New York Paralegal Blog

FBI Seeking North Carolina Girl Who Disappeared 12 Years Ago

2012-02-14T15:53:00.000-05:00

The Charlotte Division of the FBI is bringing new attention to the case of a missing girl on the 12th anniversary of her disappearance with a multi-platform media campaign. On February 14, 2000, 9-year-old Asha Degree left her home in Shelby, North Carolina, in the middle of the night and disappeared. A combination of media publicity, digital billboards, online promotion, and the use of social media will be utilized to generate new tips to find Asha. A photo of Asha as a 9-year-old child and an age-progressed photo of what she would look like at the age of 19 will be featured on 14 Adams Outdoor Advertising digital billboards across the Charlotte area and will be sent out on various FBI social media platforms including Facebook and Twitter.

Asha’s family last saw her asleep in her bedroom around 2:30 a.m. An hour and a half later, she was seen by drivers walking along North Carolina Highway 18 in Shelby, North Carolina. Her parents reported her missing by 6:30 a.m. More than a year later, Asha’s book bag was discovered buried along North Carolina 18 in Burke County.

The FBI is investigating Asha’s disappearance in partnership with the Cleveland County Sheriff’s Office and the North Carolina State Bureau of Investigation. Additionally, the Cleveland County Sheriff’s Office Cold Case Unit will be reviewing Asha’s case in the near future. Anyone with information regarding this case should call FBI Charlotte at 704-672-6100 or the Cleveland County Sheriff’s Office at 704-484-4787.

DISTRICT ATTORNEY VANCE ANNOUNCES INDICTMENT OF 37 MEMBERS OF ORGANIZED CHECK FRAUD AND MONEY LAUNDERING RING

2012-02-14T15:43:00.000-05:00

Members of Conspiracy Stole from at least 30 Bank Accounts

Manhattan District Attorney Cyrus R. Vance, Jr., today announced the indictment of 37 individuals in connection with a forged check and money laundering ring based in Brooklyn that compromised at least 30 bank accounts at JP Morgan Chase Bank (“Chase Bank”) and Citibank, and stole more than $150,000. All of the defendants are charged with Conspiracy, and the ringleaders are additionally charged with Grand Larceny, Money Laundering, and in some cases, Criminal Possession of a Forged Instrument and Identity Theft.[1]

The charges arise from a joint investigation by the Manhattan District Attorney’s Office’s Cybercrime and Identity Theft Bureau, the NYPD’s Special Frauds Squad, the United States Secret Service Credit Card Squad, and the United States Postal Inspection Service.

“Identity theft is one of the fastest growing crimes in New York City,” said District Attorney Vance. “Dismantling these increasingly sophisticated conspiracies requires the kind of multi-agency coordination and partnership that led to today’s charges. My Office’s Cybercrime and Identity Theft Bureau will continue to work with our partners in law enforcement to prosecute criminal rings that steal personal identifying information for their own enrichment.”

New York City Police Commissioner Raymond W. Kelly said: “These 21st century bank robbers didn’t rely on notes or guns, instead they stole identities, forged checks and withdrew thousands of dollars that didn’t belong to them. But our Financial Crimes Task Force was able to piece together digital clues and shut down their operation. I commend the NYPD detectives, federal investigators and the Manhattan District Attorney’s Office for catching these thieves.”

Special Agent-in-Charge of the New York Field Office of the U.S. Secret Service Brian G. Parr said: “The Secret Service New York Field Office continues to work closely with its local law enforcement partners, collaboratively investigating a broad spectrum of financial fraud schemes. The hard work and dedication of those involved in this investigation has thwarted further fraudulent activity by this group. Financial fraud and identity theft continue to be a top investigative priority for the U.S. Secret Service.”

Inspector-in-Charge of the New York Office of the U.S. Postal Inspection Service Ronald Verrochio said: “Bank fraud impacts all New Yorkers. The Postal Inspectors will continue to work with the Manhattan District Attorney to identify and bring to justice those individuals who prey on our financial systems for their personal gains through fraud.”

According to documents filed in court and statements made on the record in court, from approximately December 2009 to October 2010, ringleaders EARL A. BARRANCO, a/k/a “HOOD,” 25, MAURICE HILTON, 24, ANDRE BEVANS, 20, and JD DAP CUZ offered Chase Bank and Citibank accountholders money in exchange for access to their bank accounts. The defendants then created counterfeit checks using the account information of at least 30 uninvolved individuals and deposited these checks into the accounts owned by their co-conspirators. Once the funds were available for withdrawal, the defendants fraudulently withdrew or directed the withdrawal of money from tellers and ATM machines. The defendants also used the ATM cards of these Chase Bank and Citibank accountholders to purchase more than 250 United States Postal Money Orders fraudulently.

To date, the fraud has resulted in a loss of more than $100,000 from Chase Bank and more than $50,000 from Citibank. According to documents filed at court, BARRANCO used a portion of the stolen money to fund his lifestyle, which included purchases at luxury retail establishments, restaurants, and clubs.

Assistant District Attorney Joanne Y. Li is handling the prosecution of this case under the supervision of Assistant District Attorney David Szuchman, Chief of the Cybercrime and Identity Theft Bureau. The following persons also assisted in this investigation: Cybercrime Analyst Richard Barbieri, Forensic Account Biagio Rosano, Selena Ley of the High Technology Analysis Unit, Investigator Erin Donovan, Senior Investigator Robert Muldoon, and former intern John Cusick.

District Attorney Vance thanked NYPD Detective Richard Providence, Deputy Inspector Gregory Antonsen, Special Agents Matthew Wagner and Daniel P. McGoldrick from the United States Secret Service, and Inspector Ketty Larco of the U.S. Postal Inspection Service for their assistance. District Attorney Vance also thanked Chase Bank, including Fraud Investigator Dorothy Petrillo and Citibank, including Senior Investigator Juergen Krauss, for their cooperation.

Defendant Information:

EARL BARRANCO a/k/a “HOOD,” D.O.B. 7/22/1986

Edgewater, NJ

Charges:

Conspiracy in the Fourth Degree, a Class E Felony, 2 counts
Grand Larceny in the Second Degree, a Class C Felony, 2 counts
Money Laundering in the Second Degree, Class C Felony, 1 count

AUDLEY BARRANCO, D.O.B. 06/30/1959

Brooklyn, NY

Charges:

Conspiracy in the Fourth Degree, a Class E Felony, 2 counts
Grand Larceny in the Second Degree, a Class C Felony, 2 counts
Money Laundering in the Second Degree, Class C Felony, 1 count
Criminal Possession of a Forged Instrument in the Second Degree, a Class D Felony, 1 count
Identity Theft in the First Degree, a Class D Felony, 1 count

LAVARDO BARRANCO, D.O.B. 5/19/1980

Turks and Caicos Islands

Charges:

Conspiracy in the Fourth Degree, a Class E Felony, 2 counts
Grand Larceny in the Second Degree, a Class C Felony, 2 counts
Money Laundering in the Second Degree, Class C Felony, 1 count
Criminal Possession of a Forged Instrument in the Second Degree, a Class D Felony, 1 count
Identity Theft in the First Degree, a Class D Felony, 1 count

MAURICE HILTON, D.O.B. 03/29/1987

Brooklyn, NY

Charges:

Conspiracy in the Fourth Degree, a Class E Felony, 2 counts
Grand Larceny in the Second Degree, a Class C Felony, 2 counts
Money Laundering in the Second Degree, a Class C Felony, 1 count

ANDRE BEVANS, D.O.B. 2/13/1991

Brooklyn, NY

Charges:

Conspiracy in the Fourth Degree, a Class E Felony, 2 counts
Grand Larceny in the Second Degree, a Class C Felony, 2 counts
Money Laundering in the Second Degree, a Class C Felony, 1 count

CHRISTIAN R. CAMPBELL, D.O.B. 3/29/1989

Brooklyn, NY

Charges:

Conspiracy in the Fourth Degree, a Class E Felony, 1 count

KEMAR COHEN, D.O.B. 5/30/1987

Uniondale, NY

Charges:

Conspiracy in the Fourth Degree, a Class E Felony, 1 count

EBONY COLLINS, D.O.B. 1/17/1987

Norcross, GA

Charges:

Conspiracy in the Fourth Degree, a Class E Felony, 1 count

ARIELLE CRUMP, D.O.B. 10/22/1990

Brooklyn, NY

Charges:

Conspiracy in the Fourth Degree, a Class E Felony, 1 count

KERVENS DUFOUR, D.O.B. 3/24/1986

Brooklyn, NY

Charges:

Conspiracy in the Fourth Degree, a Class E Felony, 1 count

ALLISON GNOINSKI, D.O.B. 11/20/1985

Kearny, NJ

Charges:

Conspiracy in the Fourth Degree, a Class E Felony, 1 count

LASHAA HARRIS, D.O.B. 5/3/1989

New York, NY

Charges:

Conspiracy in the Fourth Degree – Class E Felony- 1 count

ANTOINE HAWKINS, D.O.B. 12/2/1989

Springfield Gardens, NY

Charges:

Conspiracy in the Fourth Degree, a Class E Felony, 1 count

JELISA FRANKLIN, D.O.B. 5/13/1989

Hamden, CT

Charges:

Conspiracy in the Fourth Degree, a Class E Felony, 1 count

CODEL GLEAN, D.O.B. 6/24/1989

Brooklyn, NY

Charges:

Conspiracy in the Fourth Degree, a Class E Felony, 1 count

BRITTANY GRAY, D.O.B. 11/30/1987

Brooklyn, NY

Charges:

Conspiracy in the Fourth Degree, a Class E Felony, 1 count

ROBERT HUNTER, D.O.B. 7/18/1992

Brooklyn, NY

Charges:

Conspiracy in the Fourth Degree, a Class E Felony, 1 count

JAMES R. LEVEILLE, D.O.B. 12/31/1986

Brooklyn, NY

Charges:

Conspiracy in the Fourth Degree, a Class E Felony, 1 count

TYIESHA M. LLEWELLYN, D.O.B. 1/6/1992

Brooklyn, NY

Charges:

Conspiracy in the Fourth Degree, a Class E Felony, 1 count

SHANTI MITCHELL, D.O.B. 12/19/1983

Brooklyn, NY

Charges:

Conspiracy in the Fourth Degree, a Class E Felony, 1 count

KENNISE MOSLEY, D.O.B. 6/13/1991

Brooklyn, NY

Charges:

Conspiracy in the Fourth Degree, a Class E Felony, 1 count

JEFFREY PIERRE-LOUIS, D.O.B. 10/19/1988

Brooklyn, NY

Charges:

Conspiracy in the Fourth Degree, a Class E Felony, 1 count

KENNETH S. PRICE D.O.B. 7/20/1987

Brooklyn, NY

Charges:

Conspiracy in the Fourth Degree, a Class E Felony, 1 count

CRYSTAL REED, D.O.B. 7/22/1991

Brooklyn, NY

Charges:

Conspiracy in the Fourth Degree, a Class E Felony, 1 count

DANITA SADLER, D.O.B. 5/7/1989

Brooklyn, NY

Charges:

Conspiracy in the Fourth Degree, a Class E Felony, 1 count

DALE AUSTIN SMALL, D.O.B. 8/8/1974

Far Rockaway, NY

Charges:

Conspiracy in the Fourth Degree, a Class E Felony, 1 count

NORA SANTIAGO, D.O.B. 7/18/1973

Brooklyn, NY

Charges:

Conspiracy in the Fourth Degree, a Class E Felony, 1 count

MARLON SCOTT SINCLAIR, D.O.B. 4/4/1991

Brooklyn, NY

Charges:

Conspiracy in the Fourth Degree, a Class E Felony, 1 count

TEPREME SCALES, D.O.B. 6/17/1991

Brooklyn, NY

Charges:

Conspiracy in the Fourth Degree, a Class E Felony, 1 count

JOVANNA SOTO, D.O.B. 9/30/1988

Far Rockaway, NY

Charges:

Conspiracy in the Fourth Degree, a Class E Felony, 1 count

BRITNEY WATSON, D.O.B. 11/6/1987

Brooklyn, NY

Charges:

Conspiracy in the Fourth Degree, a Class E Felony, 1 count

TIFFANY YATES, D.O.B. 2/11/1986

Brooklyn, NY

Charges:

Conspiracy in the Fourth Degree, a Class E Felony, 1 count

5 JOHN DOE DEFENDANTS:

Charges:

Conspiracy in the Fourth Degree, a Class E Felony, 5 counts
Grand Larceny in the Second Degree, a Class C Felony, 5 counts
Identity Theft in the First Degree, a Class D Felony, 4 counts
Criminal Possession of a Forged Instrument in the Second Degree, a Class D Felony, 4 counts

AS RX DRUG CRISIS GROWS, A.G. SCHNEIDERMAN LAUNCHES “SHARE YOUR I-STOP STORY” WEBSITE

2012-02-13T16:29:00.000-05:00

NEW YORK— Attorney General Eric Schneiderman today launched a new website, “Share Your I-STOP Story,” that showcases personal stories from New Yorkers who have been impacted by the growing epidemic of prescription drug abuse. As momentum builds for legislative action to address the problem, the site urges doctors, pharmacists, addiction sufferers and their families to put a human face on the issue, and help persuade state lawmakers to pass Schneiderman’s Internet System for Tracking Overprescribing (I-STOP) plan aimed at reining in prescription drug abuse. I-STOP connects doctors and pharmacists to a real time, online database that tracks the prescribing and dispensing of frequently abused narcotics.

“Numbers and statistics are important, but at the end of the day, the prescription drug crisis is about people,” said Attorney General Schneiderman. “The firsthand experiences of doctors, pharmacists, patients and family members prove that the status quo is not tenable. You can’t read these stories and not feel some urgency to improve our system and prevent more tragedies from happening in the future.”

Click here to visit the “Share Your I-STOP Story” website: www.ag.ny.gov/online_forms/istop.jsp

The launch of the “Share Your I-STOP Story” site comes in the wake of endorsements for the Attorney General’s legislation from U.S. Senator Kirsten Gillibrand, as well as a bipartisan coalition of 24 U.S. Representatives from across New York State, the District Attorneys Association of the State of New York, New York State Association of Chiefs of Police, New York State Association of PBA's, and the Police Benevolent Association of the New York State Troopers, Inc. Support in the state Legislature for I-STOP is growing as well, with 30 Senate and 40 Assembly sponsors from both parties signed on, including lead sponsors Senator Andrew Lanza (R-Staten Island) and Assemblymember Michael Cusick (D-Staten Island).

The I-STOP stories on the website include those of parents, doctors and pharmacists urging the Legislature to address the prescription drug crisis.

“Tools to improve communication and transparency between health care providers offer the potential to mitigate this disturbing trend of prescription drug abuse while preserving the flexibility needed by physicians,” said Robert J. Fortuna, MD, MPH of Rochester.

“We’re not the first parents to lose a child to drug addiction, but we’d like to be among the last. Please help put a mechanism in place to track prescriptions and drug inventories in the doctor’s offices to bring an end to the addiction epidemic,” said Teri Kroll of Copiague.

“I urge everyone to work together for a solution that will save other people from the same fate that became of my son Michael. When you lose a child, you lose your future,” said Avi Israel of Buffalo.

“I-STOP is the key that we need in order to perform our role as pharmacists to the utmost of our ability - dispensing medications responsibly in a way that will keep New Yorkers safer from the epidemic of prescription drug abuse,” said pharmacist Dora Sosnowik of Oceanside.

Attorney General Schneiderman recently released a report detailing the growing prescription drug abuse epidemic in New York State and nationwide, illustrating the need for a new solution. Statewide, the number of prescriptions for all narcotic painkillers has increased by six million, from 16.6 million in 2007 to nearly 22.5 million in 2010. Both admissions for prescription drug abuse treatment, and deadly overdoses of prescription drugs, are on the rise, according to the report.

The Attorney General’s I-STOP bill would create an online, real-time database to report and track both the prescribing and the dispensing of certain narcotics. The system would enable doctors and pharmacists to provide prescription pain medications, and other controlled substances, to patients who truly need them. At the same time, it will arm them with the necessary data to detect potentially dangerous drug interactions, identify patterns of abuse by patients, doctors and pharmacists, help those who suffer from crippling addictions and prevent potential addiction before it starts. Prescription drug monitoring programs operate in 43 states.

Civil Rights Corruption" w/Ricardo Jones Sr. Former Senior Federal Investigator for the EEOC-NYDO

2012-02-06T17:46:00.000-05:00

Wednesday 02/08/2012 @12pm
Eastern Standard Time

"Civil Rights Corruption" w/Ricardo Jones Sr.
Former Senior Federal Investigator for the EEOC-NYDO

The false sense of the rule of law, due process and discrimination.

Call in with your questions, suggestions and comments (646)716-6587 Remember to press 1 if you would like to speak with us during this live broadcast.

Brought to you by: Chick Chat

THREE MEN SENTENCED TO LIFE TERMS IN PRISON FOR VIOLENT HARLEM MURDER AND ROBBERY

2012-02-06T17:36:00.000-05:00

Manhattan District Attorney Cyrus R. Vance, Jr., today announced the sentencing of three men to significant prison terms for robbing and murdering a 24-year-old man in Harlem in 2008. MICHAEL SMITH, 33, was sentenced today to 20-years-to-life in prison following his conviction at trial in December 2011 of multiple charges, including Murder in the Second Degree. ANTHONY SMITH, 30, pled guilty to Murder in the First Degree in August 2010 and was sentenced to 20-years-to-life in prison. In May 2011, MELVIN PETERS, 49, was convicted at a separate trial of multiple charges, including Murder in the Second Degree, and was sentenced to 45-years-to-life in June 2011.

“Greed and a callous disregard for human life motivated these defendants to viciously attack and rob a young man, leaving his wife a widow and his two young children to grow up without a father,” District Attorney Vance said. “Gun violence continues to plague our streets, and is far too prevalent in certain areas of Manhattan, including where this shooting occurred. We need to stop the flow of illegal guns, such as the one used to carry out this murder, into our city.”

As proven at trial, in the early morning hours of September 28, 2008, several individuals, including MICHAEL SMITH, ANTHONY SMITH, MELVIN PETERS attacked the victim inside 2050 Eighth Avenue, striking and kicking him repeatedly. The defendants then took property, including a watch, from the victim. The defendants dragged the victim out of the building and into West 112th Street, where ANTHONY SMITH used a gun provided by his cousin MICHAEL SMITH to shoot the victim in the head.

Assistant District Attorneys Vera Varshavsky and Eve Teipel prosecuted the case under the supervision of Assistant District Attorney Eugene Porcaro, Chief of Trial Bureau 30.

Defendant Information:

MICHAEL SMITH, D.O.B. 03/23/1978

New York, NY

Convicted:

Murder in the Second Degree, a class A felony, one count
Kidnapping in the First Degree, a class A felony, one count
Gang Assault in the First Degree, a class B felony, one count
Criminal Possession of a Weapon in the Second Degree, a class C felony, two counts
Sentenced:

20-years-to-life in prison
ANTHONY SMITH, D.O.B. 11/23/1981

Bronx, NY

Convicted:

Murder in the First Degree
Sentenced:

20-years-to-life in prison
MELVIN PETERS, D.O.B. 01/18/1963

New York, NY

Convicted:

Murder in the Second Degree, a class A felony, one count
Murder in the Second Degree, a class A felony, one count
Gang Assault in the First Degree, a class B felony, one count
Robbery in the First Degree, a class B felony, one count
Robbery in the Second Degree, a class C felony, one count
Robbery in the Third Degree, a class D felony, one count
Sentenced:

45-years-to-life in prison

EEOC Wins Jury Verdict for Retaliation Victims at Atlanta-Area Restaurant

2012-02-06T17:32:00.000-05:00

Waitress and Three Family Members Fired for Reporting Misconduct, Federal Agency Charged

ATLANTA – A federal jury has awarded $51,700 in back pay, compensatory and punitive damages to four family members who were fired for resisting sexual harassment at a Tucker, Ga., restaurant, the U.S. Equal Employment Opportunity Commission (EEOC) announced today.

According to the EEOC’s suit, Lauren Goldston, a waitress for Sangria’s Mexican Café, engaged in protected activity when she opposed and complained about unwelcome sexual advances, remarks, and inappropriate touching by a male cook at the restaurant. Lauren Goldston’s mother, Sara, aunt, Francesca, and uncle, Max, also worked at Sangria’s. They all reported the sexual harassment to Sangria’s’ owner on several occasions, the EEOC said, but nothing was done by the company to remedy the hostile work environment. Instead of ending the harassment, the EEOC charged, Sangria’s terminated all of the Goldstons in retaliation for reporting the misconduct.

The Atlanta jury of eight returned a unanimous verdict finding that the claimants were entitled to back pay in the amount of $4,000, as the Goldstons largely mitigated their back pay damages by finding other employment after they were fired. The jury also awarded compensatory damages in the amount of $22,000 and punitive damages in the amount of $15,700.

“This verdict is significant because it indicates to employers that, regardless of their size, they must afford their employees the statutorily protected right to oppose unlawful discrimination without the fear of retaliation,” said Bernice Williams Kimbrough, district director for the Atlanta District Office.

Robert Dawkins, regional attorney for the EEOC in Atlanta, added, “Suing a small employer is a difficult proposition. However, the EEOC pursued this case to prevent similar acts of retaliation from recurring. In this case, the jury did a fabulous job. Their verdict was fair, thoughtful and well reasoned as they attempted to balance compensating the Goldstons on one hand while ensuring the economic viability of the restaurant going forward.”

The EEOC is responsible for enforcing federal laws prohibiting employment discrimination. Further information about the EEOC is available on its web site at www.eeoc.gov.

Retired NYPD Officer Convicted in Manhattan Federal Court of Conspiring to Distribute Narcotics

2012-02-03T16:24:00.000-05:00

Defendant Also Convicted of Using, Carrying, and Possessing a Firearm in Connection with the Drug Conspiracy

Preet Bharara, the United States Attorney for the Southern District of New York, announced that ALFREDO RIVERA, a retired New York City Police Department (“NYPD”) officer, was found guilty yesterday on both counts of an indictment that charged him with participating in a conspiracy to distribute cocaine and using, carrying, and possessing a firearm in connection with that conspiracy. The verdict came following a four-day jury trial in Manhattan federal court before U.S. District Judge Katherine B. Forrest.

RIVERA’s co-defendant, Rafael Jimenez, a former auxiliary police sergeant with the NYPD, previously pled guilty on November 2, 2011, to participating in the cocaine distribution conspiracy.

According to the Indictment and the evidence at trial:

During a January 12, 2010, meeting with a government informant (the “First Informant”), Jimenez said he would use an armed retired NYPD officer to assist in the transportation of cocaine. In February of 2010, Jimenez and RIVERA met with a second government informant (the “Second Informant”), whom Jimenez and RIVERA believed to be a large-scale cocaine distributor. During this meeting, RIVERA—who was armed with an NYPD-issued nine millimeter handgun—told the Second Informant that if stopped by the police, “I just show my I.D. and my shield...they always say, ‘get out of here.’” Jimenez and RIVERA subsequently agreed to transport a 10 kilogram load of cocaine from a warehouse in Long Island to a narcotics customer in the Bronx, New York. RIVERA agreed to be paid $1,200 per kilogram of cocaine transported, for a total of $12,000 for 10 kilograms of cocaine, and further agreed to use a portion of that money to pay Jimenez for his role in the transaction.

On March 23, 2010, RIVERA, while armed with the handgun, drove to a warehouse in Long Island, where he was observed by law enforcement agents picking up a duffel bag that contained approximately 10 kilograms of a white substance consistent with the appearance of cocaine. RIVERA then drove the bag from the warehouse to the Bronx.

* * *

RIVERA, 53, of the Bronx, New York, is scheduled to be sentenced on May 18, 2012. He faces a mandatory minimum sentence of 15 years in prison and a maximum sentence of life in prison.

Jimenez, 58, of New York, New York, is scheduled to be sentenced on March 9, 2012. He faces a mandatory minimum sentence of 10 years in prison and a maximum sentence of life in prison.

Mr. Bharara praised the outstanding investigative work of the Federal Bureau of Investigation and the NYPD’s Internal Affairs Bureau.

This case is being handled by the Office’s Public Corruption Unit. Assistant United States Attorneys Brian A. Jacobs and Howard S. Master are in charge of the prosecution.

DISTRICT ATTORNEY VANCE ANNOUNCES SENTENCING IN ATTEMPTED MURDER CASE ON UPPER EAST SIDE

2012-02-03T16:18:00.000-05:00

Defendant Sentenced to 15 Years in Prison for Violent Attack on Ex-Girlfriend

Manhattan District Attorney Cyrus R. Vance, Jr., today announced the sentencing of RAMON LALONDRIZ-CASTILLO, 26, to 15 years in prison and five years post-release supervision, for shooting his ex-girlfriend two years ago as she left work on the Upper East Side. On January 5, 2012, the defendant pleaded guilty to the top charge in the indictment, Attempted Murder in the Second Degree.

“Dating violence among teens and young adults is under-reported, downplayed, or ignored, even though we know it can be just as serious as domestic violence between adults,” said District Attorney Vance. “I would like to commend the bravery of the survivor in this case for speaking out against her attacker at today’s sentencing. We hope that her message reaches the public and helps young people recognize the warning signs of an abusive relationship. It is important for teens and young adults to be able to report violence to their friends or family members, and for parents to start a conversation with their children about what constitutes a healthy, respectful relationship. I encourage anyone in a potentially abusive relationship to call my Office’s Domestic Violence Hotline at 212-335-4308. Help is available for those in need.”

According to documents filed in court and statements made on the record in court, on January 9, 2010, LALONDRIZ-CASTILLO followed the victim, who was 21 at the time, as she and a co-worker left the store where they were both employed. On the corner of East 91st Street and Third Avenue, the defendant rushed toward the victim from behind and attacked her. LALONDRIZ-CASTILLO pushed the victim to the ground, pointed a handgun in her direction, and fired several gunshots before fleeing the scene. The victim was shot twice, once in the base of her skull and once in her right forearm. She was treated at a hospital for her injuries, and made a full recovery.

District Attorney Vance thanked Assistant District Attorney Jon Veiga, Deputy Bureau Chief of Violent Criminal Enterprise Unit, who handled the prosecution of this case.

Defendant Information:

RAMON LALONDRIZ-CASTILLO, D.O.B. 2/27/1985

Convicted:
• Attempted Murder in the Second Degree, a class B felony, one count

Sentenced:
• 15 years in state prison
• 5 years post-release supervision

A.G. SCHNEIDERMAN ANNOUNCES MAJOR LAWSUIT AGAINST NATION’S LARGEST BANKS FOR DECEPTIVE & FRAUDULENT USE OF ELECTRONIC MORTGAGE REGISTRY

2012-02-03T00:05:00.001-05:00

Complaint Charges Use Of MERS By Bank Of America, J.P. Morgan Chase, And Wells Fargo Resulted In Fraudulent Foreclosure Filings

NEW YORK – Attorney General Eric T. Schneiderman today filed a lawsuit against several of the nation’s largest banks charging that the creation and use of a private national mortgage electronic registry system known as MERS has resulted in a wide range of deceptive and fraudulent foreclosure filings in New York state and federal courts, harming homeowners and undermining the integrity of the judicial foreclosure process. The lawsuit asserts that employees and agents of Bank of America, J.P. Morgan Chase, and Wells Fargo, acting as "MERS certifying officers," have repeatedly submitted court documents containing false and misleading information that made it appear that the foreclosing party had the authority to bring a case when in fact it may not have. The lawsuit names JPMorgan Chase Bank, N.A., Bank of America, N.A., Wells Fargo Bank, N.A., as well as Virginia-based MERSCORP, Inc. and its subsidiary, Mortgage Electronic Registration Systems, Inc.

The lawsuit further asserts that the MERS System has effectively eliminated homeowners' and the public's ability to track property transfers through the traditional public records system. Instead, this information is now stored only in a private database – which is plagued with inaccuracies and errors – over which MERS and its financial institution members exercise sole control. Additional defendants include BAC Home Loans Servicing, LP, Chase Home Finance LLC, EMC Mortgage Corporation, and Wells Fargo Home Mortgage, Inc.

“The banks created the MERS system as an end-run around the property recording system, to facilitate the rapid securitization and sale of mortgages. Once the mortgages went sour, these same banks brought foreclosure proceedings en masse based on deceptive and fraudulent court submissions, seeking to take homes away from people with little regard for basic legal requirements or the rule of law,” said Attorney General Schneiderman. “Our action demonstrates that there is one set of rules for all – no matter how big or powerful the institution may be – and that those rules will be enforced vigorously. Only through real accountability for the illegal and deceptive conduct in the foreclosure crisis will there be justice for New York’s homeowners.”

The financial industry created MERS in 1995 to allow financial institutions to evade local county recording fees, avoid the hassle and paperwork of publicly recording mortgage transfers, and facilitate the rapid sale and securitization of mortgages. MERS operates as a membership organization, and most large companies that participate in the mortgage industry – by originating loans, buying or investing in loans, or servicing loans – are members, including JPMorgan Chase, Bank of America, Wells Fargo, Fannie Mae, and Freddie Mac. Over 70 million loans nationally have been registered in MERS System, including about 30 million currently active loans.

Through their membership in MERS, these companies avoided publicly recording the purchase and sale of mortgages by designating MERS Inc. – a shell company with no economic interest in any mortgage loan – as the "nominal" mortgagee of the loan in the public records. Instead, MERS members were supposed to log mortgage transfers in the MERS private electronic registry. The basic theory behind MERS is that, because MERS Inc. serves as a "nominee" (or agent) for most major lenders, it remains the "mortgagee" in the public records regardless of how often the loan is sold or transferred among MERS members. Thus, although MERSCORP has only about 70 employees, MERS Inc. serves as the mortgagee of record for tens of millions of loans registered in the MERS System.

MERS has granted over 20,000 “certifying officers” the authority to act on its behalf, including the authority to assign mortgages, to execute paperwork necessary to foreclose, and to submit filings on behalf of MERS in bankruptcy proceedings. These certifying officers are not MERS employees, but instead are employed by MERS members, including JPMorgan Chase, Bank of America, and Wells Fargo.

MERS' conduct, as well as the servicers’ use of the MERS System, has resulted in the filing of improper New York foreclosure proceedings, undermined the integrity of the judicial process, created confusion and uncertainty concerning property ownership interests, and potentially clouded titles on properties throughout the State of New York. In fact, several New York judges have questioned the standing of the foreclosing party in cases involving MERS loans and the validity of mortgage assignments executed by MERS certifying officers.

The lawsuit specifically charges that the defendants have engaged in the following fraudulent and deceptive practices:

MERS has filed over 13,000 foreclosure actions against New York homeowners listing itself as the plaintiff, but in many instances, MERS lacked the legal authority to foreclose and did not own or hold the promissory note, despite saying otherwise in court submissions.
MERS certifying officers, including employees and agents of JPMorgan Chase, Bank of America, and Wells Fargo, have repeatedly executed and submitted in court legal documents purporting to assign the mortgage and/or note to the foreclosing party. These documents contain numerous defects, including affirmative misrepresentations of fact, which render them false, deceptive, and/or invalid. These assignments were often automatically generated and "robosigned" by individuals who did not review the underlying property ownership records, confirm the documents’ accuracy, or even read the documents. These false and defective assignments often masked gaps in the chain of title and the foreclosing party's inability to establish its authority to foreclose, and as a result have misled homeowners and the courts.
MERS' indiscriminate use of non-employee "certifying officers" to execute vital legal documents has confused, misled, and deceived homeowners and the courts and made it difficult to ascertain whether a party actually has the right to foreclose. MERS certifying officers have regularly executed and submitted in court mortgage assignments and other legal documents on behalf of MERS without disclosing that they are not MERS employees, but instead are employed by other entities, such as the mortgage servicer filing the case or its counsel. The signature line just indicates that the individual is an "Assistant Secretary," "Vice President," or other officer of MERS. Indeed, these documents often purport to assign the mortgage to the certifying officer's own employer. Moreover, as a result of the defendants' failure to track the designation of certifying officers and the scope of their authority to act, individuals have executed legal documents on behalf of MERS, such as mortgage assignments and loan modifications, when they were either not designated as a MERS certifying officer at the time or were not authorized to execute documents on behalf of MERS with respect to the subject loan.
MERS and its members have deceived and misled borrowers about the importance and ramifications of MERS' role with respect to their loan by providing inadequate disclosures.
The MERS System is riddled with inaccuracies which make it difficult to verify the chain of title for a loan or the current note-holder, and creates confusion among stakeholders who rely on the information. In addition, as a result of these inaccuracies, MERS has filed mortgage satisfactions against the wrong property.

The lawsuit seeks a declaration that the alleged practices violate the law, as well as injunctive relief, damages for harmed homeowners, and civil penalties. The lawsuit also seeks a court order requiring defendants to take all actions necessary to cure any title defects and clear any improper liens resulting from their fraudulent and deceptive acts and practices.

The matter is being handled by Deputy Bureau Chief of the Bureau of Consumer Frauds & Protection Jeffrey K. Powell, Assistant Attorney General Clare Norins, and Assistant Solicitor General Steven C. Wu, under the supervision of First Deputy Attorney General Harlan Levy.

Manhattan U.S. Attorney and FBI Assistant Director in Charge Announce Charges Against Two Former Credit Suisse Managing Directors and Vice President for Fraudulently Inflating Subprime Mortgage-Related Bond Prices in Trading Book

2012-02-01T17:19:00.000-05:00

Defendants’ Alleged Conduct Contributed to More Than $2.6 Billion Dollar Write-Down in Bank’s Reported Net Income; Two Defendants Have Pled Guilty and Are Cooperating with the Government’s Investigation

Preet Bharara, the United States Attorney for the Southern District of New York, and Janice K. Fedarcyk, the Assistant Director in Charge of the New York Office of the Federal Bureau of Investigation (“FBI”), announced today the filing of charges against KAREEM SERAGELDIN, DAVID HIGGS, and SALMAAN SIDDIQUI, respectively, managing director/global head of structured credit, managing director, and vice-president in the Investment Banking Division of Credit Suisse Group (“Credit Suisse”).
The defendants are charged with fraudulently inflating the prices of asset-backed bonds which comprised subprime residential mortgage backed securities (“RMBS”) and commercial mortgage backed securities (“CMBS”) in Credit Suisse’s trading book in late 2007 and early 2008. The defendants’ alleged manipulation of these bond prices contributed to Credit Suisse taking a $2.65 billion write-down of its 2007 year-end financial results. SERAGELDIN, HIGGS, and SIDDIQUI were able to secure significant year-end bonuses for themselves since bonus amounts were largely based on trading books’ profitability. SERAGELDIN’s 2007 bonus was over $1.7 million and his Incentive Share Unit Award was more than $5.2 million. The latter was rescinded after Credit Suisse discovered the alleged fraud. HIGGS and SIDDIQUI each pled guilty today, to one count of conspiracy to falsify books and records and commit wire fraud, for their roles in the scheme. They are cooperating with the government’s investigation.

Manhattan U.S. Attorney Preet Bharara said: “While the residential housing market was in free fall, and shock waves were reverberating throughout the economy, these defendants decided they were above the rules of the market and above the law. As alleged, they papered over more than a half billion dollars in subprime mortgage-related losses to secure for themselves a big payday at the same time that many people were losing their homes and their jobs.”

FBI Assistant Director in Charge Janice K. Fedarcyk stated: “The defendants’ overvaluation of mortgage-backed securities benefitted them in the short run, and contributed to Credit Suisse incurring a two billion-dollar-plus write-down when discovered. While the housing market was collapsing, the defendants profited, not by correctly predicting the trend, but by cooking the books.”

The following allegations are based on the Indictment filed against SERAGELDIN and the Informations to which HIGGS and SIDDIQUI pled guilty:

The Defendants’ Roles at Credit Suisse

SERAGELDIN was employed at Credit Suisse as a managing director. He held the position of global head of the Structured Credit Group in the Securities Department of Credit Suisse’s Investment Banking Division, and divided his time between the company’s New York, and London offices. The Structured Credit Group held and traded ABS (“Asset Backed Security”) cash bonds, which included RMBS and CMBS. SERAGELDIN oversaw and managed a number of trading books, including a trading book known as “ABN1.” The ABN1 book was comprised primarily of several thousand individual long and short subprime-related positions, and also included other securities. The long positions consisted of, among other things, various types of cash securities, including AAA-rated and non-AAA-rated cash bonds. Until March 2008, ABN1 had a net asset value of approximately $5.35 billion, approximately $3.71 billion of which consisted of ABS cash bonds, including RMBS and CMBS positions.

HIGGS, who reported directly to SERAGELDIN, was also employed as a managing director at Credit Suisse during the relevant time period, and was based in Credit Suisse’s London office. SIDDIQUI was employed as a trader and Vice President at Credit Suisse and was based in the New York office. Together with an unnamed co-conspirator (“CC-1”), SIDDIQUI was responsible for the day-to-day marking of the value of certain trading books overseen by SERAGELDIN.

Pricing of Mortgage-Backed Securities

Credit Suisse traders were required at all relevant times to price securities they held at their fair value, that is, on a “mark-to-market” basis, determined by reference to the current market price of the asset or liability, or the current price for a similar asset or liability. In the absence of a liquid market, Credit Suisse traders were required to look to other indicia in order to determine the fair value of the assets on their books. During this time, the ABX Index served as a benchmark for certain securities backed by home loans. It was widely understood within Credit Suisse that traders were to consult the corresponding ABX indices when pricing RMBS bonds and related products.

The Defendants’ Bond Pricing Scheme

The deterioration throughout 2007 of the real estate market in the United States, including the subprime housing market, led to significant reductions in valuations of mortgage-backed securities. As mortgage delinquencies increased across the country, the value of the securities backed by these mortgages decreased and the market for them became increasingly illiquid.

By late November 2007, SERAGELDIN was aware that the market for mortgage-backed securities had declined enormously. On November 28, 2007, SERAGELDIN told HIGGS, SIDDIQUI, and CC-1 that “the housing market [was] going down the tubes” and that they had to “find a way to sell these bonds,” i.e., mortgage-backed bonds in ABN1. As SERAGELDIN recognized, “[t]hose bonds are going to start trading worse than the [ABX] Index.” The defendants did not sell the bonds because the market prices for the bonds were substantially below the inflated value at which they marked the bonds.

From August 2007 through February 2008, SERAGELDIN, HIGGS, SIDDIQUI and their co-conspirators artificially increased the price of bonds in order to create the false appearance of profitability in the ABN1 trading book. Specifically, SERAGELDIN directed HIGGS on numerous occasions to reach specific Profit & Loss (“P&L”) targets on a daily and month-end basis. HIGGS, in turn, instructed SIDDIQUI, CC-1, and another unnamed co- conspirator (“CC-2”) to mark the books so as to achieve the particular P&L targets specified by SERAGELDIN, rather than to reflect the fair value of the bonds.

In order to reach specific P&L targets, SERAGELDIN, HIGGS, SIDDIQUI, and their co-conspirators marked up bond prices without regard to fair market value; improperly offset mark-downs with gains realized in other parts of the book to avoid a P&L impact; and engaged in the practice of “reversing out,” which involved freezing marks at a favorable point in time to achieve a desired P&L result. In addition, as part of their scheme, SERAGELDIN, HIGGS, SIDDIQUI, and their co-conspirators concealed their manipulation of bond marks from internal control personnel within Credit Suisse who were charged with independently ensuring the accuracy of bond prices, and they devised other ways to avoid detection of their fraud.

Credit Suisse’s ABN1 Trading Book Was Falsely Inflated as a Result of the Scheme

As a result of the scheme, there was a growing disparity between the values ascribed to the marks in the ABN1 book and the available external benchmarks, such as the ABX Index. From August 2007 through the end of that year, as ABX Index prices fell, bond prices in ABN1 that were supposed to reflect the ABX Index remained effectively stable, thereby giving the false impression to Credit Suisse senior management that the ABN1 book was profitable. On one occasion in January 2008, SERAGELDIN expressed concern to HIGGS that the overpriced bonds were at risk of being discovered: “We should mark these down because someone is going to spot this.”

The 2008 Mark-Down

On March 20, 2008, Credit Suisse issued a press release, which announced completion of its internal review and stated that the fair value reduction, or write-down, of the ABS positions—which includes but is not limited to the ABNl book—was approximately $2.65 billion.

Approximately $540 million of this write-down was attributable to the ABN1 trading book and included ABS cash bonds for the fourth quarter 2007 that SERAGELDIN manipulated and inflated in connection with his scheme.

***

SERAGELDIN, 38, a United States citizen who currently resides in the United Kingdom, is charged with conspiracy to falsify books and records and to commit wire fraud, as well as with substantive charges of falsifying books and records and wire fraud. If convicted, SERAGELDIN faces a maximum sentence of five years in prison on the conspiracy count, a maximum sentence of 20 years in prison on each of the books and records and the wire fraud counts, a maximum fine of $5,000,000 on the books and records count, and a maximum fine of the greater of $250,000, or twice the gross gain or loss from the offense on each of the conspiracy and wire fraud counts.

HIGGS, 42, a citizen and resident of the United Kingdom, and SIDDIQUI, 36, a resident of the Washington, D.C. metropolitan area, each pled guilty to one count of conspiracy to falsify books and records and commit wire fraud. HIGGS and SIDDIQUI each face a maximum sentence of five years in prison and a fine of the greater of $250,000, or twice the gross gain or loss from the offense.

Mr. Bharara praised the work of the Federal Bureau of Investigation and thanked the Securities and Exchange Commission for its assistance in the investigation of this case. He said the investigation is continuing.

12 indicted in large-scale drug and money laundering case

2012-02-01T17:15:00.000-05:00

DETROIT — Twelve individuals were charged in an indictment for their role in a significant drug distribution operation that allegedly trafficked in excess of 30 kilograms of heroin, 12 kilograms of cocaine, 1,000 pounds of marijuana and laundered in excess of $21 million. The joint investigation was conducted by U.S. Immigration and Customs Enforcement's (ICE) Homeland Security Investigations (HSI), the Drug Enforcement Administration and the Internal Revenue Service Criminal Investigation Division.

The charges were announced Wednesday by United States Attorney Barbara L. McQuade, Eastern District of Michigan, Special Agent in Charge Robert L. Corso, DEA, Special Agent in Charge Erick Martinez, IRS CID and Special Agent in Charge Brian Moskowitz, HSI Detroit.

Indicted were Carlos Ellis Powell, 37, of Washington Township, Mich., Eric Jerome Powell, 34, of Franklin Farms, Mich., Ignacio Avalos, 21, of Phoenix, Kenneth Robert Daniels, 53, of Detroit, Earnest Lee Proge, Jr., 36, of Detroit, Tobias John Proge, 28, of Clinton Township, Mich., Dwayne Rnay Taylor, 35, of Detroit, Tamika Olivia Turner, 34, of Eastpointe, Mich., Juan Valle, 59, of Coldwater, Mich., Margarita Lopez DeVallejo, 39, of LaHabla, Calif., Benny Bernard Whigham, 34, of Detroit and Donald Lee Wilson, 49,of Parkland, Fla.

"Thwarting today's criminal organizations requires the collective expertise, diverse statutory authorities and jurisdiction of many agencies and departments," said Moskowitz. "This case is a perfect example of the power of collaboration and its impact on public safety here in Detroit."

The indictment, which was returned on January 25, 2012 and unsealed today, alleges that beginning in 2006 and continuing to the present, Carlos Powell, Eric Powell and ten others operated a drug organization which dealt in multi-kilogram quantities of heroin, cocaine and marijuana, in the Detroit metropolitan area. Members of the organization would arrange for large amounts of money derived from the sale of drugs to be transported to Phoenix, Mexico and elsewhere for the purpose of purchasing more controlled substances. As part of the conspiracy, members of the organization would use semi-trucks and vehicles equipped with traps and hidden compartments to transport heroin, cocaine and marijuana, as well as cash generated from the sale of these drugs.

Members of this organization, using the illegal proceeds of their narcotic sales, purchased and leased numerous luxury vehicles, acquired and sold real property, and purchased jewelry while concealing the true source and nature of the funds involved in the transaction through false names and nominee purchasers.

It is alleged that members of the organization would deposit large amounts of cash derived from the sale of drugs into various bank accounts, purchase cashier's checks and money orders, and wire transfer these funds. These funds would then be used to purchase assets and pay personal expenses with the goal of concealing the true source, nature and ownership of the funds.

"We are focused on dismantling major drug trafficking organizations that bring illegal drugs into our community," McQuade said. "We want young people to see that the lucrative rewards from drug trafficking are short-lived and lead to criminal charges."

The indictment also seeks criminal forfeiture of jewelry appraised at over $800,000, eight pieces of real property in Michigan and Georgia valued in excess of $750,000, 10 vehicles, including a 2004 Rolls Royce, 2006 and 2008 Bentleys, a 2006 Ferrari, 4 Mercedes', a Ranger Rover and two boats.

The investigation was assisted by the following Michigan-based agencies: Northville Township Police Department, Plymouth Township Police Department, Warren Police Department, Redford Police Department, Macomb County Sheriff's Office, Detroit Police Department and the state police.

An indictment is only a charge and is not evidence of guilt. Every defendant is entitled to a fair trial in which it will be the government's burden to prove guilt beyond a reasonable doubt.

L.A. Fire Department Settles EEOC Harassment & Retaliation Case for Nearly $500,000

2012-01-31T23:03:00.001-05:00

Firefighter Tormented by Sexual and Religious Harassment & Disciplined in Retaliation for Participating in Another Firefighter’s Discrimination Proceeding

LOS ANGELES — The Los Angeles City Fire Department will pay $494,150 and implement widespread anti-harassment training to settle federal charges of discrimination filed with the U.S. Equal Employment Opportunity Commission (EEOC), the federal agency announced today.

Anthony Almeida, a firefighter/engineer employed since 1986, filed an EEOC discrimination charge initially in 2007, alleging that he was continually harassed by fellow firefighters at his station who employed deeply offensive comments of a sexual and religious nature. An EEOC investigation uncovered that the harassment, which began in late 2006, appeared linked to a lawsuit filed against the Catholic Church by Almeida regarding sexual abuse he suffered by a priest. One coworker learned that Almeida had filed a lawsuit against the Catholic Church over the abuse, and several coworkers mocked him for that, using explicit and offensive religious and sexual epithets. Although Almeida complained about the harassment to management officials, the EEOC investigation found that the Fire Department failed to adequately halt or address it. Further, the investigation found that Almeida had suffered retaliatory discipline for his participation in another equal employment opportunity investigation.

Harassment of a sexual or religious nature, along with retaliation, violates Title VII of the Civil Rights Act of 1964. Following a determination by the EEOC that there was reasonable cause to believe a violation of law occurred, the Los Angeles City Fire Department entered into a three-year conciliation agreement with the EEOC and Almeida, who was represented by private counsel. The agreement effectively settles the case administratively, thereby avoiding litigation. Aside from the monetary relief, the Fire Department agreed to provide widespread live anti-harassment training to all fire station chiefs and their subordinate staff, impacting every fire station in the city of Los Angeles. The Fire Department also agreed to continue to enforce its policies against discrimination, harassment and retaliation; to offer an external equal employment opportunity complaint procedure; to post a notice on the matter; to report future instances of harassment to the EEOC; and, to publicize the settlement via press release.

“We are pleased that the Los Angeles City Fire Department is demonstrating its commitment toward creating a workplace free of harassment and retaliation,” said Olophius Perry, district director for the EEOC’s Los Angeles District Office. “By working with the EEOC this way, the Department is sending a message that no further civil rights abuses will be tolerated -- a key responsibility of all employers.”

According to its website, the Los Angeles City Fire Department employs over 3,500 uniformed personnel and has 103 neighborhood fire stations across its 470 square-mile jurisdiction, protecting approximately four million people living within the city of Los Angeles.

The EEOC enforces federal laws prohibiting employment discrimination. Further information about the EEOC is available on its web site at www.eeoc.gov.

DISTRICT ATTORNEY VANCE ANNOUNCES SENTENCING IN MIDTOWN ARSON CASE

2012-01-31T12:04:00.000-05:00

Daniel Phillips Sentenced to 10 Years In Prison For Setting Major Fire in Residential Building

Manhattan District Attorney Cyrus R. Vance, Jr., today announced the sentencing of DANIEL PHILLIPS, 32, to 10 years in prison to be followed by five years post-release supervision, as well as $10,000 in restitution. On November 1, 2010, the defendant was convicted at trial on charges of Arson in the Second Degree, Criminal Mischief in the Second Degree, and Reckless Endangerment in the Second Degree, for starting a fire at 410 West 48th Street, a six-story apartment building with approximately 71 residents.

“It must have been terrifying for the residents and families fleeing this fire to find flames and smoke blanketing their building’s stairwell in the middle of the night,” said District Attorney Vance. “The defendant had every reason to believe that setting this fire would endanger every resident in the building, but he did it anyway, causing extensive damage and displacing residents on a bitterly cold winter night. Apart from jeopardizing lives, the safety of firefighters responding to the scene was also compromised.”

As proven at trial, the defendant attended a party in the building during the early morning hours of January 25, 2009. PHILLIPS got into an argument with another individual, and was asked to leave by the host at approximately 4:30 a.m. The defendant left the apartment and the building and, within moments, he returned and set a fire underneath a stairwell on the first floor, where the recycling and garbage bins were kept. The fire and smoke traveled up the stairwell, blowing out the skylight on the roof, and causing significant fire damage to the stairwell and smoke damage to the majority of apartments. On a 14-degree night, dozens of people in the building were evacuated, many via fire escapes. The fire caused more than $320,000 in damage to the building itself.

District Attorney Vance thanked Assistant District Attorney Ryan Hayward, who prosecuted this case, under the supervision of Assistant District Attorney William Darrow, Chief of Trial Bureau 70. Former Trial Preparation Assistant Elaine Driscoll assisted at trial.

Defendant Information:

DANIEL PHILLIPS, 5/30/79
New York, NY

Convicted:

Arson in the Second Degree, a class B violent felony, one count
Criminal Mischief in the Second Degree, a class D felony, one count
Reckless Endangerment in the Second Degree, a class A misdemeanor

Sentenced:

10 years in state prison
5 years post-release supervision
$10,000 restitution

DMV EMPLOYEE INDICTED FOR ISSUING FRAUDULENT DRIVER LICENCES

2012-01-30T23:56:00.000-05:00

Clarence Jenkins Charged with Accepting Forged Documents to Issue Driver Licenses Unlawfully

Manhattan District Attorney Cyrus R. Vance, Jr., and New York State Inspector General Ellen N. Biben announced the indictment of CLARENCE JENKINS, 56, a clerk at the New York State Department of Motor Vehicles (“DMV”), for unlawfully processing applications for New York State driver licenses to three individuals, including at least one deported felon who illegally returned to the country, after accepting forged driver licenses purportedly issued by the Commonwealth of Puerto Rico that JENKINS knew were forgeries. JENKINS is charged with Criminal Possession of a Forged Instrument in the Second Degree, Issuing a False Certificate, and Official Misconduct.

“Taking advantage of his position as a public employee, this defendant is charged with enabling at least one deported felon to unlawfully obtain a New York driver license,” said District Attorney Vance. “In doing so, he may have jeopardized public safety.”

Inspector General Biben said: “The charged conduct is not only criminal but exposed the public to the risk of other crimes. My office will continue to root out such breaches of the public trust, and I thank District Attorney Vance’s office for their effective work on this matter.”

New York State Department of Motor Vehicles Commissioner Barbara J. Fiala said: “The processing of license documents without presenting proper identification is a serious crime which the department will continue to assist law enforcement and prosecutors in preventing. I congratulate the DMV staff and law enforcement agencies involved in this investigation as well as the staff of the District Attorney who will prosecute this case.”

The DMV routinely issues New York State driver licenses to individuals who present valid licenses from other states or the Commonwealth of Puerto Rico.

According to documents filed in court and statements made on the record, JENKINS worked for ten years as a clerk at the DMV office located at 159 East 125th Street in Manhattan. He is accused of accepting forged driver licenses purportedly issued by the Commonwealth of Puerto Rico from at least three individuals who paid money to obtain the illegally-issued New York State driver licenses.

According to documents filed in court and statements made on the record in court, a previously deported felon paid $3,500 to obtain a license from JENKINS. This individual was given specific instructions to go to the DMV at 125th Street, wear a Yankees hat, sit in front of JENKINS’ window, and then wait for a signal from JENKINS. On January 13, 2009, JENKINS accepted a forged Puerto Rican driver license from the individual and, in turn, issued to him a New York State driver license.

On June 11, 2009, according to the indictment, JENKINS accepted a forged Puerto Rican driver license from a second individual, who paid $7,000 to obtain a genuine New York license from JENKINS. Finally, JENKINS is also accused of accepting, on August 20, 2009, a forged Puerto Rican driver license and issuing a New York State driver license to a third individual, who paid $4,000 for the license.

Assistant District Attorney Eli Cherkasky is prosecuting this case, under the supervision of Assistant District Attorney Daniel Cort, Chief of the Public Integrity Unit.

District Attorney Vance thanked Investigative Counsel Ken Michaels, Deputy Chief Investigator Nicholas D’Amelio, and Investigator Ann Peters from the New York State Inspector General’s Office; and Sergeant William Planeta and Detective Lawrence Lloyd of the Special Investigations Division of the New York City Police Department; and Senior Investigator Robert Riley of the New York State Department of Motor Vehicles for their assistance in the case.

[1]The charges contained in the indictment are merely allegations, and the defendant is presumed innocent unless and until proven guilty.

Defendant information:

CLARENCE JENKINS, D.O.B. 6/2/1955
New York, NY

Charges:
• Criminal Possession of a Forged Instrument in the Second Degree, a class D felony, 3 counts
• Issuing a False Certificate, a class E felony, 3 counts
• Official Misconduct, a class A misdemeanor, 3 counts

EEOC Wins Preliminary Injunction to Prevent Retaliation Against Pitre, Inc. Employees

2012-01-30T12:09:00.001-05:00

Federal Court Issues ‘Extraordinary Remedy’ in Class Male-on-Male Sexual Harassment and Retaliation Suit Filed Against Albuquerque Car Dealership

ALBUQUERQUE, N.M. – Pitre Inc., a car dealership in Albuquerque, N.M., was barred on January 26, 2012 by the U.S. District Court from threatening or retaliating against current and former employees who participate in the employment discrimination lawsuit filed against it by the U.S. Equal Employment Opportunity Commission (EEOC). The EEOC filed a motion for a preliminary injunction due to the immediate danger of “substantial and irreparable injury” to charging parties, class members, witnesses, and potential class members due to intimidation.

Chief United States District Court Judge Bruce Black, who granted the EEOC’s motion, prohibited the Pitre dealership and all of its agents from threatening or engaging in retaliatory actions against all current and former employees who participate in the lawsuit filed by the EEOC against Pitre, Inc. Under the preliminary injunction, the dealership and all of its agents, except the dealership’s attorneys, are prohibited from contacting current non-management employees or former employees regarding the facts and/or defenses in the lawsuit without an EEOC attorney present. Judge Black also affirmatively directed the dealership to instruct its employees that it is unlawful to engage in retaliatory actions against any current or former employee based upon their participation in the lawsuit.

The EEOC filed the underlying lawsuit on behalf of a class of male employees, who were allegedly subjected to egregious sexual harassment and retaliation over a ten-year period. The EEOC contends that Pitre, Inc. engaged in unlawful behavior after the filing of the lawsuit by threatening witnesses, offering witnesses money in exchange for their agreement not to participate in the lawsuit, encouraging local dealerships to engage in retaliatory acts, such as refusing to hire former Pitre employees, and intimidating current employees by creating a work environment that was permeated with retaliation.

“We are very pleased by this court order. Our laws mandate that people should be free to assert their civil rights without retribution. We hope that our witnesses, class members, potential class members, and charging parties will now be safe from any retaliation for participating in this lawsuit,” said Mary Jo O’Neill, regional attorney of the EEOC’s Phoenix District Office, which has jurisdiction over Arizona, Colorado, Wyoming, New Mexico and Utah.

The EEOC enforces federal laws prohibiting employment discrimination. Further information about the EEOC is available on its web site at www.eeoc.gov.

EEOC Sues Suffolk Laundry Services for Sexual Harassment of Female Laundry Workers

2012-01-30T12:04:00.001-05:00

Company Ignored Years of Sexual Harassment by Manager, Agency Charged

NEW YORK – Suffolk Laundry Services, Inc. created a sexually hostile work environment for female laundry workers over the course of many years and then retaliated against these women when they complained, the U.S. Equal Employment Opportunity Commission (EEOC) charged in a federal lawsuit it filed today. The Southampton, N.Y.-based commercial laundry service provides linens to various establishments, including restaurants and hospitals on Long Island.

According to EEOC’s lawsuit, a manager physically and verbally sexually harassed multiple female laundry workers at the facility. The agency alleged that over the course of several years, the manager regularly touched women on their buttocks, hips, backs, forcibly kissed them, and made comments about their appearance and body parts. The agency also alleged that the manager subjected the women to verbal sexual harassment by conditioning requests for time off or for laundry machine repairs with demands that the women sit on his lap or kiss him. The lawsuit further charged that after discrimination charges were filed with the EEOC, Suffolk Laundry continued to permit the manager to remain in his position of authority and retaliated against women who complained by terminating them, reducing their work hours and/or altering their work assignments.

Such alleged conduct constitutes sex discrimination in violation of Title VII of the Civil Rights Act of 1964. The EEOC filed suit in U.S. District Court for the Eastern District of New York (12-CV-409) after first attempting to reach a pre-litigation settlement through its conciliation process. The suit seeks to recover compensatory damages for women who suffered sexual harassment while employed for the Suffolk Laundry Services as well as obtain injunctive relief to prevent future harassment and retaliation. The EEOC will litigate the case in partnership with LatinoJustice PRLDEF, the non-profit organization representing the seven women who filed charges.

“The EEOC stands ready to litigate sexual harassment cases when we believe that discrimination has occurred,” said EEOC General Counsel P. David Lopez. “And it is important that we work in partnership with organizations such as LatinoJustice that aid our efforts to ensure that the rights of victims of alleged discrimination are vindicated.”

Ami Sanghvi, a trial attorney in the New York District Office, added, “It took a great deal of courage for the women who filed charges to come forward and speak up against a manager who had power over their livelihood. The EEOC is committed to ensuring that they and other female workers need not feel as though they must silently suffer sexual harassment.”

The EEOC’s New York District Office has jurisdiction over New York, Connecticut, Maine, Massachusetts, New Hampshire, Rhode Island, Vermont, and portions of New Jersey.

The EEOC enforces federal laws prohibiting employment discrimination. Further information about the EEOC is available on its web site at www.eeoc.gov.

Ozarks Electric Cooperative Sued By EEOC For Religious Discrimination

2012-01-26T17:51:00.000-05:00

Power Supplier Fired Jehovah’s Witness for Wanting One Day Off to Attend Religious Convention, Federal Agency Charges

FAYETTEVILLE, Ark. – Ozarks Electric Cooperative Corporation, an electric power supplier located in Fayetteville, Ark., violated federal law by firing an employee because of her religious practices, the U.S. Equal Employment Opportunity Commission (EEOC) charged in a lawsuit it filed today.

According to the EEOC’s suit (Case No. 5:12-cv-05014-JLH, filed in U.S. District Court for the Western District of Arkansas, Fayetteville Division), Julia Solis, a call center customer service representative and a Jehovah’s Witnesses, requested one day off to attend a religious convention. The company denied the request and finally fired Solis for this, the agency said.

Such conduct violates Title VII of the Civil Rights Act of 1964, which protects employees against discriminationbased on religion and requires employers to provide employees with reasonableaccommodations to allow them to practice their sincerely held religiousbeliefs. The EEOC filed suit after first attempting to reach a pre-litigation settlement through its conciliation process.

The EEOC has asked the court to grant a permanent injunction enjoining Ozarks Electric from engaging in any further employment practice that discriminates against employees because of their religious beliefs and requiring the company to reasonably accommodate the religious beliefs of employees. The EEOC has also asked the court to order the company to provide relief to Solis, compensatory and punitive damages and any other relief the court deems necessary and proper.

“This employee’s request was so modest and minor it is astounding the company not only refused it, but also fired her.” said Katharine W. Kores, district director of the EEOC’s Memphis District Office, which has jurisdiction over Arkansas, Tennessee and portions of Mississippi. “Employees should never be forced to choose between their religion and their job.”

Ozarks Electric Cooperative Corporation is a not-for-profit corporation that supplies electric power to its members in Northwest Arkansas and Northeast Oklahoma. According to its website, it serves more than 62,000 homes, farms, businesses and industries in parts of Benton, Crawford, Franklin, Madison and Washington counties in Arkansas, and Adair, Cherokee, Delaware and Sequoyah counties in Oklahoma.

The EEOC enforces federal laws prohibiting employment discrimination. Further information about the EEOC is available on its web site at www.eeoc.gov.

Jonathan Gonzales-Alvarez Convicted by Jury for Murdering Bar Employee

2012-01-26T17:47:00.000-05:00

Manhattan District Attorney Cyrus R. Vance, Jr., announced the conviction of JONATHAN GONZALES-ALVAREZ, 23, for fatally stabbing a security guard at a restaurant and bar in Washington Heights after the bar’s employees asked him to quiet down. A jury in New York State Supreme Court found GONZALES-ALVAREZ guilty of all of the charges in the indictment: Murder in the Second Degree and Gang Assault in the First Degree. The defendant will be sentenced on February 15, 2012.

“A father of two young boys lost his life merely because he asked the defendant to quiet down at a bar,” said District Attorney Vance. “I thank the jurors for their service in this case.”

As proven at trial, on October 27, 2009, GONZALES-ALVAREZ was at La Casa Del Mofongo, a bar in Washington Heights that was hosting a late night karaoke and dance contest. When GONZALES-ALVAREZ became rowdy, the bar’s employees asked him to quiet down. GONZALES-ALVAREZ then punched the bar’s security guard, Arsene Epouta, in the face and stabbed him with a switchblade multiple times in the back, right thigh, abdomen, and heart. Epouta was later pronounced dead at New York Presbyterian Hospital.

A separately charged defendant, LUIS ALMANZAR, 23, is facing manslaughter charges in a pending case.

Assistant District Attorneys Jeffrey Levinson and Amy Sharpe prosecuted the case, under the supervision of Assistant District Attorney Warren Murray, Chief of Trial Bureau 50.

Defendant Information:

JONATHAN GONZALES-ALVAREZ, D.O.B. 3/1/1988
Bronx, NY

Convicted:
• Murder in the Second Degree, a class A felony, 1 count
• Gang Assault in the First Degree, a class B felony, 1 count

Private Sector Bias Charges Hit All-Time High

2012-01-25T18:46:00.000-05:00

Pending Inventory Reduced for First Time in 10 Years, Record Amount of Relief Obtained in FY 2011, EEOC Reports

WASHINGTON—The U.S. Equal Employment Opportunity Commission (EEOC) received a record 99,947 charges of employment discrimination and obtained $455.6 million in relief through its administrative program and litigation in Fiscal Year 2011, the agency announced today. For the second year in a row, despite a record number of receipts, the Commission resolved more charges than it took in with 112,499 resolutions (7,500 more resolutions than FY 2010—an increase of 7%)—leaving 78,136 pending charges, a ten percent decrease in its inventory, the first year the agency has seen a reduction since 2002.

The FY 2011 data also show:

Due to EEOC’s enforcement programs in both the private and federal sectors, 5.4 million individuals benefitted from changes in employment policies or practices in their workplace during the past fiscal year.
Through its combined enforcement, mediation and litigation programs, the EEOC was able to obtain a record $455.6 million in relief for private sector, state, and local employees and applicants, a more than $51 million increase from the past fiscal year and continuing the upward trend of the past three fiscal years.
The mediation program reached record levels, both in the number of resolutions – 9,831 – which is 5% more than in FY 2010 (9,362), and benefits -- $170,053,021-- $28 million more than FY 2010.
The Commission filed 300 lawsuits and its litigation efforts resulted in $91 million of relief, representing the third year in a row that the relief obtained was greater than in the preceding year. Continuing to build on its commitment to systemic litigation, 23 of the lawsuits filed involved systemic allegations involving large numbers of people and an additional 67 had multiple victims (less than 20).
The Commission also filed 261 “merits” (merits suits include direct suits and interventions alleging violations of the substantive provisions of the statutes enforced by the Commission and suits to enforce administrative settlements) lawsuits.
EEOC’s public outreach and education programs reached approximately 540,000 persons.
In the federal sector, where the EEOC has different enforcement obligations, the Commission resolved a total of 7,672 requests for hearings, securing more than $58 million in relief for parties who requested hearings. It also resolved 4,510 appeals from final agency determinations.

“For the second year in a row, the EEOC received a record number of new charges of discrimination,” said EEOC Chair Jacqueline Berrien. “Nevertheless, the hard work of our employees, combined with increased investments in training, technology and staffing in 2009 and 2010, and strategic management of existing resources made 2011 a year of extraordinary achievements for the EEOC.”

The total number of charges received was up slightly from last fiscal year’s record total. Once again, charges alleging retaliation under all the statutes the EEOC enforces were the most numerous at 37,334 charges received, or 37.4 percent of all charges, closely followed by charges involving claims of race discrimination at 35,395 charges or 35.4 percent. While the numbers of charges with race and sex discrimination allegations declined from the previous year, charges with the two other most frequently-cited allegations increased:

Disability discrimination--25,742
Age discrimination—23,465

The agency’s enforcement of Americans with Disabilities Act (ADA) produced the highest increase in monetary relief among all of the statutes: the administrative relief obtained for disability discrimination charges increased by almost 35.9 percent to $103.4 million compared to $76.1 million in the previous fiscal year. Back impairments were the most frequently cited impairment under the ADA, followed by other orthopedic impairments, depression, anxiety disorder and diabetes.

For the first full fiscal year of enforcement, the EEOC received 245 charges under the Genetic Information Nondiscrimination Act, which prohibits discrimination on the basis of genetic information, including family medical history. So far, none of these charges has proceeded to litigation.

The EEOC is responsible for enforcing Title VII of the Civil Rights Act of 1964, the Age Discrimination in Employment Act, the Equal Pay Act, the Americans with Disabilities Act, and the Genetic Information Nondiscrimination Act.

The fiscal year 2011 enforcement and litigation statistics, which include trend data, are available on the EEOC’s website at http://www.eeoc.gov/eeoc/statistics/enforcement/index.cfm. More information about the EEOC is available on its website at www.eeoc.gov.

DA VANCE ANNOUNCES INDICTMENT OF FORMER GENERAL COUNSEL OF NYS THRUWAY EMPLOYEES LOCAL 72 FOR STEALING MORE THAN $211,000

2012-01-25T18:43:00.000-05:00

Kevin Clor Accused of Submitting 150 Bogus Receipts for CLE Classes, Legal Reference Materials

Manhattan District Attorney Cyrus R. Vance, Jr., today announced the indictment of KEVIN CLOR, 40, for stealing more than $211,000 from the New York State Thruway Employees Local 72 (the “Union”) and for submitting forged receipts for reimbursement. CLOR was indicted on two counts of Grand Larceny in the Second Degree, 16 counts of Criminal Possession of a Forged Instrument in the Second Degree, and 16 counts of Falsifying Business Records in the First Degree.

“As general counsel of the New York State Thruway Employees union, the defendant had a duty to protect the rights and financial well-being of the union’s members,” said District Attorney Vance. “Instead of representing their best interests, he stands accused of violating their trust and used his position to enrich himself illegally.”

According to documents filed in court, from January 5, 2001, to April 21, 2011, CLOR worked as the General Counsel of the Union. Chartered by the International Brotherhood of Teamsters, the Union represents more than 2,500 full-time and part-time employees of the New York State Thruway Authority, including toll collectors, grounds workers, janitors, painters, and carpenters.

CLOR worked out of his home office in Buffalo, NY, and, among other things, was responsible for representing Union members at disciplinary proceedings, grievance proceedings with the New York State Thruway Authority, and arbitration hearings. CLOR was entitled to reimbursement for legitimate and necessary business expenses incurred on behalf of the Union and required travel. As a matter of course, CLOR was reimbursed for travel and lodging when he traveled to represent Union members in proceedings around the state, and for Continuing Legal Education (“CLE”) classes, and legal reference materials. In order to be reimbursed, CLOR was required to submit an expense report and original receipts to the Union’s office in Manhattan. Once the expense report was reviewed and approved, the Union would mail CLOR a reimbursement check.

Between January 2006 to in or about May 2011, CLOR is charged with stealing over $211,000 from the Union by submitting approximately 150 forged receipts to the Union for reimbursement. Based on these receipts, approximately $128,000 was paid to CLOR from the Union’s Welfare Fund, and approximately $84,000 was paid from the Union’s general account.

CLOR is accused of submitting for reimbursement numerous false receipts for CLE classes that he never attended or were never offered, legal materials that he never purchased, and UPS services he never used:

• CLOR claimed to have attended and paid for CLE classes, totaling $30,000, given by the International Foundation, an accredited CLE provider. In actuality, CLOR never attended or paid for the classes, and was not given CLE credit by the International Foundation.

• CLOR submitted receipts, totaling more than $48,000, for CLE classes allegedly given by the “Education Certification Department” of the New York State Department of Civil Service (“NYSDCS”) located in Albany. NYSDCS does not operate an “Education Certification Department” and the address listed on the receipts is not a valid NYSDCS address.

• CLOR claimed to have attended CLE classes, totaling more than $23,000, provided by the Nichols School. In fact, the Nichols School is a private middle and high school near CLOR’s home in Buffalo, and does not provide CLE classes. The only expenses CLOR appears to have paid for at the school was the rental of the school’s ice rink on two occasions.

• CLOR submitted receipts, totaling over $22,000, for numerous legal reference materials he claimed to have purchased from Thomson Reuters. The receipts, however, bear the wrong corporate name of the company and include the names of alleged salespeople who are not employees of Thomson Reuters. Additionally, some of the books CLOR claimed to have purchased were not published by Thomson Reuters.

• CLOR submitted forged UPS receipts, totaling over $37,000, for alleged copying and mailing services. The address listed on the receipts is not an actual UPS store location. Additionally, there are no records of the transactions listed on the forged receipts.

Assistant District Attorney José Fanjul is prosecuting this case, under the supervision of Special Prosecutions Bureau Chief Thomas Wornom and Deputy Bureau Chiefs Judy Salwen and Archana Rao. Trial Preparation Assistant Colleen MacPhee of the Special Prosecutions Bureau, and Financial Investigator Vincent Jones of the District Attorney’s Forensic Accounting and Financial Investigations Bureau assisted in the investigation. Investigators Eva Barriga of the District Attorney’s Investigations Bureau assisted in the arrest of the defendant, under the supervision of Senior Investigator Santiago Batista and Chief Investigator John Bilich.

[1] The charges contained in the indictment are merely allegations, and the defendant is presumed innocent unless and until proven guilty.

Defendant information:

KEVIN CLOR, D.O.B. 11/05/1971
Buffalo, NY

Charges:
• Grand Larceny in the Second Degree, a class C felony, 2 counts
• Criminal Possession of a Forged Instrument in the Second Degree, a class D felony, 16 counts
• Falsifying Business Records in the First Degree, a class E felony, 16 counts

NYPD Officer Pleads Guilty to Extortion and Criminal Civil Rights Violation

2012-01-24T23:47:00.011-05:00

Defendant Fabricated Resisting Arrest Charge

Michael Daragjati, an eight-year veteran of the New York City Police Department, pleaded guilty today to violating an African-American victim’s civil rights by charging him with resisting arrest knowing that there was no probable cause to support that charge. Daragjati also pleaded guilty to attempting to violently extort property from another victim. The guilty pleas were entered before United States District Judge William F. Kuntz, II, at the U.S. Courthouse in Brooklyn. As part of his plea agreement, Daragjati will not oppose termination of his employment by the NYPD and has agreed never to apply for a job in law enforcement in the future. Daragjati faces a maximum sentence of 21 years’ imprisonment.

The guilty plea was announced by Loretta E. Lynch, United States Attorney for the Eastern District of New York; Janice K. Fedarcyk, Assistant Director in Charge, Federal Bureau of Investigation, New York Field Office; and Raymond W. Kelly, Commissioner, New York City Police Department.

In his plea allocution today, Daragjati admitted that he knew the victim would spend the night in jail after Daragjati charged him with resisting arrest without probable cause. As charged in the government’s pleading filed today, after swearing out the criminal complaint falsely charging the victim with resisting arrest, Daragjati was recorded telling a friend on the telephone that he had just “fried another n****r (expletive deleted).”

Daragjati also threatened and assaulted a second victim in an effort to extort snowplow equipment that Daragjati believed the second victim had stolen from him.

“The defendant criminally abused the immense authority and public trust conferred on him by his status as a police officer,” stated United States Attorney Lynch. “Hiding behind his badge, he subjected his victims to false arrest, imprisonment and threats of violence. He has been held to account for his criminal acts and will not have the opportunity repeat them.”

FBI Assistant Director in Charge Fedarcyk stated, “Police officers are expected to carry out their duties with respect and professionalism, and to honor the oath of office. Daragjati admitted to egregious breaches of that oath, including intentionally fabricating a criminal charge, depriving his victim of his liberty. The public should never have to be protected from those sworn to protect and serve.”

The government’s case is being prosecuted by Assistant United States Attorneys Paul Tuchmann, Cristina Posa and Amy Busa.

The Defendant:

MICHAEL DARAGJATI Age: 32

Four East Haven Police Officers Charged with Civil Rights Offenses

2012-01-24T16:22:00.001-05:00

David B. Fein, United States Attorney for the District of Connecticut; Thomas E. Perez, Assistant Attorney General in Charge of the Civil Rights Division; and Janice K. Fedarcyk, Assistant Director in Charge of the New York Field Office of the FBI, today announced that a federal grand jury sitting in Bridgeport returned an indictment charging four East Haven Police officers with conspiring to violate, and violating, the civil rights of members of the East Haven community. This morning, Sergeant JOHN MILLER and Officers DAVID CARI, DENNIS SPAULDING, and JASON ZULLO were arrested without incident. The indictment was unsealed today.

“Today’s indictment should serve as a powerful message that we in the Department of Justice will not tolerate the abuse of power or victimization of civilians by anyone in law enforcement,” said U.S. Attorney Fein. “The serious crimes alleged in the indictment undermine the public’s trust in the fine men and women of law enforcement who serve the people bravely and with integrity every day.”

“The allegations laid out in the indictment are troubling and the Justice Department is committed to vigorously investigating and prosecuting cases where we find allegations of police misconduct,” said Assistant Attorney General Perez. “The EHPD has a critical mission—to ensure public safety in East Haven. The Civil Rights Division is committed to helping EHPD fulfill that mission effectively while respecting the rights of the people it serves. As deeply rooted as these problems are, I remain optimistic that we can fix them.”

“The four police officers charged today allegedly formed a cancerous cadre that routinely deprived East Haven residents of their civil rights,” said FBI Assistant Director in Charge Fedarcyk. “The public should not need protection from those sworn to protect and serve. In simple terms, these defendants behaved like bullies with badges.”

According to allegations contained in the indictment, from approximately 2007 through 2011, Miller, Cari, Spaulding, and Zullo, while acting under color of law, conspired to injure, oppress, threaten, and intimidate various members of the East Haven community in violation of their constitutional rights.

The indictment alleges that Miller and others maintained and perpetuated an environment where the use of unreasonable force and unreasonable searches and seizures was tolerated and encouraged. It is alleged that Cari, Spaulding, and Zullo engaged in unreasonable searches and seizures, including unlawful searches of premises and arrests of individuals without probable cause or based on false and misleading information, and that Miller, Spaulding, Zullo, and another officer used unreasonable force during lawful and unlawful arrests.

It is alleged that this unreasonable force was used when victims were unarmed, neither resisting nor interfering with the police, but rather securely under the control of the police or otherwise cooperative. In some cases, the victims were handcuffed with their hands behind their backs when officers assaulted them. Some of the victims were particularly vulnerable because they were undocumented aliens or otherwise marginalized, having little perceived standing in the community, and thus unlikely to raise objection to the abuse.

The indictment further alleges that Spaulding and Zullo intimidated, harassed, and humiliated members of the Latino community and their advocates. Spaulding and Zullo conducted unreasonable and illegal searches at Latino-owned businesses, and Spaulding followed, intimidated and harassed advocates who worked to defend the rights of members of the Latino community.

The indictment alleges more than 30 overt acts by the four defendants and others in furtherance of the conspiracy. The acts include:

A July 2007 incident during which Miller and another officer used unreasonable force against a victim in the vicinity of the Saltonstall Parkway;
A November 2008 incident during which Spaulding used excessive force against an individual in the parking lot of a Latino-owned restaurant and bar. Spaulding then arrested the individual under false pretenses to cover-up the assault, and prepared a false report to justify the false arrest;
A January 2009 incident in the same parking lot during which Spaulding and Zullo arrested three individuals under false pretenses and with Miller and Cari present. Zullo then used excessive force against two of the individuals in the EHPD station, and Spaulding prepared a false report to justify the arrests;
A February 2009 incident during which Spaulding, Cari and other officers illegally searched a vehicle parked outside of a Latino-owned grocery store. Inside the store, Cari and Spaulding, under Miller’s supervision, then arrested a religious leader, who is also an advocate for Latinos, on false pretenses. At Miller’s direction, Cari, Spaulding, Zullo, and others conducted an illegal search of the back room of the store in an effort to unlawfully seize the store’s video recording equipment. In the days following the arrest, Cari drafted various false versions of an arrest report to cover up the false arrest of the religious leader. In the months following the incident, Spaulding engaged in behavior intended to intimidate the religious leader and others;
A January 2010 incident during which Miller used excessive force against an individual in the vicinity of Thompson Avenue, and then reprimanded a fellow officer who witnessed the assault and reported it to a supervisory sergeant;
Intimidation and harassment of East Haven Police Commissioners who were attempting to investigate the arrest of the religious leader and certain alleged misconduct involving Miller;
Intimidation of EHPD personnel, including threatening statements about an EHPD officer who was believed to be cooperating in an investigation of EHPD.

Each of the four defendants is charged with one count of conspiracy against rights, which carries a maximum term of imprisonment of 10 years and a fine of up to $250,000.

Miller, Spaulding, and Zullo are also charged with one count of use of unreasonable force by a law enforcement officer, which carries a maximum term of imprisonment of 10 years and a fine of up to $250,000.

Additionally, Spaulding is charged with two counts and Cari with one count of deprivation of rights for making arrests without probable cause. Each of these counts carries a maximum term of imprisonment of one year and a fine of up to $100,000.

Finally, Spaulding is charged with two counts and Cari with one count of obstruction of a federal investigation for preparing false reports to justify the false arrests. Each of these counts carries a maximum term of imprisonment of 20 years and a fine of up to $250,000.

The indictment was returned under seal on January 18. The case has been assigned to Chief United States District Judge Alvin W. Thompson in Hartford.

U.S. Attorney Fein stressed that an indictment is not evidence of guilt. Charges are only allegations, and each defendant is presumed innocent unless and until proven guilty beyond a reasonable doubt.

This matter is being investigated by the Civil Rights Squad of the FBI’s New York Field Office. New York FBI Special Operation teams, including its SWAT Team, assisted today’s arrests.

U.S. Attorney Fein stated that the investigation is ongoing and encouraged individuals with information that may be helpful to the investigation to call the FBI at 212-384-5000.

Deputy United States Attorney Deirdre M. Daly and Assistant United States Attorney Krishna R. Patel are prosecuting the case with assistance from the Criminal Section of the Civil Rights Division.

Berryhill Owner Groped Bartenders, Then Retaliated Against Them for Complaining, Federal Agency Charges

2012-01-24T16:11:00.000-05:00

HOUSTON – A Houston-area restaurant chain violated federal law when it subjected its bartenders to sexual harassment, the U.S. Equal Employment Opportunity Commission (EEOC) charged in a lawsuit it filed today. The EEOC also alleged that the company subjected the workers to retaliation after they complained about the misconduct.

According to the EEOC’s lawsuit, (Civil Action No 4:12-cv-00221), filed in U.S. District Court for the Southern District of Texas, Berryhill Baja Grill subjected Kimberly Kulig and Laura Baatz to repeated sexual harassment. Baatz and Kulig, both bartenders, were sexually harassed by Philip Wattel, the owner of two Berryhill restaurants from at least 2006 to 2008. Wattel’s harassment included groping the two women, and exposing himself to at least one of them. The two employees complained about the harassment to Wattel himself, the store manager and a corporate human resources official. However, the misconduct continued, the EEOC said. Berryhill had no sexual harassment policy during the relevant time period. After the employees complained about the harassment and filed discrimination charges with the EEOC, Berryhill gave Kulig an unfavorable working schedule and refused to rehire Baatz. Thereafter, the harassment became so severe that Kulig was forced to quit her job in about December 2007, the EEOC said. Baatz’s employment with Berryhill was terminated in or about February 2008.

Sexual harassment and retaliation are forms of discrimination which violate Title VII of the Civil Rights Act of 1964. The EEOC is seeking a permanent injunction prohibiting the company from engaging in further employment discrimination or retaliation, as well as back pay, compensatory damages and punitive damages.

“Sexual harassment is a form of psychological abuse that undermines an employee’s ability to work, affecting her productivity and morale,” said R.J. Ruff, director of the EEOC’s Houston District Office.

EEOC Regional Attorney Jim Sacher said, “Every company has a duty to protect its employees from sexual harassment in the workplace. And employees have a right to protect themselves from such harassment by coming to the EEOC.”

The EEOC enforces federal laws prohibiting employment discrimination. Additional information about the EEOC is available on the agency’s website at http://www.eeoc.gov.

CONVICTED WHITE COLLAR CRIMINAL PLEADS GUILTY IN MURDER-FOR-HIRE PLOT Aaron Hand Sought Retribution Against Witness While in Prison for Mortgage Fraud

2012-01-23T23:13:00.001-05:00

Manhattan District Attorney Cyrus R. Vance, Jr., today announced the guilty plea of AARON HAND, 40, to Conspiracy to Commit Murder in the First and Second Degrees for conspiring to murder a witness who testified against him at his 2010 trial, at which he was convicted of masterminding a $100 million mortgage fraud. HAND will be sentenced on February 6, 2012. This sentence will run consecutively with the 8 1/3-to-25 years that HAND is currently serving on his mortgage fraud conviction.

“The defendant’s actions strike at the heart of the justice system,” said District Attorney Vance. “Nothing is more important than the safety of witnesses, and my Office will do everything in its power to ensure their safety.”

In July 2010, Hand was convicted by a jury of heading up a $100 million mortgage fraud scheme through a corrupt loan origination company called AFG Financial Group, Inc. One month later, HAND was sent to the New York State Coxsackie Correctional Facility to serve his sentence.

As admitted during his guilty plea in court, in July 2011, HAND began attempting to arrange from prison the murder of one of the witnesses who testified against him at his trial (the “Witness”). Based on a tip that one of its investigators received in August 2011, the Manhattan District Attorney’s Office, working with the Inspector General’s Office of the New York State Department of Corrections and Community Supervision and the New York City Police Department, began an investigation.

According to documents filed in court, on August 26, 2011, an undercover investigator from the District Attorney’s Office, posing as a “hit man,” met with HAND at the Coxsackie Correctional Facility. During a lengthy, recorded conversation, HAND provided the undercover investigator with details of where the Witness lived and outlined ways in which the investigator could carry out the hit. HAND also told the investigator that if the hit occurred at the Witness’s home, the Witness’s spouse and young children would likely also have to be killed so that law enforcement would be unable to link HAND to the hit.

HAND agreed to compensate the undercover investigator, both once the hit happened and also with an upfront payment to buy a firearm and other supplies for the crime. HAND later also provided the undercover investigator with the phone number of an associate whom the investigator could contact to get the money (the “Associate”).

In order to obtain the Associate’s assistance—and in order to obtain money from his unwitting parents to make the upfront payment—HAND concocted a story that he needed the cash to bribe a Correction Officer at the Coxsackie Facility. Ultimately, HAND’s parents provided $150 to the Associate, at HAND’S request, during a roadside exchange off the Long Island Expressway. Investigators from the District Attorney’s Office captured the exchange on surveillance video after learning of the planned hand-off through HAND’S prison calls and communications intercepted via a court-authorized wiretap of the Associate’s cell phone.

Just days after the hand-off, on September 10, 2011, the Associate met the undercover investigator outside a diner on the east side of Manhattan and gave him the $150 in cash that HAND’s parents had provided. After receiving the money from the Associate, the undercover investigator visited HAND a second time at the Coxsackie Correctional Facility on September 15, 2011. During that meeting, HAND again told the undercover investigator that he wanted the Witness murdered and agreed to pay the undercover investigator $2,000 for the hit. HAND and the undercover investigator agreed that the murder would occur within two weeks and that the plot was in motion.

Assistant District Attorneys Dana Irvis and Peirce R. Moser handled the prosecution of the case under the supervision of Assistant District Attorneys Christopher Conroy and Polly Greenberg, Deputy Chiefs of the Major Economic Crimes Bureau; Assistant District Attorney Richard Weber, Deputy Chief of the Investigation Division and Chief of the Major Economic Crimes Bureau; and Executive Assistant District Attorney Adam S. Kaufmann, Chief of the Investigation Division. ADAs Irvis and Moser were assisted in the investigation by Trial Preparation Assistants Anusha Pamula and Katherine Savarese, both of the Major Economic Crimes Bureau; Senior Investigator Gerald Bergold, Supervising Investigator Michael Wigdor and Undercover Investigator 102, all of the Investigation Bureau; Detective Michael Bazerman of the District Attorney’s NYPD Office Squad; Senior Investigator John Cavalcante and Deputy Inspector General Kenneth Torreggiani, both of the Inspector General’s Office of the New York State Department of Corrections and Community Supervision; Detectives Scott Christie and Tricia Peterson, both of the New York City Police Department; and Senior Investigators Reginald Barometre, James Fenrich, and Thomas Lombardo, and Investigators Max Adler, Behzad Ahdout, Keith Christensen, Karen Kelly, David Lee, Faith Tuohy, and Matthew Winters, all of the Investigation Bureau.

Defendant Information:

AARON HAND, D.O.B. 12/25/1971
Coxsackie Correctional Facility, Coxsackie, New York

Convicted:
• Conspiracy in the Second Degree to commit the crimes of Murder in the First and Second Degrees, a class B felony, one count

SEMINAR LUNCHEON CYBER-BULLYING

2012-01-21T14:18:00.000-05:00

The Paralegal Association of Rochester is hosting a seminar luncheon on cyber-bullying.

Erica DiRenzo, Esq. from Hiscock & Barclay
Wednesday, February 29, 2012
Noon at the Powers Building, 8th Floor Conference Room, 16 W. Main Street.

Click here for more information.

CUNY Citizenship Now! Volunteer Registration Form

2012-01-21T13:55:00.000-05:00

Dear Volunteers,

CUNY Citizenship Now! is excited to announce our next citizenship event on Saturday, February 4th. Our weekend events truly highlight the dedication of volunteers like you and are an integral part of our core mission at CUNY Citizenship Now!

Join us at our next event sponsored by Assembly Member Nelson L. Castro and the Office of International Student Services of Bronx Community College. The event will take place at Bronx Community College and will be our first event of 2012 in the Bronx. We have had a great turnout in our previous events in Queens and Manhattan, and we hope to assist just as many, if not more people, as we make our way around the five boroughs this year.

To attend this event, please click on the appropriate button below.

Please note that you must RSVP using the link in this email in order to volunteer at this event. Due to constraints on capacity, we are no longer able to accommodate walk-in volunteers.

We hope to see you there!

Citizenship Now!

Application Assistance Day with
Assembly Member Nelson L. Castro

Saturday, February 4th, 2012

Open to the Public from 11:00 a.m. to 2:00 p.m*
Bronx Community College
Colston Hall Lower Level
2155 University Avenue
Bronx, NY 10453

If you were forwarded this email and are not on our listserv, please click here to fill out our brief online form, and then click on the appropriate button below.

TO REGISTER, CLICK HERE

*We urge you to arrive promptly at 10 a.m. so that you can sign in, watch our orientation video, and enjoy breakfast.

For more information, please call Alex Lapegna at
(212) 652-2035 or email cunycitizenshipnow@gmail.com.

Sincerely,

CUNY Citizenship Now!

Commercial Bankruptcy APC Course Released By NALA!

2012-01-21T13:37:00.001-05:00

A new Advanced Paralegal Certification (APC) course in Commercial Bankruptcy under Chapters 7 and 11 of the United States Bankruptcy Code is now available to paralegals seeking advanced certification in this specialty practice area.

The new course focuses on bankruptcies of business debtors. Chapter 7 provides for debt relief and liquidation of an enterprise’s assets. Chapter 11 gives a business protection from creditors and a chance to prepare a plan of reorganization to pay debts and stay in business. Source, NALA

DISTRICT ATTORNEY VANCE ANNOUNCES ARRAIGNMENT OF FUGITIVE ATTORNEY CHARGED WITH STEALING CLIENT FUNDS

2012-01-20T23:57:00.006-05:00

Douglas Arnsten Charged With Stealing More Than $7 Million From Client Before Fleeing to Hong Kong

Manhattan District Attorney Cyrus R. Vance, Jr., today announced the arraignment of DOUGLAS ARNSTEN, 34, a real estate attorney, for embezzling more than $7 million from a client of the Manhattan law firm Crowell & Moring, where he was formerly employed. With the assistance of officers from the U.S. Department of Justice’s Office of International Affairs and U.S. Marshals Service, ARNSTEN was returned to New York earlier today. The defendant has been charged in New York County Criminal Court with two counts of Grand Larceny in the First Degree and one count of Scheme to Defraud in the First Degree.[1]

“Lawyers who steal funds from their clients do more than just violate the law; they betray an important trust,” said District Attorney Vance. “The day after Douglas Arnsten was terminated from his firm, my Office initiated an investigation into his conduct and he fled to Hong Kong, where he had been held by authorities ever since. He is charged with abusing his client’s trust and, to make matters worse, he attempted to evade justice. He will be prosecuted with those factors in mind.”

According to the felony complaint, ARNSTEN was an attorney at Crowell & Moring between February 2007 and September 2011. Regal Real Estate LLC (“Regal”), a real estate management company for commercial and residential buildings in Manhattan, used the firm, and specifically the defendant, as their attorney on most, if not all, of their real estate transactions. Beginning in April 2010, ARNSTEN began moving money from the escrow accounts related to the sale of Regal’s properties into bank accounts he controlled.

According to the bail application made by the District Attorney’s Office in court, after the theft from Regal was uncovered, a second corporate client of Crowell & Moring contacted the Manhattan District Attorney’s Office regarding the defendant’s handling of that client’s funds. The investigation into ARNSTEN is continuing.

This investigation was conducted by Assistant District Attorneys Gary J. Galperin, Senior Investigative Counsel, and Sophi K. Jacobs of the Rackets Bureau, who handled the case under the supervision of Assistant District Attorneys Michael Scotto, former Chief of the Rackets Bureau, Jane Tully, Deputy Chief of the Rackets Bureau, and Executive Assistant District Attorney Adam S. Kaufmann, Chief of the Investigation Division. Trial Preparation Assistant Michael S. Taddei, Supervising Financial Investigator Matthew Paul, Senior Rackets Investigators Reginald Barometre and James Fenrich, Rackets Investigator Jonathan Reid, and Chief Investigator John Bilich also provided valuable assistance with the investigation. Assistant District Attorney Madeleine Guilmain is handling the asset forfeiture aspect of the case, under the supervision of Assistant District Attorney Duncan Levin, Chief of the Asset Forfeiture Unit.

District Attorney Vance thanked the U.S. Department of Justice’s Office of International Affairs, the U.S Marshals Service, and officials in the People’s Republic of China for their assistance.

Defendant Information:

DOUGLAS ARNSTEN, D.O.B. 12/6/77
Staten Island, NY

Charges:
• Grand Larceny in the First Degree, a class B felony, two counts
• Scheme to Defraud in the First Degree, a class E felony, one count

Former Chicago Lawyer Sentenced to 15 Years in Prison for Mortgage Fraud Involving at Least 102 Fraudulent Bailouts

2012-01-20T22:13:00.006-05:00

CHICAGO—A former Chicago lawyer was sentenced to 15 years in federal prison for engaging in mortgage and bankruptcy fraud schemes involving a so-called “mortgage bailout” program that purported to “rescue” financially distressed homeowners but instead tricked victims into relinquishing title to their homes and declaring bankruptcy. The defendant, Norton Helton, participated in at least 102 fraudulent mortgage bailout transactions and more than a dozen fraudulent bankruptcies in 2004 and 2005. He was ordered to pay more than $3.2 million in mandatory restitution to various lenders and financial institutions that were not repaid by the borrowers or fully recovered through subsequent foreclosure sales, federal law enforcement officials announced today.

Helton, 50, of Atlanta and formerly of Chicago, was sentenced Wednesday by U.S. District Judge Samuel Der-Yeghiayan in federal court in Chicago. He was ordered to begin serving his sentence in June.

Helton and two co-defendants, Charles White and Felicia Ford, were convicted of multiple fraud counts following a five-week trial in June and July 2010. White, 43, of Chicago, was sentenced late last year to more than 22 years in prison, while Ford, 39, of Chicago, is awaiting sentencing next month.

White owned and operated Eyes Have Not Seen (EHNS), which purported to offer insolvent homeowners mortgage bailout services that would prevent them from losing their homes in foreclosure by selling their property to third-party investors for whom the defendants fraudulently obtained mortgage financing. The victim-clients were assured they could continue living in their homes rent and mortgage-free for a year while they attempted to eliminate their debt and repair their credit. EHNS misled clients concerning the operation of the purported program. In particular, victim-clients were not told that their homes were, in fact, being sold to third parties and that ENHS would strip their homes of any available equity at the time of sale, which EHNS did. Instead, ENHS clients were told that they were only temporarily transferring their homes and would preserve their ownership rights.

Helton was recruited by White to represent ENHS participants at the real estate transactions it orchestrated. The victim-clients typically met Helton for the first time at the closings at which they sold their homes. Helton worked to placate individuals who questioned the program and to dissuade them from retaining independent legal advice. He received above-market legal fees for appearing at closings at which he did little more than guide victim-clients through the paperwork that sold their homes with EHNS receiving all of the profits from the sale. Helton further used the ENHS real estate closings to recruit prospective bankruptcy clients, informing them that bankruptcy would serve as a component of the bailout program. Helton subsequently filed more than a dozen bankruptcy petitions for victim-clients that omitted any reference to their recent EHNS property sales.

In addition to participating in ENHS’s bailout program, Helton attempted to implement his own mortgage bailout program through Diamond Management of Chicago, Inc., a foreclosure avoidance company comparable to EHNS. Helton marketed Diamond’s bailout program and his bankruptcy services as part of a “credit repair” system.

Patrick J. Fitzgerald, United States Attorney for the Northern District of Illinois, announced the sentence today with Robert D. Grant, Special Agent in Charge of the Chicago Office of the Federal Bureau of Investigation; Barry McLaughlin, Special Agent in Charge of the U.S. Housing and Urban Development Office of Inspector General in Chicago; and Thomas P. Brady, Inspector in Charge of the U.S. Postal Inspection Service in Chicago. The U.S. Trustee Program, a Justice Department component that oversees administration of bankruptcy cases and private trustees, also assisted in the investigation.

The government is being represented by Assistant U.S. Attorneys Joel Hammerman and Mark E. Schneider.

The case is part of a continuing effort to investigate and prosecute mortgage fraud in northern Illinois and nationwide under the umbrella of the interagency Financial Fraud Enforcement Task Force, which was established to lead an aggressive, coordinated, and proactive effort to investigate and prosecute financial crimes. For more information on the task force, visit: www.StopFraud.gov.

Choctaw Transportation Company Settles EEOC Racial Discrimination Suit for $75,000

2012-01-19T18:16:00.000-05:00

Company Refused to Hire Blacks as Deckhands, Federal Agency Charged

MEMPHIS, Tenn. – Choctaw Transportation Company, Inc., a marine construction and transportation company located in Dyersburg, Tenn., will pay $75,000 to an African-American job applicant to settle a racial discrimination lawsuit filed by the U.S. Equal Employment Opportunity Commission (EEOC), the agency announced today.

In its lawsuit, the EEOC charged that the company violated federal law by refusing to hire a black job applicant for a deckhand position because of his race. The EEOC charged that Choctaw has for decades segregated its work force and has refused to hire blacks in deckhand positions. The EEOC further charged that Choctaw violated the record-keeping provision of the Americans with Disabilities Act (ADA) when it failed to properly maintain medical and personnel records.

Race discrimination in hiring violates Title VII of the Civil Rights Act of 1964. The EEOC filed suit, No. 1:10-cv-01248-JDB-egb, in U.S. District Court for the Western District of Tennessee, Eastern Division, after first attempting to settle the matter through its conciliation process.

In addition to monetary relief, the three-year consent decree settling the lawsuit enjoins Choctaw Transportation from further discriminating against blacks in hiring and requires it to use its best efforts to fill up to 25% of available positions with African-Americans. The consent decree further provides for training both on and off its vessels on employee rights under Title VII, and requires Choctaw Transportation to maintain records of discrimination complaints, provide annual reports to the EEOC, and post a notice to employees about the lawsuit that includes the EEOC’s contact information.

“Employees should not be subjected to racial discrimination in hiring, as it is a violation of federal law,” said Faye Williams, Regional Attorney for the EEOC’s Memphis District Office. “The EEOC will continue to ensure that such barriers to employment are removed.”

According to company information, Choctaw Transportation operates a marine construction and transportation company that works, in part, with the U.S. Army Corps of Engineers in the marine/barge industry.

The EEOC enforces federal laws prohibiting employment discrimination. Further information about the EEOC is available on its web site at www.eeoc.gov..

Manhattan U.S. Attorney and FBI Assistant Director in Charge Announce Charges Against Seven Investment Professionals for Insider Trading Scheme that Allegedly Netted More Than $61.8 Million in Illegal Profits

2012-01-18T23:08:00.000-05:00

Preet Bharara, the United States Attorney for the Southern District of New York, and Janice K. Fedarcyk, the Assistant Director in Charge of the New York Office of the Federal Bureau of Investigation (“FBI”), today announced charges against seven investment professionals, who worked at three different hedge funds and two other investment firms, for engaging in a scheme in which they provided each other with material, non-public information (“Inside Information”) about two publicly traded technology companies, Dell, Inc. (“Dell”) and NVIDIA (“NVDA”).

Using the Dell Inside Information, the three hedge funds netted more than $61.8 million in illegal profits and one of the investment firms avoided $78,000 in losses. Charged in a complaint unsealed today are: TODD NEWMAN, a former portfolio manager at a Connecticut-based hedge fund (“Hedge Fund A”); ANTHONY CHIASSON, a former portfolio manager and a co-founder of a Manhattan-based hedge fund (“Hedge Fund B”); JON HORVATH, a research analyst who worked in the New York office of a Connecticut-based hedge fund (“Hedge Fund C”); and DANNY KUO, a research analyst and fund manager at an investment firm with offices in California and Nevada (“Investment Firm D”). This morning, NEWMAN, HORVATH, and KUO were arrested, and CHIASSON surrendered to federal authorities. Later today, CHIASSON and HORVATH are expected to be presented in Manhattan federal court, NEWMAN is expected to be presented in Massachusetts federal court, and KUO is expected to be presented in federal court in the Central District of California.

Also unsealed today were the guilty pleas of: JESSE TORTORA, a former research analyst at Hedge Fund A; SPYRIDON “Sam” ADONDAKIS, a research analyst at Hedge Fund B; and SANDEEP “Sandy” GOYAL, a research analyst who worked at the Manhattan office of a global asset management firm (“Investment Firm 1”). They pled guilty to their roles in the insider trading scheme and are cooperating with the government’s investigation.

Manhattan U.S. Attorney Preet Bharara said: “The charges unsealed today allege a corrupt circle of friends who formed a criminal club whose purpose was profit and whose members regularly bartered lucrative inside information so their respective funds could illegally profit. And profit they allegedly did—to the tune of more than $61 million on illegal trades of a single stock—much of it coming in a $53 million short trade. Here, The Big Short was The Big Illegal Short. We have demonstrated through our prosecutions that insider trading is rampant and has its own social network, a network we intend to dismantle. We will be unrelenting in our pursuit of those who think they are above the law.”

FBI Assistant Director in Charge Janice K. Fedarcyk said: “The FBI has arrested more than 60 people in ‘Operation Perfect Hedge’ to date, and this initiative is far from over. If you are engaged in insider trading, what distinguishes you from the dozens who have been charged is not that you haven’t been caught; it’s that you haven’t been caught yet.”

According to the complaint and Informations unsealed today in Manhattan federal court, and statements made during the related plea proceedings:

TORTORA and ADONDAKIS were part of a circle of research analysts at different investment firms who obtained Inside Information directly or indirectly from employees who worked at public companies, and then shared it with each other and with the Hedge Fund portfolio managers for whom they worked. HORVATH and KUO were allegedly part of the circle as well, and used and shared Inside Information similarly. For example, in 2008 and 2009, TORTORA admitted to providing ADONDAKIS, HORVATH and KUO with Inside Information related to Dell’s first and second quarter 2008 earnings that he had received from GOYAL, who had a source inside Dell’s investor relations department. TORTORA also admitted to providing the Dell Inside Information to NEWMAN, the portfolio manager for whom he worked. ADONDAKIS admitted to providing the Dell Inside Information to CHIASSON, the portfolio manager for whom he worked. Both TORTORA and ADONDAKIS told their portfolio managers that the information came from a source at Dell.

In exchange for the Dell Inside Information, TORTORA admitted to arranging with NEWMAN to pay GOYAL via a sham research consulting arrangement Hedge Fund A made with an individual (“Individual 1”), the proceeds of which were deposited in a joint account Individual 1 shared with GOYAL. In fact, Individual 1 never provided any research consulting services, but Hedge Fund A nonetheless made four $18,750 payments to Individual 1 between February 2008 and September 2008. Individual 1 also received a $100,000 bonus from Hedge Fund A in January 2009.

The Dell Short

The Dell Inside Information was allegedly used to execute illegal trades in the first and second quarters of 2008. For example, beginning in July 2008, the Dell Insider provided GOYAL initial information concerning Dell’s revenues and/or gross margins for the second quarter. After the close of the quarter in 2008, but prior to Dell’s public earnings announcement on August 28 of that year, the Dell Insider provided to GOYAL, who in turn provided to TORTORA, more specific information concerning Dell’s margins that confirmed the gross margin would be lower than market expectations. On August 5, 2008, TORTORA forwarded an e-mail to ADONDAKIS, HORVATH and KUO, that he is alleged to have originally sent to NEWMAN, that included the Inside Information he had received from GOYAL. In the days before the August 28, 2008 earnings announcement, GOYAL had additional communications with TORTORA and again confirmed that Dell’s gross margin would be lower than market expectations. TORTORA admitted to passing this information on to NEWMAN and to ADONDAKIS, who admitted to providing the information to CHIASSON. In another e-mail sent by TORTORA on August 25, 2008, he wrote, “did new apple and dell checks today and both sound bad, same as before.” Trading records show that Hedge Funds A, B, and C all allegedly sold quantities of Dell shares “short,” based at least in part on the Inside Information they received during the period prior to the company’s second quarter earnings announcement. Hedge Fund A reaped $2.8 million in allegedly illegal profits, Hedge Fund B made more than $50 million, and Hedge Fund C made $1 million. Trading records also show that KUO allegedly avoided approximately $78,000 by trading on the Inside Information for Investment Firm D.

In all, the conduct alleged in the complaint relating to the Dell Inside Information resulted in more than $61.8 million in illegal insider trading profits realized by Hedge Funds A, B, and C.

The NVIDIA Inside Information

In addition, in multiple fiscal quarters, KUO allegedly obtained confidential financial information about NVIDIA, a publicly traded technology company, shortly before its public earnings release and provided it to TORTORA, ADONDAKIS, and HORVATH. The information included NVIDIA’s gross margin and revenue information. As alleged, e-mail communications from KUO to the other research analysts stated explicitly that the information was coming from an employee inside NVIDIA.

* * *

NEWMAN, 47, of Needham, Massachusetts; CHIASSON, 38, of New York, New York; HORVATH, 42, of New York, New York; and KUO, 36, of Pasadena, California, are each charged with one count of conspiracy to commit securities fraud and one count of securities fraud. The conspiracy charge carries a maximum potential penalty of five years in prison and a fine of $250,000 or twice the gross gain or loss from the offense. The securities fraud charge carries a maximum potential penalty of 20 years in prison and a maximum fine of $5 million.

TORTORA, 34, ADONDAKIS, 40, and GOYAL, 39, each pled guilty to one count of conspiracy to commit securities fraud and one count of securities fraud. TORTORA pled guilty on May 18, 2011; ADONDAKIS pled guilty on April 25, 2011; and GOYAL pled guilty on November 3, 2011. They each face a statutory maximum sentence of 25 years in prison.

Mr. Bharara praised the investigative work of the Federal Bureau of Investigation. He also thanked the U.S. Securities and Exchange Commission. He also noted that the investigation is continuing.

This case was brought in coordination with President Barack Obama’s Financial Fraud Enforcement Task Force, on which Mr. Bharara serves as a Co-Chair of the Securities and Commodities Fraud Working Group. President Obama established the interagency Financial Fraud Enforcement Task Force to wage an aggressive, coordinated, and proactive effort to investigate and prosecute financial crimes. The task force includes representatives from a broad range of federal agencies, regulatory authorities, inspectors general, and state and local law enforcement who, working together, bring to bear a powerful array of criminal and civil enforcement resources. The task force is working to improve efforts across the federal executive branch, and with state and local partners, to investigate and prosecute significant financial crimes, ensure just and effective punishment for those who perpetrate financial crimes, combat discrimination in the lending and financial markets, and recover proceeds for victims of financial crimes.

The charges against NEWMAN, CHIASSON, HORVATH, and KUO are merely accusations, and the defendants are presumed innocent unless and until proven guilty.

Assistant U.S. Attorneys Antonia Apps, David Leibowitz, and Richard Tarlowe are in charge of the prosecution.

Health Care Consultant Pleads Guilty in Manhattan Federal Court to Bribing New York State Senator Carl Kruger

2012-01-18T23:03:00.001-05:00

Preet Bharara, the United States Attorney for the Southern District of New York, announced that SOLOMON KALISH, a health care consultant, pled guilty today in Manhattan federal court to bribing New York State Senator Carl Kruger. KALISH pled guilty before U.S. District Judge Jed S. Rakoff.

Manhattan U.S. Attorney Preet Bharara stated: “Solomon Kalish is the sixth and final defendant to be convicted in connection with a sprawling bribery scheme that ensnared a powerful New York State Senator, a lobbyist, two hospital CEOs, and a physician. Public corruption erodes the confidence of the citizenry in elected officials and we will do everything in our power to hold them accountable for their conduct.”

According to the indictment, the complaint, and statements made at today’s plea proceeding:

KALISH owned and operated Adex Management, Inc. (“Adex”), a marketing/consulting firm incorporated in June 1992, that brokers relationships in the health care industry. Between 2007 and 2011, KALISH, through Adex, paid $197,005 to Olympian Strategic Development Corp. (“Olympian”), a consulting company controlled by Michael Turano. Carl Kruger allegedly had a close relationship with Turano, a Manhattan-based gynecologist, and was effectively a member of his family. According to the Complaint, numerous individuals and entities—including David Rosen, the chief executive officer of the MediSys Health Network, and Robert Aquino, the chief executive officer of Parkway Hospital—made payments directly or indirectly to Adex, understanding that, in exchange for these payments, Senator Kruger would take official action to help them as opportunities arose.

* * *

KALISH, 61, of Rockville Centre, New York, pled guilty to one count of conspiracy to commit honest services fraud. Kalish faces a maximum potential penalty of 20 years in prison and a fine of $250,000 or twice the gross gain or loss from the offense. He is scheduled to be sentenced by Judge Rakoff on May 22, 2012.

KALISH was initially charged on March 10, 2011, along with seven others, including Kruger, Turano, Richard Lipsky, a lobbyist, Rosen, Aquino, real estate developer Aaron Malinsky, and New York State Assemblyman William Boyland, Jr.

Rosen, 64, of Harrison, New York, was convicted at a trial before Judge Rakoff on September 12, 2011, for his involvement in schemes to bribe Kruger, former New York State Assemblyman Anthony Seminerio, and Boyland. Rosen is scheduled to be sentenced by Judge Rakoff on March 2, 2012.

Boyland, 41, of Brooklyn, New York, was acquitted by a jury on November 10, 2011.

The government entered into a deferred prosecution agreement with Malinsky, 63, of New York, New York, on November 22, 2011.

Kruger, 62, of Brooklyn, New York, pled guilty to two counts of conspiracy to commit honest services fraud and two counts of conspiracy to commit bribery on December 20, 2011.

Turano, 50, of Brooklyn, New York, pled guilty to one count of conspiracy to commit bribery on December 20, 2011. Kruger and Turano are scheduled to be sentenced by Judge Rakoff on April 26, 2012.

Aquino, 54, of Glen Head, New York, pled guilty to one count of conspiracy to commit bribery on January 3, 2012. Aquino is scheduled to be sentenced by Judge Rakoff on May 3, 2012.

Lipsky, 64, of New York, New York, pled guilty to one count of conspiracy to commit bribery and one count of bribery. Lipsky is scheduled to be sentenced by Judge Rakoff on May 4, 2012.

Mr. Bharara praised the investigative work of the Federal Bureau of Investigation.

This prosecution is being handled by the Office’s Public Corruption Unit. Assistant U.S. Attorneys Glen McGorty, William Harrington, Michael Bosworth, and Kan Nawaday are in charge of the prosecution.

Pepsi to Pay $3.13 Million and Made Major Policy Changes to Resolve EEOC Finding of Nationwide Hiring Discrimination Against African Americans

2012-01-11T18:08:00.000-05:00

Company’s Former Use of Criminal Background Checks Discriminated Based On Race, Agency Found

MINNEAPOLIS – Pepsi Beverages (Pepsi), formerly known as Pepsi Bottling Group, has agreed to pay $3.13 million and provide job offers and training to resolve a charge of race discrimination filed in the Minneapolis Area Office of the U.S. Equal Employment Opportunity Commission (EEOC). The monetary settlement will primarily be divided among black applicants for positions at Pepsi, with a portion of the sum being allocated for the administration of the claims process. Based on the investigation, the EEOC found reasonable cause to believe that the criminal background check policy formerly used by Pepsi discriminated against African Americans in violation of Title VII of the Civil Rights Act of 1964.

The EEOC’s investigation revealed that more than 300 African Americans were adversely affected when Pepsi applied a criminal background check policy that disproportionately excluded black applicants from permanent employment. Under Pepsi’s former policy, job applicants who had been arrested pending prosecution were not hired for a permanent job even if they had never been convicted of any offense.

Pepsi’s former policy also denied employment to applicants from employment who had been arrested or convicted of certain minor offenses. The use of arrest and conviction records to deny employment can be illegal under Title VII of the Civil Rights Act of 1964, when it is not relevant for the job, because it can limit the employment opportunities of applicants or workers based on their race or ethnicity.

“The EEOC has long standing guidance and policy statements on the use of arrest and conviction records in employment,” said EEOC Chair Jacqueline A. Berrien. “I commend Pepsi’s willingness to re-examine its policy and modify it to ensure that unwarranted roadblocks to employment are removed.”

During the course of the EEOC’s investigation, Pepsi adopted a new criminal background check policy. In addition to the monetary relief, Pepsi will offer employment opportunities to victims of the former criminal background check policy who still want jobs at Pepsi and are qualified for the jobs for which they apply. The company will supply the EEOC with regular reports on its hiring practices under its new criminal background check policy. Pepsi will conduct Title VII training for its hiring personnel and all of its managers.

“When employers contemplate instituting a background check policy, the EEOC recommends that they take into consideration the nature and gravity of the offense, the time that has passed since the conviction and/or completion of the sentence, and the nature of the job sought in order to be sure that the exclusion is important for the particular position. Such exclusions can create an adverse impact based on race in violation of Title VII,” said Julie Schmid, Acting Director of the EEOC’s Minneapolis Area Office. “We hope that employers with unnecessarily broad criminal background check policies take note of this agreement and reassess their policies to ensure compliance with Title VII.”

“We obtained significant financial relief for a large number of victims of discrimination, got them job opportunities that they were previously denied, and eradicated an unlawful barrier for future applicants,” said EEOC Chicago District Director John Rowe. “We are pleased that Pepsi chose to work with us to reach this conciliation agreement and that through our joint efforts, we have been able to bring about real change at Pepsi without resorting to litigation.”

The EEOC enforces federal laws against employment discrimination. The EEOC issued its first written policy guidance regarding the use of arrest and conviction records in employment in the 1980s. The Commission also considered this issue in 2008 and held a meeting on the use of arrest and conviction records in employment last summer. The EEOC is a member of the federal interagency Reentry Council, a Cabinet-level interagency group convened to examine all aspects of reentry of individuals with criminal records.

The Minneapolis Area Office is part of the EEOC’s Chicago District. The Chicago District is responsible for investigating charges of discrimination in Minnesota, Illinois, Wisconsin, Iowa and North and South Dakota. Further information is available at www.eeoc.gov.

Former Boy Scouts leader sentenced to 95 years in prison on child pornography charges

2012-01-06T23:49:00.001-05:00

GRAND RAPIDS, Mich. – A former Gerber Boy Scout Camp director was sentenced to 95 years in federal prison for filming young boys dressing in a YMCA locker room and for a having a massive collection of child pornography. The sentence is the result of an extensive investigation conducted by U.S. Immigration and Customs Enforcement's (ICE) Homeland Security Investigations (HSI).

Scott Allan Herrick, 40, of Twin Lakes, Mich., surreptitiously videotaped boys as they were dressing in the boys' locker room in the YMCA in Muskegon, Mich., where Herrick was a swim instructor. He also kept a massive collection of 100,000 images of child pornography with him at the Gerber Boy Scouts Camp in Twin Lakes. He was convicted at trial of three counts of attempting to produce child pornography. On the first day of trial, Herrick pleaded guilty to two counts of distributing child pornography and one count of possessing child pornography.

Chief U.S. District Judge Paul L. Maloney, who presided over the trial and sentencing, explained that the sexual exploitation of children by using institutions like the Boy Scouts and the YMCA, "tears at the social fabric of our country." Judge Maloney warned others who would use their positions of trust with children for sexual exploitation, "you will be punished severely."

In addition to being the camp director, Herrick also worked as a pool safety instructor for third-grade children at the YMCA in Muskegon. Herrick was trading child pornography online and was discovered during a series of undercover FBI operations. In July 2010, ICE HSI and FBI special agents executed a search warrant on the Gerber Boy Scout Camp and discovered evidence of child pornography. He was arrested and has been held in custody since that time.

"Herrick used and abused his position of trust in organizations dedicated to the health and welfare of children to satisfy his own perverse sexual interest in young boys," said U.S. Attorney Donald A. Davis, Western District of Michigan. "My office sought and secured firm punishment for this appalling violation of community trust and childhood innocence. My office places a high priority on child exploitation cases, which will mean very long and well deserved time in prison for offenders like Herrick."

"All children have an absolute right to grow up free from the fear of being sexually exploited," said Brian M. Moskowitz, special agent in charge of ICE HSI in Detroit. "And children should never have to fear those who are supposed to protect them. HSI and our partners will relentlessly pursue anyone who sexually exploits our kids in any way."

"The FBI is committed to protecting our most precious assets, our children," said Andrew G. Arena , special agent in charge of the FBI's Detroit Division. "Along with our law enforcement partners, the FBI will bring to justice those individuals who prey on the innocent."

This investigation is part of Operation Predator, a nationwide ICE HSI initiative to protect children from sexual predators, including those who travel overseas for sex with minors, Internet child pornographers, criminal alien sex offenders, and child sex traffickers. ICE HSI encourages the public to report suspected child predators and any suspicious activity through its toll-free hotline at 1-866-DHS-2-ICE or by completing its online tip form. Both are staffed around the clock by investigators.

Suspected child sexual exploitation or missing children may be reported to the National Center for Missing and Exploited Children, an Operation Predator partner, at 1-800-843-5678 or http://www.cybertipline.com.

Genovese Organized Crime Family Associate Frank DiMattina Convicted of Extortion and a Related Firearms Charge

2012-01-06T23:24:00.010-05:00

Following a three-day trial, a federal jury in Brooklyn today returned a verdict convicting Genovese Organized Crime Family associate Frank DiMattina, also known as “Frankie D” and “Frankie Ariana,” of Hobbs Act extortion and a related firearms charge.

The conviction was announced by Loretta E. Lynch, United States Attorney for the Eastern District of New York, and Janice K. Fedarcyk, Assistant Director in Charge, Federal Bureau of Investigation, New York Field Office.

The counts of conviction included the 2010 extortion of a Staten Island caterer who was forced to withdraw his bid on a lucrative Staten Island Catholic school lunch program contract, which was in competition with a bid submitted by the defendant. At trial, the victim caterer testified that the defendant threatened him by displaying a gun and by threatening to have a co-conspirator assault the victim if he did not withdraw his bid. As part of the threat, DiMattina also told the victim to warn his business partner, a bagel store owner, that DiMattina would “burn down his bagel stores” if the victim and his partner did not withdraw their bid. The government presented the testimony of several witnesses at trial, including the extortion victim and a priest who was responsible for overseeing the bid process for the school lunch program.

“This case demonstrates organized crime still conducts its business in its traditional way—by relying on threats and violence to intimidate hardworking individuals trying to make a legitimate living. Here, the defendant sought to use fear and intimidation to obtain business, rather than honest competition. Such efforts will always be met with the full force of the law,” stated United States Attorney Lynch. “We will not rest until organized crime is eradicated from our communities.”

FBI Assistant Director in Charge Fedarcyk stated, “New York’s organized crime families are the embodiment of the saying, ‘The more things change, the more they stay the same.’ Whatever the money-making scheme, violence or the threat of violence is always looming as the means to the criminal end. The FBI remains committed to stopping it.”

When sentenced by United States District Judge Jack B. Weinstein, the defendant faces a mandatory minimum sentence of five years of imprisonment.

The government’s case was prosecuted by Assistant United States Attorney Jack Dennehy.

The Defendant:
Name: FRANK DIMATTINA
Age: 44

Matrix L.L.C. Will Pay $450,000 to Settle EEOC Race Discrimination and Retaliation Lawsuit

2012-01-06T18:47:00.007-05:00

PHILADELPHIA –Matrix, L.L.C., one of the region’s largest cleaning companies, will pay $450,000 to a class of 15 former employees and provide significant relief to settle a race discrimination and retaliation lawsuit filed by the U.S. Equal Employment Opportunity Commission (EEOC), the agency announced today.

In the lawsuit, the EEOC alleged that Matrix officials told white supervisor Barbara Palermi not to hire any more black cleaners to work at a client’s site in Concordville, Pa. When Palermi hired additional black cleaners based on their qualifications to do the job, Matrix dismissed her in retaliation for opposing the company’s racial discrimination.

The EEOC alleged that Matrix management officials also discriminated against the African-American cleaners, telling them to sit in the back of the cafeteria during break times and later disallowing them from using the cafeteria at all for their breaks. Matrix later fired all of the employees at the worksite and replaced them with an entirely non-black cleaning crew, the EEOC said in its lawsuit filed in U.S. District Court for the Eastern District of Pennsylvania, Civil Action No. 2:11-cv-06183.

Such alleged conduct violates Title VII of the 1964 Civil Rights Act, which prohibits discrimination based on race, and makes it unlawful for an employer to retaliate against an employee for opposing discrimination, including opposing instructions to make hiring decisions based on race.

The EEOC filed suit after first attempting to reach a pre-litigation settlement through its conciliation process. In addition to the monetary relief to the class of fifteen, the three-year consent decree resolving the lawsuit bars Matrix from engaging in any further race discrimination or retaliation. Matrix is required to train its supervisors and managers about the prohibitions against racial discrimination and retaliation, report to the EEOC regarding against complaints of discrimination or retaliation at the Concordville, Pa., work site and post a remedial notice. The consent decree was approved by the court on January 4, 2011. “We commend the company for its agreement to carry out the significant equitable relief provided in the consent decree, including providing expansive annual training, which will benefit all company employees,” said District Director Spencer H. Lewis, Jr. of the EEOC’s Philadelphia District Office. EEOC regional attorney Debra M. Lawrence added, “We appreciate Matrix’s cooperation and diligence throughout the negotiation process to resolve this case quickly without engaging in protracted and costly litigation.” The EEOC enforces federal laws prohibiting employment discrimination.

Manhattan-Based Lobbyist Pleads Guilty to Bribing Former New York State Senator Carl Kruger

2012-01-04T23:17:00.007-05:00

Preet Bharara, the United States Attorney for the Southern District of New York, announced that RICHARD LIPSKY, a lobbyist, pled guilty today to two counts of bribing former New York State Senator Carl Kruger. LIPSKY pled guilty before U.S. District Judge Jed S. Rakoff.

Manhattan U.S. Attorney Preet Bharara stated: “As a lobbyist, Richard Lipsky was permitted to influence the legislative process on behalf of his clients with the power of his arguments, not the power of his checkbook. For too long and in too many ways, corruption has warped government in New York state and New York City. This office will take every step necessary to root out that corruption and restore the public’s faith in its government and its leaders.”

According to the indictment, the complaint, and statements made at today’s plea proceeding in Manhattan federal court:

LIPSKY is a professional lobbyist and has been the principal of Richard Lipsky Associates, Inc. since approximately 1981. LIPSKY’s clients include various unions and associations, food retail businesses, supermarkets, and beverage distributors. Between 2007 and 2011, LIPSKY paid over $250,000 to Olympian Strategic Development Corp. (“Olympian”) and Bassett Brokerage (“Bassett”), two consulting companies controlled by Michael Turano, a Manhattan-based gynecologist. Kruger had a close relationship with Turano and was effectively a member of Turano’s family. In exchange for the payments that LIPSKY made to Olympian and Bassett, Kruger undertook official action to benefit LIPSKY and his lobbying clients.

According to statements made by LIPSKY during today’s plea proceeding, in the Fall of 2007, Senator Kruger asked LIPSKY to retain Olympian, Michael Turano, and his brother Gerard Turano, to work with him on a project in Brooklyn. Over the course of one year, Olympian and the Turanos did little in the way of documented work. Subsequently, in 2008, Senator Kruger referred a number of clients to LIPSKY and asked that he pay Olympian, Bassett, and/or Michael Turano a referral fee from the money received from the referred clients. LIPSKY admitted that he agreed to make these payments knowing that, in return, Kruger would take official action as a member of the New York State Senate to benefit LIPSKY, his family, and his business. The government’s plea agreement with LIPSKY provides that the value of the actual bribes and/or a reasonable estimate of the benefits received in exchange for the bribes is between $120,000 and $200,000.

***

LIPSKY, 64, of New York, New York, pled guilty to one count of conspiracy to commit bribery and one count of bribery. For each count, he faces a maximum potential penalty of five years in prison and a fine of $250,000 or twice the gross gain or loss from the offense. He is scheduled to be sentenced by Judge Rakoff on May 4, 2012 at 4:00 p.m.

LIPSKY was initially charged on March 10, 2011, along with seven others, including Kruger, Turano, Solomon Kalish, the owner of marketing/consulting firm Adex Management, David Rosen, the former CEO of MediSys Health Network, Robert Aquino, the former CEO of Parkway Hospital, real estate developer Aaron Malinsky, and New York State Assemblyman William Boyland, Jr.

Kruger, 62, of Brooklyn, New York, pled guilty to two counts of conspiracy to commit honest services fraud and two counts of conspiracy to commit bribery on December 20, 2011. Turano, 50, of Brooklyn, New York, pled guilty to one count of conspiracy to commit bribery on December 20, 2011. They are scheduled to be sentenced by Judge Rakoff on April 26, 2012.

Rosen, 64, of Harrison, New York, was convicted at a bench trial before Judge Rakoff on September 12, 2011 for his involvement in schemes to bribe Kruger, former New York State Assemblyman Anthony Seminerio, and Boyland. He is scheduled to be sentenced by Judge Rakoff on March 2, 2012.

Aquino, 54, of Glen Head, New York, pled guilty to one count of conspiracy to commit bribery on January 3, 2012. He is scheduled to be sentenced by Judge Rakoff on May 3, 2012.

Boyland, 41, of Brooklyn, New York, was acquitted by a jury on November 10, 2011.

The government entered into a deferred prosecution agreement with Malinsky, 63, of New York, New York, on November 22, 2011.

Charges are still pending against Kalish, 61, of Rockville Centre, New York, and he is presumed innocent unless and until proven guilty. Kalish is scheduled for trial on April 23, 2012.

Mr. Bharara praised the investigative work of the Federal Bureau of Investigation.

This prosecution is being handled by the office’s Public Corruption Unit. Assistant U.S. Attorneys Glen McGorty, William Harrington, Michael Bosworth, and Kan Nawaday are in charge of the prosecution.

Former Queens Hospital Executive Pleads Guilty to Bribing Former New York State Senator Carl Kruger

2012-01-03T23:22:00.001-05:00

Preet Bharara, the United States Attorney for the Southern District of New York, announced that ROBERT AQUINO, the former chief executive officer of Parkway Hospital in Queens, pled guilty today to bribing former New York State Senator Carl Kruger. AQUINO pled guilty before U.S. District Judge Jed S. Rakoff.

Manhattan U.S. Attorney Preet Bharara stated: “Robert Aquino was all too willing to make sure a bribe was paid to preserve his job as CEO of a hospital. Like others in this case, he chose to fight his battle with money under the table rather than to play by the rules. And like others in this case, he now faces the prospect of jail. This office remains committed to breaking the chains of corruption that weigh down New York politics.”

According to the indictment, the complaint, and statements made at today’s plea proceeding in Manhattan federal court:

AQUINO served as the chief executive officer of Parkway Hospital in Queens, New York. When Parkway Hospital was slated to be closed by New York State in the summer of 2008, AQUINO caused Parkway Hospital to make $60,000 in payments to Adex Management Inc. (“Adex”), a company in which former New York State Senator Carl Kruger had an interest. As alleged in the Complaint, Adex paid half of the $60,000 it received from Parkway Hospital to Olympian Strategic Development Corp., a consulting company controlled by Michael Turano, who had a close relationship with Kruger. As AQUINO stated at today’s plea proceeding, he understood that in exchange for making the payments to Adex, Senator Kruger would undertake official action in his capacity as a member of the New York State Senate to help keep Parkway Hospital open.

***

AQUINO, 54, of Glen Head, New York, pled guilty to one count of conspiracy to commit bribery. He faces a maximum potential penalty of five years in prison and a fine of $250,000 or twice the gross gain or loss from the offense.

AQUINO was initially charged on March 10, 2011, along with seven others, including Kruger, Turano, Richard Lipsky, a lobbyist, Solomon Kalish, the owner of Adex, David Rosen, the former CEO of MediSys Health Network, real estate developer Aaron Malinsky, and New York State Assemblyman William Boyland, Jr.

Kruger, 62, of Brooklyn, New York, pled guilty to two counts of conspiracy to commit honest services fraud and two counts of conspiracy to commit bribery on December 20, 2011. Turano, 50, of Brooklyn, New York, pled guilty to one count of conspiracy to commit bribery on December 20, 2011. Kruger and Turano are scheduled to be sentenced by Judge Rakoff on April 26, 2012.

Rosen, 64, of Harrison, New York, was convicted at a trial before Judge Rakoff on September 12, 2011 for his involvement in schemes to bribe Kruger, former New York State Assemblyman Anthony Seminerio, and Boyland. Rosen is scheduled to be sentenced by Judge Rakoff on January 6, 2012.

Boyland, 41, of Brooklyn, New York, was acquitted by a jury on November 10, 2011.

The government entered into a deferred prosecution agreement with Malinsky, 63, of New York, New York, on November 22, 2011.

Charges are still pending against Lipsky, 64, of New York, New York, and Kalish, 61, of Rockville Centre, New York, and they are presumed innocent unless and until proven guilty.

Mr. Bharara praised the investigative work of the Federal Bureau of Investigation.

This prosecution is being handled by the Office’s Public Corruption Unit. Assistant U.S. Attorneys Glen McGorty, William Harrington, Michael Bosworth, and Kan Nawaday are in charge of the prosecution.

Grand Central Partnership Fired Rastafarian for Complaining of Threatened Violence, EEOC Says

2012-01-03T11:08:00.001-05:00

Despite Earlier Consent Decree Barring Religious Discrimination and Retaliation, Security Guard Fired After Complaining of Coworker’s Threat, Federal Agency Charges

NEW YORK – Grand Central Partnership, Inc. (GCP), a not-for-profit developer of real estate, offices, and facilities around the Grand Central Terminal area in New York, violated a consent decree and committed new illegal acts when it fired a black Rastafarian security officer in retaliation for his complaints about threats of violence and racism, the U.S. Equal Employment Opportunity Commission (EEOC) charged in a lawsuit filed Friday.

According to the suit, in 2009, EEOC and GCP settled an earlier lawsuit about GCP’s treatment of Rastafarian and Caribbean security officers with a consent decree filed in federal court. In that settlement, the parties had agreed that GCP would offer accommodations for the religious practices of the Rastafarian security officers and not retaliate against Rastafarian security officers for their participation in the lawsuit. As part of that settlement, GCP is still subject to supervision by the federal court in that action.

The new lawsuit claims that in 2010, the hostility toward Rastafarians at GCP erupted again when a non-Caribbean security officer threatened to shoot and kill a group of Rastafarian officers. After a white security supervisor made light of the physical threats made to the Rastafarian security officers, one Rastafarian security officer objected to the supervisor’s conduct and his past discrimination. Additionally, he called the supervisor a racist for referring in the past to a group of Rastafarians with the “N word” and threatening to stand in the way of their getting paid for their work. After the security officer complained to the supervisor and telephoned EEOC, GCP fired him about three months later.

This alleged conduct violates Title VII of the Civil Rights Act of 1964, which protects employees from retaliation when they complain about employment discrimination based on race or religion. It additionally is a breach of the original consent decree filed in 2009. The EEOC filed suit, Civil Action No.11 Civ. 9682 SDNY, in U.S. District Court for the Southern District of New York, only after attempting to reach a voluntary pre-litigation settlement.

Elizabeth Grossman, Regional Attorney of EEOC’s New York District Office, said, “EEOC is particularly concerned when it obtains a consent decree to stop violations of the law and the employer turns around and ignores the settlement by reverting to the illegal behavior.
We will pursue vigorously retaliation claims against employers whose managers would rather not comply with court orders and fire individuals who object to threats based on their religion and bias based on race.”

“Retaliation against an employee who objects to threats of violence against his co-religionists and then objects to racism will not be tolerated. EEOC’s lawsuit should make it clear that an employer may not blame the victim when it loses control of its managers and employees,” Michael Ranis, a trial attorney in EEOC's New York District Office, said.

EEOC is the federal government agency responsible for enforcing anti-discrimination laws in the workplace. Further information about the EEOC is available at www.eeoc.gov.

GE Funding Capital Market Services Inc. Admits to Anticompetitive Conduct by Former Traders in the Municipal Bond Investments Market and Agrees to Pay $70 Million to Federal and State Agencies

2011-12-23T16:58:00.000-05:00

WASHINGTON—GE Funding Capital Market Services Inc. entered into an agreement with the Department of Justice to resolve the company’s role in anticompetitive activity in the municipal bond investments market and agreed to pay a total of $70 million in restitution, penalties and disgorgement to federal and state agencies, the Department of Justice announced today.

As part of its agreement with the department, GE Funding admits, acknowledges and accepts responsibility for illegal, anticompetitive conduct by its former traders. According to the non-prosecution agreement, from 1999 through 2004, certain former GE Funding traders entered into unlawful agreements to manipulate the bidding process on municipal investment and related contracts, and caused GE Funding to make payments and engage in other related activities in connection with those agreements through at least 2006. These contracts were used to invest the proceeds of, or manage the risks associated with, bond issuances by municipalities and other public entities.

“GE Funding’s former traders entered into illegal agreements to manipulate the bidding process on municipal investment contracts,” said Sharis A. Pozen, Acting Assistant Attorney General in charge of the Justice Department’s Antitrust Division. “This anticompetitive conduct harmed municipalities, as well as taxpayers. Today’s resolution requires GE Funding to pay penalties, disgorgement and restitution to the victims of its illegal activity. We will continue to use all the tools at our disposal to uphold our nation’s antitrust laws and ensure competition in the financial markets.”

Under the terms of the agreement, GE Funding agreed to pay restitution to victims of the anticompetitive conduct and to cooperate fully with the Justice Department’s Antitrust Division in its ongoing investigation into anticompetitive conduct in the municipal bond derivatives industry. To date, the ongoing investigation has resulted in criminal charges against 18 former executives of various financial services companies and one corporation. Nine of the 18 executives charged have pleaded guilty.

The Securities and Exchange Commission (SEC), the Internal Revenue Service (IRS) and 25 state attorneys general also entered into agreements with GE Funding requiring the payment of penalties, disgorgement of profits from the illegal conduct and payment of restitution to the victims harmed by the bid manipulation by GE Funding employees, as well as other remedial measures.

As a result of GE Funding’s admission of conduct; its cooperation with the Department of Justice and other enforcement and regulatory agencies; its monetary and non-monetary commitments to the SEC, IRS and state attorneys general; and its remedial efforts to address the anticompetitive conduct, the department agreed not to prosecute GE Funding for the manipulation of bidding for municipal investment and related contracts, provided that GE Funding satisfies its ongoing obligations under the agreement.

JPMorgan Chase & Co., UBS AG and Wachovia Bank N.A. also reached agreements with the Department of Justice and other federal and state agencies to resolve anticompetitive conduct in the municipal bond derivatives market. On May 4, 2011, UBS AG agreed to pay a total of $160 million in restitution, penalties and disgorgement to federal and state agencies for its participation in the anticompetitive conduct. On July 7, 2011, JPMorgan agreed to pay a total of $228 million in restitution, penalties and disgorgement to federal and state agencies for its role in the conduct. On Dec. 8, 2011, Wachovia Bank agreed to pay a total of $148 million in restitution, penalties and disgorgement to federal and state agencies for its participation in the anti-competitive conduct.

YOUTH MINISTER SENTENCED TO 22 YEARS IN PRISON FOR RAPE AND SEXUAL ABUSE OF FIVE GIRLS

2011-12-20T23:42:00.003-05:00

Manhattan District Attorney Cyrus R. Vance, Jr., announced the sentencing of JEREMY FULTON, 29, a former minister at Mariners’ Temple Baptist Church in Lower Manhattan, to 22 years in prison, followed by 20 years of post-release supervision. On April 3, 2011, FULTON pled guilty to Rape in the First Degree relating to the rape and sexual abuse of five girls who attended his church, where FULTON also served as the associate director of the church’s after-school and summer camp programs.

“This defendant used his position of authority and respect as a member of the clergy to win the trust of parents and gain access to children for the purpose of sexually abusing these girls,” said District Attorney Vance. “Children who survive sexual abuse often face a lifetime of recovery. We hope the conclusion of this case and this sentence bring a measure of justice to those victims and their families.”

In all, the defendant admitted to sexually abusing five children, four of whom he had met through church-related programs. This abuse consisted of repeated sexual intercourse with three of the young victims and repeated sexual touching of all the children. The victims ranged in age from 10 to 16 years old, and with at least two of the girls the abuse lasted for a period of several years. FULTON committed some of the abuse on church property, and solicited sexually explicit photographs from one victim, which he kept on his computer.

District Attorney Vance thanked Assistant District Attorney Kevin Wilson, who handled the prosecution of this case under the supervision of Assistant District Attorneys Penelope Brady; Robert Hettleman, Chief of the Child Abuse Unit; Audrey Moore, Chief of the Special Victims Bureau; and Executive Assistant District Attorney Karen Friedman-Agnifilo, Chief of the Trial Division. DANY Senior Investigator Elena Lui and Trial Preparation Assistant Carole James, as well as forensic analysts Steve Moran, Selena Ley and Jessica Ho of the Cybercrimes and Identity Theft Bureau, also assisted in the investigation.

Defendant Information:

JEREMY FULTON, D.O.B. 6/16/1982
New York, N.Y.

Convicted:
• Rape in the First Degree, a Class B Violent Felony, one count

Sentence:
• 22 years in prison
• 20 years post-release supervision
• Mandatory sex-offender registry

M. Slavin & Sons to Pay $900,000 to Settle EEOC

2011-12-18T18:07:00.001-05:00

NEW YORK –M. Slavin & Sons, Ltd., doing business as M. Slavin & Sons Fish, a retail and wholesale fish market, will pay $900,000 and furnish other relief to settle an employment discrimination suit filed by the U.S. Equal Employment Opportunity Commission (EEOC), the agency announced 12/15/11.

The EEOC had charged that the company created a hostile work environment forover 30 black and African male loaders and drivers, including physical and verbal sexual harassment, offensive comments based on race and national origin, and retaliation against those who took part in the case.

The EEOC’s suit, CV 09-5330, filed in U.S. District Court for the Eastern District of New York, charged that M. Slavin’s owners and managers harassed the employees from 1984 onward by physically groping them, making explicit sexual comments and using offensive racial terms such as “n----r” and “African b-----d.” Many of the men worked for M. Slavin for 10 to 20 years and endured this treatment because they desperately needed the work. The suit originated from a discrimination charge by Kevin Pierson, a truck loader for Slavin, who reported such abuse.

The EEOC’s investigation subsequently disclosed that the misconduct was widespread and involved many victims. The business recently moved its production to its Hunts Point, Bronx location, but the harassment occurred at the employer’s Brooklyn location. The lawsuit was resolved by a consent decree which will be executed by Judge Jack B. Weinstein.

In addition to the monetary relief, M. Slavin must revamp how it addresses discriminatory harassment and retaliation and submit to 5years of monitoring by the EEOC. Under the decree M. Slavin is ordered to: retain an independent equal employment opportunity coordinator to receive and investigate complaints; conduct targeted one-on-one training forowners and managers who were the worst harassers; institute annual training for all owners, managers and employees on anti-discrimination; post an announcement of the resolution of the case at the job site; and report to the EEOC on any new discrimination complaints.

“Thanks to Kevin Pierson’s EEOC charge and this lawsuit, employees at M. Slavin will now be able to work in an environment free from discrimination,” said Sunu P. Chandy, a senior trial attorney in the EEOC's New York District Office. “If an incident does occur, there will be an objective investigation into these complaints. The EEOC is grateful to all individuals who stepped forward, despite their fears of retaliation, to assist us in the prosecution of this matter.” Elizabeth Grossman, regional attorney in the EEOC’s New York District Office, added, “It is especially difficult to fashion effective relief when harassment is conducted by owners of the company.

Under this consent decree M. Slavin is obligated to bring on board an outside professional who will bring much needed oversight. The EEOC will also closely monitor M. Slavin to ensure an end to the racial and sexual harassment of workers at this company.” The EEOC is the federal government agency responsible for enforcing anti-discrimination laws in the workplace. Further information about the EEOC is available at www.eeoc.gov.

ICE leads effort to prepare for mass migration incidents

2011-12-13T16:56:00.000-05:00

In the mid-1990s, tens of thousands of Haitians and Cubans attempted to seek refuge in the United States during what was deemed Operation Sea Signal. Years before that, tens of thousands of Cubans exited their country for the United States during the Mariel Boatlift. Both of these events serve as examples of mass migration and historical reminders of how such events can affect a nation's security.

U.S. Department of Homeland Security (DHS) Secretary Janet Napolitano recently directed U.S. Immigration and Customs Enforcement (ICE) to develop a national-level mass migration plan. The plan must outline how to address the health care, sheltering, processing, transition and disposition of large numbers of undocumented individuals who may arrive in the United States as the result of mass migration.

ICE's immigration enforcement authorities provide the agency the expertise to lead the development and execution of this plan. ICE has a multitude of experience in caring for large numbers of people. On a daily basis, ICE houses nearly 33,000 detainees nationwide who await deportation or further legal action.

While this plan is a preventative measure, it is part of DHS' ongoing commitment to contingency planning for possible events that could affect our national security. It falls under the new Presidential Policy Directive on National Preparedness.

ICE is currently working with leadership from several other agencies, including the Department of Justice, Department of Defense, Department of State and Health and Human Services. Representatives from these agencies have identified the following three objectives:

Build a common understanding as to the task, scope, planning organization, planning process and milestones;
Educate the partner community on mass migration issues through a formal threat analysis and review of historical and current mass migration events;
Assign roles, responsibilities and tasks for the planning effort.
Gary Mead, executive associate director for ICE's Enforcement and Removal Operations (ERO), and Richard M. Chavez, director of the Office of Operations Coordination and Planning for DHS, have both spoken of the importance of the plan, emphasizing the complexity of the challenge facing the planning team, as well as the need for broad-based collaboration among all the agencies who have a stake in the domestic mass migration issue.

"It's really all about preparedness," said Mike Webster, acting unit chief for the ICE ERO Incident Response Unit. "The most important thing we can do is give our employees the tools they need to succeed at their job."

Eight Former Senior Executives and Agents of Siemens Charged in Alleged $100 Million Foreign Bribe Scheme

2011-12-13T16:50:00.000-05:00

WASHINGTON—Eight former executives and agents of Siemens AG and its subsidiaries have been charged for allegedly engaging in a decade-long scheme to bribe senior Argentine government officials to secure, implement and enforce a $1 billion contract with the Argentine government to produce national identity cards, announced Assistant Attorney General Lanny A. Breuer of the Justice Department’s Criminal Division, U.S. Attorney Preet Bharara for the Southern District of New York and Ronald T. Hosko, Special Agent in Charge of the FBI, Washington Field Office’s Criminal Division.

The defendants charged in the indictment returned late yesterday are:

■ Uriel Sharef, a former member of the central executive committee of Siemens AG;
■ Herbert Steffen, a former chief executive officer of Siemens Argentina;
■ Andres Truppel, a former chief financial officer of Siemens Argentina;
■ Ulrich Bock, Stephan Signer, and Eberhard Reichert, former senior executives of Siemens Business Services (SBS); and
■ Carlos Sergi and Miguel Czysch, who served as intermediaries and agents of Siemens in the bribe scheme.
The indictment charges the defendants and their co-conspirators with conspiracy to violate the Foreign Corrupt Practices Act (FCPA) and the wire fraud statute, money laundering conspiracy and wire fraud.

“Today’s indictment alleges a shocking level of deception and corruption,” said Assistant Attorney General Breuer. “The indictment charges Siemens executives, along with agents and conduits for the company, with committing to pay more than $100 million in bribes to high-level Argentine officials to win a $1 billion contract. Business should be won or lost on the merits of a company’s products and services, not the amount of bribes paid to government officials. This indictment reflects our commitment to holding individuals, as well as companies, accountable for violations of the FCPA.”

“As alleged, the defendants in this case bribed Argentine government officials in two successive administrations and paid off countless others in a successful effort to secure a billion dollar contract,” said U.S. Attorney Bharara. “When the project was terminated, they even sought to recover the profits they would have reaped from a contract that was awarded to them illegitimately in the first place. Bribery corrupts economic markets and creates an unfair playing field for law-abiding companies. It is critical that we hold individuals as well as corporations accountable for such corruption as we are doing today.”

“Backroom deals and corrupt payments to foreign officials to obtain business wear away public confidence in our global marketplace,” said FBI Special Agent in Charge Hosko of the Washington Field Office’s Criminal Division. “The investigation into this decades-long scheme serves as an example that the FBI is committed to curbing corruption and will investigate those who try to advance their businesses through foreign bribery.”

According to the indictment, the government of Argentina issued a tender for bids in 1994 to replace an existing system of manually created national identity booklets with state of the art national identity cards (the DNI project). The value of the DNI project was $1 billion. In 1998, the Argentine government awarded the DNI project to a special-purpose subsidiary of Siemens AG.

The indictment alleges that during the bidding and implementation phases of the project, the defendants and their co-conspirators caused Siemens to commit to paying nearly $100 million in bribes to sitting officials of the Argentine government, members of the opposition party and candidates for office who were likely to come to power during the performance of the project. According to the indictment, members of the conspiracy worked to conceal the illicit payments through various means. For instance, Bock made cash withdrawals from Siemens AG general-purpose accounts in Germany totaling approximately $10 million, transported the cash across the border into Switzerland and deposited the funds into Swiss bank accounts for transfer to officials. Bock, Truppel, Reichert, and other conspirators also allegedly caused Siemens to wire transfer more than $7 million in bribes to a bank account in New York disguised as a foreign exchange hedging contract relating to the DNI project. Over the duration of the conspiracy, the conspirators allegedly relied on at least 17 off-shore shell companies associated with Sergi, Czysch and other intermediaries to disguise and launder the funds, often documenting the payments through fake consulting contracts.

In May 1999, according to the indictment, the Argentine government suspended the DNI project, due in part to instability in the local economy and an impending presidential election. When a new government took power in Argentina, and in the hopes of getting the DNI project resumed, members of the conspiracy allegedly committed Siemens to paying additional bribes to the incoming officials and to satisfying existing obligations to officials of the outgoing administration, many of whom remained in influential positions within the government.

When the project was terminated in May 2001, members of the conspiracy allegedly responded with a multi-faceted strategy to overcome the termination. According to the indictment, the conspirators sought to recover the anticipated proceeds of the DNI project, notwithstanding the termination, by causing Siemens AG to file a fraudulent arbitration claim against the Republic of Argentina in Washington, D.C. The claim alleged wrongful termination of the contract for the DNI project and demanded nearly $500 million in lost profits and expenses. Members of the conspiracy allegedly caused Siemens to actively hide from the tribunal the fact that the contract for the DNI project had been secured by means of bribery and corruption, including tampered witness statements and pleadings that falsely denied the existence of corruption.

In related actions, the indictment also alleges that members of the conspiracy continued the bribe scheme, in part to prevent disclosure of the bribery in the arbitration and to ensure Siemens’ ability to secure future government contracts in Argentina and elsewhere in the region. In four installments between 2002 and 2007, members of the conspiracy allegedly caused Siemens to pay approximately $28 million in further satisfaction of the obligations. Conspirators continued to conceal these additional payments through various means. For example, Sharef, Truppel and other members of the conspiracy allegedly caused Siemens to transfer approximately $9.5 million through fictitious transactions involving a Siemens business division that had no role in the DNI project. They also caused Siemens to pay an additional $8.8 million in 2007 under the legal cover of a separate arbitration initiated in Switzerland by the intermediaries to enforce a sham $27 million contract from 2001 between SBS and Mfast Consulting, a company controlled by their co-conspirator intermediaries, which consolidated existing bribe commitments into one contract. The conspirators caused Siemens to quietly settle the arbitration, keeping all evidence of corruption out of the proceeding. The settlement agreement included a provision preventing Sergi, Czysch and another intermediary from testifying in, or providing information to, the Washington arbitration.

Siemens’s corrupt procurement of the DNI project was not exposed during the lifespan of the conspiracy, and, in February 2007, the arbitral tribunal in Washington sided with Siemens AG, awarding the company nearly $220 million on its DNI claims, plus interest. On Aug. 12, 2009, following Siemens’ corporate resolutions with the U.S. and German authorities—new management of Siemens caused Siemens AG to forego its right to receive the award and, as a result, the company never claimed the award money.

The indictment charges the defendants with conspiracy to violate the anti-bribery, books and records and internal control provisions of the FCPA; conspiracy to commit wire fraud; conspiracy to commit money laundering; and substantive wire fraud.

The charges announced today follow the Dec. 15, 2008, guilty pleas by Siemens AG and its subsidiary, Siemens S.A. (Siemens Argentina), to criminal violations of the FCPA. As part of the plea agreement, Siemens AG and Siemens Argentina agreed to pay fines of $448.5 million and $500,000, respectively.

In a parallel civil action, the Securities and Exchange Commission (SEC) announced charges against executives and agents of Siemens. The department acknowledges and expresses its appreciation of the significant assistance provided by the staff of the SEC during the course of these parallel investigations.

Today’s charges follow, in large part, the laudable actions of Siemens AG and its audit committee in disclosing potential FCPA violations to the department after the Munich Public Prosecutor’s Office initiated an investigation. Siemens AG and its subsidiaries disclosed these violations after initiating an internal FCPA investigation of unprecedented scope; shared the results of that investigation; cooperated extensively and authentically with the department in its ongoing investigation; and took remedial action, including the complete restructuring of Siemens AG and the implementation of a sophisticated compliance program and organization.

The department and the SEC closely collaborated with the Munich Public Prosecutor’s Office in bringing this case. The high level of cooperation, including sharing information and evidence, was made possible by the use of mutual legal assistance provisions of the 1997 Organization for Economic Cooperation and Development Convention on Combating Bribery of Foreign Public Officials in International Business Transactions.

The case is being prosecuted by Principal Deputy Chief Jeffrey H. Knox of the Criminal Division’s Fraud Section, and by Assistant U.S. Attorneys Jason P. Hernandez and Sarah McCallum of the U.S. Attorney’s Office for the Southern District of New York. The Fraud Section of the Justice Department’s Criminal Division and the Complex Frauds Unit of the U.S. Attorney’s Office for the Southern District of New York are handling the case. The case was investigated by FBI agents who are part of the Washington Field Office’s dedicated FCPA squad. The Criminal Division’s Office of International Affairs provided significant assistance in this matter.

John Martinez Convicted of Burglary and Robbery Charges in Four Separate Incidents

2011-12-13T16:43:00.000-05:00

Manhattan District Attorney Cyrus R. Vance, Jr., announced the sentencing of JOHN MARTINEZ, 40, to 18 years-to-life in prison for using an ice pick or knife to rob three women as they entered their homes in and around Stuyvesant Town and Peter Cooper Village on the East Side of Manhattan, and for attempting to do the same to a fourth woman. On November 10, 2011, MARTINEZ pled guilty to Burglary in the Second Degree and Attempted Robbery in the First Degree.

“This defendant threatened the safety and security of women and children in their own apartment buildings,” said District Attorney Vance. “With this strong sentence, a dangerous criminal will be kept out of our neighborhoods.”

According to documents filed in court, on November 22, 2010, MARTINEZ cornered his first victim in the elevator of her apartment building in Peter Cooper Village. While riding in the elevator, MARTINEZ pulled out a knife and demanded the woman give him money. The victim handed over approximately $700 in cash, and MARTINEZ fled.

On December 2, 2010, in the elevator of a residential building in Stuyvesant Town, MARTINEZ pulled out an ice pick and demanded that his second victim, who was with her three-year-old son at the time, hand over her money, jewelry and credit cards. After the victim gave him approximately $80 in cash, he threatened to stab the child if his mother did not take MARTINEZ back to her family’s apartment to retrieve more money. When they arrived at the victim’s floor, the woman and child were able to enter their apartment without MARTINEZ gaining entry.

Minutes later on December 2, 2010, MARTINEZ entered an apartment building on East 14th Street and once again boarded an elevator with a woman and her two small children. MARTINEZ wielded the ice pick and requested that she give him her jewelry and money. The victim handed him her wallet and a ring, and he fled.

Less than a half-hour before the first successful robbery on December 2, 2010, the defendant followed a woman into a different apartment building on East 14th Street. However, the woman refused to step into the elevator with the defendant, although he encouraged her to do so. MARTINEZ was charged with Burglary in the Second Degree in connection with this incident.

District Attorney Vance thanked Assistant District Attorneys James Zaleta and Samuel David for prosecuting this case, under the supervision of Assistant District Attorney Kerry O’Connell, Chief of Trial Bureau 80, and Executive Assistant District Attorney Karen Friedman-Agnifilo, Chief of the Trial Division.

Defendant Information:

JOHN MARTINEZ, D.O.B. 06/30/1971
Bronx, NY

Convicted:
• Burglary in the Second Degree, a class C felony, one count
• Attempted Robbery in the First Degree, a class C felony, three counts

Sentence:
• 18 years-to-life in state prison

Whitehall Healthcare Sued For Religious Discrimination

2011-12-12T18:29:00.001-05:00

An Ann Arbor, Mich., nursing home violated federal law when it fired a Jehovah’s Witness based on her religion and need for a religious accommodation, the U.S. Equal Employment Opportunity Commission (EEOC) charged in a lawsuit it filed on 12/9/11.

According to the EEOC’s suit (Case No. 2:11-cv-15407), filed in U.S. District Court for the Eastern District of Michigan, Whitehall Healthcare terminated the discrimination victim, a Jehovah’s Witness from Ann Arbor, from her job as a certified nursing assistant due to her need to have Wednesdays and Sundays off to attend religious services.

Such alleged conduct violates Title VII of the Civil Rights Act of 1964, which protects employees against discrimination based on religion and requires employers to provide employees with reasonable accommodations to allow them to practice their sincerely held religious beliefs.

The EEOC filed suit after first attempting to reach a pre-litigation settlement through its conciliation process. The EEOC is seeking an injunction to prohibit the company from engaging in this type of discrimination in the future, as well as monetary relief on the behalf of the victim. “An employer has a legal duty to accommodate an employee's sincerely held religious beliefs, plain and simple,” said Lauren Gibbs, trial attorney for the EEOC's Detroit Field Office. “Firing someone for asserting that right violates federal law against religious discrimination and only makes a bad situation worse.”

The EEOC enforces federal laws prohibiting employment discrimination. Further information about the EEOC is available on the agency’s website at www.eeoc.gov.

Business owner pleads guilty to trafficking in counterfeit circuit breakers

2011-12-08T17:42:00.000-05:00

JACKSONVILLE, Fla. – A Texas business owner pleaded guilty in federal court Wednesday to one count of mail fraud and one count of trafficking in counterfeit circuit breakers, following an investigation by U.S. Immigration and Customs Enforcement's (ICE) Homeland Security Investigations (HSI).

Elod Tamas "Nick" Toldy, 62, of Austin, Texas, owner and operator of Pioneer Breaker & Control Supply in Austin, and Nick's Sales, the business' online sales and marketing component, is scheduled to be sentenced in April.

"This individual, motivated only by greed, has allowed these potentially dangerous counterfeit circuit breakers to be bought and used in homes and businesses around the country. These items, which have not been properly manufactured or tested, could lead to costly repairs, property damage, and even serious injury or death," said Susan McCormick, special agent in charge of the ICE HSI office overseeing Jacksonville. "Together with our law enforcement partners, HSI will continue to engage in an unrelenting pursuit of those companies and individuals who attempt to profit from the illegal trafficking of counterfeit products."

On April 21, 2010, ICE HSI special agents from Jacksonville and Austin executed a search warrant at Pioneer Breaker & Control Supply's warehouse in Austin, resulting in the seizure of approximately 19,000 counterfeit electrical components and label making equipment. The manufacturer's suggested retail price (MSRP) of the electrical components was more than $1.7 million. A subsequent search of another warehouse in Laredo, Texas, by ICE HSI special agents there lead to the seizure of an additional 77,000 counterfeit circuit breakers with an MSRP of more than $3 million.

According to court documents, beginning on or around December 2008 until April 2010, Toldy devised and executed a scheme in which he traveled to the People's Republic of China with sample circuit breakers produced in the United States and met with manufacturers there to produce products bearing the counterfeit trademark name "Stab-Lok." Toldy then imported the counterfeit circuit breakers into the United States bearing this counterfeit trademark and also "Zinsco," "Telemecanique," "ABB" and "Siemens."

Toldy would also affix labels bearing the counterfeit trademark of "UL" for "United Laboratories" on the circuit breakers and other electronic products. He then used his companies, Pioneer Breaker & Control Supply and Nick's Sales, to market and sell the counterfeit goods as legitimate products manufactured by the respective trade-holders and tested by United Laboratories.

Former Illinois Governor Rod R. Blagojevich Sentenced to 14 Years in Prison for Corruption in Office

2011-12-07T17:33:00.000-05:00

CHICAGO—Former Illinois Gov. Rod R. Blagojevich was sentenced today to 14 years in federal prison following his conviction at trials in 2010 and 2011 on 18 felony counts of corruption during his tenure as governor, including his effort in 2008 to illegally trade the appointment of a United States Senator in exchange for $1.5 million in campaign contributions or other personal benefits. Blagojevich was also sentenced for shaking down the chief executive of a children’s hospital for $25,000 in campaign contributions in exchange for implementing an increase to pediatric reimbursement rates; holding up the signing of a bill to benefit the Illinois horse racing industry in an attempt to illegally obtain $100,000 in campaign contributions; and lying to the FBI in 2005.

Blagojevich, who will turn 55 on Dec. 10, was ordered to surrender to the U.S. Bureau of Prisons on Feb. 16, 2012, to begin serving his sentence. The prison term is the longest-ever imposed on a former governor in the Northern District of Illinois.

“When it is the governor who goes bad, the fabric of Illinois is torn, disfigured and not easily repaired,” U.S. District Judge James Zagel said in imposing the sentence after a two-day hearing. “The harm here is not measured in the value of money or property . . . the harm is the erosion of public trust in government,” he said.

The judge imposed a fine of $20,000 and two years of supervised release after incarceration. Blagojevich also must pay a special assessment of $1,800, or $100 on each count of conviction.

During the sentencing hearing, Judge Zagel agreed with the government that the properly calculated advisory federal sentencing guidelines provided for a sentencing range of 30 years to life. He also agreed with the government that the range was not appropriate within the context of this case, and found an “effective” guideline range of 188 to 235 months in prison, which was proximate to the government’s recommended sentence of 15 to 20 years. The judge further reduced the range to 151 to 188 months after finding that Blagojevich accepted responsibility for his crimes at sentencing.

In sentencing papers, the government contended that “Blagojevich’s criminal activity was serious, extended, and extremely damaging.” The crimes proven at trial were not isolated incidents, but, instead, were part of an approach to public office that Blagojevich adopted from the moment he became governor after he was first elected in 2002 on the heels of gubernatorial corruption and running on a campaign to end “pay-to-play” politics.

“Blagojevich betrayed the trust and faith that Illinois voters placed in him, feeding great public frustration, cynicism and disengagement among citizens. People have the right to expect that their elected leaders will honor the oath they swear to, and this sentence shows that the justice system will stand up to protect their expectations,” said Patrick J. Fitzgerald, United States Attorney for the Northern District of Illinois.

“The sentence handed down today represents a repayment of the debt that Blagojevich owes to the people of Illinois. While promising an open and honest administration, in reality, the former governor oversaw a comprehensive assault on the public’s trust,” said Robert D. Grant, Special Agent in Charge of the Chicago Office of the Federal Bureau of Investigation.

Thomas P. Brady, Inspector in Charge of the U.S. Postal Inspection Service in Chicago, said: “The United States Postal Inspection Service is proud to be one of the federal law enforcement agencies to help ferret out this type of political corruption in Illinois. The Inspection Service is committed to increasing the public’s trust and confidence through our investigations of fraudulent activity. While the sentencing today closes one chapter, we must adhere to a renewed standard of accountability to ensure that the citizens of our state are not victimized by political corruption and greed.”

Alvin Patton, Special Agent in Charge of the Internal Revenue Service Criminal Investigation Division in Chicago, said: “Today’s sentence sends a loud message that public corruption will not be tolerated. The IRS Criminal Investigation Division, together with the U.S. Attorney’s Office and our law enforcement partners, will continue to aggressively pursue violators of the public trust. Regardless of political office or position, no one is above the law.”

James Vanderberg, Special Agent in Charge of the Chicago Regional Office of the U.S. Department of Labor, Office of Inspector General, said: “This sentence sends a clear message that public officials cannot engage in corruption for personal benefit in exchange for political favors.

Blagojevich, a lawyer and former state prosecutor, state legislator, and U.S. Representative, was arrested on Dec. 9, 2008, while serving his second term as governor. He was accused of using his office in numerous matters involving state appointments, business, legislation and pension fund investments to seek or obtain such financial benefits as money, campaign contributions, and employment for himself and others, in exchange for official actions, including trying to leverage his authority to appoint a United States Senator to replace then President-Elect Obama.

Blagojevich went to trial in the summer of 2010 and was convicted of lying to FBI agents when he falsely told them in an interview on March 16, 2005, that he did not track, or want to know, who contributed to him or how much money they contributed to him, but the jury was deadlocked on all remaining counts.

He went to trial again in the spring of 2011 and was convicted on 17 additional counts, including 10 counts of wire fraud, two counts of attempted extortion, two counts of conspiracy to commit extortion, one count of soliciting bribes, and two counts of conspiracy to solicit and accept bribes.

The prosecution was part of Operation Board Games, a public corruption investigation of pay-to-play schemes, including insider-dealing, influence-peddling and kickbacks involving private interests and public duties. The investigation began in 2003 and has resulted in convictions against 15 defendants, including two former chiefs of staff for Blagojevich while he was governor.

The government is being represented in the Blagojevich case by Assistant U.S. Attorneys Reid Schar, Carrie Hamilton and Christopher Niewoehner.

Marvell Finance Employee Pleads Guilty in New York to Insider Trading Charge

2011-12-07T17:30:00.001-05:00

NEW YORK—Stanley Ng, formerly the Securities and Exchange Commission (SEC) reporting manager at Marvell Technology Group Ltd., pleaded guilty today in connection with his involvement in an insider trading scheme, announced Preet Bharara, U.S. Attorney for the Southern District of New York. Ng pleaded guilty before U.S. District Judge Jed S. Rakoff to conspiring to commit securities fraud and wire fraud by providing material, non-public information about Marvell to Winifred Jiau and Son Ngoc Nguyen, for the purpose of executing profitable securities transactions.

According to the information filed today in Manhattan federal court, the complaint, other court documents filed in this case and testimony from the trial of co-conspirator Winifred Jiau:

Ng was employed as the SEC reporting manager at Marvell from 2002 until 2010. In that capacity, he had access to Marvell’s non-public financial earnings before they were publicly announced. Ng, and Nguyen, who was employed in the finance department of NVIDIA Corporation, were recruited by Jiau to join an “investment club.” As part of the club, Ng and Nguyen agreed to provide Jiau with material, non-public information regarding Marvell and NVIDIA, respectively. In exchange, Jiau agreed to provide them with stock tips received from other individuals. The inside information that Ng provided included detailed, non-public financial earnings of Marvell before the company publicly announced its financial results.

For example, in May 2008 and August 2008, Ng provided Jiau with detailed and accurate financial results for Marvell. At various times, Jiau and Nguyen purchased Marvell stock based on the inside information provided by Ng. In addition, Jiau sold the inside information that she received from Ng to portfolio managers at hedge funds—including Samir Barai and Noah Freeman—who in turn used it to execute illicit securities transactions in Marvell stock.

U.S. Attorney Bharara stated: “Stanley Ng was given access to confidential, non-public information so he could ensure that his employer complied with reporting requirements for public companies that are mandated by federal law. Ironically, he used that access to trade on the information and to help others in his so-called ‘club’ do the same. He has now admitted his guilt.”

Ng, 43, of Cupertino, Calif., pleaded guilty to one count of conspiracy to commit securities fraud and wire fraud, which carries a maximum potential penalty of five years in prison and a fine of $250,000 or twice the gross gain or loss from the offense. As part of his agreement, Ng also agreed to forfeit $6,464, which represents his illicit gains from the insider trading conduct.

Jiau, 44, of Freemont, Calif., was previously convicted by a jury of one count of conspiracy to commit securities fraud and wire fraud, and one count of securities fraud. She was sentenced on Sept. 21, 2011, by Judge Rakoff to a term 48 months in prison and two years of supervised release.

Nguyen, 40, of San Jose, Calif., pleaded guilty on May 27, 2011, to one count of conspiracy to commit securities fraud and wire fraud. He is awaiting sentencing.

Barai, 40, of New York, pleaded guilty on May 27, 2011, to one count of conspiracy to commit securities fraud and wire fraud, one count of securities fraud, one count of wire fraud, and one count of obstruction of justice. He is awaiting sentencing.

Freeman, 35, of Boston, pleaded guilty on Feb. 7, 2011, to one count of conspiracy to commit securities fraud and wire fraud, and one count of securities fraud. He is awaiting sentencing.

U.S. Attorney Bharara praised the investigative work of the FBI and thanked the SEC for its assistance. He also noted that the investigation is continuing.

HEDGE FUND MANAGER PLEADS GUILTY TO DEFRAUDING FAMILY AND FRIENDS OF MORE THAN $2 MILLION

2011-12-07T17:25:00.000-05:00

Manhattan District Attorney Cyrus R. Vance, Jr., today announced the guilty plea of CHRISTOPHER VULLIEZ, 37, for running a scheme that resulted in thefts totaling in excess of $2 million from approximately a dozen victims. VULLIEZ pleaded guilty to seven counts of Grand Larceny in the Second Degree, six counts of Grand Larceny in the Third Degree, one count of Scheme to Defraud in the First Degree, and ten counts of felony violations of the Martin Act (the New York State securities fraud law). VULLIEZ will also forfeit approximately $2.2 million, which will be distributed to victims.

“The defendant abused his status as a hedge fund manager to steal from his friends and family, reminding us how vulnerable we all are to those intent on crime, even those in our inner circles,” said District Attorney Vance. “This case once again demonstrates the need to enhance the Martin Act, so that law enforcement authorities can more aggressively prosecute white collar crimes.”

According to documents filed in court and VULLIEZ’S plea allocution, VULLIEZ received funds from approximately a dozen friends and family members, who he had asked to invest in particularized securities, and solicited other individuals to lend money to him based on his claimed personal circumstances. VULLIEZ represented that he would be investing his investors’ money in specific, promising new businesses. At the time he made these representations, he did not intend to make such investments, and in fact, VULLIEZ never did so.

Additionally, to persuade individuals to lend him money, the defendant made numerous intentionally false statements and promises, telling certain lenders that he had sufficient assets to cover the loan money but that his assets were temporarily frozen due to divorce litigation. At the time he made these representations, there was no divorce litigation and no frozen assets. Instead of using the investors’ and lenders’ money in the way he represented, VULLIEZ re-directed their money to a company called EatStrong and to cover defendant’s other unauthorized business and personal expenses.

In September, the District Attorney’s Office also entered into a settlement agreement in a related civil asset forfeiture case against an individual who will disgorge approximately $1 million that she received from VULLIEZ traceable to these crimes.

District Attorney Vance thanked Assistant District Attorney Vimi Bhatia of the Major Economic Crimes Bureau, who handled the case under the supervision of Deputy Bureau Chief Micki Shulman and Bureau Chief Richard Weber. Trial Preparation Assistants Elah Lanis and Marisa Calleja assisted in the investigation, as did Investigator Louis Capolupo of the District Attorney’s Office’s Investigations Bureau, who assisted in this case under the supervision of Chief Investigator John Bilich. District Attorney Vance also thanked Assistant District Attorneys Tara Miner and Duncan Levin, Chief of the Asset Forfeiture Unit, who handled the asset forfeiture aspects of the case.

District Attorney Vance also thanked the United States Securities and Exchange Commission, New York Regional Office, for its participation and support in a parallel civil investigation.

Defendant Information:

CHRISTOPHER VULLIEZ, D.O.B. 4/24/73
New York, NY

Convicted:

Grand Larceny in the Second Degree, Class C felony, 7 counts
Grand Larceny in the Third Degree, Class D felony, 6 counts
Scheme to Defraud in the First Degree, Class E felony, 1 count
General Business Law Section 352-c(6) - “Securities Fraud,” Class E felony, 10 counts

Henry Gaston Sentenced to 20 Years in Prison for 2010 Rape and Burglary; Santos Lopez Sentenced to 22 Years to Life in Prison for Slashing Two Sisters in 2009

2011-12-06T17:48:00.000-05:00

Manhattan District Attorney Cyrus R. Vance, Jr., today announced the sentencing of HENRY GASTON, 50, a previously convicted registered sex offender, to 20 years in state prison for breaking into a woman’s apartment on July 12, 2010, raping her, and stealing her property. On November 22, 2011, a jury in State Supreme Court convicted the defendant of Rape in the First Degree, Burglary in the Second Degree, Sex Abuse in the First Degree, Criminal Possession of Stolen Property in the Fourth Degree, and Grand Larceny in the Fourth Degree.

District Attorney Vance also announced the sentencing of SANTOS LOPEZ, 32, to 22-years-to-life in state prison for slashing two women, who are sisters, in the face on February 1, 2009, permanently scarring them. On October 21, 2011, a jury in State Supreme Court convicted the defendant of four counts of Assault in the First Degree.

“Today, two violent criminals who brutally attacked three women are behind bars, and will be for a long time,” said District Attorney Vance. “Both were convicted of prior violent crimes, served time, and were released, only to commit additional serious violent crimes once they got out of prison. They were given a second chance to be productive members of society, and lost it. Although their crimes were different, they both left their victims with permanent trauma, and physical and emotional scars. I would like to commend the victims in both cases for their bravery in coming forward and testifying against their attackers.”

District Attorney Vance thanked Assistant District Attorneys Jeffrey Levinson and Jonathan Dreyfuss for prosecuting the GASTON case, under the supervision of Assistant District Attorney Coleen Balbert, Deputy Chief of the Sex Crimes Unit, and Assistant District Attorney Martha Bashford, Chief of the Sex Crimes Unit. Trial Preparation Assistant Jamie Whittenberg assisted in the investigation.

District Attorney Vance thanked Assistant District Attorneys Scott Leet and Marisa Darden for prosecuting the LOPEZ case. Trial Preparation Assistant John Kane assisted with the investigation.

Defendant Information:

HENRY GASTON, D.O.B. 11/16/61
Hempstead, NY

Convicted:

Rape in the First Degree, a class B felony, 1 count
Burglary in the Second Degree, a class C felony, 2 counts
Sexual Abuse in the First Degree, a class D felony, 1 count
Criminal Possession of Stolen Property in the Fourth Degree, a class E felony, 1 count
Grand Larceny in the Fourth Degree, a class E felony, 1 count
Sentence:

20 years in state prison
SANTOS LOPEZ, D.O.B. 4/12/79
New York, NY

Convicted:

Assault in the First Degree, a class B felony, 4 counts
Sentence:

22 years to life in state prison

Ryan N. Hermon, Chief of Staff to New York State Assemblyman William F. Boyland Jr., Charged with Bribery and Hobbs Act Extortion Conspiracy

2011-12-01T17:51:00.006-05:00

Loretta E. Lynch, United States Attorney for the Eastern District of New York, and Janice K. Fedarcyk, Assistant Director in Charge of the New York Office of the Federal Bureau of Investigation, today announced the unsealing of a complaint charging Ryan N. Hermon, chief of staff for New York State Assemblyman William F. Boyland, Jr., with bribery and conspiracy to solicit more than $250,000 in exchange for performing official acts for the bribe payers.1 Hermon was arrested today and is scheduled to be arraigned this afternoon before United States Magistrate Judge Robert M. Levy, at the U.S. Courthouse, 225 Cadman Plaza East, Brooklyn, New York.

The criminal complaint alleges the following:

Between August 2010 and August 2011, Hermon, Assemblyman Boyland and others conspired to solicit and accept bribes from a carnival promoter (“CW”) and two undercover FBI agents (“UC1” and “UC2”), whom they believed to be out-of-state businessmen and real estate developers, in exchange for taking official action to secure business opportunities for CW, UC1 and UC2. Hermon is also charged with bribery for soliciting and accepting several thousand dollars in cash bribes from UC1 in exchange for taking official actions as opportunities arose on behalf of CW’s carnivals.

Carnival Scheme: Hermon Solicits and Takes Approximately $2,000 in Cash Bribes

Starting in August 2010, Assemblyman Boyland agreed to assist CW and UC1 with CW’s carnival business.2 In February 2011, Hermon told UC1 during a recorded conversation that she had become a member of the “team” assigned to work on CW’s carnivals.

On February 24, 2011, CW met with Hermon and another member of Assemblyman Boyland’s staff to discuss what CW needed from Assemblyman Boyland’s office. At the recorded meeting, Hermon asked CW whether she would be paid for her work: “[W]e are not making any money. Are we getting some money for this?” When the CW responded affirmatively, Hermon asked: “Are we getting money or are you giving it to my boss?” She then stated, “[M]y check can go to my business needs.”

On February 27, 2011, Hermon solicited and took a $1,000 cash bribe from UC1 at a restaurant in Manhattan. During the recorded meeting, UC1 and Hermon discussed what UC1 and CW needed from Assemblyman Boyland’s office for the carnivals. UC1 suggested that a call from Hermon to government officials would carry “more weight” than calls from other staffers. Hermon agreed, stating, “Absolutely, it does.”

During this meeting Hermon again indicated to UC1 that she was interested in being paid for her work, stating, “I wouldn’t mind, you know, eating some steak or potatoes.” UC1 offered to give Hermon a “down payment,” which Hermon enthusiastically accepted. An excerpt of the conversation follows:

UC1: I can even make a down payment today if you like, or check or cash or whatever you like.

HERMON: I would love that.

UC1: Okay, good.

HERMON: Are you serious?

UC1: Yeah, oh yeah. I come prepared for all–

HERMON: Oh my God!

UC1: I come prepared for all contingencies.

HERMON: You just, like, made me hot.

At the end of the lunch, UC1 paid HERMON $1,000 in cash.

On or about March 8, 2011, CW met with Hermon at Assemblyman Boyland’s district office. Hermon gave CW five signed letters that she had prepared. The letters were written on Assemblyman Boyland’s official letterhead and expressed Assemblyman Boyland’s support for CW and the carnivals that CW purported to be promoting.

On or about March 31, 2011, Hermon solicited and accepted another $1,000 cash bribe from UC1 in his car. During the recorded meeting, Hermon told UC1 that she was sharing the money she received from UC1 with other staffers in Assemblyman Boyland’s office. Hermon told UC1 that as a result of the bribes, he was receiving better service from the staffers: “[T]he staff, when I come in and say well [UC1] needs this, dah dah dah did dah. They’re jumping ‘cause they know, like I’m, they’re gonna get something or they got something.”

Conspiracy to Solicit Over $250,000 for Official Action and Influence

Assemblyman Boyland was charged with bribery in a separate case in the Southern District of New York on March 10, 2011.3

On or about March 22, 2011, during a recorded telephone conversation, Hermon informed UC1 that she was calling on Assemblyman Boyland’s behalf to “see if you can actually help him financially with, you know, retaining an attorney, he needs some cash and he’s cash strapped. . . . [T]hat’s exactly what he’s calling about.” Hermon then informed UC1 that the amount Assemblyman Boyland needed was $7,000.

On or about March 25, 2011, UC1 met Assemblyman Boyland at his district office in Brooklyn. During that meeting, which was recorded by UC1, Assemblyman Boyland and UC1 discussed real estate development projects in Assemblyman Boyland’s district that Assemblyman Boyland had previously discussed with UC1 and UC2. UC1 made clear that the money he was going to give Assemblyman Boyland was coming from both him and UC2, and in response, Assemblyman Boyland stated, “We’ll do business.” UC1 then told Assemblyman Boyland that he and UC2 wanted state grant monies to help finance the proposed development projects. Assemblyman Boyland assured UC1 that the money was there and stated that his support was a “no brainer” because the projects are “right here at home.”

At the end of the meeting, UC1 gave Assemblyman Boyland the $7,000 in cash, and stated: “Knowing that if you think you want to bring someone else onboard or knowing that you’ll be there politically for us is all that we’re looking for.” In response, Assemblyman Boyland made a “thumbs up” sign and affirmed that “the political thing will be fine in terms of just where we need to go because I’m thinking environmental and I’m thinking the two houses of the state and city. You know, the relationships are there.”

On or about April 29, 2011, during a recorded conversation in a hotel suite in Atlantic City, New Jersey, Assemblyman Boyland solicited a $250,000 bribe from UC1 and UC2. Assemblyman Boyland proposed a scheme which called for UC1 and UC2 to purchase a former hospital in Assemblyman Boyland’s district for $8 million, obtain state grant money to renovate the hospital, and resell it to a non-profit organization that Assemblyman Boyland claimed to control for $15 million. In exchange for the $250,000, Assemblyman Boyland promised that he would, among other things, arrange for the sale and take official action and use his influence to secure state grant money to allow UC1 and UC2 to renovate the hospital so that it could be sold to Assemblyman Boyland’s organization for a profit.

Starting in May 2011, Hermon and UC1 had multiple recorded conversations about the hospital deal and the $250,000 bribe. During one meeting, Hermon told UC1 that Assemblyman Boyland had informed her that UC1 and UC2 had agreed to pay Assemblyman Boyland the $250,000. UC1 responded that he and UC2 had not agreed to pay the money yet, but stated that “it’s not an issue if, if uh we start to move in our direction.” Hermon stated that the hospital deal was “doable,” that she had been “on the phone with a state representative hearing about their enthusiasm about the project,” and that Assemblyman Boyland “definitely has state support.” In a later telephone conversation, Hermon told UC1 that “just like the carnival, I’m just being put onto this [hospital] project,” and stated that she had attended meetings about the project and set up a meeting for Assemblyman Boyland with a state agency about it. In discussing the project, she stated that Assemblyman Boyland “has the power ‘cause of the fact that it’s state, that’s one, and he’s a state Assemblyman. Also, he has power because he, it’s in his district. And he has the relationships on the state level . . . .”

On or about May 27, 2011, Assemblyman Boyland, Hermon and an individual whom Assemblyman Boyland described as a “developer” met with UC2 and took him on a site tour of the hospital.

On or about June 7, 2011, in a recorded meeting, Hermon told UC1 that Assemblyman Boyland did not want her to continue her efforts to set up meetings between UC1 and other elected officials and that Assemblyman Boyland wanted “them” to stay in the background. Later that day, UC1, UC2 and Assemblyman Boyland met in a hotel room in Manhattan. During a recorded conversation, Assemblyman Boyland renewed his request for $250,000 in connection with the hospital project.

On or about June 28, 2011, Hermon explained to UC1 during a recorded telephone call that Assemblyman Boyland had not placed a planned call to UC1 because he had been questioned by law enforcement about “his role with the hospital.”

“Ryan Hermon’s job was to provide aid and assistance to her community. Instead, she allegedly used her position to help herself, trading her influence and energy for personal gain. The charged conduct is an affront to the people of New York,” stated United States Attorney Lynch. “Staffers who sell the public’s trust are on notice that they will be held to account for their criminal activities.” Ms. Lynch stated that the government’s investigation is continuing.

FBI Assistant Director in Charge Fedarcyk stated, “Ms. Hermon’s responsibility to the public was pushed aside. Apparently, her concept of her job included conspiring with her boss to solicit and take bribes. Every instance of public corruption undermines public confidence, and every instance will be vigorously policed by the FBI.”

If convicted, Hermon faces a maximum sentence of 20 years in prison.

The government’s case is being prosecuted by Assistant United States Attorneys Roger Burlingame, Carolyn Pokorny and Lan Nguyen.

The Defendant:

RYAN N. HERMON
Age: 33

1 The charges contained in the complaint are merely allegations, and the defendant is presumed innocent unless and until proven guilty.

2 As detailed more fully in the complaint, to obtain the permissions and/or permits necessary to operate carnivals in New York City, carnival businesses must obtain the support of local community boards and elected officials.

3 Boyland was acquitted of those charges on November 10, 2011.

Butterball Sued By EEOC For Harassment, Firing Of HIV-Positive Employee

2011-12-01T17:29:00.001-05:00

Turkey Company Violated Federal Disability Law, Agency Charged

GARNER, N.C. – The U.S. Equal Employment Opportunity Commission (EEOC) charged in a lawsuit filed today that Butterball, LLC, a Garner, N.C.-based turkey processing company, violated federal law by subjecting an employee to a hostile work environment based on the fact that she has Human Immunodeficiency Virus (HIV), and firing her because of that disability.

According to the lawsuit, Butterball subjected Tracy Montgomery to harassment throughout her employment in October and November 2009. Specifically, three of Montgomery’s co-workers expressed to her on a daily basis that they did not want to touch her or work with her because she is HIV-positive. The three employees also referred to Montgomery using derogatory names to describe her HIV status. The EEOC further alleges that Montgomery complained to her supervisor about the harassment on a daily or near-daily basis, but the harassment persisted. Butterball’s plant manager was also aware of the harassment after conducting a meeting with Montgomery and one of her co-workers to address an altercation that the co-worker provoked. However, the next day, the plant manager fired Montgomery.

The Americans With Disabilities Act (ADA) protects employees with disabilities from being harassed, fired, or from other employment decisions based on disabilities that are covered under the act, such as HIV. The EEOC filed suit in U.S. District Court for the Eastern District of North Carolina, Western Division (U.S. Equal Employment Opportunity Commission v. Butterball, LLC, Civil Action No. 5:11-cv-00685) after first attempting to reach a pre-litigation settlement through its conciliation process. The EEOC seeks monetary damages for Montgomery as well as certain injunctive relief.

“Harassment that targets a person with an ADA-covered disability, is just as much a violation of federal law as harassment based on a person’s race, color, gender, age, religion, or national origin,” said Lynette A. Barnes, regional attorney for the EEOC’s Charlotte District. “HIV/AIDS has always been a sensitive health issue, and an employer has no excuse for failing to intervene when an employee complains of vicious harassment based on her HIV status.”

EEOC Supervisory Trial Attorney Tina Burnside added, “Employees have the right to work in an environment free from harassment, and Title VII prohibits both harassment and firing an employee because of her disability.”

President Barack Obama has charged federal agencies to implement the National HIV/AIDS Strategy, which includes addressing and preventing employment-related discrimination against people living with HIV.This case serves as an example of how the EEOC will strongly enforce federal laws to ensure that qualified people are not wrongfully deprived of an opportunity to earn a living simply because of their HIV status.

The EEOC enforces federal laws prohibiting employment discrimination. Further information about the EEOC is available on the agency’s web site at www.eeoc.gov.

Luihn Food System Pays $277,000 To Resolve EEOC Sexual Harassment Lawsuit

2011-11-29T16:49:00.004-05:00

Company Failed to Stop Abuse of Female Employees at Raleigh KFC, Agency Charged

RALEIGH, N.C. – Luihn Food Systems, Inc. will pay $277,000 and furnish other relief to resolve a sexual harassment lawsuit filed by the U.S. Equal Employment Opportunity Commission (EEOC), the agency announced today.

According to the lawsuit, Tina Underwood, Sheila Mungin, Sabin Sheridan, Barbara Nowlin and a class of similarly situated female employees were sexually harassed between February 2007 and January 2008 while working at a Kentucky Fried Chicken restaurant owned and operated by Luihn Food Systems in Raleigh, N.C. The harassment included unwelcome sexual touching by a male employee at the restaurant, including rubbing his body against the women, touching their buttocks and breasts and walking into the restroom while a female employee was using it. Despite receiving several complaints about the harassment, Luihn Food Systems failed to take action to stop it, the EEOC said.

Sexual harassment violates Title VII of the Civil Rights Act of 1964. The EEOC originally filed suit in August 2009 in U.S. District Court, Eastern District of North Carolina (Civil Action No. 5:09cv00387), after first attempting to reach a pre-litigation settlement through its conciliation process.

In addition to monetary damages, the two-year consent decree resolving the suit requires Luihn to revise its sexual harassment policy to include, among other things, procedures for reporting sexual harassment and procedures for the prompt investigation of employee complaints about it. Luihn will also post a copy of its sexual harassment policy at all of its facilities and conduct an annual training program for all employees on its policy and Title VII’s prohibition against sexual harassment.

“Once an employer is put on notice that any of its employees, male or female, are being subjected to sexual harassment, it must take prompt corrective action to stop it,” said Lynette A. Barnes, regional attorney for the EEOC’s Charlotte District, which includes the Raleigh Area Office, where the original charges of discrimination were filed. “We are pleased that, in resolving this case, Luihn is taking action to encourage the prompt reporting and investigation of sexual harassment complaints.”

Tina Burnside, supervisory trial attorney for the EEOC’s Charlotte District, added, “The EEOC is pleased that the consent decree includes injunctive measures designed to ensure that this kind of harassment does not happen again.”

The EEOC is responsible for enforcing federal laws prohibiting discrimination in employment. More information about the EEOC is available on its website at www.eeoc.gov.

Is The KKK Running The EEOC?

2011-11-27T19:06:00.005-05:00

EEOC Axed Whistleblower
Systemic discrimination against black people at the EQUAL EMPLOYMENT OPPORTUNITY COMMISION?

Investigator Ricardo Jones was employed with th New York City Branch Equal Employment Opportunity Commission (EEOC) when he contacted The Black Star News to tell anyone who would listen about “The EEOC is not investigating African-American complaints from New York to North Carolina.” Source,
http://blackstarnews.com/news/125/ARTICLE/6216/2010-01-14.html

http://www.blackstarnews.com/news/135/ARTICLE/5982/2009-09-05.html

HUGUES AKASSY SENTENCED TO 20 YEARS IN PRISON FOR RAPE, STALKING, AND HARASSING WOMEN ON THE UPPER WEST SIDE

2011-11-17T17:53:00.000-05:00

Manhattan District Attorney Cyrus R. Vance, Jr., today announced the sentencing of HUGUES AKASSY, 43, to 20 years in state prison for his conviction on charges of stalking, harassing, and, in one case, sexually assaulting a woman on the Upper West Side between November 2007 and July 2010. On November 7, 2011, AKASSY was found guilty following a jury trial.

“The defendant refused to take no for an answer,” District Attorney Vance said. “He stalked these women obsessively and, when they refused his advances, he grew irate, harassing them over the phone, via e-mail, and in person. In one case, the jury found that his dangerous behavior escalated to rape, leaving his victim traumatized physically and emotionally. I commend the victims for bravely coming forward to seek justice.”

As proven at trial, AKASSY separately accosted four women in Manhattan from November 2007 to January 2010. In February 2009, AKASSY approached a victim on an Upper West Side street, and he later appeared at her apartment building uninvited on at least two occasions. The defendant screamed obscenities at the victim outside of her building for rejecting his advances and sent her an insulting e-mail.

In June 2009, AKASSY invited a second victim on a picnic in Riverside Park. Two days after the picnic, he appeared at her workplace uninvited, and when she stated that she was uncomfortable with his coming to her workplace, he sent her an e-mail in which he called her a “shallow” woman. In August 2009, he appeared at her workplace again and claimed that he had forgotten that she worked there. The victim stated in her testimony at trial that she only consented to go on another picnic with the defendant because she felt guilty about hurting his feelings. After the second picnic, the defendant insisted on walking the victim home. When they arrived at her apartment building, the defendant asked if he could use her bathroom, to which she replied that he would have to leave after using the bathroom. AKASSY grew angry, banging on the building door and ringing her buzzer for approximately twenty minutes. From October to December 2009, the defendant appeared frequently at her workplace and stared at her.

In late 2009, AKASSY approached a third victim at the art gallery that she directed on Central Park West. The defendant began to appear frequently at the gallery for shows and events. In January 2010, the defendant stole the keys to the gallery while the victim and some artists were preparing for a show. After returning the keys to the gallery, the defendant denied taking them. In February 2010, the victim saw the defendant hiding behind a pillar in the gallery and staring at her. The victim called the police to make a complaint, and later the gallery employees asked AKASSY not to return. AKASSY grew angry at the victim, repeatedly called her, and once approached the victim in a subway station to scream at her. At trial, he admitted to calling the victim more than two dozen times in one evening.

In July 2010, AKASSY invited a fourth victim, a tourist from Russia, to a picnic in Riverside Park. AKASSY led her to an isolated area of the park, where he threw her down and violently raped her. The victim escaped and walked to a group of men standing nearby in the park, who testified at trial that she was visibly shaken. The defendant, who had followed the victim, tried to convince the men not to call the police. The defendant hailed a cab and watched the victim from inside the cab, until police officers removed him from the vehicle and arrested him.

District Attorney Vance thanked Assistant District Attorneys Jessica Troy and Emily Auletta for prosecuting the case, under the supervision of Assistant District Attorney Martha Bashford, Chief of the Sex Crimes Unit. Trial Preparation Assistant Ivette Sanchez assisted with the case.

Defendant Information:

HUGUES AKASSY, D.O.B. 3/31/1968

Address Unknown

Convicted:

Rape in the First Degree, a class B felony, one count
Stalking in the Third Degree, a class A misdemeanor, two counts
Aggravated Harassment in the Second Degree, a class A misdemeanor, three counts
Sentenced:

20 years in prison
5 years post-release supervision

Manhattan U.S. Attorney Charges Seven Individuals for Engineering Sophisticated Internet Fraud Scheme That Infected Millions of Computers Worldwide and Manipulated Internet Advertising Business

2011-11-09T16:34:00.000-05:00

PREET BHARARA, the United States Attorney for the Southern District of New York, JANICE K. FEDARCYK, the Assistant Director in Charge of the New York Office of the Federal Bureau of Investigation (“FBI”), and PAUL MARTIN, the Inspector General of the National Aeronautics and Space Administration, Office of Inspector General (“NASA OIG”), today announced charges against six Estonian nationals and one Russian national for engaging in a massive and sophisticated Internet fraud scheme that infected with malware more than four million computers located in over 100 countries. Of the computers infected with malware, at least 500,000 were in the United States, including computers belonging to U.S. government agencies, such as NASA; educational institutions; non-profit organizations; commercial businesses; and individuals. The malware secretly altered the settings on infected computers enabling the defendants to digitally hijack Internet searches and re-route computers to certain websites and advertisements, which entitled the defendants to be paid. The defendants subsequently received fees each time these websites or ads were clicked on or viewed by users. The malware also prevented the installation of anti-virus software and operating system updates on infected computers, leaving those computers and their users unable to detect or stop the defendants’ malware, and exposing them to attacks by other viruses.

Six of the defendants, VLADIMIR TSASTSIN, 31, TIMUR GERASSIMENKO, 31, DMITRI JEGOROV, 33, VALERI ALEKSEJEV, 31, KONSTANTIN POLTEV, 28, and ANTON IVANOV, 26, all Estonian nationals, were arrested and taken into custody yesterday in Estonia by the Estonian Police and Border Guard Board. The U.S. Attorney’s Office will seek their extradition to the United States. The seventh defendant, ANDREY TAAME, 31, a Russian national, remains at large.

Manhattan U.S. Attorney PREET BHARARA said: “These defendants gave new meaning to the term, ‘false advertising.’ As alleged, they were international cyber bandits who hijacked millions of computers at will and re-routed them to Internet websites and advertisements of their own choosing—collecting millions in undeserved commissions for all the hijacked computer clicks and Internet ads they fraudulently engineered. The international cyber threat is perhaps the most significant challenge faced by law enforcement and national security agencies today, and this case is just perhaps the tip of the Internet iceberg. It is also an example of the success that can be achieved when international law enforcement works together to root out internet crime. We are committed to continuing our vigilance and efforts—it is essential to our national security, our economic security, and our citizens’ personal security.”

FBI Assistant Director in Charge JANICE K. FEDARCYK said: “The defendants hijacked 4 million computers in a hundred countries, including half a million computers in the United States, rerouting Internet traffic and generating $14 million in illegitimate income. The globalization of the legitimate economy was the inspiration for Thomas Friedman’s The World Is Flat. The global reach of these cyber thieves demonstrates that the criminal world is also flat. The Internet is pervasive because it is such a useful tool, but it is a tool that can be exploited by those with bad intentions and a little know-how. In this context, international law enforcement cooperation and strong public-private partnerships are absolute necessities, and the FBI is committed to both.”

NASA Inspector General PAUL MARTIN said: “These arrests illustrate the level of cooperation needed to confront the growing worldwide threat of cyber crime. We will continue working with our national and international colleagues to help protect governments, U.S. agencies like NASA, businesses, and individual users of the Internet from fraud and theft.”

The Cyber-Fraud Scheme

According to the Indictment unsealed today in Manhattan federal court:

Internet advertising is a multi-billion-dollar industry in which website owners sell advertising space on their sites. Because of the vast number of website operators—also referred to as publishers—and advertisers on the Internet, advertisers often rely on third party “ad brokers” to contract with and deliver their advertisements to publishers. Similarly, rather than contract with ad brokers individually, website publishers often join together and form “publisher networks” to contract with ad brokers collectively.

As alleged in the Indictment, from 2007 until October 2011, the defendants controlled and operated various companies that masqueraded as legitimate publisher networks (the “Publisher Networks”) in the Internet advertising industry. The Publisher Networks entered into agreements with ad brokers under which they were paid based on the number of times that Internet users clicked on the links for certain websites or advertisements, or based on the number of times that certain advertisements were displayed on certain websites. Thus, the more traffic to the advertisers’ websites and display ads, the more money the defendants earned under their agreements with the ad brokers. As alleged in the Indictment, the defendants fraudulently increased the traffic to the websites and advertisements that would earn them money. They accomplished this by making it appear to advertisers that the Internet traffic came from legitimate clicks and ad displays on the defendants’ Publisher Networks when, in actuality, it had not.

To carry out the scheme, the defendants and their co-conspirators used what are known as “rogue” Domain Name System (“DNS”) servers, and malware (“the Malware”) that was designed to alter the DNS server settings on infected computers. Victims’ computers became infected with the Malware when they visited certain websites or downloaded certain software to view videos online. The Malware altered the DNS server settings on victims’ computers to route the infected computers to rogue DNS servers controlled and operated by the defendants and their co-conspirators. The re-routing took two forms that are described in detail below: “click hijacking” and “advertising replacement fraud.” The Malware also prevented the infected computers from receiving anti-virus software updates or operating system updates that otherwise might have detected the Malware and stopped it. In addition, the infected computers were also left vulnerable to infections by other viruses.

Click Hijacking

When the user of an infected computer clicked on a search result link displayed through a search engine query, the Malware caused the computer to be re-routed to a different website. Instead of being brought to the website to which the user asked to go, the user was brought to a website designated by the defendants. Each “click” triggered payment to the defendants under their advertising agreements. This click hijacking occurred for clicks on unpaid links that appear in response to a user’s query as well as clicks on “sponsored” links or advertisements that appear in response to a user’s query—often at the top of, or to the right of, the search results—thus causing the search engines to lose money. Several examples of click hijacking illustrated in the Indictment include:

When the user of an infected computer clicked on the domain name link for the official website of Apple-iTunes, the user was instead taken to a website for a business unaffiliated with Apple Inc. that purported to sell Apple software.
When the user of an infected computer clicked on a domain name link for Netflix, the user was instead taken to a website for an unrelated business called “BudgetMatch.”
When the user of an infected computer clicked on the domain name link for the official government website of the Internal Revenue Service, the user was instead taken to the website for H&R Block, a major tax preparation business.

Advertising Replacement Fraud

Using the DNS Changer Malware and rogue DNS servers, the defendants also replaced legitimate advertisements on websites with substituted advertisements that triggered payments to the defendants. Several examples of the advertising replacement fraud illustrated in the Indictment include:

When the user of an infected computer visited the home page of the Wall Street Journal, a featured advertisement for the American Express “Plum Card” had been fraudulently replaced with an ad for “Fashion Girl LA.”
When the user of an infected computer visited the Amazon.com website, a prominent advertisement for Windows Internet Explorer 8 had been fraudulently replaced with an ad for an email marketing business.
When the user of an infected computer visited the ESPN website, a prominent advertisement for “Dr. Pepper Ten” had been fraudulently replaced with an ad for a timeshare business.

The defendants earned millions of dollars under their advertising agreements, not by legitimately displaying advertisements through their Publisher Networks, but rather by using the Malware to fraudulently drive Internet traffic to the websites and ads that would earn them more money. As a result, the defendants and their co-conspirators earned at least $14 million in ill-gotten gains through click hijacking and advertisement replacement fraud. The Indictment further alleges that the defendants laundered the proceeds of the scheme through numerous companies including, among others, Rove Digital, an Estonian corporation, and others listed in the Indictment.

The defendants’ scheme also deprived legitimate website operators and advertisers of substantial monies and advertising revenue. In addition to search engines losing revenue as a result of click hijacking on their sponsored search result listings, advertisers lost money by paying for clicks that they believed came from interested computer users, but which were in fact fraudulently engineered by the defendants. Furthermore, the defendants’ conduct risked reputational harm to businesses that paid to advertise on the Internet—but that had no knowledge or desire for computer users to be directed to their websites or advertisements through the fraudulent means used by the defendants.

* * *

Each defendant is charged with five counts of wire and computer intrusion crimes (see below chart). In addition, TSASTSIN is charged with 22 counts of money laundering.

Remediation Efforts

In conjunction with the arrests yesterday, authorities in the United States seized computers at various locations, froze the defendants’ financial accounts, and disabled their network of U.S.-based computers—including dozens of rogue DNS servers located in New York and Chicago. Additionally, authorities in the United States took steps with their foreign counterparts to freeze the defendants’ assets located in other countries. Remediation efforts were immediately undertaken to minimize any disruption of Internet service to the users of computers infected with the Malware. This remediation was necessary because the dismantling of the defendants’ rogue DNS servers—to which millions of computers worldwide had been redirected—would potentially have caused all of those computers, for all practical purposes, to lose access to websites.

The remediation effort is being carried out pursuant to the order of a Manhattan federal court judge. As part of that order, the defendant’s rogue DNS servers have been replaced with legitimate ones. Internet Systems Consortium (“ISC”), a not-for-profit entity, was appointed by the court to act as a third-party receiver for a limited period of 120 days during which time it will administer the replacement DNS servers. Although the replacement DNS servers will provide continuity of Internet service to victims, those replacement servers will not remove the Malware from the infected computers. Users who believe their computers may be infected can find additional information at FBI.gov.

Mr. BHARARA praised the investigative work of the FBI, NASA OIG, and the Estonian Police and Border Guard Board. Mr. BHARARA also specially thanked the National High Tech Crime Unit of the Dutch National Police Agency. The FBI and NASA OIG received assistance from multiple domestic and international private sector partners, including Georgia Tech University, Internet Systems Consortium, Mandiant, National Cyber-Forensics and Training Alliance, Neustar, Spamhaus, Team Cymru, Trend Micro, University of Alabama at Birmingham and members of an ad hoc group of subject matter experts known as the DNS Changer Working Group (DCWG).

The Office’s Complex Frauds and Asset Forfeiture Units are handling this case. Assistant U.S. Attorneys SARAH LAI, JAMES PASTORE, and ALEXANDER J. WILSON are in charge of the prosecution.

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

U.S. v. Tsastsin, et al.

COUNT

CHARGE

DEFENDANTS

MAXIMUM PENALTIES
1

Wire fraud conspiracy

VLADIMIR TSASTSIN
ANDREY TAAME
TIMUR GERASSIMENKO
DMITRI JEGOROV
VALERI ALEKSEJEV
KONSTANTIN POLTEV
ANTON IVANOV

30 years in prison
2

Computer intrusion conspiracy

VLADIMIR TSASTSIN
ANDREY TAAME
TIMUR GERASSIMENKO
DMITRI JEGOROV
VALERI ALEKSEJEV
KONSTANTIN POLTEV
ANTON IVANOV

10 years in prison
3

Wire fraud

VLADIMIR TSASTSIN
ANDREY TAAME
TIMUR GERASSIMENKO
DMITRI JEGOROV
VALERI ALEKSEJEV
KONSTANTIN POLTEV
ANTON IVANOV

30 years in prison
4

Computer intrusion (furthering fraud)

VLADIMIR TSASTSIN
ANDREY TAAME
TIMUR GERASSIMENKO
DMITRI JEGOROV
VALERI ALEKSEJEV
KONSTANTIN POLTEV
ANTON IVANOV

Five years in prison
5

Computer intrusion (transmitting information)

VLADIMIR TSASTSIN
ANDREY TAAME
TIMUR GERASSIMENKO
DMITRI JEGOROV
VALERI ALEKSEJEV
KONSTANTIN POLTEV
ANTON IVANOV

10 years in prison
6

Money laundering

VLADIMIR TSASTSIN

30 years in prison
7

Engaging in monetary transactions of value over $10,000 involving fraud proceeds

VLADIMIR TSASTSIN

Per count: 10 years in prison

- Remarks by FBI Assistant Director in Charge Fedarcyk
- Related FBI story