Attorney General James Announces Sentencing of Bronx Clinic Owner for Stealing More Than $4 Million

 

Leslie Montgomery Sentenced to 3 to 9 Years in State Prison, Ordered to Pay Millions for Sham Housing Assistance Scheme

 New York Attorney General Letitia James today announced the sentencing of Leslie Montgomery, 51, of the Bronx, for defrauding New York state out of millions of dollars in false Medicaid claims and exploiting low-income New Yorkers. Montgomery — who owned Healthy Living Community Center (Healthy Living) and LCM Livery P/U, Inc. (LCM Livery) — scammed New Yorkers through an elaborate scheme, whereby Montgomery advertised a sham housing assistance program to lure low-income individuals into providing their personal information. She then used the personal information to submit false claims for custom-molded back braces to MetroPlus Health Plan, a Medicaid-funded managed care organization, for braces that were not needed and never ordered by patients. Montgomery was sentenced today in Bronx County Supreme Court to three to nine years in state prison and ordered to pay back more than $4 million dollars in restitution to New York state.

“Exploiting New Yorkers’ desperate need for affordable housing to steal public funds is despicable,” said Attorney General James. “Ms. Montgomery’s greedy and illegal scheme violated the public’s trust and hurt our vulnerable communities in the process. My office will continue to root out this kind of greed and corruption. Those who attempt to steal off the backs of New Yorkers will be prosecuted to the fullest extent of the law.” 

Last month, Montgomery pled guilty to Grand Larceny in the First Degree and Money Laundering in the First Degree, both class B felonies. Her company, LCM Livery, pled guilty to Money Laundering in the First Degree. As outlined in court documents, Montgomery used social media to advertise a sham housing assistance program as a ruse to lure low-income New Yorkers to Healthy Living. Healthy Living then required New Yorkers to divulge personal information, including their Medicaid numbers, in order to qualify for the purported program. But instead of helping people find housing, Montgomery used their information to submit false claims to MetroPlus for highly customized back braces that she never provided to the Medicaid recipients. From time to time, Montgomery provided a $20 “off-the-shelf” back brace that was mailed directly from Amazon to the recipient. However, most of the time, she never provided a back brace at all, and yet still billed MetroPlus between approximately $750 to $1,550 per item.

As part of her guilty plea, Montgomery admitted to submitting false Medicaid claims to MetroPlus for the custom-molded back braces, which were never requested or provided to the Medicaid recipients. Altogether, she pocketed more than $4 million from the scheme. Montgomery also admitted to hiding the criminal proceeds using shell companies, including LCM Livery, through which she funneled the stolen money to purchase two homes in the Bronx.

In conjunction with the criminal case, the Office of the Attorney General (OAG) also filed a civil complaint against Montgomery and her companies. The complaint — which asserts violations of New York’s False Claims Act, Section 145-b of New York’s Social Services Law, Executive Law Sections 63(12) and 63-c, and other causes of action — seeks to additionally recover millions of dollars in Medicaid money obtained by these defendants as a result of their fraudulent conduct. That suit is still pending in court.

The OAG wishes to thank the New York State Department of Health, the Office of the Medicaid Inspector General, and MetroPlus for their assistance and cooperation in this investigation.

MFCU’s investigation was led by Detectives Alexander Kats and David Salembier, with the assistance of Supervising Detective James Briscoe, under the supervision of Deputy Chief Executive Officer Kenneth Morgan and Deputy Chief Commanding Officer William Falk. The underlying financial audit was completed by Senior Auditor Investigator Ying Tuo, with the assistance of NYC Regional Deputy Chief Auditor Jonathan Romano and NYC Regional Chief Auditor Thomasina Smith. Legal Assistants Victoria Sepe and Danielle Vercelli also assisted in the investigation.

The criminal case is being prosecuted by Special Assistant Attorneys General Hayley Campbell and Anjna Kapoor, with assistance from Deputy Regional Director David Arias and NYC Regional Director Twan Bounds. Thomas O’Hanlon is MFCU’s Chief of Criminal Investigations-Downstate. The civil action is being litigated by MFCU Civil Enforcement Division Deputy Chief Konrad Payne, with the assistance of Civil Enforcement Chief Alee N. Scott. MFCU is led by Director Amy Held and Assistant Deputy Attorney General Paul J. Mahoney and is a part of the Division for Criminal Justice. The Division for Criminal Justice is led by Chief Deputy Attorney General José Maldonado and is overseen by First Deputy Attorney General Jennifer Levy.

Reporting Medicaid Provider Fraud: MFCU defends the public by addressing Medicaid provider fraud and protecting nursing home residents from abuse and neglect. If an individual believes they have information about Medicaid provider fraud or about an incident of abuse or neglect of a nursing home resident, they can file a confidential complaint online on the OAG website or by calling the MFCU hotline at (800) 771-7755. If the situation is an emergency, please call 911.

MFCU’s total funding for federal fiscal year (FY) 2022 is $59,918,216. Of that total, 75 percent — or $44,938,664 — is awarded under a grant from the U.S. Department of Health and Human Services. The remaining 25 percent of the approved grant — totaling $14,979,552 for FY 2022 — is funded by New York state. Through its recoveries in law enforcement actions, MFCU regularly returns more to the state than it receives in state funding.

Governor Hochul Illuminates New York Landmarks in Solidarity with the People of Ukraine

 

Governor Kathy Hochul today announced that New York State landmarks will be lit blue and yellow March 24, marking one month since the beginning of the Russian invasion, in solidarity with the Ukrainian people.

“As the proud home of the largest Ukrainian population in the United States, New York will continue to stand by the Ukrainian people in their fight against tyranny and oppression,” Governor Hochul said. “Our prayers are with the innocent victims of the unconscionable violence that continues to be perpetrated on a free and sovereign nation.”

Governor Hochul launched a new website containing resources offered by New York State and its partners to help Ukrainian people and their friends and allies here in New York. This follows the Governor’s announcement warning consumers about scams and cybersecurity threats amid Russia’s invasion of Ukraine. In an additional show of support, the Governor also announced the Ukrainian flag will be flown on the Capitol building, the Executive Mansion, and the Division of Homeland Security and Emergency Services headquarters.

Last week, the Governor announced an Executive Order to prohibit state agencies and authorities from contracting with entities that continue to do business in Russia. In early March, Governor Hochul announced actions to strengthen the Department of Financial Services' (DFS) enforcement of sanctions against Russia, including the expedited procurement of additional blockchain analytics technology. In February, Governor Hochul ordered all state agencies and authorities to divest public funds from Russia and stop doing business with Russian companies.

The landmarks to be lit in solidarity with the people of Ukraine include:

• One World Trade Center
• Governor Mario M. Cuomo Bridge  
• Kosciuszko Bridge 
• The H. Carl McCall SUNY Building 
• State Education Building 
• Alfred E. Smith State Office Building  
• Empire State Plaza
• State Fairgrounds - Main Gate and Expo Center 
• Niagara Falls
• The "Franklin D. Roosevelt" Mid-Hudson Bridge 
• Grand Central Terminal - Pershing Square Viaduct 
• Albany International Airport Gateway
• Fairport Lift Bridge over the Erie Canal 

Van Cortlandt Jewish Center News and Notes - 3/25/22

 

Here's this week's edition of the VCJC News and Notes email. We hope you enjoy it and find it useful!

Reminders Shabbos Shabbos information is, as always, available on our website, both in the information sidebar and the events calendar. Here are the times you need:   Shabbos Candles Friday 3/25/22 @ 6:55 pm Shabbos morning services at 8:45 am.  Please join the services if you can do so safely.  Shabbos Ends Saturday 3/26/22 @ 7:59 pm   There is NO Membership Meeting on Sunday 3/27 Some of you may have received a postal mail from Phil Baiser discussing a membership meeting on Sunday, 3/27.  THERE IS NO SUCH MEETING BEING HELD.  DO NOT PLAN ON ATTENDING. A separate communication from the Board will be sent out via postal mail discussing the items in Phil's mail, which was not authorized by the Board and which contained both a lot of misinformation and privileged information that should not have been shared.  Please do not disseminate the information contained in that mail any further.

Statement from Governor Kathy Hochul on Supreme Court Granting Preliminary Injunction to Preserve the Waterfront Commission

 

“The Supreme Court has granted our motion for a preliminary injunction preventing New Jersey from unilaterally withdrawing from the Waterfront Commission. Coming less than 24 hours after New York filed our reply, this swift decision is a victory for the safety of New Yorkers and for the health of our economy. In light of current geopolitical uncertainty, the work of the Waterfront Commission in combatting crime at the port and protecting vital industries is more important than ever before. I thank Attorney General James, Solicitor General Underwood, and the entire team for their work on this case on behalf of New York State. We will continue to fight for New Yorkers to crack down on corruption and crime and protect the safe transport of goods.”

DEC ADVISES OF AVALANCHE RISK IN ADIRONDACKS DUE TO WARMER WEATHER

 

The New York State Department of Environmental Conservation (DEC) today advised backcountry users in the Adirondacks, especially the High Peaks region, of potential avalanche risk following mild temperatures and high winds. Avalanche danger increases during thaws when warmer weather and rain melt existing snowpack and snow becomes increasingly unstable as it undergoes freeze/thaw cycles. 

Backcountry hikers, downhill skiers, snowboarders, and other visitors who may traverse slides or steep, open terrain should be aware of and prepared for avalanche conditions. Avalanches can occur in any situation where snow, slope, and weather conditions combine to create instability in the snowpack. While the majority of steep, open terrain is found in the High Peaks region of the Adirondacks, avalanche-prone terrain is found on mountains throughout the Adirondack Mountains. Skiers, snowboarders, and hikers should assess their own experience level before going into the backcountry and should be equipped with avalanche safety tools and knowledge, including participation in an avalanche safety course. 

Recently, DEC Forest Rangers led a search in the Adirondacks for a 63-year-old individual who planned to climb Mount Colden on the weekend of March 11, but failed to return. On March 18, Forest Rangers and volunteer rescuers located the subject deceased in the Trap Dike under approximately four feet of snow. After consulting experts at the National Avalanche Center, evidence suggests an avalanche may have occurred at the site. However, without an eyewitness and due to changing snow conditions, it is impossible to say for certain if the snow accumulation was the result of an avalanche or drifted snow.

An avalanche was confirmed on a slide located on Wright Mountain on Feb. 12, 2022. Two skiers were initially buried. One of the two skiers was able to self-rescue and locate and dig out his companion. Both skiers had proper safety gear including shovels, beacons, and transceivers. The pair had also practiced rescue techniques before the trip.

How to Minimize Risk 

Individuals headed outdoors can reliably avoid avalanches by recognizing and avoiding avalanche terrain. Travel on the valley floor away from large avalanche runouts, along ridgetops above avalanche paths, in dense timber, or on slopes of 25 degrees or less that do not have steeper slopes above them. Avoid cornices, or hanging masses of hardened snow. 

Risk cannot be entirely eliminated if traversing avalanche terrain, but risk can be minimized by using techniques: climb, descend, or cross avalanche areas one at a time; cross a slope at the very top or bottom if possible; climb or descend the edge of a slope rather than the center; carry and know how to use avalanche rescue gear; and turn back or alter the route if signs of unstable snow are detected. 

Signs of Danger 

When the snow cover is very unstable, nature often broadcasts clear danger signals. Fresh avalanches are the best clue. Snow that cracks, collapses, or makes hollow sounds is unstable. Weak layers that are found by digging snow pits are signs of unstable snow. Snow that has become wet from thaw or rain can be dangerous. Even if no signs of unstable snow are found, individuals should always travel observing the techniques listed above to minimize risk. 

Be Prepared 

Outdoor adventurers should always have an avalanche transceiver (or beacon), shovel, and a collapsible or ski-pole probe during avalanche conditions and should practice frequently to be proficient in using a beacon. However, visitors should not take extra risk just because rescue equipment is available to be used and should always carry a day pack with enough equipment to spend the night. 

What to do if Caught in an Avalanche 

Surviving avalanches can depend on luck, but it is always better to avoid avalanches in the first place. Remember that only one of three victims buried without a beacon survives. If caught in an avalanche, first try to escape to the side, or grab a tree or rock. If knocked down, get rid of poles, skis, and a heavy pack. Swim with the avalanche to try to stay on top and avoid trees. When the avalanche slows down, reach the surface or make an airpocket. 

Safe Travel Techniques 

• Never put everyone on the slope. Only one person should be on the slope at a time.
• Have an escape route planned. Always think avalanche - What will you do if the slope slides? Have a plan before you travel.
• Use slope cuts. Keep your speed up and cut across the starting zone, so that if the slope slides, your momentum can carry you off the moving slab into safer terrain. You can do this on skis, snowboards or on snowmobiles.
• Watch out for cornices, which tend to break farther back than expected. Always give them a wide berth. NEVER walk out to the edge of a drop-off without first checking it out. Many people have died this way.
• If it looks too dangerous, find a safer route. Use terrain to your advantage. Follow ridges, thick trees and slopes with safer consequences. You can almost always go back the way you came. The route got you there, it will most likely get you back as well.
• If there's no other choice, go underground. You can almost always weather out a bad storm or bad avalanche by digging a snow cave or seeking the shelter of a crevasse. You may be uncomfortable but you will be alive.

To contact a Forest Ranger, whether it's for a search and rescue, to report a wildfire, or to report illegal activity on State lands and easements, call 833-NYS-RANGERS.

NYS Economy Added 39,800 Private Sector Jobs in February 2022

 

The Number of Private Sector Jobs in New York State Grew by 0.5% in February

 According to preliminary seasonally adjusted figures released today by the New York State Department of Labor, the number of private sector jobs in New York State increased over the month by 39,800, or 0.5%, to 7,888,300 in February 2022. By comparison, the number of private sector jobs in the U.S. increased by 0.5% in February 2022.

    New York State's private sector jobs (not seasonally adjusted) increased by 458,000, or 6.3%, over the year in February 2022. By comparison, the number of private sector jobs in the U.S. increased by 5.4% over the year.

   New York State's seasonally adjusted unemployment rate decreased from 5.3% to 4.9% in February 2022.

    The number of private sector jobs in New York State is based on a payroll survey of 18,000 New York businesses conducted by the U.S. Department of Labor’s Bureau of Labor Statistics (BLS). Monthly payroll employment estimates are preliminary and subject to revision as more complete data become available the following month. The BLS calculates New York State’s unemployment rate based partly upon the results of the monthly Current Population Survey (CPS) of approximately 3,100 households in the State.

Note: Seasonally adjusted data are used to provide the most valid month-to-month comparison. Non-seasonally adjusted data are valuable in year-to-year comparisons of the same month – for example, February 2021 versus February 2022.

Statewide Industry Employment

February 2022 – Seasonally Adjusted

• On a net basis, the total number of nonfarm jobs in the state increased by 30,600 over the month, while private sector jobs rose by 39,800, in February 2022.

• At the same time, the total number of nonfarm jobs in the nation increased by 678,000, while private sector jobs increased by 654,000.

NYS' Nonfarm Job Growth Lagged the Nation's

Over-the-Month % Change in Total Nonfarm & Private Sector Jobs, January – February 2022  

Total Nonfarm and Private Sector Jobs Increased in February 2022 Total Nonfarm and Private Sector Jobs (in 1000s), February 1990 – February 2022 Statewide Unemployment February 2022 – Seasonally Adjusted In February 2022, the statewide unemployment rate decreased from 5.3% to 4.9% New York City’s unemployment rate decreased over the month from 7.6% to 7.0%. Outside of New York City, the unemployment rate decreased from 3.6% to 3.4%, reaching its lowest level on record (current records date back to 1976). The number of unemployed New Yorkers decreased over the month by 36,500, from 498,700 in January to 462,200 in February 2022. NYS Unemployment Rate Fell by 0.4 Percentage Points in February 2022 Labor Force Statistics, February 2021, January - February 2022 The Labor Force and Number of Unemployed Fell in February 2022 Total Labor Force & Number of Unemployed, February 2010 - February 2022 NYS and US Unemployment Rate Decreased Unemployment Rate, NYS & US, February 2010 - February 2022 Unemployment Rate Fell in NYC and in Balance of State Unemployment Rate, NYC & BOS, February 2010 - February 2022

OPERATION CHOPPING BLOCK: TWO ALLEGED GANG MEMBERS INDICTED FOR SELLING 33 FIREARMS TO UNDERCOVER OFFICER

 

Weapons Had Been in Circulation, At Least Two Were Used in Shootings; Guns Sold Include Assault Rifles and Ghost Guns

 Bronx District Attorney Darcel D. Clark and New York City Police Commissioner Keechant L. Sewell today announced that two Bronx men have been indicted for selling 33 weapons and large capacity ammunition feeding devices to an undercover NYPD officer.

 District Attorney Clark said, “The defendants allegedly sold these deadly weapons, many of them loaded, on the streets of the Bronx in broad daylight. All but a handful of these guns have been here for some time; at least two of the guns have been connected to shootings in the Bronx and Manhattan. While we focus on the Iron Pipeline bringing new guns from out of state, this is a case of stopping criminals from recycling weapons that are destroying our communities. I thank the courageous undercover officer for helping to make the Bronx safer.”

 Commissioner Sewell said, “The NYPD and our law enforcement partners are focused on anything or anyone threatening the safety of the people we serve and every gun we take off our streets is another realization of the public-safety promise we make every day, to every New Yorker. I want to commend and thank the NYPD’s Firearms Suppression Section, the Violent Criminal Enterprise Bureau of the Bronx County DA’s Office, the New York Division of the Drug Enforcement Administration, and all the investigators and prosecutors who worked on this important case.”

 Drug Enforcement Administration Acting Special Agent in Charge Tim Foley said, “Today’s arrests put two gang members in jail and shut down access to a gun cache in our backyard. We have seen gun violence and drug trafficking become partners in crime; but law enforcement collaboration is tracking down those responsible in order to make our communities safer. I commend the Bronx District Attorney’s Office, the New York City Police Department, and Homeland Security Investigations New York for their partnership and laudable efforts throughout this investigation.”

 Homeland Security Investigations New York Acting Special Agent in Charge Ricky J. Patel said, “Anytime an illegally owned gun is removed from the street, it undoubtedly makes our communities safer. HSI stands with our partners at the ATF, Bronx District Attorney’s Office, the NYPD and the DEA to do whatever it takes to combat gun violence and stem the flow of violent crime throughout New York City. HSI will continue to forge law enforcement partnerships and utilize every tool in its arsenal to vigorously pursue any individual involved in the trafficking of illegal weapons, a necessity in preserving public safety and stopping gun violence.”

 District Attorney Clark said the defendants, Dereck Velasquez, 29, AKA “Chop,” and Eric Colvin, 26, both of the Bronx, were indicted on 242 counts, including Criminal Sale of a Firearm, Criminal Possession of a Weapon, Conspiracy, Criminal Possession of a Firearm, Possession of Ammunition, Criminal Sale of a Controlled Substance In or Near School Grounds, and Criminal Possession of a Controlled Substance. The defendants were arrested today. They both were arraigned today before Bronx Supreme Court Justice Albert Lorenzo. The defendants were remanded and are due back in court on March 29, 2022.

 The four-month investigation dubbed “Operation Chopping Block,” was conducted by the Bronx District Attorney’s Violent Criminal Enterprise Bureau and the NYPD’s DEA Firearms Task Force of the NYPD’s Firearms Suppression Section, with U.S. Drug Enforcement Administration’s New York Division and Homeland Security Investigations New York.

  According to the investigation, the defendants sold most of the weapons in the Bronx on Jackson Avenue, East 163rd Street and other streets near the Forest Houses in the Morrisania section. Four of the transactions occurred in Harlem.

 The weapons were transferred in broad daylight. In one incident, weapons were held in a laundry bag and pushed in a cart by the seller who then dumped them into the undercover officer’s vehicle.

 Investigators traced two of the firearms to shootings in the Bronx and Manhattan through ballistics evidence found at the scenes, and the investigation continues into the origins of the guns and whether any others have been used in crimes. Two of the firearms are ghost guns, which have no serial numbers and may be composed of 3D printed parts.

 The investigation was conducted by the NYPD’s Firearms Suppression Section, Detective Harish Mansharamani, Sergeant Brian O’Hanlon, Captain Jeffrey Heilig, Inspector Brian Gill; and Assistant Chief Christopher McCormack and Chief of Detectives James Essig.

 District Attorney Clark thanked the DEA’s Group D-34, New York Division for their assistance in the investigation. Group D-34 comprises DEA, NYPD Firearms Investigations Unit, Amtrak Police and Port Authority Police. District Attorney Clark thanked HSI for its assistance in the investigation. 

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

Two Defendants Charged In Non-Fungible Token (“NFT”) Fraud And Money Laundering Scheme

 

Defendants Executed a $1 Million NFT Fraud Scheme in January 2022, and Were Preparing to Execute a Second Prior to Their Arrests

 Damian Williams, the United States Attorney for the Southern District of New York, Thomas Fattorusso, Special Agent in Charge of the New York Field Office of the Internal Revenue Service, Criminal Investigation (“IRS-CI”), Ricky J. Patel, the Acting Special Agent-in-Charge of the New York Field Office of the Department of Homeland Security (“HSI”), and Daniel B. Brubaker, Acting Inspector-in-Charge of the New York Office of the U.S. Postal Inspection Service (“USPIS”), announced that  ETHAN NGUYEN, a/k/a “Frostie,” a/k/a “Jakefiftyeight,” a/k/a “Jobo,” a/k/a “Joboethan,” a/k/a “Meltfrost,” and ANDRE LLACUNA, a/k/a “heyandre,” were charged in a criminal complaint with conspiracy to commit wire fraud and conspiracy to commit money laundering, in connection with a million-dollar scheme to defraud purchasers of NFTs advertised as “Frosties.”  Rather than providing the benefits advertised to Frosties NFT purchasers, NGUYEN and LLACUNA transferred the cryptocurrency proceeds of the scheme to various cryptocurrency wallets under their control.  Prior to their arrests in Los Angeles, California, NGUYEN and LLACUNA were preparing to launch the sale of a second set of NFTs advertised as “Embers,” which was anticipated to generate approximately $1.5 million in cryptocurrency proceeds. 

U.S. Attorney Damian Williams said: “NFTs have been around for several years, but recently mainstream interest has skyrocketed. Where there is money to be made, fraudsters will look for ways to steal it. As we allege, Mr. Nguyen and Mr. Llacuna promised investors the benefits of the Frosties NFTs, but when it sold out, they pulled the rug out from under the victims, almost immediately shutting down the website and transferring the money. Our job as prosecutors and law enforcement is to protect investors from swindlers looking for a payday.”

IRS-CI Special Agent-in-Charge Thomas Fattorusso said: “NFTs represent a new era for financial investments, but the same rules apply to an investment in an NFT or a real estate development. You can’t solicit funds for a business opportunity, abandon that business and abscond with money investors provided you. Our team here at IRS-CI and our partners at HSI closely track cryptocurrency transactions in an effort to uncover alleged schemes like this one.”

HSI Acting Special Agent-in-Charge Ricky J. Patel said: “The trending market and demand for NFT investments has not only drawn the attention of real artists, but scam artists as well.  The arrested thieves allegedly hid behind online identities where they promised investors rewards, giveaways, and exclusive opportunities before implementing their ‘rug pull’ scheme – leaving investors with empty pockets and no legitimate investment. HSI New York’s Dark Web & Cryptocurrency Task Force worked closely with our IRS-CI partners to identify and shut down these fraudsters as they prepared to launch the sale of yet another NFT project that would have likely scammed countless others.”

USPIS Acting Inspector-in-Charge Daniel B. Brubaker said: “The rise and popularity of various cryptocurrencies have changed the landscape of buying and selling investments, leading to ample opportunities for new fraud schemes. Today’s arrests involved Non-Fungible Tokens (“NFTs"), opening the door to alternative investment options and substantial risk. These assets may seem like a good deal or a way to become wealthy, but in many cases, as in this situation, only lead to the loss of your money. Postal Inspectors will pursue fraudsters with our law enforcement partners in any consumer market and advise consumers to pursue emerging investment trends with diligence and skepticism."

As alleged in the Complaint[1]:

Since in or about January 2022, IRS-CI and HSI have been investigating a NFT fraud scheme based on reports from purchasers of Frosties utility NFTs[2] that they had been defrauded in what is colloquially referred to as a “rug pull.”  As the term suggests, a “rug pull” refers to a scenario where the creator of an NFT and/or gaming project solicits investments and then abruptly abandons a project and fraudulently retains the project investors’ funds.  According to the official Frosties website, Frosties purchasers would be eligible for holder rewards, such as, inter alia, giveaways, early access to a metaverse game, and exclusive mint passes to upcoming Frosties seasons.  In reality, on or about January 9, 2022, NGUYEN and LLACUNA, whose legal identities were disguised to Frosties NFT purchasers, abruptly abandoned the Frosties NFT project within hours after selling out of Frosties NFTs, deactivated the Frosties website, and transferred approximately $1.1 million in cryptocurrency proceeds from the scheme to various cryptocurrency wallets under their control in multiple transactions designed to obfuscate the original source of funds.  A screenshot taken from the Frosties website is shown below:

 

 

Prior to their arrests, NGUYEN and LLACUNA were advertising a second NFT project under the name “Embers,” which, based on similarities to the Frosties NFT project, is believed to be another fraud scheme that was expected to launch on or around March 26, 2022.  A screenshot taken from the Embers website is shown below:

 

 

ETHAN VINH NGUYEN, 20, and ANDRE MARCUS QUIDDAOEN LLACUNA, 20, are each charged with one count of commit wire fraud, in violation of 18 U.S.C. § 1349, which carries a maximum sentence of 20 years in prison; and one count of conspiracy to commit money laundering, in violation of 18 U.S.C. § 1956(h), which carries a maximum sentence of 20 years in prison.

The maximum potential sentences described above are prescribed by Congress and are provided here for informational purposes only, as any sentencing of the defendants would be determined by the assigned judge.

Mr. Williams praised the outstanding investigative work of HSI, IRS-CI, and USPIS. 

The case is being handled by the Office’s Complex Frauds and Cybercrime Unit.  Assistant United States Attorney Danielle M. Kudla is in charge of the prosecution.

If you believe that you have been a victim of this crime, please contact HSI Special Agent Paul Nugent at paul.nugent@ice.dhs.gov.

[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 herein should be treated as an allegation as to the defendants charged in the Complaint.

[2] A “utility” NFT offers holders added benefits, such as reward programs, giveaways, and early access to events for NFT holders.