“Alleged International Terrorist Arraigned Today in Brooklyn Federal Court Following Extradition from Nigeria”

October 1, 2013

The Federal Bureau of Investigation on September 27, 2013 released the following:

As a Member of al Qaeda in the Arabian Peninsula, Nigerian Man Allegedly Received Weapons Training, Recruited Operatives, and Helped Publish ‘Inspire’ Magazine

Lawal Olaniyi Babafemi, a Nigerian citizen charged with providing material support to al Qaeda in the Arabian Peninsula (AQAP), a designated foreign terrorist organization, and using firearms in furtherance of that crime, was arraigned today before United States District Judge John Gleeson at the federal courthouse in Brooklyn, New York. At this initial appearance in court in the United States after his extradition from Nigeria, Babafemi was ordered held without bail.

The charges and arraignment were announced by Loretta E. Lynch, United States Attorney for the Eastern District of New York; John Carlin, Acting Assistant Attorney General for the National Security Division; and George Venizelos, Assistant Director in Charge of the New York Field Office of the Federal Bureau of Investigation.

“As alleged in the indictment, the defendant was a member of a violent terrorist organization bent on doing harm to the United States and its allies. The defendant threw his efforts behind al Qaeda in the Arabian Peninsula’s media, recruitment, and weapons training campaigns in an effort to strengthen the terrorist group’s grip on the region and extend its reach throughout the world. We will use every tool at our disposal to combat al Qaeda and other terrorist groups in a manner consistent with our laws,” stated United States Attorney Lynch. Ms. Lynch also expressed her grateful appreciation to the government of Nigeria for its assistance and cooperation in this extradition.

“As alleged, the defendant trained with al Qaeda, assisted in its propaganda efforts, and actively recruited others to join its demented cause. We will continue to work with our international partners to mitigate the global terrorist threat,” stated FBI Assistant Director in Charge Venizelos.

According to court documents and the record of today’s proceeding, between approximately January 2010 and August 2011, the defendant traveled twice from Nigeria to Yemen to meet and train with leaders of AQAP, the Yemen-based branch of al Qaeda. Babafemi assisted in AQAP’s English-language media operations, which include the publication of the magazine Inspire. At the direction of the now-deceased senior AQAP commander Anwar al-Aulaqi, Babafemi was provided by AQAP leadership with the equivalent of almost $9,000 in cash to recruit other English-speakers from Nigeria to join that group. While in Yemen, Babafemi also received weapons training from AQAP.

On February 21, 2013, a grand jury in the Eastern District of New York returned a sealed indictment charging the defendant with one count of conspiracy to provide material support to AQAP, in violation of Title 18, United States Code, Section 2339B; one count of providing and attempting to provide material support to AQAP, in violation of Title 18, United States Code, Section 2339B; one count of unlawful use of machineguns, in violation of Title 18, United States Code, Section 924(c); and one count of conspiracy to unlawfully use machineguns, in violation of Title 18, United States Code, Section 924(o). At the request of the United States, the Nigerian government thereafter commenced extradition proceedings against the defendant in July 2013, and he was ordered extradited in September 2013.

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

If convicted, the defendant faces up to 15 years in prison on each of the material support charges and up to life on each of the firearms charges.

The government’s case is being prosecuted by Assistant United States Attorneys Zainab Ahmad and Hilary Jager, with assistance from Trial Attorney William M. Narus of the Justice Department’s Counterterrorism Section and the Justice Department’s Office of International Affairs.

Defendant:

Lawal Olaniyi Babafemi
Age: 33″

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Douglas McNabb – McNabb Associates, P.C.’s
Federal Criminal Defense Attorneys Videos:

Federal Crimes – Be Careful

Federal Crimes – Be Proactive

Federal Crimes – Federal Indictment

Federal Crimes – Detention Hearing

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To find additional federal criminal news, please read Federal Criminal Defense Daily.

Douglas McNabb and other members of the U.S. law firm practice and write and/or report extensively on matters involving Federal Criminal Defense, INTERPOL Red Notice Removal, International Extradition Defense, OFAC SDN Sanctions Removal, International Criminal Court Defense, and US Seizure of Non-Resident, Foreign-Owned Assets. Because we have experience dealing with INTERPOL, our firm understands the inter-relationship that INTERPOL’s “Red Notice” brings to this equation.

The author of this blog is Douglas C. McNabb. Please feel free to contact him directly at mcnabb@mcnabbassociates.com or at one of the offices listed above.


Florida Attorney Charged with Allegedly Laundering Purported Stock Fraud Proceeds

July 11, 2013

The Federal Bureau of Investigation (FBI) on July 10, 2013 released the following:

Michael Scaglione, Esq. Laundered More Than $750,000, was Placed Under Arrest After Accepting an Additional $500,000 in Cash to Launder

BROOKLYN, NY— Michael J. Scaglione, Esq., 41, an attorney in Coral Gables, Florida, was arrested this morning on charges that he laundered more than $750,000, which he believed were proceeds from a penny stock fraud scheme. The money was, in fact, provided to Scaglione by an undercover law enforcement agent who posed as a criminal stock promoter as part of a sting operation. Scaglione, who is a partner at Scaglione Law Firm P.A. in Coral Gables, Florida, was arrested after he took possession of an additional $500,000 in cash that he agreed to launder.

The charges were announced by Loretta E. Lynch, United States Attorney for the Eastern District of New York; George Venizelos, Assistant Director in Charge, Federal Bureau of Investigation, New York Field Office (FBI); and Toni Weirauch, Special Agent in Charge, United States Internal Revenue Service, Criminal Investigation, New York (IRS).

According to the complaint unsealed this morning in the Eastern District of New York, Scaglione exploited his position as an attorney to launder money through an escrow account for an undercover law enforcement agent (“undercover agent”) who posed as a corrupt stock promoter. In his dealings with Scaglione, the undercover agent represented himself to be a middleman working with corrupt stock brokers who artificially inflated prices for worthless stock in exchange for high commissions. Scaglione agreed to launder what he believed were proceeds of this stock fraud through his attorney escrow account in order to hide that money from the United States Securities and Exchange Commission and the IRS. Scaglione then funneled over $750,000, including $88,000 in cash given to him in a Federal Express box in the lobby of a Miami Beach hotel, through the escrow account into the undercover agent’s bank account in Long Island, New York. Scaglione carefully structured the movement of these funds to avoid triggering financial reporting requirements. In exchange, Scaglione collected over $25,000 in fees. In recorded conversations, Scaglione assured the undercover agent that their conversations were “completely privileged” and that his money was “safe” with Scaglione. When the undercover agent explained to Scaglione that he did not “want to go to jail,” Scaglione stated to the undercover agent that the escrow account was “tight as can be.” Directly prior to his arrest this morning, at a hotel in Miami Beach, Florida, Scaglione accepted an additional $500,000 in cash from the undercover agent, which Scaglione believed to be proceeds from the penny stock fraud.

“As alleged in the complaint, Scaglione hid behind his license to practice law as he threw himself into the purported scheme to launder money. In so doing, he crossed the line from attorney to defendant,” stated United States Attorney Lynch. “I would like to thank our partners at the FBI and the IRS for their swift action and effective work on this important investigation.”

FBI Assistant Director in Charge Venizelos stated, “As alleged, the defendant breached the code of ethics for his profession and flagrantly broke the law, in laundering what he believed to be the proceeds of criminal activity. Contrary to the counsel he gave, the attorney-client privilege is not a veil of secrecy to hide criminal conduct.”

IRS Special Agent in Charge Weirauch stated, “Criminal attempts to conceal reportable financial transactions from government agencies, including the Internal Revenue Service and the Securities and Exchange Commission, may appear to be victimless crimes to some. However, they erode our nation’s financial systems and ultimately harm the American public. In particular, the laundering of proceeds from illegitimate activities that are nevertheless taxable threatens our voluntary tax compliance system; failure to investigate and prosecute these types of crimes would erode public confidence.”

The defendant is scheduled to appear tomorrow before United States Magistrate Judge Alicia M. Otazo-Reyes at the United States Courthouse in Miami, Florida, for removal proceedings to the Eastern District of New York.

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

The government’s case is being prosecuted by Assistant United States Attorney Jacquelyn M. Kasulis.

This case was brought in coordination with President Barack Obama’s Financial Fraud Enforcement Task Force. President Obama established the interagency 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.

Defendant:

Michael J. Scaglione
Age: 41
Miami Springs, Florida”

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Douglas McNabb – McNabb Associates, P.C.’s
Federal Criminal Defense Attorneys Videos:

Federal Crimes – Be Careful

Federal Crimes – Be Proactive

Federal Crimes – Federal Indictment

Federal Crimes – Detention Hearing

Federal Mail Fraud Crimes

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To find additional federal criminal news, please read Federal Criminal Defense Daily.

Douglas McNabb and other members of the U.S. law firm practice and write and/or report extensively on matters involving Federal Criminal Defense, INTERPOL Red Notice Removal, International Extradition Defense, OFAC SDN Sanctions Removal, International Criminal Court Defense, and US Seizure of Non-Resident, Foreign-Owned Assets. Because we have experience dealing with INTERPOL, our firm understands the inter-relationship that INTERPOL’s “Red Notice” brings to this equation.

The author of this blog is Douglas C. McNabb. Please feel free to contact him directly at mcnabb@mcnabbassociates.com or at one of the offices listed above.


Gershon Barkany Charged by a Criminal Complaint Alleging He Defrauded Investors of $50 Million in a Real Estate Ponzi Scheme

March 29, 2013

The Federal Bureau of Investigation (FBI) on March 28, 2013 released the following:

“Far Rockaway Man Charged with Defrauding Victims of $50 Million in a Real Estate Ponzi Scheme

Earlier today, FBI agents arrested Gershon Barkany based on a criminal complaint alleging that the Far Rockaway man defrauded investors by promising to use their money in “risk-free” deals to purchase and then immediately re-sell at a profit large real estate properties located in New York City and New Jersey. In fact, the complaint alleges that no such deals existed and the defendant defrauded victims of more than $50 million.

The charges were announced by Loretta E. Lynch, United States Attorney for the Eastern District of New York, and George Venizelos, Assistant Director in Charge, Federal Bureau of Investigation (FBI), New York Field Office. The defendant’s initial appearance is scheduled for this afternoon before United States Magistrate Judge A. Kathleen Tomlinson at the United States Courthouse in Central Islip, New York.

According to the criminal complaint that was unsealed this morning, Barkany induced at least five investors to wire transfer large sums of money supposedly to purchase real estate in Manhattan, Queens, the Bronx, and Atlantic City, New Jersey. According to one of the investor victims, Barkany claimed that the sellers of these properties would only close on the real estate sales contracts after Barkany had located a purchaser who would be willing to buy the property from Barkany at a higher price. In that way, Barkany assured the victim that the real estate deals would be “risk free.”

In fact, the real estate deals did not exist. As part of Barkany’s Ponzi scheme, he diverted some of the funds he received to pay investors whom he had earlier defrauded. The defendant also lost some of the funds in gambling and otherwise used the money for his own benefit.

“Barkany’s victims sought the security of investing in real estate. Instead, they were taken for millions by the defendant’s lies and deception,” stated United States Attorney Lynch. “As alleged, the promised high returns were only for him, as he used his victims’ money to gamble and keep his scheme afloat. Today’s arrest demonstrates the Department of Justice’s commitment to investigate and prosecute financial crimes.” Ms. Lynch added that the government’s investigation is continuing.

FBI Assistant Director in Charge Venizelos stated, “As alleged, Barkany promised a get-rich-quick investment scheme that really had potential to enrich only him. There were no investment properties, just a house of cards built on a foundation of lies. There may be no truly risk-free investments, but investors are entitled to honesty.”

If convicted, the defendant faces a maximum sentence of 20 years’ imprisonment.

The government’s case is being prosecuted by Assistant United States Attorney Christopher C. Caffarone.

Defendant
Gershon Barkany
Far Rockaway
Age: 29”

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Douglas McNabb – McNabb Associates, P.C.’s
Federal Criminal Defense Attorneys Videos:

Federal Crimes – Be Careful

Federal Crimes – Be Proactive

Federal Crimes – Federal Indictment

Federal Crimes – Detention Hearing

Federal Mail Fraud Crimes

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To find additional federal criminal news, please read Federal Criminal Defense Daily.

Douglas McNabb and other members of the U.S. law firm practice and write and/or report extensively on matters involving Federal Criminal Defense, INTERPOL Red Notice Removal, International Extradition Defense, OFAC SDN Sanctions Removal, International Criminal Court Defense, and US Seizure of Non-Resident, Foreign-Owned Assets. Because we have experience dealing with INTERPOL, our firm understands the inter-relationship that INTERPOL’s “Red Notice” brings to this equation.

The author of this blog is Douglas C. McNabb. Please feel free to contact him directly at mcnabb@mcnabbassociates.com or at one of the offices listed above.


Accused Military Tech Exporter Pleads Not Guilty in N.Y.

October 22, 2012

Bloomberg Businessweek on October 22, 2012 released the following:

“By Christie Smythe

Alexander Fishenko, owner of Houston-based Arc Electronics Inc., pleaded not guilty in a Brooklyn, New York, federal court to illegally exporting microelectronics to Russian military and intelligence agencies.

Fishenko, a U.S. citizen formerly of Kazakhstan, appeared today before U.S. District Judge Sterling Johnson. He’s accused in a 25-count indictment of violating the International Emergency Economic Powers Act and the Arms Export Control Act, obstructing justice and operating as an unregistered agent of the Russian government.

Arc shipped at least $50 million worth of technology goods to Russia without an export license, the government alleged. Ten other individuals, most of whom were employees of either Arc or a Moscow-based procurement firm Apex System LLC, were charged in the indictment, which was unsealed on Oct. 3.

The computer chips supplied by Arc appear similar to those used in missiles and fighter jets, the government said in court papers. One of the end users of the electronics was the Federal Security Service, successor to the KGB spy agency, according to the filings.

A lawyer for Fishenko, Richard Rosenberg, who was appointed by the court today, said in a phone interview after the hearing that he wasn’t sure whether his client will seek bail. He declined to comment further.

The case is U.S. v. Fishenko, 1:12-cr-626, U.S. District Court, Eastern District of New York (Brooklyn).”

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Douglas McNabb – McNabb Associates, P.C.’s
Federal Criminal Defense Attorneys Videos:

Federal Crimes – Be Careful

Federal Crimes – Be Proactive

Federal Crimes – Federal Indictment

Federal Crimes – Detention Hearing

Federal Mail Fraud Crimes

————————————————————–

To find additional federal criminal news, please read Federal Criminal Defense Daily.

Douglas McNabb and other members of the U.S. law firm practice and write and/or report extensively on matters involving Federal Criminal Defense, INTERPOL Red Notice Removal, International Extradition Defense, OFAC SDN Sanctions Removal, International Criminal Court Defense, and US Seizure of Non-Resident, Foreign-Owned Assets. Because we have experience dealing with INTERPOL, our firm understands the inter-relationship that INTERPOL’s “Red Notice” brings to this equation.

The author of this blog is Douglas C. McNabb. Please feel free to contact him directly at mcnabb@mcnabbassociates.com or at one of the offices listed above.


Alleged Russian Agent, His Associates, and Their Businesses Indicted for Ties to Russian Military and Intelligence Agencies – Illegal Exports – Secret US FISA Wiretaps Used

October 3, 2012

The Federal Bureau of Investigation (FBI) on October 3, 2012 released the following:

“Russian Agent and 10 Other Members of Procurement Network for Russian Military and Intelligence Operating in the U.S. and Russia Indicted in New York

Defendants Also Include Texas- and Russia-Based Corporations; 165 Persons and Companies ‘Designated’ by Commerce Department

BROOKLYN, NY—An indictment was unsealed today in U.S. District Court for the Eastern District of New York charging 11 members of a Russian military procurement network operating in the United States and Russia, as well as a Texas-based export company and a Russia-based procurement firm, with illegally exporting high-tech microelectronics from the United States to Russian military and intelligence agencies.

Alexander Fishenko, an owner and executive of the American and Russian companies, is also charged with operating as an unregistered agent of the Russian government inside the United States by illegally procuring the high-tech microelectronics on behalf of the Russian government. The microelectronics allegedly exported to Russia are subject to strict government controls due to their potential use in a wide range of military systems, including radar and surveillance systems, weapons guidance systems, and detonation triggers.

The charges were announced by Loretta E. Lynch, U.S. Attorney for the Eastern District of New York; Lisa Monaco, Assistant Attorney General for National Security; Stephen L. Morris, Special Agent in Charge, FBI, Houston Field Office; Under Secretary of Commerce Eric L. Hirschhorn, Department of Commerce; and Timothy W. Reeves, Special Agent in Charge, Naval Criminal Investigative Service, Central Field Office.

The defendants arrested yesterday and today will be arraigned this afternoon before U.S. States Magistrate Judge George C. Hanks, Jr., at the U.S. Courthouse in Houston, where the government will seek their removal to the Eastern District of New York.

In addition to the unsealing of the charges, search warrants were executed today at seven residences and business locations associated with the defendants, and seizure warrants were executed on five bank accounts held by Fishenko and defendant Arc Electronics Inc., the Texas-based export company. In conjunction with the unsealing of these charges, the Department of Commerce has added 165 foreign persons and companies who received, transshipped, or otherwise facilitated the export of controlled commodities by the defendants to its “Entity List.” This designation imposes a license requirement before any commodities can be exported from the United States to these persons or companies and establishes a presumption that no such license will be granted.

The Scheme

As alleged in the indictment, between approximately October 2008 and the present, Fishenko and the other defendants engaged in a surreptitious and systematic conspiracy to obtain advanced, technologically cutting-edge microelectronics from manufacturers and suppliers located within the United States and to export those high-tech goods to Russia, while carefully evading the government licensing system set up to control such exports. The microelectronics shipped to Russia included analog-to-digital converters, static random access memory chips, microcontrollers, and microprocessors. These commodities have applications and are frequently used in a wide range of military systems, including radar and surveillance systems, missile guidance systems, and detonation triggers. Russia does not produce many of these sophisticated goods domestically.

According to the indictment and a detention motion filed by the government today, defendant Alexander Fishenko was born in what was, at the time, the Soviet Republic of Kazakhstan, and graduated from the Leningrad Electro-Technical Institute in St. Petersburg, Russia. He immigrated to the United States in 1994 and became a naturalized citizen of the United States in 2003. In 1998, he founded defendant Arc Electronics Inc. in Houston. Between 2002 and the present, Arc has shipped approximately $50,000,000 worth of microelectronics and other technologies to Russia. Fishenko and his wife are the sole owners of Arc, and Fishenko serves as the company’s president and chief executive officer. Fishenko is also a part owner and executive of defendant Apex System LLC, a Moscow, Russia-based procurement firm. Apex, working through subsidiaries, served as a certified supplier of military equipment for the Russian government. Between 1996 and the present, Fishenko has regularly traveled back and forth between the United States and Russia. Defendant Alexander Posobilov entered the United States from Russia in 2001 and became a naturalized citizen in 2008. He joined Arc in 2004 and serves as its director of procurement. Posobilov was arrested at George Bush Intercontinental Airport in Houston on his way to Singapore and Moscow.

The defendants allegedly exported many of these high-tech goods, frequently through intermediary procurement firms, to Russian end users, including Russian military and intelligence agencies. To induce manufacturers and suppliers to sell them these high-tech goods and to evade applicable export controls, the defendants often provided false end-user information in connection with the purchase of the goods, concealed the fact that they were exporters, and falsely classified the goods they exported on export records submitted to the Department of Commerce. For example, in order to obtain microelectronics containing controlled, sensitive technologies, Arc claimed to American suppliers that, rather than exporting goods to Russia, it merely manufactured benign products such as traffic lights. Arc also falsely claimed to be a traffic light manufacturer on its website. In fact, Arc manufactured no goods and operated exclusively as an exporter.

According to the court documents, the defendants went to great lengths to conceal their procurement activities for the Russian military. For example, on one occasion, defendants Posobilov and Yuri Savin, the director of marketing at another Russian procurement firm, discussed how best to conceal the fact that certain goods Savin had purchased from Arc were intended for the Russian military. Savin asked Posobilov, “What can we do if a client is military all over?” Posobilov replied, “We can’t be the ones making things up. You should be the ones.” Similarly, on another occasion, defendant Fishenko directed a Russian procurement company that, when the company provided false end-user information, to “make it up pretty, correctly, and make sure it looks good.” On yet another occasion, Posobilov instructed a Russian procurement company to “make sure that” the end-use certificate indicated “fishing boats and not fishing/anti-submarine ones….Then we’ll be able to start working.”

Despite this subterfuge, according to the documents, the investigation revealed that the defendants were supplying Russian government agencies with sophisticated microelectronics. For example, the investigation uncovered a Russian Ministry of Defense document designating an Apex subsidiary as a company “certified” to procure and deliver military equipment and electronics. The FBI recovered a letter sent by a specialized electronics laboratory of Russia’s Federal Security Service (FSB), Russia’s primary domestic intelligence agency, to an Apex affiliate regarding certain microchips obtained for the FSB by Arc. The letter stated that the microchips were faulty and demanded that the defendants supply replacement parts.

In addition, in anticipation of an inquiry by the Department of Commerce regarding the export of certain controlled microelectronics, defendants Fishenko, Posobilov, and Arc salesperson Viktoria Klebanova allegedly directed Apex executives Sergey Klinov and Dmitriy Shegurov, as well as other Apex employees, to alter Apex’s website and forge documents regarding certain transactions to hide Apex’s connections to the Russian military. In connection with the cover-up, Apex removed images of Russian military aircraft and missiles and other links to the Russian Ministry of Defense from its website.

The Arc Defendants

In addition to Fishenko, Posobilov, and Klebanova, the indictment charges Arc salespersons Lyudmila Bagdikian, Anastasia Diatlova, Sevinj Taghiyeva, and Svetalina Zagon, as well as Arc shipping manager Shavkat Abdullaev, with one count of conspiring to violate and 21 counts of violating the International Emergency Economic Powers Act (IEEPA) and the Arms Export Control Act (AECA) and with conspiring to commit wire fraud. According to the indictment, these defendants obtained controlled microelectronics by lying and submitting false information regarding the true nature, users, and intended uses of the high-tech goods, then exporting the goods, without the required licenses, to procurement firms in Russia. The defendants’ principal port of export for these goods was John F. Kennedy International Airport in the Eastern District of New York.

The Foreign Defendants

According to the indictment, in addition to owning and controlling Arc, Fishenko is also a controlling principal of the Russian procurement firm Apex, the defendant Sergey Klinov is the chief executive officer of Apex, and the defendant Dmitriy Shegurov is an employee of Apex. Apex and its affiliates supplied microelectronics to Russian government agencies, including Russian military and intelligence agencies. The defendant Yuri Savin was the director of marketing at Atrilor Ltd., another Russian procurement firm. Klinov, Shegurov, and Savin conspired with Fishenko and the Arc defendants to obtain controlled U.S.-origin microelectronics and to export those technologically sensitive goods to Russia without the required export licenses by falsifying information to hide the true nature, users, and intended uses of the goods. In addition, Fishenko, Posobilov, Klebanova, Klinov, and Shegurov were charged with obstruction of justice, and Fishenko and Arc were charged with conspiring to commit money laundering.

The individual defendants face maximum terms of incarceration of five years for the conspiracy charge, 20 years for each of the substantive IEEPA and AECA charges, and 20 years for the obstruction of justice charge. In addition, Fishenko faces a maximum term of incarceration of 20 years for conspiring to commit money laundering and 10 years for acting as an unregistered agent of the Russian government. The corporate defendants face fines of up to $500,000 for the conspiracy count and $1 million for each of the substantive IEEPA and AECA counts.

“As alleged in the indictment, the defendants spun an elaborate web of lies to evade the laws that protect our national security. The defendants tried to take advantage of America’s free markets to steal American technologies for the Russian government. But U.S. law enforcement detected, disrupted, and dismantled the defendants’ network,” stated United States Attorney Loretta E. Lynch. “We will not rest in our efforts to protect the technological advantage produced by American ingenuity. And, we will expose and hold responsible all who break our counter-proliferation laws, particularly those, like Fishenko, who serve foreign governments.” Ms. Lynch thanked the United States Attorney’s Office for the Southern District of Texas for its assistance in this matter.

“Today’s case underscores the importance of safeguarding America’s sensitive technology and our commitment to disrupt and prosecute networks that attempt to illegally export these goods,” said Lisa Monaco, Assistant Attorney General for National Security. “I applaud the many agents, analysts, and prosecutors who worked on this extensive investigation.”

“In this day and time, the ability of foreign countries to illegally acquire sensitive and sophisticated U.S. technology poses a significant threat to both the economic and national security of our nation,” said Houston FBI Special Agent in Charge Stephen L. Morris. “While some countries may leverage our technology for financial gain, many countries hostile to the United States seek to improve their defense capabilities and to modernize their weapons systems at the expense of U.S. taxpayers. The FBI will continue to work aggressively with our partners in the U.S. Intelligence Community to protect this technology and hold accountable those companies that willfully choose to violate our U.S. export laws.”

“Today’s action is a perfect example of two of the core benefits of the administration’s export control reform effort—higher enforcement walls around controlled items and extensive coordination and cooperation among the enforcement agencies. I applaud our special agents who worked with the Justice Department in the interagency effort that led to today’s actions,” said Under Secretary of Commerce Eric L. Hirschhorn.

“The receipt of U.S.-made, cutting-edge microelectronics has advanced Russia’s military technological capabilities. NCIS and the Department of the Navy have worked closely with the FBI, the Department of Justice, and the Department of Commerce in this investigation due to the potential for significant enhancement of Russian naval weapons systems that would result from the illegal acquisition of these export-controlled technologies,” said Special Agent in Charge Timothy W. Reeves, NCIS Central Field Office.

As a result of this case, there may be victims and witnesses who need to contact the agencies involved in the investigation. If your business has been approached by one of the defendants or by someone trying to obtain export-protected, sensitive technology who appeared not to be legitimate, please report that information to businessoutreach@leo.gov. The information will remain confidential and will be handled by the appropriate authorities.

The government’s case is being prosecuted by Assistant U.S. Attorneys Daniel Silver, Hilary Jager, and Claire Kedeshian, as well as Trial Attorney David Recker of the Counterespionage Section of the Justice Department’s National Security Division.

The charges contained in the indictment are merely allegations, and the defendants have not yet been convicted of these offenses.

The Defendants:

Arc Electronics Inc.
Principal Place of Business: Houston, Texas

Apex System LLC
Principal Place of Business: Moscow, Russia

Alexander Fishenko, age 46

Shavkat Abdullaev, age 34

Lyudmila Bagdikian, age 58

Anastasia Diatlova, age 38

Viktoria Klebanova, age 37

Sergey Klinov, age 44

Alexander Posobilov, age 58

Yuri Savin, age 36

Dmitriy Shegurov, age unknown

Sevinj Taghiyeva, age 32

Svetalina Zagon, age 31″

USA v. Fishenko et al., Case No. 1:12-cr-00626-SJ
Federal Criminal Indictment

Letter to the Court Moving for a Permanent Order of Detention

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Douglas McNabb – McNabb Associates, P.C.’s
Federal Criminal Defense Attorneys Videos:

Federal Crimes – Be Careful

Federal Crimes – Be Proactive

Federal Crimes – Federal Indictment

Federal Crimes – Detention Hearing

Federal Mail Fraud Crimes

Federal Crimes – Appeal

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To find additional federal criminal news, please read Federal Criminal Defense Daily.

Douglas McNabb and other members of the U.S. law firm practice and write and/or report extensively on matters involving Federal Criminal Defense, INTERPOL Red Notice Removal, International Extradition Defense, OFAC SDN Sanctions Removal, International Criminal Court Defense, and US Seizure of Non-Resident, Foreign-Owned Assets. Because we have experience dealing with INTERPOL, our firm understands the inter-relationship that INTERPOL’s “Red Notice” brings to this equation.

The author of this blog is Douglas C. McNabb. Please feel free to contact him directly at mcnabb@mcnabbassociates.com or at one of the offices listed above.


Connecticut art gallery owner arrested on federal charges alleging fraud

April 4, 2012

PostCrescent.com on April 3, 2012 released the following:

By John Christoffersen, Associated Press

“BRIDGEPORT, Conn. (WTW) — An art dealer was arrested on fraud charges Tuesday, more than a year after his Madison gallery was raided by the FBI.

David Crespo, who has been accused previously of dishonest dealings in the art world, appeared in U.S. District Court in Bridgeport on mail and wire fraud charges. He was released on $50,000 bond.

Crespo owned Brandon Gallery, which was raided in November 2010 by FBI agents who seized several pieces of artwork. At the time Crespo denied that he was the target of a federal probe and said he was assisting a larger investigation into art fraud.

Crespo’s attorney and his wife declined to comment at Tuesday’s hearing.

Philip Coffaro, a Long Island art gallery owner who once did business with Crespo, said he was interviewed by FBI agents who showed him fraudulent certificates that Crespo had apparently used to overstate the value of signed Marc Chagall prints. Crespo would buy items from him for around $200 and mark them up as much as $10,000 for sale as far afield as Korea, Coffaro said.

“The certificates were disgusting,” Coffaro said.

Coffaro had a falling-out with Crespo in 2008 when he accused his former associate of selling off a piece of art that did not belong to him.

A lawsuit in the Eastern District of New York alleged that Coffaro loaned Crespo a Salvador Dali painting, “Folle Folle Folle Minerva.” Coffaro said Crespo later refused his demands to return it, giving it instead to another man to pay off a debt.

Coffaro spent $40,000 to reclaim the painting and sold it for about $220,000, but Crespo continued to claim ownership of the painting, according to a complaint.

A judge ruled in 2010 that Coffaro is the rightful owner. That ruling is under appeal.

“David is his own worst enemy,” said Coffaro, who owns Gallery 25 in Mineola, N.Y. “He took advantage of the system. He took advantage of people. He’s very smooth.”

The next court hearing for Crespo was scheduled for July 13.”

18 U.S.C. § 1341 – Mail Fraud

18 U.S.C. § 1343 – Wire Fraud

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Douglas McNabb – McNabb Associates, P.C.’s
Federal Criminal Defense Attorneys Videos:

Federal Crimes – Be Careful

Federal Crimes – Be Proactive

Federal Crimes – Federal Indictment

Federal Crimes – Detention Hearing

Federal Mail Fraud Crimes

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To find additional federal criminal news, please read Federal Crimes Watch Daily.

Douglas McNabb and other members of the U.S. law firm practice and write and/or report extensively on matters involving Federal Criminal Defense, INTERPOL Red Notice Removal, International Extradition and OFAC SDN Sanctions Removal.

The author of this blog is Douglas C. McNabb. Please feel free to contact him directly at mcnabb@mcnabbassociates.com or at one of the offices listed above.


Laurie Schneider Indicted by a Federal Grand Jury for Allegedly Operating Ponzi Schemes

February 2, 2012

The Federal Bureau of Investigation (FBI) on February 1, 2012 released the following:

“Oceanside Woman Indicted for Operating Ponzi Schemes

Defendant Allegedly Defrauded Investors of More Than $4 Million

Laurie Schneider, of Oceanside, New York, has been indicted for operating Ponzi schemes that defrauded investors of more than $4 million.[1] The defendant was arraigned earlier today before United States Magistrate Judge A. Kathleen Tomlinson at the United States Courthouse, 100 Federal Plaza, Central Islip, New York.

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

As alleged in the indictment, Schneider began accepting money in September 2006 from individuals seeking a return on their investment. In one scheme, operating a shell company incorporated as Janitorial Close-Out City Corp., Schneider falsely informed potential investors that Janitorial Close-Out invested in industrial equipment and machinery manufactured by companies in China. To induce investments, Schneider, among other things, (1) personally guaranteed specified positive rates of return as high as 60 percent, (2) represented that she had a business contact who had strong relationships with companies in China, and (3) represented that she would be able to buy the industrial equipment and machinery at wholesale prices which Janitorial Close-Out would resell in the United States at a 15 to 60 percent profit over a nine to 18-month period. In fact, the indictment charges that Schneider actually was running a Ponzi scheme, paying returns to Janitorial Close-Out investors not from any profits earned on the purchase and resale of industrial equipment and machinery, but rather from existing investors’ deposits or money paid by new investors. Schneider never produced or earned the rates of return that she promised. Rather, the positive rates of return were simply pre-determined rates made up by Schneider based upon fictitious profits.

The government estimates that Schneider defrauded over 25 investors in Janitorial Close-Out of more than $4 million, and more than $5 million through related schemes.

“In these difficult economic times, it’s all the more troubling that, as alleged in the indictment, someone would take advantage of the trust of investors for personal financial gain,” stated United States Attorney Lynch. “As alleged, this defendant falsely represented herself as having international business connections that would benefit her investors, when in reality she was engaged in purely homegrown fraud and deception. This indictment serves as a warning that we will vigorously investigate and prosecute those who, by deceit and false promises, would steal from those who believed they were investing in a legitimate enterprise.” Ms. Lynch added that the government’s investigation is continuing.

FBI Assistant Director-in-Charge Fedarcyk stated, “Ponzi schemes have been around for so long because, unfortunately, they are such an effective means of swindling people out of their hard-earned money. Investors need to be wary of ‘investment opportunities’ that ‘guarantee’ inordinately high rates of return, and should perform due diligence. But it is the perpetrators of these fraudulent schemes, not their victims, who are to blame. The FBI remains committed to protecting the investing public from them.”

If convicted, Schneider faces a maximum sentence of 20 years’ imprisonment on each of three counts of wire fraud count.

The government’s case is being prosecuted by Assistant United States Attorneys Richard T. Lunger and Lara Treinis Gatz.

The Defendant:

LAURIE SCHNEIDER Age: 37

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

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Douglas McNabb – McNabb Associates, P.C.’s
Federal Criminal Defense Attorneys Videos:

Federal Crimes – Be Careful

Federal Crimes – Be Proactive

Federal Crimes – Federal Indictment

Federal Crimes – Detention Hearing

Federal Mail Fraud Crimes

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To find additional federal criminal news, please read Federal Crimes Watch Daily.

Douglas McNabb and other members of the U.S. law firm practice and write and/or report extensively on matters involving Federal Criminal Defense, INTERPOL Red Notice Removal, International Extradition and OFAC SDN Sanctions Removal.

The author of this blog is Douglas McNabb. Please feel free to contact him directly at mcnabb@mcnabbassociates.com or at one of the offices listed above.


Seven Members, Associates, and Leaders of Folk Nation Gang Indicted for Alleged Racketeering and Murder

February 1, 2012

The Federal Bureau of Investigation (FBI) on January 31, 2012 released the following:

Additional Charges Include Robbery, Assault, Illegal Use of Firearms, and Related Crimes

A superseding indictment was unsealed in federal court in Brooklyn this morning charging seven members, associates, and leaders of the violent Brooklyn street gang “Six Tre Outlaw Gangsta Disciples Folk Nation,” also known as the “Folk Nation.” The 16-count indictment charges the defendants with violent crimes including racketeering, murder in-aid-of racketeering, murder conspiracy, attempted murder, robbery, assault, and illegal use of firearms.[1] Two defendants will be arraigned later today before United States Magistrate Judge Marilyn D. Go at the federal courthouse in Brooklyn. The defendants face sentences up to life imprisonment if convicted.

The charges were 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. As detailed in the indictment and other court filings submitted by the government, a two-year joint investigation by the FBI and the NYPD revealed that since 2008, a violent set of the Folk Nation gang committed numerous crimes of violence including four murders, three attempted murders, two assaults, and six robberies. The gang was based in the Ebbets Field Houses, a New York City public housing community, although its criminal activities extended into the Tri-State area.

The gang is alleged to have used extreme and indiscriminate violence to further its objectives. The defendants’ victims include a 10-year-old girl, who was severely injured when she was shot in the neck by gang members while they were attempting to murder a rival. The gang is alleged to have committed four murders, in an effort to assert its power over the neighborhoods in which it operated. On at least two occasions, gang members missed their intended targets and hit innocent bystanders—after one murder at a teenager’s birthday party in an Ebbets Field apartment, gang members acknowledged that they had killed the wrong person.

In order to fund its illegal activities, members of the gang allegedly committed violent robberies of individuals and commercial establishments. Members of the gang are alleged to have robbed the Lee Perla jewelry store at the Riverside Square Mall in Hackensack, New Jersey, making off with hundreds of thousands of dollars worth of luxury watches. According to the indictment, the gang also targeted individual robbery victims, whom they lured to secluded areas in Brooklyn, via Internet advertisements on Craigslist, and then robbed at gunpoint. According to a detention memorandum filed by the government, the charged murders and other acts of violence took place on public streets, in front of personal residences, and even on a playground, in Brooklyn neighborhoods.

The charges announced today are the latest in a series of federal indictments in this district charging members of violent street gangs with racketeering crimes.

“Motivated by greed, the Folk Nation employed indiscriminate violence to destroy the lives of their perceived enemies. But their violence spread beyond the gang world into the streets and playgrounds of Brooklyn, and innocent bystanders, including a child, were caught in the crossfire. Terrorizing a community, this gang claimed its turf by force and robbed from businesses and individuals alike leaving a trail of victims in its wake,” stated United States Attorney Lynch. “We are steadfast in our commitment to dismantling street gangs that put at risk the members of our community, and the seriousness of today’s charges reflect that commitment.”

“The reason the FBI places such a high priority on gang investigations is the extreme violence gangs so often commit. Here, as charged in the indictment, the defendants’ ruthlessness was matched by their recklessness. They allegedly showed no apparent concern for bystanders, and bystanders were seriously hurt as a consequence,” said Assistant Director in Charge Fedarcyk.

NYPD Commissioner Kelly stated, “Through a variety of partnerships, including clergy, the Brooklyn District Attorney, and in this case United States Attorney Loretta Lynch, the police department is suppressing crime in Brooklyn to the point where last year for the first time since 1963 murder in the Borough fell below 200. As charged in the indictment, members of the Folk Nation have been responsible for multiple murders and shootings, and their apprehension and prosecution should have a continued salutary effect for the residents in and around the Ebbets Field Houses.”

The government’s case is being prosecuted by Assistant United States Attorneys Zainab Ahmad and Seth DuCharme.

The Defendants:

YASSA ASHBURN, also known as “Indio,” “Swirls,” and “Swerve”
Age: 28

HAILE CUMMINGS, also known as “Ruger” and “Rugah”
Age: 20

GERALDO ELAINOR, also known as “Gunny” and “Geraldo Casimir”
Age: 21

DANIEL HARRISON, also known as “Bones,”
Age: 24

RICKY HOLLENQUEST, also known as “Dancer”
Age: 20

JAMAL LAURENT, also known as “Tails” and “Gunner”
Age: 22

TREVELLE MERRITT, also known as “Tiger”
Age: 19

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

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Douglas McNabb – McNabb Associates, P.C.’s
Federal Criminal Defense Attorneys Videos:

Federal Crimes – Be Careful

Federal Crimes – Be Proactive

Federal Crimes – Federal Indictment

Federal Crimes – Detention Hearing

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To find additional federal criminal news, please read Federal Crimes Watch Daily.

Douglas McNabb and other members of the U.S. law firm practice and write and/or report extensively on matters involving Federal Criminal Defense, INTERPOL Red Notice Removal, International Extradition and OFAC SDN Sanctions Removal.

The author of this blog is Douglas McNabb. Please feel free to contact him directly at mcnabb@mcnabbassociates.com or at one of the offices listed above.


Five Alleged Members of the Bonanno Crime Family Arrested for Racketeering and Related Charges

January 30, 2012

The Federal Bureau of Investigation (FBI) on January 27, 2012 released the following:

Defendants Include One Current and Two Former Members of the Bonanno Crime Family Administration

A 14-count superseding indictment was unsealed this morning in Brooklyn federal court charging five members of the Bonanno organized crime family of La Cosa Nostra (the “Bonanno family”) variously with racketeering, extortion, illegal gambling, and conspiring to distribute marijuana. An associate of the Gambino organized crime family of La Cosa Nostra (the “Gambino family”) was also charged with loansharking.[1] The defendants were arrested earlier today in New York and are scheduled to be arraigned this afternoon before United States Magistrate Judge Joan M. Azrack, at the U.S. Courthouse, 225 Cadman Plaza East, Brooklyn, New York. The case has been assigned to United States Chief District Court Judge Carol B. Amon.

The charges were announced by Loretta E. Lynch, United States Attorney for the Eastern District of New York; Wilbert L. Plummer, Acting Special Agent in Charge, Drug Enforcement Administration, New York Field Division; 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.

As alleged in the indictment and a detention memorandum filed by the government today, defendant Vincent Badalamenti, also known as “Vinny TV,” is a made member of the Bonanno family and a current member of the family’s administration, who until his arrest, was the highest ranking member of the Bonanno family at liberty. Defendants Anthony Graziano, also known as “TG,” and Nicholas Santora, also known as “Nicky Mouth,” are captains in the Bonanno family and former members of the Bonanno family administration. Defendant Vito Balsamo is an acting captain in the Bonanno family, and defendant Anthony Calabrese is a soldier in the Bonanno family. The indictment is the result of a multi-year joint investigation by the DEA and FBI that utilized a variety of techniques to gather evidence, such as consensual recordings of the defendants discussing their charged crimes, cooperating witnesses who were formerly members and associates of organized crime, and surveillance. The evidence revealed a pattern of violence and intimidation employed by the defendants to further their enterprise’s economic interests, including Badalamenti allegedly directing the hostile takeover of a bar located on Coney Island Avenue in Brooklyn, as a result of its owner’s failure to repay a debt owed to Badalamenti.

The charges in the indictment also demonstrate the recidivist nature of organized crime defendants. For example, as detailed in the government’s detention memorandum, Santora allegedly participated in his charged crimes following his prior conviction and incarceration, and while released on supervised release, and Graziano allegedly committed his charged crimes within weeks of being released to a federal halfway house. During one consensual recording, a cooperating witness (“CW”) told Graziano that during Graziano’s most recent prison term, the CW was sent to collect money from one of Graziano’s loanshark victims who “was crying hysterical.” The CW and Graziano also discussed how the CW was sent on multiple occasions to collect money from the same victim by a member of the Bonanno family’s ruling panel, to which Graziano responded, “Yeah, well, he was trying to collect my money.” On another occasion, Graziano allegedly directed the CW to meet a second extortion victim and “open him up.”

The charges and arrests announced today are the latest in an ongoing investigation that has resulted in the prosecution of more than 175 members and associates of the Bonanno family in the Eastern District of New York. Since March 2002, more than 10 Bonanno family bosses, acting bosses and administration members have been convicted in this district on racketeering and racketeering-related charges.

“Members of organized crime continue to exploit their victims the old-fashioned way—through violence, threats, and intimidation. Learning nothing from their incarceration, two of the defendants allegedly sought to regain their money and influence on the street while still under federal supervision. But because they learned nothing, they find themselves back in custody again, along with their co-defendants,” stated United States Attorney Lynch. “As law enforcement has so successfully done before, we will employ our own time-tested techniques to bring them to justice to account for their crimes. We will not rest in this pursuit until the Bonanno crime family and La Cosa Nostra have been completely dismantled.”

DEA Acting Special Agent in Charge Plummer stated, “These arrests prove that justice comes to those who have abused the system. The five defendants arrested with RICO charges will face the consequences of their alleged illegal actions in the court of law. The New York Drug Enforcement Task Force worked diligently with the United States Attorney’s Office in order to keep our city and state crime free.” Mr. Plummer thanked the New York Drug Enforcement Task Force which comprises agents and officers of the DEA, New York State Police and the New York City Police Department for their hard work on this investigation.

FBI Assistant Director in Charge Fedarcyk stated, “Today’s charges confirm that La Cosa Nostra families continue to engage in the bedrock money-making activities like extortion and loansharking, and are not shy about resorting to violence as a method. As long as mobsters continue their predatory ways, the FBI will continue to target the mob.”

NYPD Commissioner Kelly stated, “This case demonstrates that the FBI, DEA, and NYPD in partnership with federal prosecutors, are relentless and will continue to dismantle organized crime and protect the public from its insidious effects.”

If convicted, each defendant faces a maximum sentence of 20 years’ imprisonment.

The government’s case is being prosecuted by Assistant United States Attorneys Nicole M. Argentieri and Stephen E. Frank.

The Defendants:

VINCENT BADALAMENTI Age: 53

VITO BALSAMO Age: 55

ANTHONY CALABRESE Age: 44

ANTHONY GRAZIANO Age: 71

JAMES LAFORTE Age: 35

NICHOLAS SANTORA Age: 69

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

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Douglas McNabb – McNabb Associates, P.C.’s
Federal Criminal Defense Attorneys Videos:

Federal Crimes – Be Careful

Federal Crimes – Be Proactive

Federal Crimes – Federal Indictment

Federal Crimes – Detention Hearing

————————————————————–

To find additional federal criminal news, please read Federal Crimes Watch Daily.

Douglas McNabb and other members of the U.S. law firm practice and write and/or report extensively on matters involving Federal Criminal Defense, INTERPOL Red Notice Removal, International Extradition and OFAC SDN Sanctions Removal.

The author of this blog is Douglas McNabb. Please feel free to contact him directly at mcnabb@mcnabbassociates.com or at one of the offices listed above.


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

December 2, 2011

The Federal Bureau of Investigation (FBI) on December 1, 2011 released the following:

“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.”

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Douglas McNabb – McNabb Associates, P.C.’s
Federal Criminal Defense Attorneys Videos:

Federal Crimes – Be Careful

Federal Crimes – Be Proactive

Federal Crimes – Federal Indictment

Federal Crimes – Detention Hearing

————————————————————–

To find additional federal criminal news, please read Federal Crimes Watch Daily.

Douglas McNabb and other members of the U.S. law firm practice and write and/or report extensively on matters involving Federal Criminal Defense, INTERPOL Red Notice Removal, International Extradition and OFAC SDN Sanctions Removal.

The author of this blog is Douglas McNabb. Please feel free to contact him directly at mcnabb@mcnabbassociates.com or at one of the offices listed above.