Thursday, November 3, 2016
Wednesday, November 2, 2016
Manhattan U.S. Attorney Announces Charges Against Six Individuals For Their Role In International Money Laundering Scheme Involving Over $100 Million
Defendants Transferred Funds Through Dozens Of Shell Companies In The United States and Mexico As Part Of A Scheme To Fraudulently Obtain Tax Refunds From the Government of Mexico
Preet Bharara, the United States Attorney for the Southern District of New York, William J. Cotter, Special Agent-in-Charge of the San Antonio Field Office of the Internal Revenue Service, Criminal Investigations (“IRS-CI”), and Terence S. Opiola, Special Agent in Charge of the Newark Field Office of the Department of Homeland Security, Homeland Security Investigations (“HSI”), announced today a complaint charging CARLOS DJEMAL, ISIDORO HAIAT, BRAULIO LOPEZ, MAX FRAENKEL, DANIEL BLITZER, and ROBERT MORENO with international money laundering and wire fraud as well as conspiracies to commit these same offenses. DJEMAL was arrested in Chicago, Illinois; MORENO was arrested in Dallas, Texas; FRAENKEL was arrested in Austin, Texas. BLITZER will be presented this afternoon in Manhattan federal court before U.S. Magistrate Judge Andrew J. Peck. HAIAT and LOPEZ have not been apprehended.
Manhattan U.S. Attorney Preet Bharara said: “As alleged, Carlos Djemal, Isidoro Haiat, and their co-defendants used the U.S. banking system to commit an international fraud scheme that deprived the Mexican government of substantial tax revenue and involved the laundering of over $100 million. Thanks to the outstanding investigative work of HSI and the IRS, these alleged criminals will now face charges in an American court.”
IRS-CI Special Agent-in-Charge William J. Cotter said: “This investigation took law enforcement above and beyond its traditional role in financial crimes. In effect, it put us squarely in the middle of the high-tech world of banking and the sophisticated electronic movement of money. This investigation serves to remind us that there is no such thing as free money and there are no awards or incentives for creativity when it comes to crime.”
According to the allegations in the Complaint[1] unsealed today in Manhattan federal court:
Beginning in or about June 2011 through in or about at least May 2016, CARLOS DJEMAL, ISIDORO HAIAT, BRAULIO LOPEZ, MAX FRAENKEL, DANIEL BLITZER, and ROBERT MORENO were engaged in a scheme to defraud the Mexican government of tax revenue relating to Mexico’s value added tax (“VAT”) and then launder the proceeds of the scheme throughout the United States and Mexico. The Mexican government imposes VAT on goods sold from one Mexican company to another; however, when certain goods (such as cellular phones) are exported from Mexico, the previously-paid VAT is refunded to the exporter. DJEMAL, HAIAT, LOPEZ, MORENO, FRAENKEL, and BLITZER created and controlled dozens of companies (the “Front Companies”) purportedly doing business as importers and exporters of cellular phones in order to fraudulently obtain VAT refunds from the Mexican government.
In order to carry out the scheme, DJEMAL and HAIAT caused Front Companies in Mexico to purchase outdated cellular phones from other companies seeking to sell outdated inventory. DJEMAL and HAIAT then caused these phones to be exported to Front Companies in the United States owned and operated by others involved in the scheme. During the export process, DJEMAL and HAIAT obtained fraudulent invoices and created export documents that each falsely inflated the value of the phones being exported, thereby enabling them to fraudulently seek inflated VAT refunds from the Mexican tax authority.
Once the phones were shipped to the United States, they were transferred to one or more Front Companies in the United States created by LOPEZ, MORENO, FRAENKEL, or BLITZER, and then shipped back to a different Front Company in Mexico. Through this process, the phones were shipped repeatedly in a circular fashion between Front Companies controlled by the defendants and their co-conspirators in Mexico and the United States, enabling DJEMAL and HAIAT, to obtain multiple fraudulent VAT refunds for the same phones.
In order to create the appearance of legitimate cell phone sales, each transfer of phones was generally accompanied by a transfer of funds to and from accounts held in the name of the relevant Front Companies and owned and controlled by the defendants or their co-conspirators. As part of the scheme, each defendant or co-conspirator who controlled a Front Company receiving funds as part of the scheme retained approximately 1% for his participation in the scheme.
Between approximately June 2011 to approximately May 2016, DJEMAL, HAIAT, LOPEZ, MORENO, FRAENKEL, and BLITZER moved more than $100 million dollars through dozens of accounts maintained by Front Companies in this fashion, including through accounts maintained at a financial institution in the Southern District of New York.
Mr. Bharara praised the outstanding work of HSI and IRS-CI for their investigative efforts and ongoing support and assistance with the case.
The prosecution of this case is being overseen by the Office’s Money Laundering and Asset Forfeiture Unit. Assistant U.S. Attorney Jaimie L. Nawaday is in charge of the case.
The charges contained in the Complaint are merely accusations, and the defendants are presumed innocent unless and until proven guilty.
New York City Police Officer Merlin Alston Convicted In Manhattan Federal Court For Participating In A Drug Distribution Conspiracy
Preet Bharara, the United States Attorney for the Southern District of New York, James P. O’Neill, the Commissioner of the New York City Police Department (“NYPD”), James J. Hunt, Special Agent in Charge of the New York Field Division of the Drug Enforcement Administration (“DEA”), and William F. Sweeney Jr., Assistant Director-in-Charge of the New York Division of the Federal Bureau of Investigation (“FBI”), announced that New York City Police Officer MERLIN ALSTON, 33, was convicted today of narcotics and firearms charges for his role in a long-running conspiracy to distribute large amounts of cocaine and molly in the Bronx. The jury convicted ALSTON on both counts in the controlling indictment following a two-week trial before U.S. District Judge Colleen McMahon.
U.S. Attorney Preet Bharara stated: “Rather than use his police badge and gun to serve and protect the citizens of New York City, Merlin Alston instead chose to protect and serve major Bronx drug dealers. Today’s unanimous jury verdict demonstrates that no one is above the law.”
DEA Special Agent in Charge James J. Hunt said: “Merlin Alston’s crimes were an about-face to law enforcement. As members of the New York Drug Enforcement Task Force worked to rid our communities of drugs, he was pushing drugs into them. I applaud our law enforcement partners and the U.S. Attorney’s Office Southern District of New York for their efforts in this investigation.”
According to court papers and evidence admitted at trial:
From 2010 to 2014, MERLIN ALSTON, who at the time was an active NYPD police officer, conspired with others to distribute large quantities of narcotics. ALSTON personally delivered approximately 40 kilograms of cocaine during that time. In addition, ALSTON provided armed security to a cocaine trafficker, using a shotgun and his NYPD service weapon to do so. ALSTON also provided confidential information about law enforcement operations, including arrests and surveillance, to several Bronx drug dealers.
For these activities, ALSTON was convicted of one count of conspiracy to distribute narcotics and one count of possession of firearms in furtherance of the narcotics conspiracy. ALSTON faces a mandatory minimum of 15 years in prison and a maximum sentence of life in prison. ALSTON is scheduled to be sentenced on February 2, 2017, before Chief Judge McMahon. 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.
U.S. Attorney Bharara thanked the Office of the Special Narcotics Prosecutor for the City of New York for its invaluable assistance, and praised the DEA, the FBI, and the NYPD for their outstanding work in this investigation. The DEA New York Drug Enforcement Task Force comprises agents and officers of the DEA, the NYPD, and the New York State Police.
BP DIAZ DIAZ HOSTS PREVIEW OF 6th ANNUAL ‘SAVOR THE BRONX’ RESTAURANT WEEK
“Savor the Bronx” Restaurant Week, produced by the Bronx Tourism Council and co-hosted by the Bronx Overall Economic Development Corporation (BOEDC), showcases the borough’s best eateries by offering special values and discounts.
More information about the event, as well as a list of participating restaurants, can be found at www.savorthebronx.com.
“Epicureans from around the world are invited to experience the amazing tastes we have to offer in our borough,” said Bronx Borough President Ruben Diaz Jr. “The Bronx has always been home to a tremendous food culture, and ‘Savor the Bronx’ is a great way to sample the many different styles of food our world-class restaurant community has to offer.”
“Tourism continues to grow in The Bronx, and our restaurants, breweries and world-class food producers have played a major role in encouraging that growth,” said Olga Luz Tirado, Executive Director of The Bronx Tourism Council. “With so many great flavors to offer, we urge those seeking a fresh new culinary experience to celebrate ‘Savor the Bronx’ Restaurant Week with us.”
This 12-day event, which runs from November 7th through November 18th, will feature over 40 participants and is the perfect opportunity to explore your taste buds at various restaurants around The Bronx. The preview event featured samples from some of the borough’s top eateries and food producers, including the Mott Haven Bar & Grill, Bronx Hot Sauce, Chelsea Craft Brewing Company, Havana Café, The Bronx Brewery, Lloyd’s Carrot Cake and Gun Hill Brewery.
In addition to hosting the preview, Borough President Diaz and The Bronx Tourism Council also unveiled a new “Savor the Bronx” video series, which will highlight Bronx restaurants and other borough culinary businesses.
The series launched with four videos highlighting borough eateries:
Bistro SK: http://bit.ly/2dYH4l8
Ceetay: http://bit.ly/2f5ZJLG
Moss Café: http://bit.ly/2ej955s
Havana Café: http://bit.ly/2evPXir
“Thanks to this new ‘Savor the Bronx’ video series, our borough’s burgeoning culinary scene is having its moment in the sun. Bronxnet and The Bronx Tourism Council have developed a tremendous new series that will help promote our borough’s restaurant and food producers to a new audience, and that is certainly something to be proud of. I look forward to future episodes,” said Borough President Diaz.
Pictured below Havana Cafe, Mott Haven Cafe, Bronx Brewery, and Lloyd's Carrot Cake.
MAYOR DE BLASIO ANNOUNCES APPOINTMENT OF JOHN SIEGAL TO CCRB
Mayor Bill de Blasio today announced the appointment of John Siegal to the Civilian Complaint Review Board. Siegal brings a wealth of experience to this position, with three decades as a trial lawyer, and having worked in both the private and public sectors as a partner at BakerHostetler and chief speechwriter to Mayor David N. Dinkins.
“John Siegal’s years of private practice and helping clients navigate the litigation process, as well as his commitment to public service, make him a great addition to the Civilian Complaint Review Board,” said Mayor Bill de Blasio. “John has spent his time deepening his understanding of the law and the responsibilities that come with being a public servant. We also both had the pleasure of working with Mayor Dinkins and his Administration to combat inequality in all its forms. I look forward to working closely with John to address the needs and concerns of every New Yorker.”
"My career has been devoted to advocacy, mostly for clients but for government reform too. I am grateful to Mayor de Blasio for the opportunity to now serve as a fact-finder helping to fairly and judiciously hear and determine civilian complaints to strengthen the NYPD and its relationship with the communities it serves and protects," said John Siegal.
About John Siegal
John Siegal is an accomplished trial lawyer and courtroom advocate in federal and state courts in New York and across the nation. As a partner at BakerHostetler, he advises and litigates primarily for financial services, media and real estate industry clients in private business disputes and matters involving public agencies and controversies.
From 2009 through 2014, Siegal served as the Litigation Group Coordinator of BakerHostetler's New York practice, managing a group that rapidly expanded to more than 100 litigating lawyers. At the same time, and throughout his career, Siegal has been an active participant in New York’s civic and political life.
As a younger lawyer, he served in City Hall as Assistant and Chief Speechwriter to Mayor David N. Dinkins and immediately out of college he worked as a Capitol Hill Staff Aide to U.S. Senator Charles E. Schumer. He serves on the Boards of Directors of the Fund for Modern Courts, the Center for an Urban Future and, formerly, the Council of Urban Professionals. He also was appointed to the Transition Committee helping staff the Office of Attorney General Eric Schneiderman.
About the Civilian Complaint Review Board
The Civilian Complaint Review Board (CCRB) is made up of 13 members: five members designated by the Mayor; five members designated by the City Council; and three members designated by the Police Commissioner. The CCRB is an independent agency that is empowered to receive, investigate, mediate, hear, make findings and recommend action on complaints against New York City police officers alleging the use of excessive or unnecessary force, abuse of authority, discourtesy or the use of offensive language.