33 Charged With Racketeering, Narcotics, Firearms, And Bank Fraud Offenses In Connection With Violent Gang Activity And Drug Trafficking Near The Mill Brook Houses In The Bronx, New York

   Joon H. Kim, the Acting United States Attorney for the Southern District of New York, William F. Sweeney Jr., Assistant Director-in-Charge of the New York Field Office of the Federal Bureau of Investigation (“FBI”), James J. Hunt, the Special Agent in Charge of the New York Field Division of the Drug Enforcement Administration (“DEA”), and James P. O’Neill, the Commissioner of the New York City Police Department (“NYPD”), announced the unsealing today of three Indictments and two Complaints charging 33 individuals with racketeering, narcotics, firearms, and bank fraud offenses in connection with violent gang and drug trafficking conduct near the Mill Brook Houses, in the Bronx, New York.    

The indictment in U.S. v. Michael White, et al. charges a total of 14 individuals, eight of whom are charged with racketeering conspiracy in connection with their membership in a gang known as “MBG” (also known as “Money Bitches Guns” and “Millbrook Gangstas”) and 11 of whom are charged with racketeering conspiracy in connection with their association with the gang known as the “Young Gunnaz,” also known as the “YGz.”  The indictment in U.S. v. Gary Davis, et al. charges a total of 15 individuals, four of whom are charged with racketeering conspiracy in connection with their membership in a gang known as “Killbrook.”  The indictment in U.S. v. Algi Crawford, et al. charges two individuals with bank fraud.  The complaint in U.S. v. Bernard Franklin, charges one individual with heroin distribution.  The complaint in United States v. James Green, 17 Mag. 7566, charges one individual with crack cocaine distribution.

A total of 24 defendants were taken into custody today; five other defendants are already in state custody on other charges.  Of the 33 defendants, 23 will be presented before U.S. Magistrate Judge Katharine H. Parker later today.  DAVID OQUENDO was arrested in the Northern District of New York and will be presented and arraigned in the United States District Court for the Northern District of New York later today.  U.S. v. Michael White is assigned to U.S. District Judge Robert W. Sweet.   U.S. v. Gary Davis is assigned to U.S. District Judge Lorna G. Schofield.   U.S. v. Algi Crawford is assigned to U.S. District Judge J. Paul Oetken.   U.S. v. Bernard Franklin and U.S. v. Eric Green are not yet assigned to District Judges

Acting U.S. Attorney Joon H. Kim said:  “As alleged, members and associates of these gangs and crews plagued the Mill Brook Houses for a decade, engaging in violence and selling drugs.  One of the victims was Bolivia Beck, a 21-year-old who was shot dead in broad daylight.  Thanks to the terrific investigative work of the FBI, DEA, and NYPD, the defendants will now face justice in federal court.” 

FBI Assistant Director-in-Charge William F. Sweeney Jr. said:  “The gang members we rounded up in this case, and in many other investigations, seem to not learn the lesson that they cannot act with impunity.  These gangs have a significantly negative impact on the neighborhoods where they operate, but we can’t make these arrests in a vacuum.  We need the community to seize the chance at a fresh start to rebuild a safer place to live.  With that said, we have had tremendous success in bringing down crime in New York City through our collaboration on the FBI NY Metro Safe Streets Task Force.  We will keep focusing our resources against these gangs, and we won’t ever stop pursing the most violent criminals who look to fill the void.”

DEA Special Agent in Charge James J. Hunt said:  “The drug trafficking of all three gangs around the Mill Brook Houses was a breeding ground for violence.   By working collaboratively with our partners, law enforcement removed these gang members who are allegedly responsible for jeopardizing the safety of their neighbors by putting them in the middle of their turf war.”

As alleged in the Indictments and Complaint unsealed today in Manhattan federal court and in other court papers[1]:

MBG was a criminal enterprise involved in committing numerous acts of violence, including attempted murders, in the vicinity of the Mill Brook Houses in the Bronx.  Members and associates of MBG enriched themselves by selling drugs, such as crack cocaine and marijuana.  In particular, on or about February 4, 2013, MBG member DAVID OQUENDO attempted to murder a rival gang member in the Mill Brook Houses. On August 17, 2014, CHRISTOPHER HOWARD, a/k/a “Juju,” attempted to murder rival gang members in the Mill Brook Houses.

The YGz was a criminal enterprise involved in committing numerous acts of violence, including attempted murders, in the vicinity of the Mill Brook Houses in the Bronx.  Members and associates of the YGz enriched themselves by selling drugs, such as crack cocaine and marijuana.  On October 28, 2012, YGz member MICHAEL WHITE, a/k/a “Mike,” attempted to murder rival gang members, causing injuries to multiple people.

Killbrook was a criminal enterprise involved in committing numerous acts of violence, including murder and attempted murders, in the vicinity of the Mill Brook in the Bronx.  Members and associates of Killbrook enriched themselves by selling drugs such as crack cocaine and marijuana.  On or about April 18, 2011, Killbrook member GARY DAVIS, a/k/a “Reckless,” a/k/a “Poppa,” murdered Bolivia Beck in the Mill Brook Houses. 

           

Charts containing the names, charges, and maximum penalties for the defendants are set forth below.  The maximum potential sentences in this case are prescribed by Congress and are provided here for informational purposes only, as any sentencing of the defendants will be determined by the judge.

Mr. Kim praised the outstanding investigative work of the FBI, DEA, and NYPD. 

The charges contained in the Indictments and Complaint are merely accusations, and the defendants are presumed innocent unless and until proven guilty.       

United States v. Michael White, et al.

COUNT	CHARGE	DEFENDANTS	MAX. PENALTIES
1	Racketeering conspiracy   18 U.S.C. § 1962(d)	MICHAEL WHITE (age 29) JOEY COLON (age 28) DEMETRIUS WINGO (age 25) ANTHONY BUSH (age 27) DAVID OQUENDO (age 27) CHRISTIAN PEREZ (age 24) JAMES ROBINSON (age 30) CHRISTOPHER HOWARD (age 25)	20 years in prison
2	Racketeering conspiracy   18 U.S.C. § 1962(d)	MICHAEL WHITE JOEY COLON DEMETRIUS WINGO ANTHONY BUSH DAVID OQUENDO CHRISTIAN PEREZ ALLEN KNIGHT (age 28) MIGUEL CALDERON (age 23) JAMESE SNIPES (age 19) WESLEY MONGE (age 20) OSCAR BRIONES (age 20)	20 years in prison
3	Narcotics conspiracy   21 U.S.C. § 846	JOEY COLON DEMETRIUS WINGO ANTHONY BUSH DAVID OQUENDO CHRISTIAN PEREZ JAMES ROBINSON ALLEN KNIGHT MIGUEL CALDERON JAMESE SNIPES WESLEY MONGE OSCAR BRIONES ROY ROBINSON (age 38)	Life in prison   Mandatory minimum of 10 years in prison
4	Violent crime in aid of racketeering   18 U.S.C. § 1959(a)(3), (5)	MICHAEL WHITE	20  years in prison
5	Violent crime in aid of racketeering   18 U.S.C. § 1959(a)(3), (5)	DAVID OQUENDO	20 years in prison
6	Violent crime in aid of racketeering   18 U.S.C. § 1959(a)(3), (5)	CHRISTOPHER HOWARD	20 years in prison
7	Using or carrying a firearm during and in relation to, or possessing a firearm in furtherance of, a crime of violence or drug trafficking crime   18 U.S.C. § 924(c )	JOEY COLON DEMETRIUS WINGO ANTHONY BUSH DAVID OQUENDO CHRISTIAN PEREZ JAMES ROBINSON CHRISTOPHER HOWARD	Life in prison   Mandatory minimum of 10 years in prison
8	Using or carrying a firearm during and in relation to, or possessing a firearm in furtherance of, a crime of violence or drug trafficking crime   18 U.S.C. § 924(c )	MICHAEL WHITE ALLEN KNIGHT MIGUEL CALDERON WESLEY MONGE OSCAR BRIONES	Life in prison   Mandatory minimum of 10 years in prison
9	Using or carrying a firearm during and in relation to, or possessing a firearm in furtherance of, a drug trafficking crime   18 U.S.C. § 924(c )	ROY ROBINSON	Life in prison   Mandatory minimum of 5 years in prison

                         United States v. Gary Davis, et al.

COUNT	CHARGE	DEFENDANTS	MAX. PENALTIES
1	Racketeering conspiracy   18 U.S.C. § 1962(d)	GARY DAVIS (age 27) RAMEL JACKSON (age 26) ANDREW BURRELL (age 26) QUENTIN STARKES (age 25)	For GARY DAVIS, life in prison   For all other defendants, 20 years in prison
2	Narcotics conspiracy   21 U.S.C. § 846	ANDRE COFIELD (age 40) PATRICK INNIS (age 39) GARY DAVIS RAMEL JACKSON ANDREW BURRELL QUENTIN STARKES MATTHEW COOPER (age 26) JUSTIN COOPER (age 29) NAYSEAN CHAVIS (age 25) HASSAN MUHAMMAD (age 20) CHIMBA CARLOS (age 31) WILLIAM RAY (age 27) JEFFREY GOODRIDGE (age 30) MICHAEL LAMAR (age 36) LUIS GOMEZ (age 24)	Life in prison   Mandatory minimum of 10 years in prison
3	Using or carrying a firearm during and in relation to, or possessing a firearm in furtherance of, a crime of violence or drug trafficking crime   18 U.S.C. § 924(c )	GARY DAVIS RAMEL JACKSON ANDREW BURRELL	Life in prison   Mandatory minimum of 10 years in prison
4	Using or carrying a firearm during and in relation to, or possessing a firearm in furtherance of, a drug trafficking crime   18 U.S.C. § 924(c )	WILLIAM RAY	Life in prison   Mandatory minimum of 5 years in prison

                          United States v. Algi Crawford, et al.

COUNT	CHARGE	DEFENDANTS	MAX. PENALTIES
1	Bank fraud conspiracy   18 U.S.C. § 1349	ALGI CRAWFORD (age 35) JONATHAN GRIFFIN (age 31)	30 years in prison
2	Bank fraud   18 U.S.C. § 1344	ALGI CRAWFORD JONATHAN GRIFFIN	30 years in prison

                      United States v. Bernard Franklin

COUNT	CHARGE	DEFENDANTS	MAX. PENALTIES
1	Distribution of heroin   21 U.S.C. §§ 812, 841(a)(1), 841(b)(1)(C)	BERNARD FRANKLIN (age 32)	20 years in prison

                  United States v. James Green

COUNT	CHARGE	DEFENDANTS	MAX. PENALTIES
1	Possession with the intent to distribute crack cocaine   21 U.S.C. §§ 812, 841(a)(1), 841(b)(1)(B)	JAMES GREEN (age 49)	40 years in prison

[1] As the introductory phrase signifies, the entirety of the text of the Indictments and Complaint constitutes only allegations, and every fact described herein should be treated as an allegation.

Acting Manhattan U.S. Attorney And FBI Assistant Director Announce Securities And Wire Fraud Charges Against Founders Of Purported Snack Business

   Joon H. Kim, the Acting United States Attorney for the Southern District of New York, and William F. Sweeney Jr., the Assistant Director-in-Charge of the New York Field Office of the Federal Bureau of Investigation (“FBI”), announced the arrest and unsealing of a complaint charging LISA BERSHAN, BARRY SCHWARTZ, and JOEL MARGULIES with securities fraud, wire fraud, and conspiracy to commit those offenses in connection with a scheme to defraud investors in a company variously called The Awake Company and Starship Snacks (“Starship”). 

BERSHAN and SCHWARTZ were presented earlier today in federal court in Atlanta, and MARGULIES was presented earlier today in federal court in Tennessee. 

In a separate action, the SEC filed civil charges against BERSHAN, SCHWARTZ, and MARGULIES.  

Acting U.S. Attorney Joon H. Kim said:  “As alleged, while promising a sure thing, in the form of guaranteed returns, the defendants were actually selling nothing but lies.  Instead of using investors’ money to grow the business, they allegedly spent it on plastic surgeries, jewelry, and cars.  Thanks to the terrific investigative work of the FBI, the defendants will now have to answer in court for their lies.”

FBI Assistant Director-in-Charge William F. Sweeney Jr. said:  “Bershan, Schwartz, and Margulies allegedly led investors to believe their company was on a guaranteed path to success. To further support their claim, as charged today, they promised to buy back any shares that didn’t appreciate within a year, including a supplemental interest payment of five percent. Samples of chocolate intended to represent the caffeinated snack they had supposedly developed were provided to some for good measure, but the chocolate was void of its key ingredient. In the end the numbers didn’t add up as this sweet deal turned sour.”

According to the allegations in the Complaint unsealed in Manhattan federal court:[1]

As alleged, BERSHAN, SCHWARTZ, and MARGULIES created Starship with the stated goal of marketing and selling a caffeinated chocolate snack.  BERSHAN, SCHWARTZ, and MARGULIES subsequently raised over $2 million from investors by telling them that their investments in Starship would be personally guaranteed against any losses; that Starship was on the verge of a lucrative acquisition by another entity, Monster Beverage Corp. (“Monster”); and that Starship’s signature product had been developed successfully.  All of these representations were false and misleading.  Starship had no ability to honor the guarantees that it and BERSHAN made to investors.  It was never in talks with Monster to be acquired.  And it had never developed or engaged a third party to develop its caffeinated snack.  After receiving investor monies, moreover, BERSHAN, SCHWARTZ, and MARGULIES used those funds to maintain their own extravagant lifestyles, spending hundreds of thousands of dollars on things like luxury clothing, plastic surgery, interior decorating, and luxury housing in New York City. 

Beginning in August 2015, BERSHAN, MARGULIES, and SCHWARTZ began soliciting investments in Starship.  In order to assure investors that their investments in Starship would be safe, BERSHAN sent investors images of herself in what appeared to be a mansion with subject lines like, “Just a glimpse – my parents sure as hell didn’t leave me this.”  BERSHAN and MARGULIES also signed investment documents providing that “[t]he Company and Lisa Bershan, its founder, have committed to repurchase” investors’ shares at the price that they had paid for them if they had not appreciated within a year, and further guaranteeing that “Lisa Bershan . . . [would] add an interest payment of 5%” in such an event.  These guarantees were not made in good faith, as neither BERSHAN nor Starship had any significant assets or ability to honor the guarantees they were making.  To the contrary, BERSHAN had unpaid tax liabilities and multiple outstanding civil judgments (and did not actually own the mansion that, as discussed above, she implicitly held out to investors as her own).

In addition to making bogus guarantees, BERSHAN, SCHWARTZ, and MARGULIES also told investors that Starship was in discussions to be acquired by Monster, and that this transaction would take place through a one-to-one exchange of Starship stock for Monster stock.  In October 2015, for example, MARGULIES sent an email to multiple investors that sought additional investments and expressly stated, “[t]he deal as I am certain you have heard is done thanks in no small part to the extraordinary talents and skills of our CEO, Lisa Bershan.  If you are not aware of the deal, it is a one to one --- share for share exchange of [Starship] for Monster after a six month holding period of [Starship] shares.”  Given that Monster’s stock was, at the time, trading at many multiples of the $3 per share that Starship’s investors initially paid at the time, this purported transaction would result in tremendous gains for Starship investors.  But there was no basis for the claim that the “deal . . . [was] done.”  Starship was never acquired by Monster or any other entity, and, indeed, was never in negotiations with Monster. 

Finally, BERSHAN, SCWHARTZ, and MARGULIES misrepresented the nature and progress of Starship’s purported business to investors.  BERSHAN, SCHWARTZ, and MARGULIES told investors that Starship had developed its caffeinated chocolate snack, when, in reality, it had not done so.  Indeed, in order to mislead investors into thinking that the product was further along than it actually was, BERSHAN, SCHWARTZ, and MARGULIES actually provided samples of normal chocolates to certain investors, falsely telling them that the chocolates were caffeinated as per Starship’s business plan. 

In total, BERSHAN, SCHWARTZ, and MARGULIES raised over approximately $2 million from investors based on these false representations.  Much of this amount was simply misappropriated by BERSHAN and SCHWARTZ (or paid to MARGULIES).  Between August 2015 and July 2017, for example, BERSHAN and SCHWARTZ spent over $39,000 on plastic surgery; over $209,000 on retail purchases, including jewelry, clothes, and interior decorating; over $11,900 at a Mercedes dealership; and hundreds of thousands of dollars on luxury housing. 

MARGULIES, 72, of Murfreesboro, Tennessee, BERSHAN, 65, and SCHWARTZ, 71, are each charged with one count of conspiring to commit securities and wire fraud, which carries a maximum prison sentence of five years in prison; one count of securities fraud, which carries a maximum sentence of 20 years in prison; and one count of wire fraud, which carries a maximum sentence of 20 years in prison.  The charges also carry a maximum fine of $5 million, or twice the gross gain or loss from the offense.  The maximum potential sentences in this case are prescribed by Congress and are provided here for informational purposes only, as any sentencing of the defendants will be determined by the judge.           

Mr. Kim praised the exceptional work of the Federal Bureau of Investigation, and thanked the Securities and Exchange Commission for its assistance. 

The allegations contained in the Complaint are merely accusations, and the defendant is 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.

Manhattan Tax Attorney Sentenced To Two Years In Prison For Participation In Multimillion-Dollar Tax Evasion Scheme And Lying To The IRS

   Joon H. Kim, the Acting United States Attorney for the Southern District of New York, announced that HAROLD LEVINE, a Manhattan tax attorney, was sentenced today by U.S. District Judge Jed S. Rakoff to 24 months in prison for tax evasion and obstruction of the Internal Revenue Service (“IRS”), stemming from his scheme to siphon millions of dollars of tax shelter fee income from the law firm at which he worked and failing to report the diverted fees as income.  LEVINE’s scheme also involved making false statements to IRS auditors, and urging a witness to provide false testimony to the same IRS auditors who were investigating LEVINE’s receipt of the fees. 

Acting U.S. Attorney Joon H. Kim said:  “Harold Levine stole first from his law firm partners and then from American taxpayers by filing tax returns that left out millions of dollars of income.  As if tax evasion by a tax attorney were not bad enough, Levine tried to get out of it by lying to the IRS during an audit and urging a witness to give false testimony.  Levine’s jail sentence should serve as a reminder that everyone – including tax lawyers – must be truthful in reporting their income, and deal honestly with, the tax authorities.”

According to the Indictment, LEVINE’s guilty plea, and statements made during the plea proceedings and other court proceedings:

Between 2004 and 2012, LEVINE, a tax attorney and former head of the tax department at a major Manhattan Law Firm (the “Law Firm”), schemed with co-defendant Ronald Katz, a certified public accountant, to obstruct and impede the due administration of the Internal Revenue laws by evading income taxes on millions of dollars of fee income generated from tax shelter and related transactions that LEVINE worked on while a partner of the Law Firm.  Specifically, LEVINE failed to report approximately $3 million in income to the IRS on his personal tax returns during the period 2005-2011.  Most of the fee income LEVINE failed to report was routed by him through a limited liability company LEVINE controlled, which was nominally owned by a family member. 

As part of the scheme, for example, LEVINE caused tax shelter fees paid by a Law Firm client to be routed from the Law Firm’s escrow account to a partnership entity he co-owned with Katz and thereafter used those fees – totaling approximately $500,000 – to purchase a home in Levittown, on Long Island.  LEVINE caused the home to be purchased as a residence for a Law Firm employee (the “Law Firm Employee”) with whom he then enjoyed a close personal relationship.  Although LEVINE allowed the Law Firm Employee to reside in the Levittown house for over five years without paying rent, LEVINE and Katz prepared tax returns for the entity through which the home was purchased that claimed false deductions as a rental property.

In February 2013, LEVINE was questioned by IRS agents concerning his involvement in certain tax shelter transactions and the fees received by LEVINE from those transactions.  During that questioning, LEVINE falsely told the IRS that the Law Firm Employee paid him $1,000 per month in rent while living in the Levittown home.  In addition, when the Law Firm Employee was contacted by the IRS and summoned to appear for testimony, LEVINE urged the employee to falsely tell the IRS that she had paid $1,000 per month in rent to LEVINE.

In imposing sentence today, Judge Rakoff said, “There was no one in the world who knew better that he was committing a crime than Harold Levine.”

In addition to the 24-month prison sentence, LEVINE, 59, of New York, New York, was sentenced to three years of supervised release, and ordered to pay restitution to the IRS in an amount to be determined at a hearing on November 13, 2017.

Co-defendant Ronald Katz, who also pled guilty in June 2017, is scheduled to be sentenced on November 13, 2017.

Mr. Kim thanked the IRS for its assistance in this investigation and praised the outstanding investigative work of both IRS-CI and IRS Civil – Large Business & International. 

Manhattan U.S. Attorney Announces Charges Against Massachusetts Businessman For Money Laundering, Financial Support For Manhattan Brothel

   Joon H. Kim, the Acting United States Attorney for the Southern District of New York, Charles Brandeis, the Special Agent in Charge of the New York Field Office of the U.S. Department of State's Diplomatic Security Service (“DSS”), and Philip Bartlett, the Inspector in Charge of the New York Division of the United States Postal Inspection Service (“USPIS”), announced charges today against a Massachusetts businessman, DAVID STASIOR, for providing financing and financial advice to an illegal brothel operating in Manhattan, and conspiring with the brothel owner to use the proceeds from the brothel to promote the brothel’s activities. STASIOR was arrested by agents from DSS, the USPIS, and the U.S. Attorney’s Office for the Southern District of New York this morning and will be presented in federal court in Massachusetts later today.

This case arises from a multiple-year-long investigation in which 17 additional individuals have previously been charged with conspiracy to commit money laundering and conspiracy to violate the Travel Act.  The previously charged individuals have included the owners of a network of at least 10 brothels in Manhattan, and individuals who provided advertising services for these brothels.  These brothels were independently owned but worked cooperatively, and employed prostitutes who typically came to the United States from South Korea pursuant to fraudulently obtained visas or visa waivers.  STASIOR allegedly provided financing for one of these brothels, whose owner was previously charged and pled guilty to money laundering conspiracy.

Acting U.S. Attorney Joon H. Kim stated:  “For years, the defendant allegedly helped launder the proceeds of an illegal brothel operation in Manhattan, providing start-up money, ongoing financial advice, and record-keeping services.  As alleged, the defendant financially supported and profited from this business that exploited vulnerable women and laundered money.”

Special Agent in Charge Charles Brandeis stated:  “DSS continues to disrupt and dismantle transnational criminal organizations seeking to profit from the entry and illicit activities of vulnerable foreign nationals.  This investigation demonstrates the global reach of the Diplomatic Security Service.”

Inspector in Charge Philip R. Bartlett stated:  “This arrest represents the continued effort of law enforcement to put a stop to illegal activity wherever it is found.  Many claim prostitution is the oldest profession in the world.  The anonymity of the internet was used to hide the identity of its operators, keeping law enforcement in the dark.  As in this case, what is done in the dark will always be revealed in the light.”

According to the Complaint[1]:

Since 2012, DSS, USPIS, and the U.S. Attorney’s Office for the Southern District of New York have been investigating a group of brothels (the “Brothels”) operating in and around New York.  Each of the Brothels was independently owned and operated, but the owners of the Brothels worked cooperatively through, among other things, the sharing of approved customer lists and information.  STASIOR started out as a customer of the Brothels.  In 2013, he provided a co-conspirator (“CC-1”)[2] with financing to open a brothel (the “Brothel”), while requiring the co-conspirator to make periodic payments from the Brothel’s proceeds in return for his investment. 

The Brothel used a website to advertise the women prostituted in the Brothel, as well as an online aggregator of advertisements to advertise the Brothel.  The management of online advertising and payment for this advertising was coordinated by the defendant and CC-1, among others.  STASIOR sent multiple emails to CC-1 in which he provided business advice to the Brothel, including advice on how to use online advertising for the Brothel to increase the Brothel’s profits.  STASIOR’s emails included spreadsheets that listed him as a “Partner” in the business and itemized the Brothel’s prostitution revenues and the various expenses involved in running the Brothel, including the cost of advertising.  In these emails, STASIOR also itemized the payments made to him out of the Brothel’s proceeds, and stated that he was concerned about the Brothel’s profitability to ensure that CC-1 would be able to “pay back” the “debt” that had been incurred by his investment in the Brothel.          

           

STASIOR, 53, of Concord, Massachusetts, is charged with one count of conspiracy to commit money laundering, which carries a maximum sentence of 20 years in prison, and one count of conspiracy to violate the Travel Act, which carries a maximum sentence of five years in prison.  The maximum potential sentences in this case are prescribed by Congress and are provided here for informational purposes only, as any sentencing of the defendant will be determined by the judge.

If you believe you were a victim of this crime, including a victim entitled to restitution, and you wish to provide information to law enforcement and/or receive notice of future developments in the case or additional information, please contact the Victim/Witness Unit at the United States Attorney’s Office for the Southern District of New York, at (866) 874-8900.  For additional information, go to: http://www.usdoj.gov/usao/nys/victimwitness.html

Mr. Kim praised the outstanding efforts of DSS, USPIS, and the criminal investigators working in the United States Attorney’s Office for the Southern District of New York.  He added that the investigation is ongoing.

The charges contained in the Complaint are merely accusations, and the defendant is 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.

[2] CC-1 has been separately charged in the Southern District of New York with money laundering conspiracy and Travel Act conspiracy, and has pleaded guilty to money laundering conspiracy.

Bronx Man Sentenced In Manhattan Federal Court To Over 12 Years In Prison For Trafficking Approximately 40,000 Oxycodone Pills And Cocaine

  Joon H. Kim, the Acting United States Attorney for the Southern District of New York, announced that MARIO HERRERA, a/k/a “Mo,” was sentenced today to 151 months in prison for conspiring to distribute cocaine and oxycodone.  HERRERA pled guilty to one count of narcotics conspiracy on June 2, 2017, before U.S. Magistrate Judge Barbara C. Moses.  U.S. District Judge Loretta A. Preska imposed today’s sentence. 

Acting U.S. Attorney Joon H. Kim said:  “Mario Herrera led a massive drug trafficking organization that stole and forged prescriptions to illegally distribute an estimated 40,000 oxycodone pills.  Herrera’s contribution to the ongoing opioid crisis has now earned him over 12 years in federal prison.  We commend the hard work of the DEA and ATF on this important case.”

According to the Indictment and other documents filed in federal court, statements made at various proceedings in this case, and materials presented at the sentencing hearing:

From in or about late 2012 up to and including in or about December 2015, HERRERA was the leader of a drug trafficking organization (the “Herrera DTO”) that distributed large quantities of oxycodone and cocaine in the Bronx and elsewhere.  As part of his plea, HERRERA admitted his involvement in the distribution of the equivalent of 40,000 oxycodone 30-milligram pills.  In order to obtain the oxycodone that the Herrera DTO distributed, HERRERA, among other things, obtained stolen prescription pads, fabricated oxycodone prescriptions, and then pretended to be a doctor when called by pharmacies to verify the prescriptions.  In addition, HERRERA purchased oxycodone from legitimate prescription holders and others in his community for redistribution.  HERRERA also coordinated the procurement and distribution of cocaine.  As part of this cocaine distribution, HERRERA traveled to Mexico, Texas, and elsewhere.     

           

In addition to the prison term, HERRERA, 32, of the Bronx, New York, was sentenced to seven years of supervised release.  

Mr. Kim praised the outstanding investigative work of the Drug Enforcement Administration and Bureau of Alcohol, Tobacco, Firearms and Explosives in this investigation. 

A.G. Schneiderman Announces Over $1 Million In Settlements With Two Auto Dealer Groups For Deceptive Practices That Resulted In Inflated Car Prices

Auto-Dealerships In Long Island And Manhattan Will Pay Over $900,000 In Restitution To Nearly 6,400 Consumers Who Were Illegally Charged For After-Sale Items; $135,000 In Penalties And Costs To State  

Attorney General Schneiderman Has Now Returned Nearly $19 Million In Restitution To Nearly 29,000 Consumers Duped By Auto Dealerships

Schneiderman: New Yorkers Shouldn’t Have To Worry That They Will Be Duped When They Are Shopping For A Car

    Attorney General Eric T. Schneiderman today announced two separate settlements with auto dealerships that will return over $900,000 in restitution to nearly 6,400 consumers and $135,000 in penalties and costs to the state for the unlawful sale of credit repair and identity theft protection services to consumers who bought or leased vehicles.  Garden City Nissan, Nissan of Huntington, and VW of Huntington, all related dealerships, are located on Long Island. Potamkin Hyundai and Potamkin Mitsubishi are located in Manhattan.

Attorney General Schneiderman charged the dealerships with the unlawful sale of “after-sale” credit repair and identity theft protection services that often added thousands of dollars to the purchase price of the vehicle. It is a violation of state and federal law to charge upfront fees for services that promise to help consumers restore or improve their credit, and contracts that violate the law are void.

“New Yorkers shouldn’t have to worry that they will be duped when they are shopping for a car,” said Attorney General Schneiderman. “We’ll continue to make sure dealerships are not illegally profiting by charging unsuspecting consumers thousands of dollars on unwanted items. I am pleased that we have now been able to return almost $19 million in restitution to those who have fallen victim to these unscrupulous tactics.”

Typically, after working with a salesperson to choose a car, consumers met with a “Finance & Insurance Manager” who would try to sell the consumer additional “after-sale” products such as extended service contracts, key replacement services, a security system, credit repair services, and identity theft protection services. Often, these after-sale items added hundreds or thousands of dollars in hidden charges to the sale or lease price of a vehicle. The costs of these items were often bundled into the vehicle sale price and not separately itemized.  The Attorney General’s investigation showed that for some dealers, consumers were totally unaware that they had received these services. In many other cases, consumers thought that the services were free. As a result, often unbeknownst to the consumer, the price of the car stated on purchase and lease documents was inflated by the amount of these after-sale items.

In addition to the over $1 million in restitution, penalties, and costs, the settlements prohibit the dealerships from:

• Selling, offering for sale, or marketing credit repair and identity theft services in connection with the sale or lease of a vehicle;
• Selling, offering for sale, or providing to consumers any after-sale product or service unless, prior to such sale, certain material terms, including price, are disclosed verbally and in writing;
• Misrepresenting the price of the vehicle in final lease or sale contracts;
• Failing to provide consumers with sales or lease agreements that clearly and conspicuously itemize each after-sale product or service and its price.

These settlements are part of the Attorney General’s broader initiative to end the practice engaged in by many dealers of “jamming,” or unlawfully charging consumers without their consent or knowledge for purchases.

In 2015, as part of the broader investigation, Attorney General Schneiderman obtained a consent order that shut down Credit Forget, Inc. (CFI), a New York company that sold the unlawful credit repair and identity theft protection services to these and other car dealerships. 

Today’s settlements bring the total number of auto dealership settlements obtained by Attorney General Schneiderman since 2015 to 13, including over $19 million in total restitution and penalties. Nearly 29,000 consumers were eligible for restitution under these settlements. 

The dealer groups included in today’s settlements are:

Long Island

• Garden City Nissan located at 316 N. Franklin Street, Hempstead, NY 11550
• Nissan of Huntington located at 850 E. Jericho Turnpike, Huntington Station, NY 11746
• VW of Huntington located at 838 E. Jericho Turnpike, Huntington Station, NY 11746

Manhattan

• Potamkin Mitsubishi and Potamkin Hyundai are located at 2495 2nd Avenue, New York, New York 10035

Consumers who believe they have been jammed with unwanted products or services in connection with a vehicle lease or purchase, or who were sold Credit Forget It’s credit repair or identity theft protection services, are urged to file complaints online or call 1-800-771-7755.

A.G. Schneiderman Announces Arrest Of Former Grand Juror For Unlawful Disclosure Of Testimony

Jannis Danes Allegedly Leaked Details To Suspects In Grand Jury Narcotics Investigation “Operation Smackdown,” Prompting One Suspect To Flee New York State 

If Convicted, Danes Faces Up To 1 1/3 to 4 Years In State Prison 

Schneiderman: My Office Will Not Tolerate Those Who Weaken Our Justice System And Put New Yorkers’ Safety At Risk

  Attorney General Eric T. Schneiderman today announced the arrest of former Onondaga County Grand Juror Jannis Danes, 54, of Minoa, New York, for allegedly leaking details to suspects involved in “Operation Smackdown,” a joint Attorney General - State Police investigation that resulted in the indictments of 72 people charged with operating two separate drug distribution rings in New York City, Syracuse, and Oswego County. Danes was arraigned this morning in Minoa Village Court on an indictment charging her with Unlawful Grand Jury Disclosure, a Class E Felony. If convicted, Danes faces up to 1 1/3 to 4 years in state prison.

“Jurors have a legal and moral obligation to maintain impartiality and discretion—and if they don’t uphold their responsibilities to our justice system, they must face the consequences,” said Attorney General Schneiderman. “My office will not tolerate those who weaken our justice system and put New Yorkers’ safety at risk.”

State Police Superintendent George P. Beach said, “This arrest sends a clear message that anyone who seeks to interfere with the integrity of our criminal justice process and disrupt the prosecution of dangerous criminals will be held accountable and appropriately punished. I commend the astuteness of our New York State Police Special Investigations Unit and our law enforcement partners in identifying this individual and their intent to obstruct the criminal justice system.”

Prior to being selected as a juror for the Attorney General’s Operation Smackdown investigation, Danes had been instructed that Grand Jury proceedings are secretive and that disclosing the  nature  or  substance  of  any  grand  jury testimony,  evidence, or  decision would be a violation of New York State law. However, Danes knew several of the suspects of the investigation and allegedly disclosed to them specific details and contents of grand jury testimony.

On or between April 11, 2016 and May 12, 2016, Danes is alleged to have disclosed to Julie A. Long and Jeff Meyers specific details of grand jury testimony and evidence presented in connection with Operation Smackdown. Danes allegedly told Julie Long, in the presence of Jeff Meyers, that Julie Long, Mark Spratt, and other mutual acquaintances were suspects in the grand jury investigation. Danes also allegedly shared details of recorded phone calls and captured text messages presented during the trial. Additionally, Danes is alleged to have informed the suspects that the grand jury presentation was near conclusion, prompting Long to move out of state to avoid apprehension by law enforcement.

Following Danes’ disclosure, Meyers repeated information provided to him by Danes about the grand jury testimony and evidence presented in connection with Operation Smackdown to Tina A. Day, who in turn told Lori M. Raum that she was also a suspect in the grand jury investigation.

Around May 12, 2016, the Onondaga County Grand Jury named Julie Long, Mark Spratt, Lori Raum, and others as defendants in connection with Operation Smackdown. Long was ultimately apprehended in South Carolina.

The investigation was conducted by the New York State Police Special Investigations Unit.

Assisting in the investigation was OCTF Investigator Paul Pendergast, under the supervision of Supervising Investigator Thomas M. Wolf and Deputy Chief Eugene Black. The Attorney General’s Investigations Bureau is led by Chief Investigator Dominick Zarrella. 

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

NYPD OFFICER INDICTED FOR MAKING VIDEOS OF TEENAGE GIRL PERFORMING SEX ACTS

Bronx Officer Charged with Sexually Motivated Felony and Other Charges; Patronized Teen for Prostitution, Promoted Obscene Sexual Performances

  Bronx District Attorney Darcel D. Clark today announced that a New York City police officer has been indicted on sex offenses and other charges stemming from patronizing an underage girl for prostitution and inducing her to perform sex acts in videos. 

  District Attorney Clark said, “The defendant is charged with 67 counts including numerous sex offenses, for alleged sexual acts with a young girl. The defendant preyed on the vulnerable young woman and videotaped his demeaning and dehumanizing acts. It is especially disturbing that these crimes are alleged against a member of the NYPD.”

  New York City Police Commissioner James P. O’Neill said, "The nature and scope of the charges in this indictment are egregious. The fact that the defendant is an NYPD officer evidences an unconscionable violation of his oath to uphold the law and protect the public. I commend the professional actions of the NYPD investigators who initiated this case as well as the thorough follow-up by the Internal Affairs Bureau in assisting Bronx prosecutors in the securing of a criminal indictment.” 

   District Attorney Clark said the defendant, Raul Olmeda, 40, of the Bronx, who was assigned to the 42nd Precinct but has been on modified duty, was indicted on 15 counts of Sexually Motivated Felony, five counts of Use of Child in a Sexual Performance, five counts of third-degree Rape, four counts of third-degree Criminal Sexual Act, nine counts of third-degree Aggravated Patronizing a Minor for Prostitution, third-degree Patronizing a Person for Prostitution, five counts of Endangering the Welfare of a Child, five counts of Promoting an Obscene Sexual Performance by a Child, five counts of Possessing an Obscene Sexual Performance by a Child, five counts of Promoting a Sexual Performance by a Child, five counts of Possessing a Sexual Performance by a Child, fourth-degree Tampering with a Witness, Official Misconduct and Unauthorized Use of a Computer.

  Olmeda was arraigned today before Bronx Supreme Court Justice Steven Barrett and bail was set at $250,000. He is due back on October 16, 2017. If convicted of the top charge, he faces up to 15 years in prison.

  According to the investigation, between late January of 2017 and early April of 2017, the defendant allegedly repeatedly paid a teenage girl for sex and videotaped her in multiple sexual acts. While executing a search warrant on the defendant’s home, authorities seized numerous hard drives as well as a computer, cell phone and other electronic media. The investigation is ongoing.

  District Attorney Clark thanked the NYPD Internal Affairs Bureau’s Group 21 for its assistance in the investigation. 

An indictment is an accusatory instrument and not proof of a defendant’s guilt.