams and New York City Department of Consumer and Worker Protection (DCWP) Commissioner Vilda Vera Mayuga today announced a lawsuit against National Floors Direct, a nationwide company that sells and installs flooring, alleging nearly 2,500 counts of violations of the city’s consumer protection laws. The lawsuit alleges that National Floors Direct preys on consumers by targeting them with false advertisements, routinely misleading them about when service will begin, providing poor quality work, and refusing to offer refunds and cancellations in violation of the law. DCWP is seeking consumer restitution, civil penalties, and the suspension or revocation of National Floors Direct’s Home Improvement Contractor license. DCWP encourages consumers who were deceived or harmed by the company to file a consumer complaint online. 

 

“Renovating a home is one of the biggest investments a New Yorker will ever make, and that’s why consumers deserve to do business with fair and honest home improvement companies that don’t stiff their customers of thousands of dollars and leave them with shoddy work,” said Mayor Adams. “New York City has some of the strictest consumer protection laws in the nation, and we are going to enforce those laws against operators that try to take advantage of working-class New Yorkers. With this lawsuit, we are putting National Floors Direct and all others who think they are going to take advantage of New York’s consumers on notice: we are watching, and we will take action to protect consumers and recoup their money.”

 

“As we continue to build a more equitable economic future for our city, we must uplift New Yorkers and protect their essential consumer rights,” said Deputy Mayor for Housing, Economic Development, and Workforce Maria Torres-Springer. “The alleged conduct in this suit is unacceptable, and our administration’s action to hold them accountable is yet another example of our unwavering commitment to working-class New Yorkers and keeping money in their pockets.”

 

“National Floors Direct has truly set the floor for shoddy craftsmanship and their deceptive practices have left dozens of New Yorkers out of thousands of dollars because the company damaged their homes or simply refused to provide services,” said DCWP Commissioner Mayuga. “We are committed to protecting consumers and holding predatory companies accountable for violating the rights of our neighbors. If you have been harmed by National Floors Direct’s exploitative business practices, I urge you to reach out and file a complaint with us as soon as possible.”

 

National Floors Direct has regularly been one of the most complained about home improvement contractors in New York City over the last five years. Since 2019, DCWP has received 30 consumer complains about the company’s detailing predatory and deceptive practices, leading to the investigation.

 

The lawsuit, filed today, argues that National Floors Direct falsely advertises “free next day flooring installations” only to routinely delay and reschedule appointments multiple times, and then has refused to provide refunds when consumers try to cancel their contract due to the delays, leaving consumers frustrated and without the products or services they paid for. Worse, the company regularly misrepresents the work needed to fulfill contracts, like removing the existing flooring, adding on additional costs for the consumer to simply get what they thought they had already purchased. Consumers are left in the terrible position of either losing the money they have already paid or having to pay hundreds of dollars more than agreed upon to complete the installation. The suit highlights two consumers who were forced to pay nearly $1,000 in additional costs because National Floors Direct failed to disclose additional costs at the time of contract.

 

The lawsuit goes on to note that when National Floors Direct does fulfil a contract, the work is of such poor quality that consumers regularly pay additional costs just to repair the damage done to their homes. One consumer had to sew together the carpet she paid National Floors Direct to install because it began unraveling shortly after installation. Another had to replace the flooring National Floors Direct installed after just six months because portions were peeling off and uneven. National Floors Direct has refused to provide these consumers with refunds or fix their situation.

 

National Floors Direct routinely fails to disclose conditions or limitations on its “free” services and fails to disclose additional installation charges in its advertisements. The company offers discounts on basic installations, only to later inform consumers that removing existing flooring is not covered in a basic installation, adding additional costs to consumers.

 

Finally, the lawsuit claims that National Floors Direct interferes with and violates consumers’ rights to cancel contracts within the legally permitted three-day cancellation period. One consumer was told they were not allowed to cancel after just 24 hours and lost a $5,000 deposit. Another consumer was unable to reach anyone at National Floors Direct during the three-day period. The company illegally pocketed the money that these consumers had every right to get refunded.

 

In New York City, individuals and businesses must have a DCWP-issued Home Improvement Contractor license to do construction, repair, remodeling or other home improvement work that costs more than $200 to any residential building. The license does not cover new home construction, plumbing, or purely electrical work. New Yorkers should use DCWP’s License Lookup Tool to make sure a business is licensed with DCWP before entering into a contract with them. See DCWP’s Quick Tips When Hiring a Home Improvement Contractor for more information.

 

DCWP provides licensed home improvement contractors with a checklist (available in multiple languages) of legal requirements in order to help them avoid violations. In May, DCWP held a Home Improvement Contractor DCWP 101 educational webinar to help applicants and current licensees navigate the Home Improvement Contractor licensing process and understand some of the laws and rules contractors must comply with in New York City. DCWP urges consumers who believe that their contractor failed to perform work as agreed to, who owe them money, or who engaged in unlicensed activity to file a complaint at DCWP’s website or by calling 311.

 

Assemblymember John Zaccaro, Jr.'s Back-To-School Summer Bash

 

Friends, 

It’s that time of year again as the end of summer meets the start of the new school year. What better way to start things off right than with a new backpack and fresh school supplies?!

 

Join me and my team for an afternoon of fun and games FREE for the community!  

 

Details as follows: 

 

Where: Kossuth Playground

When: Saturday, August 17th

Time: 12pm - 4pm

 

Please remember that this is a first come/first served event and every adult must have their child present to receive a free back-to-school backpack and/or school supplies while supplies last. 

 

Looking forward to seeing everyone on August 17th!

 

In Gratitude

John Zaccaro, Jr. 

Attorney General Merrick B. Garland Statement on Major Cities Chiefs Association Violent Crime Survey

 

The Justice Department issued the following statement from Attorney General Merrick B. Garland on the release of the Major Cities Chiefs Association Violent Crime Surve, which shows a decrease in violent crime in the first six months of 2024 compared to the same time period last year:

“This data offers yet another indicator of a substantial reduction in violent crime in major cities across the country. In nearly 70 major cities across the country, violent crime has continued to drop during the first six months of this year compared to the same time period last year, including a 17% decrease in homicides.

This updated data comes in the wake of last year’s historic drop in homicides nationwide and one of the lowest levels of violent crime in 50 years. 

Three and a half years ago, the Justice Department launched an ambitious strategy to combat violent crime rooted in investing in our partnerships with other federal law enforcement agencies, with state and local law enforcement who risk their lives to keep their communities safe every day, and with the communities we all serve.  

The Justice Department’s work together with our partners to drive down violent crime is paying off.

But our message remains clear: we will not rest until every person and every community is safe from violent crime. 

We will continue to work with our law enforcement partners across the country to arrest violent felons, seize and trace guns used in crimes, disrupt violent drug trafficking, and make critical investments in police departments to hire more officers. And we will continue to work with our community partners to support life-saving initiatives aimed at preventing and disrupting violence before it occurs.”

EDITOR'S NOTE:

It should be noted that New York City was not included in the federal statistics.

Governor Kathy Hochul listed the following for New York City, 

• Brooklyn, Queens and Staten Island – combined 3.5% decline.

Assemblywoman Jenifer Rajkumar Officially Announces She is Running To Become the 46th Comptroller of New York City

 

Assemblywoman Jenifer Rajkumar (D-38) officially announced she is running to become the 46th Comptroller of New York City in 2025. If elected, the Assemblywoman will become the first woman of color elected to the post in the 225-year history of the post’s existence.

Upon announcing her campaign, Rajkumar said: “Every win I have ever had has been against all odds. I live for this; public service is my passion.”

Jenifer’s mom was born in a mud hut in India. Her parents immigrated to the United States with just $300 and a suitcase. To honor the promise of a country that gave her family so much opportunity, Jenifer decided to dedicate her life to public service. An ivy league educated attorney, she graduated from Stanford Law School and the University of Pennsylvania.  She later spent evenings teaching as a Professor at CUNY’s Lehman College in the Bronx to help sculpt the young minds of the City.

Speaking of the Comptroller role, Rajkumar said: “Traditionally, the Comptroller is a man in an office crunching numbers, but I will make it so much more. I am on the ground with the people in every corner of this City hearing firsthand how government is and isn’t working for them.  Together, we will implement ‘the people’s audits’ of City government. Government inefficiency costs lives, and we will fix it. Ours is the largest municipal budget in the world, and I have the experience, passion, and energy to make sure that every New Yorker is getting what they pay for.”

Speaking of the Comptroller’s role as a fiduciary to New York City’s 5 public pension funds, totaling nearly $270 billion in assets, Rajkumar said: “As Comptroller, I will first and foremost be the guardian of the hard earned retirement money of our city workers, firefighters, teachers and police officers.  I will be laser focused on maximizing pension returns and performance. New Yorkers who worked hard their whole lives deserve a healthy pension and a Comptroller with the passion, dedication, and experience to guard their money.”

A record breaking State Legislator, Rajkumar made history as the first South Asian American woman ever elected to a New York State public office in 2020, ousting an 11 year incumbent and winning by the largest margin of any insurgent that year. In less than 4 years, she passed landmark legislation– including the SMOKEOUT Act enabling New York City to close down over 800 illegal smokeshops already, the historic bill establishing Diwali as a School Holiday in New York City after a 20 year struggle by the community,  and a nationally recognized bill giving domestic workers the full protections of New York State’s Human Rights Law. 

Her other legislative wins include several pieces of legislation to make government work faster and better– including passing her bill to speed up the City’s procurement process to build capital projects more quickly, legislation making our Courts work more efficiently, and a bill to support crime victims.

A Stanford Law educated attorney who studied accounting, law and economics, Rajkumar has a record of taking on multinational corporations. She has already saved millions of taxpayer dollars in her career. Collaborating with the U.S. Department of Justice, she held multinational corporations accountable for defrauding and overcharging the federal government. Her resulting wins saved millions in taxpayer dollars and preserved the integrity of our medicare and medicaid programs.  She was also notably part of the legal team of Velez v. Novartis, a class action on behalf of 5,000 women workers labeled by the U.N. as one of the top 10 cases advancing women’s rights.

Rajkumar said, “My experience as a lawyer equips me well to be the Chief Auditor of the City of New York who will dig in to the performance of our city agencies.  As a former labor attorney, I know how to effectively execute the Comptroller’s role of protecting workers by enforcing wage violations on public works projects. As a lawyer I know how to settle legal claims against the City and oversee City contracts, two other critical functions of the Comptroller.”

The Governor of New York Andrew Cuomo appointed Jenifer as the Director of Immigration Affairs & Special Counsel for New York State in 2017. In this role, Jenifer built and led the Liberty Defense Project, a historic, first-in-the-nation $31 million dollar state-led project. In this capacity, she created a successful governmental program from scratch, oversaw government contracts with nonprofits, and allocated taxpayer dollars for maximum impact.  

The Assemblywoman has been known as “ominpresent” throughout the 5 boroughs, often appearing by the side of her ally Mayor Eric Adams who has described her as “a beast” and “a close friend.” Showing up across the City in her signature red dresses, she is a fixture of public service known as the Lady in Red. 

About her strong partnership with the Mayor, Assemblywoman Rajkumar stated: “True change happens by collaboration. The way to make historic change that will outlive us for generations to come is through partnerships across government. It is a joy working with my colleagues at all levels of government from the Mayor to the Governor to the state legislature to the city council.  The greatest moments in government- the historic moments that we live for- happen by working together. Together, we will take our City to the next level.”

State Comptroller DiNapoli Details Progress on Corporate Political Spending Disclosure

 

New Requests Being Sent to 16 Companies

During the 2024 proxy season, three portfolio companies agreed to publicly disclose their political spending while proposals at three other companies won significant support from shareholders, State Comptroller Thomas P. DiNapoli, trustee of the New York State Common Retirement Fund (Fund), announced today. DiNapoli also announced that he called on 16 companies, including Tesla Inc., Domino’s Pizza Inc., and Garmin Ltd. requesting similar comprehensive disclosure of political spending.

The agreements were reached with casino operator Caesars Entertainment Inc., delivery service DoorDash Inc., and personal finance company SoFi Technologies. DiNapoli’s proposal would provide investors with transparency into whether companies are using corporate funds to influence the political process in a way which can adversely impact their reputation, value, and bottom line.

“With the increased polarization of today’s political climate, it can be problematic for companies to fund political agendas,” DiNapoli said. “Comprehensive political spending disclosure is a corporate accountability priority for our state pension fund. As a shareholder, the Fund questions whether any spending on political causes by our portfolio companies makes sense for our investments. I commend Caesars, DoorDash, and SoFi for their decision to improve transparency.”

The proposals filed by the Fund asked the companies to publicly report monetary and nonmonetary contributions and expenditures (direct and indirect) to any campaign for or against a candidate, or to influence the public for an election or referendum. They also asked the companies to report on their policies and procedures for making these types of political expenditures.

Similar proposals at Charter Communications Inc., Airbnb Inc., and DraftKings won high levels of support from outside shareholders. Corporations face legal, reputational, and financial risks when making political contributions and expenditures. These risks are heightened by giving to trade associations and similar organizations that financially support candidates and political causes that may not align with a company’s stated values or business strategy. Because of the growing recognition by companies and their shareholders of these risks, comprehensive disclosure of corporate political spending has become a well-established best practice.

“The New York State Common Retirement Fund and State Comptroller Tom DiNapoli are leaders in making corporate political transparency and accountability the norm,” said Bruce Freed, president of the Center for Political Accountability. “They have achieved the filing of 185 political disclosure and accountability resolutions since the Citizens United decision of 2010. Their work has been crucial for protecting companies and shareholders. It is even more important this year with the heightened risks companies face from political spending.”

New Requests 

In 2024, DiNapoli asked a new set of 16 companies to comprehensively disclose their political spending. This group of companies scored poorly on the 2023 CPA-Zicklin Index of Corporate Political Disclosure and Accountability. In addition to Tesla, Domino’s Pizza, and Garmin, requests for disclosure were sent to:

• Bath & Body Works, Inc.
• Extra Space Storage Inc.
• Boyd Gaming Corp.
• Broadcom Inc.
• Crown Holdings Inc.
• Dentsply Sirona Inc.
• KBR Inc.
• Mosaic Co.
• Sarepta Therapeutics Inc.
• Science Applications International
• Scotts Miracle-Gro Company
• Textron Inc.
• The Wendy’s Company

Follow-up Efforts

DiNapoli also contacted  two companies where the Fund previously received a withdrawal agreement, but the companies still have CPA-Zicklin scores below 50%. The outreach is intended to improve their disclosure and ensure the companies are living up to their agreements. They include:

• Molson Coors Beverage Co. 
• Harley-Davidson Inc.

14 Years of Progress Toward Greater Accountability

Since the 2010 U.S. Supreme Court's Citizens United ruling striking down certain restraints on corporate political spending, DiNapoli has made it a priority to engage the Fund's portfolio companies in disclosing their political spending.

Since 2011, the Fund has filed 185 political spending and lobbying disclosure shareholder proposals, securing 64 agreements, achieving 108 votes, and withdrawing 13 proposals for other reasons. The Fund has averaged approximately 13 political spending disclosure proposals a year since 2011. Twenty-one of the agreements were secured at companies where a prior year filing or vote had spurred action.

DiNapoli noted that 26 of the 104 companies that the Fund filed proposals with are now “Trendsetters in Political Disclosure and Accountability” according to the CPA-Zicklin Index.

The New York State Common Retirement Fund is one of the largest public pension funds in the United States. The Fund holds and invests the assets of the New York State and Local Retirement System on behalf of more than one million state and local government employees and retirees and their beneficiaries. It has consistently been ranked as one of the best managed and best funded plans in the nation.

Bulgarian National Extradited for Scheme to Illegally Export U.S.-Origin Sensitive Microelectronics to Russia

Defendant and His Co-Conspirators Used Bulgarian Company to Transship Radiation-Hardened Integrated Circuits to Russia 

Bulgarian national Milan Dimitrov, 50, made his initial appearance in a federal court in San Antonio today after being extradited from Greece.

According to court documents, Milan Dimitrov allegedly conspired with Ilias Sabirov, 52, of Russia, and Dimitar Dimitrov, 74, of Bulgaria, to violate the International Emergency Economic Powers Act (IEEPA) and the Export Control Reform Act (ECRA) in a scheme to procure sensitive radiation-hardened integrated circuits from the United States and illegally export those components to Russia through Bulgaria without the required licenses from the U.S. government.

The indictment alleges that between at least May 2014 and May 2018 the defendants used the Bulgarian company Multi Technology Integration Group EEOD (MTIG) to receive export-controlled items from the United States and transship them to Russia without the required licenses.

According to the indictment, Sabirov is the head of two Russian companies — Cosmos Complect and OOO Sovtest Comp. — and controls MTIG. Both Dimitar and Milan Dimitrov worked for Sabirov at Cosmos Complect and MTIG.

As alleged, in 2014, the defendants met with the supplier of the radiation-hardened circuits in Austin, Texas, and were informed that radiation-hardened circuits could not be shipped to Russia because of U.S. trade restrictions. Sabirov then established MTIG in Bulgaria to purchase the controlled electronic circuits, which did not require a license for export to Bulgaria. The radiation-hardened properties of these circuits made them resistant to damage or malfunction in the harsh outer-space environment. The circuits were controlled for export to Russia for these very reasons. The parts were shipped to Bulgaria in 2015, and MTIG soon thereafter transshipped them to Sabirov’s companies in Russia. OOO Sovtest Comp. transferred over $1 million to MTIG for the parts.

In the same timeframe, MTIG — at Sabirov’s direction — ordered over $1.7 million in other electronic components produced by another U.S.-based electronics manufacturer. MTIG bought these parts to fulfill part of its contract with OOO Sovtest Comp. Again, the parts were shipped from the United States to Bulgaria, where they were merely repackaged and then shipped to Russia.

In late 2018, a Department of Commerce Export Control Officer interviewed Milan Dimitrov during a visit to MTIG to determine whether the radiation-hardened components were still in MTIG’s possession in Bulgaria. Milan Dimitrov, among other things, falsely denied sending the components to Russia.

Milan Dimitrov is charged with two counts of IEEPA violations, one count of money laundering, and one count of making false statements to the Department of Commerce in violation of ECRA. Each count in the indictment carries up to 20 years in federal prison.

Sabirov and Dimitar Dimitrov currently remain at large. The two were charged in the same indictment in December 2020 with two counts of IEEPA violations and one count of money laundering.

Assistant Attorney General Matthew G. Olsen of the Justice Department's National Security Division and U.S. Attorney Jaime Esparza for the Western District of Texas made the announcement.

The Commerce Department’s Office of Export Enforcement and the FBI are investigating the case with assistance from Defense Criminal Investigative Service (DCIS).

Assistant U.S. Attorneys Michael C. Galdo and G. Karthik Srinivasan are prosecuting the case along with Trial Attorney Christine Bonomo of the National Security Division’s Counterintelligence and Export Control Section. The Justice Department’s Office of International Affairs provided valuable assistance.

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

Leader of International Malvertising and Ransomware Schemes Extradited from Poland to Face Cybercrime Charges

Justice Department Unseals Charges Against Two Additional International Cybercriminals 

A Belarussian and Ukrainian dual-national charged in both the District of New Jersey and Eastern District of Virginia with leading international computer hacking and wire fraud schemes made his initial appearance in Newark, New Jersey, today after being extradited from Poland.

As alleged in court documents unsealed today, Maksim Silnikau, also known as Maksym Silnikov, 38, led two multiyear cybercrime schemes. At different points, Silnikau has been associated with the online monikers “J.P. Morgan,” “xxx,” and “lansky,” among others.

In the District of New Jersey, Silnikau, along with alleged co-conspirators Volodymyr Kadariya, a Belarussian and Ukrainian national, 38, and Andrei Tarasov, a Russian national, 33, are charged with cybercrime offenses associated with a scheme to transmit the Angler Exploit Kit, other malware, and online scams to the computers of millions of unsuspecting victim internet users through online advertisements — so-called “malvertising” — and other means from October 2013 through March 2022. In the Eastern District of Virginia, Silnikau is charged for his role as the creator and administrator of the Ransom Cartel ransomware strain and associated ransomware operations beginning in May 2021.

“Today, the Justice Department takes another step forward in disrupting ransomware actors and malicious cybercriminals who prey on victims in the U.S. and around the world,” said Deputy Attorney General Lisa Monaco. “As alleged, for over a decade, the defendant used a host of online disguises and a network of fraudulent ad campaigns to spread ransomware and scam U.S. businesses and consumers. Now, thanks to the hard work of federal agents and prosecutors, along with Polish law enforcement colleagues, Maksim Silnikau must answer these grave charges in an American courtroom.” 

“Silnikau and his co-conspirators allegedly used malware and various online scams to target millions of unsuspecting internet users in the United States and around the world,” said FBI Deputy Director Paul Abbate. “They hid behind online aliases and engaged in complex, far-reaching cyber fraud schemes to compromise victim devices and steal sensitive personal information. The FBI will continue to work with partners to aggressively impose costs on cybercriminals and hold them accountable for their actions.”

“As alleged in the indictment, Silnikau and his co-conspirators distributed online advertisements to millions of internet users for the purpose of delivering malicious content,” said Principal Deputy Assistant Attorney General Nicole M. Argentieri, head of the Justice Department’s Criminal Division. “These ads appeared legitimate but were actually designed to deliver malware that would compromise users’ devices or to deliver ‘scareware’ designed to trick users into providing their sensitive personal information. Silnikau’s arrest and extradition demonstrate that, working with its domestic and international partners, the Criminal Division is committed to bringing cybercriminals who target U.S. victims to justice, no matter where they are located.”

“These conspirators are alleged to have operated a multiyear scheme to distribute malware onto the computers of millions of unsuspecting internet users around the globe,” said U.S. Attorney Philip R. Sellinger for the District of New Jersey. “To carry out the scheme, they used malicious advertising, or ‘malvertising’, to trick victims into clicking on legitimate-seeming internet ads. Instead, the victims would be redirected to malicious internet sites that delivered malware to their devices, giving the conspirators access to the victims’ personal information. The conspirators then sold that access and information to other cybercriminals on the dark net. Throughout the scheme, the conspirators attempted to hide their identities from law enforcement, including by using fraudulent aliases and online personas.”

“This case reemphasizes the importance of both cybersecurity and our crucial law enforcement partnerships worldwide,” said U.S. Attorney Jessica D. Aber for the Eastern District of Virginia. “Online threats emerge within the digital ecosystem among those who exploit the very tools that help us connect and collaborate. In turn, we must maximize our investigative collaborations globally to address those threats. This investigation demonstrates the positive results of leveraging international partnerships to combat international crimes.”

“This arrest underscores a long-term investigation by the U.S. Secret Service, in coordination with foreign, domestic and private partners, of cybercrime organizations that allegedly distributed the notorious Angler Exploit Kit, conducted malvertising, and operated the Ransom Cartel ransomware organization,” said Assistant Director of Investigations Brian Lambert of the U.S. Secret Service. “Cybercriminals should know that even if they attempt to hide their criminal conduct behind the anonymity of the internet that eventually, through the dedication of international law enforcement professionals, they will be apprehended and held accountable for their actions.”

“The FBI will continue to work alongside our partners both overseas and in the states to identify and dismantle cyber threats, and to pursue those criminals who attempt to target and defraud victims in the United States,” said Special Agent in Charge Stephen Cyrus of the FBI Kansas City Field Office.

District of New Jersey Indictment

According to the indictment unsealed in the District of New Jersey, from October 2013 through March 2022, Silnikau, Kadariya, Tarasov, and others in Ukraine and elsewhere used malvertising and other means to deliver malware, scareware, and online scams to millions of unsuspecting Internet users in the United States and elsewhere. The malvertising campaigns were designed to appear legitimate, but often redirected victim Internet users who viewed or accessed the advertisements to malicious sites and servers that sought to defraud the users or delivered malware to the users’ devices. The conspirators’ scheme caused unsuspecting Internet users to be forcibly redirected to malicious content on millions of occasions, and defrauded and attempted to defraud various U.S.-based companies involved in the sale and distribution of legitimate online advertisements.

One strain of malware that Silnikau and others allegedly took a leading role in disseminating was the Angler Exploit Kit, which targeted web-based vulnerabilities in Internet browsers and associated plug-ins. At times during the scheme, the Angler Exploit Kit was a leading vehicle through which cybercriminals delivered malware onto compromised electronic devices. The conspirators also allegedly enabled the delivery of “scareware” ads that displayed false messages claiming to have identified a virus or other issue with a victim Internet user’s device. The messages then attempted to deceive the victim into buying or downloading dangerous software, providing remote access to the device, or disclosing personal identifying or financial information.

For years, the conspirators tricked advertising companies into delivering their malvertising campaigns by using dozens of online personas and fictitious entities to pose as legitimate advertising companies. They also developed and used sophisticated technologies and computer code to refine their malvertisements, malware, and computer infrastructure so as to conceal the malicious nature of their advertising.  

As alleged, Silnikau, Kadariya, Tarasov, and conspirators used multiple strategies to profit from their widespread hacking and wire fraud scheme, including by using accounts on predominantly Russian cybercrime forums to sell to cybercriminals access to the compromised devices of victim Internet users (so-called “loads” or “bots”), as well as information stolen from victims and recorded in “logs,” such as banking information and login credentials, to enable further efforts to defraud the victim Internet users or deliver additional malware to their devices.

Eastern District of Virginia Indictment

According to the indictment unsealed in the Eastern District of Virginia, Silnikau was the creator and administrator of the Ransom Cartel ransomware strain, created in 2021. Silnikau allegedly had been a member of Russian-speaking cybercrime forums since at least 2005 and was a member of the notorious cybercrime website Direct Connection from 2011 to 2016, when the site was shuttered after the arrest of its administrator.

Beginning in May 2021, Silnikau allegedly developed a ransomware operation and began recruiting participants from cybercrime forums. On various occasions, Silnikau allegedly distributed information and tools to Ransom Cartel participants, including information about compromised computers, such as stolen credentials, and tools such as those designed to encrypt or “lock” compromised computers. Silnikau also allegedly established and maintained a hidden website where he and his co-conspirators could monitor and control ransomware attacks; communicate with each other; communicate with victims, including sending and negotiating payment demands; and manage distribution of funds between co-conspirators.

On Nov. 16, 2021, Silnikau allegedly executed a ransomware attack on a company based in New York, and on March 5, 2022, Ransom Cartel ransomware was deployed against a company based in California. The hackers removed confidential data without authorization and demanded a monetary payment to refrain from releasing the victim’s data.

In the District of New Jersey, Silnikau, Kadariya, and Tarasov are charged with conspiracy to commit wire fraud, conspiracy to commit computer fraud, and two counts of substantive wire fraud. If convicted, Silnikau, Kadariya, and Tarasov face maximum penalties of 27 years in prison for wire fraud conspiracy, 10 years in prison for computer fraud conspiracy, counts, and 20 years in prison on each wire fraud count.

In the Eastern District of Virginia, Silnikau is charged with conspiracy to commit computer fraud and abuse, conspiracy to commit wire fraud, conspiracy to commit access device fraud, and two counts each of wire fraud and aggravated identity theft. He faces a mandatory minimum of two years in prison and a maximum penalty of 20 years in prison.

The U.S. Secret Service and FBI Kansas City Field Office are investigating the case in the District of New Jersey, and the U.S. Secret Service is investigating the case in the Eastern District of Virginia. The Department also appreciates the extensive cooperation and coordination by the United Kingdom’s National Crime Agency and Crown Prosecution Service over the course of several years, as well as significant support provided by the Security Service of Ukraine Cyber Department and Prosecutor General’s Office; Guardia Civil of Spain, Spanish Ministry of Justice, and the Public Prosecutor’s Office at the Audiencia Nacional; Policia Judiciaria of Portugal; Germany—Bundeskriminalamt (BKA) and Landeskriminalamt (LKA) Berlin; and Polish authorities, in particular assistance provided by Poland’s Central Cybercrime Bureau, Border Guard, Ministry of Justice, and National Prosecutors Office.

Senior Counsel Aarash A. Haghighat, Cyber Operations International Liaison Louisa K. Becker, and Trial Attorney Christen Gallagher of the Criminal Division’s Computer Crime and Intellectual Property Section (CCIPS) and Assistant U.S. Attorney Samantha Fasanello, Chief of the Narcotics/OCDETF Unit, for the District of New Jersey are prosecuting Silnikau and his co-defendants in the District of New Jersey. Assistant U.S. Attorneys Andrew M. Trombly, Chief of the General Crimes Unit, for New Jersey, and Christopher Oakley for the District of Kansas also provided substantial assistance to the New Jersey case. Assistant U.S. Attorneys Jonathan Keim and Zoe Bedell are prosecuting the case in the Eastern District of Virginia.

The Justice Department’s Office of International Affairs also provided substantial assistance in the extradition of Silnikau and collection of evidence.

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

Governor Hochul Highlights Statewide Decline in Crime as New York Communities Ranked Among Safest in the Nation

U.S. News & World Report Ranked Counties in Long Island, Hudson Valley and New York City Among the Top 25 Safest in America

Crime in New York State Is Down 6% Year over Year

Governor Hochul Has Invested over $800 Million in Crime-Fighting Initiatives 

Governor Kathy Hochul today highlighted ongoing declines in statewide crime as a new independent report ranked New York communities among the safest in the nation based on violent crime rates, emergency services and other key metrics. Eight counties across New York State, including counties in Long Island, the Hudson Valley and New York City, were recognized in the U.S. News & World Report ranking of "The Top 25 Safest Communities in America" – more than any other state in the nation. Four counties were among the top ten, and one county – Nassau – was ranked the safest in the nation.

“Public safety is my top priority and I’ve been laser-focused on fighting crime from the moment I took office,” Governor Hochul said. “Our approach is working, as murders, shootings, violent crime and property crime have declined statewide. But make no mistake: our work is not over, and I’ll continue working to ensure our state is safer for all.”

New York’s nation-leading performance in this new ranking reflects a broad and ongoing decline in crime. Statewide crime is down 6% year over year, according to data from both the New York State Division of Criminal Justice Services and NYPD CompStat.

The U.S. News & World Report analysis recognized the following counties among the Top 25 Safest in America – with many of them seeing significant year-over-year declines in crime for the first half of 2024:

• Long Island
  • Nassau – 18% decline
  • Suffolk – 13% decline
• Hudson Valley
  • Rockland – 26% decline
  • Westchester – 8% decline
  • Putnam – 15% decline in 2023 (2024 data pending)
• New York City
  • Brooklyn, Queens and Staten Island – combined 3.5% decline

As New York continues to make nation-leading progress in tackling crime, Governor Hochul has also continued to make historic investments in new crime-fighting initiatives statewide, amounting to more than $800 million in investments in tested programs and initiatives.

The Governor's investments also include nationally recognized initiatives administered by the state Division of Criminal Justice Services (DCJS), which provides funding, training and technical assistance to law enforcement agencies and community-based organizations in communities hardest hit by gun violence and violent crime:

• Nearly $36 million for the Gun Involved Violence Elimination (GIVE) initiative. Through GIVE, DCJS helps 28 police departments in 21 counties implement evidence-based strategies that have proven to be successful at reducing gun violence, including Problem-Oriented Policing, Hot-Spots Policing, Focused Deterrence/Group Violence Intervention, Street Outreach, and Crime Prevention through Environmental Design. These strategies focus on the few people and places that are responsible for most of the violence and engage the broader community to build trust. GIVE also funds district attorneys’ offices, probation departments, and sheriffs’ offices in those counties.
• $21 million for the SNUG Street Outreach program, which uses a public health approach to address gun violence by identifying the source, interrupting transmission, and treating individuals, families and communities affected by violence. Community-based organizations and hospitals operate the program in 14 communities and employ nearly 200 outreach workers, social workers and case managers. Outreach workers are credible messengers who have lost loved ones to violence or have prior justice system involvement. They respond to shootings to prevent retaliation, detect conflicts, and resolve them peacefully before they lead to additional violence. Social workers and case managers work with individuals affected by community violence, including friends and family. DCJS also supports New York City’s violence interruption efforts, providing $5 million for its Crisis Management System (CMS) so it can bring those programs to scale.
• $18 million for the state’s unique network of Crime Analysis Centers, which analyze, compile and distribute information, intelligence and data to local law enforcement agencies statewide. No other state has anything similar and the centers – operated in partnership with local law enforcement agencies in 10 counties and New York City – are hubs of state and local efforts to deter, investigate, and solve crimes. Last year alone, staff handled more than 90,000 requests for assistance, helping agencies solve everything from retail theft to murders.
• Up to $20 million for Project RISE, a unique funding model that convenes community stakeholders to respond to gun violence, invest in solutions, sustain positive programming, and empower communities. In its first year, the initiative supported 99 organizations, including 74 small, grassroots programs, many of which had never received state support fort their work. Programs and services funded by RISE include academic support, employment services, mentoring, and delinquency/violence prevention.