Fourteen Charged with Heroin and Cocaine Trafficking in the Bronx and Across the Hudson Valley

Preet Bharara, the United States Attorney for the Southern District of New York, George Venizelos, Assistant Director-In-Charge of the New York Office of the Federal Bureau of Investigation (“FBI”), Brian R. Crowell, the Special Agent-in-Charge of the New York Division of the Drug Enforcement Administration (“DEA”), and Joseph A. D'Amico, the Superintendent of the New York State Police, announced the arrest of 14 defendants and the unsealing of an Indictment today charging conspiracies to distribute kilogram quantities of heroin and cocaine in Beacon, the Bronx, the City of Middletown, the City of Newburgh, and New Windsor, New York.
U.S. Attorney Preet Bharara stated: “Drug traffickers long ago discovered opportunities to peddle their venom way beyond city limits, and fortunately the law enforcement community is there to intercept them. Today’s arrests exemplify our unrelenting efforts to remove drug dealers from our streets and make them safe for law-abiding citizens, city and country.”
FBI Assistant Director-in-Charge George Venizelos stated: “Heroin and cocaine are a scourge on society, often victimizing our cities' most vulnerable. Today’s arrest and subsequent charges bring us one step closer to cleaning up our streets.”
DEA Special Agent in Charge Brian R. Crowell stated: “Drug abuse claims more young people’s lives annually today than suicides, firearm deaths or school violence and unintentional drug overdose is the leading cause of injury death in 17 states, even more than automobile accidents. This case is a fine example of state, local and federal law enforcement to keep our neighborhoods safe from drug traffickers. I commend our law enforcement partners and our men and women who worked shoulder to shoulder on this investigation to make the streets safer for the residents and youth in the Newburgh area.”
NY State Police Superintendent Joseph A. D'Amico stated: “A significant amount of drugs will not make it into our communities as a result of the dedication and due diligence of investigators and prosecutors working collaboratively to wipe out these types of drug operations. It is through this cooperative effort among our partners in law enforcement that we will continue to target, and remove from our streets those who choose to engage in this type of illegal and dangerous activity.”
The Indictment charges 14 people, ESMERALDO HERNANDEZ, a/k/a “Esmo,” 32, ABNER ALVAREZ, JR., 30, ABNER ALVAREZ, SR., 47, JAMES L. CANELLI III, 36, EMILIO CASTILLO, a/k/a “E,” 28, ANTHONY CESPEDES, a/k/a “Anth,” 27, MICHAEL FIGUEROA, a/k/a “Scooby,” 36, BRADLEY FRIEDLANDER, 30, DARRELL LOPEZ, a/k/a “D,” 32, CARLOS MARTINEZ, 30, RAUL OQUENDO, 32, NYGEL RIVERA, 22, RAMON URIBE, a/k/a “Polo,” 38, and BERNARDO VALENTIN, a/k/a “Chickie,” 42, with conspiring to distribute, and possess with intent to distribute kilogram quantities of cocaine and/or heroin. The charges against each defendant and the corresponding maximum potential penalties are outlined in the chart attached to this press release.
Thirteen of the defendants charged in the Indictment unsealed today were arrested today or have previously been taken into custody. One, Darrell Lopez, remains at large as a fugitive. The defendants in custody are to be presented in White Plains federal court this afternoon before U.S. Magistrate Judge George A. Yanthis.
Mr. Bharara praised the outstanding investigative work of the FBI, the DEA, the New York State Police, the Bureau of Alcohol, Tobacco, Firearms and Explosives, the United States Immigration and Customs Enforcement’s (“ICE”) Homeland Security Investigations (“HSI”), the United States Postal Inspection Service, the Beacon Police Department, the City of Middletown Police Department, the City of Newburgh Police Department, the Town of Newburgh Police Department, and the Orange County Sheriff’s Office. . The prosecution is being handled by the Office’s White Plains Division. Assistant U.S. Attorneys Michael Gerber and Ilan Graff 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.

UNT	CHARGE	DEFENDANTS	MAXIMUM PENALTIES
1	Narcotics conspiracy (Conspiracy to distribute and possess with intent to distribute five kilograms and more of cocaine.)	ESMERALDO HERNANDEZ, a/k/a “Esmo,” ABNER ALVAREZ, JR., MICHAEL FIGUEROA, a/k/a “Scooby,” BRADLEY FRIEDLANDER, CARLOS MARTINEZ, RAUL OQUENDO, NYGEL RIVERA, RAMON URIBE, a/k/a “Polo,” BERNARDO VALENTIN, a/k/a “Chickie"	Life in prison Mandatory minimum: 10 years in prison
2	Narcotics conspiracy (Conspiracy to distribute and possess with intent to distribute one kilogram and more of heroin.)	ESMERALDO HERNANDEZ, a/k/a “Esmo,” JAMES L. CANELLI III, EMILIO CASTILLO, a/k/a “E,” ANTHONY CESPEDES, a/k/a “Anth,” MICHAEL FIGUEROA, a/k/a “Scooby,” DARRELL LOPEZ, a/k/a “D,” a RAMON URIBE, a/k/a “Polo"	Life in prison Mandatory minimum: 10 years in prison
3	Narcotics conspiracy (Conspiracy to distribute and possess with intent to distribute five kilograms and more of cocaine.)	ABNER ALVAREZ, SR. ABNER ALVAREZ, JR.	Life in prison Mandatory minimum: 10 years in prison

Executive-Level Appointments Announced in New York Field Office

Four new executives have been assigned to the FBI’s New York Field Office. They were appointed by outgoing Director Robert S. Mueller, III.
Richard M. Frankel was named special agent in charge of the Counterterrorism Division. He has served in several positions in the New York Field Office throughout his career, to include assistant special agent in charge of the Counterterrorism Division. While in this role, he oversaw the investigation of a plot to bomb two synagogues in the Bronx and shoot down a military plane near Stewart Air Force Base, the plot to explode a bomb in the New York City Subway system, and the attempt to explode a vehicle-borne bomb in Times Square. His first assignment as an FBI agent was to the Gambino Family Organized Crime Squad, and he later supervised threat response squads in New York City and at JFK Airport. In 2011, he was named associate director of national intelligence in the Office of the Director of National Intelligence. He most recently served as acting special agent in charge of the Buffalo Division.
E.W. “Bill” Priestap was named special agent in charge of the Counterintelligence Division. He joined the FBI in 1998 and was first assigned to the New York Office in 2006, where he held a variety of counterterrorism and intelligence supervisory assignments over the next few years. He later served as an assistant special agent in charge in the Counterintelligence Division and in the Intelligence Division. He most recently served as a section chief in the Counterintelligence Division at FBI Headquarters in Washington, D.C.
Leo Taddeo was named special agent in charge of the Cyber/Special Operations Division. In this role, he will oversee cyber investigations, information technology support, crisis management, tactical operations, and surveillance operations for the Criminal, Counterterrorism, and Counterintelligence Divisions. Mr. Taddeo began his FBI career in the New York Field Office in 1995 and investigated La Cosa Nostra and Russian organized crime. In July 2003, he returned to the New York Field Office to supervise an organized crime squad and a Joint FBI/NYPD Terrorism Task Force. Mr. Taddeo most recently served as section chief in the International Operations Division at FBI Headquarters, where he played a pivotal role in coordinating the FBI’s response to terrorist attacks and kidnappings overseas.
Ronald Twersky was named special agent in charge of the Administrative Division. Mr. Twersky became a special agent in 1994 and was assigned to the Los Angeles Field Office, where he investigated violent street gangs and public corruption matters. Following the September 11, 2001 terrorist attacks, Mr. Twersky volunteered to work counterterrorism matters, and in 2002, he was promoted to supervisory special agent at FBI Headquarters in the Counterterrorism Division. He subsequently transferred to the San Francisco Division as a Joint Terrorism Task Force supervisor. In 2008, he was promoted to assistant special agent in charge of the Seattle Division, where he managed cyber, counterintelligence, white-collar crime, intelligence, and administrative programs, respectively. Mr. Twersky most recently served as an inspector in the Inspection Division at FBI Headquarters, where he evaluated FBI field office and legal attaché operations and led teams conducting agent-involved shooting investigations.

Brooklyn Man Sentenced in Manhattan Federal Court to 18 Years in Prison for Providing Material Support to al Qaeda

Preet Bharara, the United States Attorney for the Southern District of New York, announced that Sabirhan Hasanoff was sentenced today in Manhattan federal court to 18 years in prison for providing and attempting to provide material support to al Qaeda associates in Yemen and elsewhere and for conspiring to provide material support to al Qaeda over the course of nearly three years. Hasanoff, who was arrested in the United Arab Emirates in 2010 and transferred to United States custody, pled guilty in June 2012 to one count of providing and attempting to provide material support and resources to al Qaeda and one count of conspiracy to provide material support and resources to al Qaeda. He pled guilty before U.S. District Judge Kimba M. Wood, who also imposed today’s sentence.
Manhattan U.S. Attorney Preet Bharara stated, “Today’s sentence reflects the egregiousness of Sabirhan Hasanoff’s conduct. The defendant not only funneled equipment capable of being used for nefarious purposes and thousands of dollars to al Qaeda operatives abroad, he also travelled to U.S. soil to surveil a major New York landmark for a potential terrorist attack. We will not hesitate to continue, with our law enforcement partners, to pursue individuals engaged in similar behavior and do what we can to ensure they are brought to justice.”
According to various public filings and sworn statements made by the defendant during proceedings in Manhattan federal court:
From 2007 through late 2009, Hasanoff supported al Qaeda in a variety of ways. Hasanoff and his co-defendant, Wesam El-Hanafi, sent equipment, including remote-controlled devices capable of use in an explosives attack, to terrorist operatives abroad. In addition, Hasanoff and El-Hanafi together funneled approximately $67,000 to al Qaeda operatives overseas. Hasanoff and El-Hanafi collected some of this money from a third individual who resided in the United States. During this time, both defendants used aliases to disguise the source of their money when making cash donations to their terrorist contacts and made extensive plans for travel to engage in jihad in Somalia, Afghanistan, and Iraq.
In August 2008, Hasanoff entered the United States from abroad, travelled to New York City, and performed surveillance on the New York Stock Exchange—all on instructions from overseas terrorists who were considering the location for a possible attack. The information that Hasanoff gathered on the stock exchange was then sent to the terror operatives.

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In addition to his prison term, Hasanoff, 37, a dual citizen of the United States and Australia who resided in Brooklyn, New York, was sentenced to three years of supervised release. He was also ordered to pay a $200 special assessment fee and forfeiture in the amount of $70,000.
El-Hanafi pled guilty in June 2012 to one count of providing and attempting to provide material support and resources to al Qaeda, and one count of conspiracy to provide material support and resources to Al Qaeda. He faces a maximum sentence of 20 years in prison.
Mr. Bharara praised the outstanding investigative work of the New York-based Joint Terrorism Task Force—which principally consists of special agents of the Federal Bureau of Investigation and detectives of the New York City Police Department. Mr. Bharara thanked the Department of Justice’s National Security Division and Office of International Affairs, the Kansas City-based JTTF, and the United States Attorney’s Office for the Western District of Missouri for their extraordinary assistance in this matter.
This case is being handled by the Office’s Terrorism and International Narcotics Unit. Assistant U.S. Attorneys John P. Cronan, Aimee Hector, Glen Kopp, Michael Lockard, and Brendan R. McGuire are in charge of the prosecution.

Bulgarian Citizen Extradited to U.S. to Face Indictment Charging Sale of Stolen Payment Card Data, Accounting Firm Hacks

NEWARK, NJ—Vanyo Minkov, 31, a citizen of the Republic of Bulgaria, is expected to appear in Newark federal court today following his extradition to face charges that he orchestrated two international conspiracies—to sell stolen payment card data and to file bogus tax returns using hacked information—that resulted in approximately $56 million in losses, New Jersey U.S. Attorney Paul J. Fishman announced.
As charged in the federal indictment, Minkov acquired stolen credit and debit card information and sold it online. He is also charged with hacking into the networks of multiple accounting firms to steal 2011 year tax filings from the firms’ clients and then using that information to file returns in their names the following year.
The U.S. Secret Service (USSS) and the IRS led an investigation coordinated with the Sofia, Bulgaria Office of the USSS; the FBI; Bulgarian law enforcement to identify and arrest Minkov in Bulgaria. He has been in the custody of Bulgarian authorities since his arrest in late May 2013 and was extradited to the United States on September 27, 2013.
According to documents filed in this case:
Between July 2011 and April 2013, Minkov participated in a scheme in which he sold stolen credit and debit card numbers and related personal identifying information online for profit. Minkov had multiple sources of the stolen data, including through the use of ATM skimming operations using specialized equipment to steal debit card information and PINs. Minkov obtained and sold stolen payment card data for more than 100,000 accounts during the course of the conspiracy. The losses caused by the scheme are currently estimated at approximately $50 million.
Some of the purchasers of the data paid using international money transfers sent from New Jersey.
Minkov also orchestrated a tax refund scheme in which he and his co-conspirators hacked into the networks of multiple accounting firms and stole the firm’s clients’ tax filings for tax year 2011. Minkov and his conspirators then used the stolen information to file false and fraudulent tax returns for the 2012 tax year in the names of the accounting firms’ clients. Because Minkov used the previous returns, the fraudulent filings are more difficult to detect. To date, the IRS has identified approximately more than $6 million in fraudulent claims made to the IRS in connection with the scheme.
The maximum potential penalties for each count are as follows:

Count	Violation	Maximum Potential Penalty
One	Conspiracy to commit wire fraud	30 years; $1 million fine or twice the gain or loss from the offense
Two	Conspiracy to defraud the government with respect to claims	10 years; $250,000 fine or twice the gain or loss from the offense
Three	Conspiracy to commit fraud and related activity in connection with identification documents, authentication features, and information	15 years; $250,000 fine or twice the gain or loss from the offense
Four	Conspiracy to commit fraud and related activity in connection with computers	five years; $250,000 fine or twice the gain or loss from the offense

U.S. Attorney Fishman credited special agents of the USSS, Newark Field Office, under the direction of Special Agent in Charge James Mottola, and the IRS, under the direction of Special Agent in Charge Shantelle P. Kitchen, for the ongoing investigation leading to the charges. U.S. Attorney Fishman also thanked the FBI, the Justice Department’s Office of International Affairs in Washington, and the Supreme Cassation Prosecutor’s Office of the Republic of Bulgaria and its law enforcement partners for their extraordinary support.
The government is represented by Assistant U.S. Attorney Andrew S. Pak of the Computer Hacking and Intellectual Property Section of the U.S. Attorney’s Office Economic Crimes Unit in Newark.
The charges and allegations contained in the indictment are merely accusations, and the defendant is considered innocent unless and until proven guilty.

Mercer County Man Sentenced to Four Years for His Role in Trenton Narcotics Ring

TRENTON, NJ—A Mercer County, New Jersey man was sentenced today to 48 months in prison for his role in a conspiracy to distribute oxycodone pain pills, U.S. Attorney Paul J. Fishman announced.
Giuseppe A. Scordato, 48, of Hamilton, New Jersey, previously pleaded guilty before U.S. District Judge Michael A. Shipp in Trenton federal court to an information charging him with one count of conspiracy to distribute and possess with intent to distribute oxycodone.
According to documents filed in this case and statements made in court:
Between November 2011 and July 2012, Scordato obtained oxycodone-based prescription pain pills from Joseph A. “JoJo” Giorgianni, Mary Manfredo, and Charles Hall, III. Scordato obtained the pills from two locations: Giorgianni’s business—JoJo’s Steakhouse—and Giordianni’s Clubhouse, which was located next to the steakhouse. Scordato would sell those pills and remit the proceeds to Giorgianni and Manfredo at JoJo’s Steakhouse in exchange for a portion of the proceeds from those sales.
In addition to the prison term, Judge Walls sentenced Scordato to serve three years of supervised release and fined him $2,000.
U.S. Attorney Fishman credited special agents of the FBI’s Trenton Resident Agency, Newark Field Office, under the direction of Special Agent in Charge Aaron T. Ford, for the investigation leading to today’s guilty pleas.
The government is represented by Assistant U.S. Attorneys Eric W. Moran and Matthew J. Skahill of the U.S. Attorney’s Office Special Prosecutions Division in Trenton and Camden, respectively

Pennsylvania Man Admits Conspiring with Alleged Members of Organized Crime Family and Others in Fraud Scheme

CAMDEN, NJ—A West Reading, Pennsylvania man admitted he conspired to defraud FirstPlus Financial Group Inc. (FPFG), a Texas-based financial services company allegedly targeted for extortionate takeover and looting by a group led by alleged Lucchese organized crime family member Nicodemo S. Scarfo, U.S. Attorney Paul J. Fishman announced.
Cory Leshner, 30, pleaded guilty before U.S. District Judge Robert B. Kugler in Camden federal court to a superseding information charging him with conspiracy to commit wire fraud.
According to documents filed in this case and statements made in court:
Leshner and 12 others—including Scarfo, an alleged member of the Lucchese La Cosa Nostra (LCN) crime family, and Salvatore Pelullo, an alleged associate of the Lucchese and Philadelphia LCN families—were variously charged in a November 2011 indictment with a racketeering conspiracy, including acts of securities fraud, wire fraud, mail fraud, bank fraud, extortion, interstate travel in aid of racketeering, money laundering, and obstruction of justice. The indictment charged that FPFG was targeted for extortionate takeover and looting by a group of the conspirators. A substantial part of the enterprise’s activities occurred in New Jersey, including communications and the transfer of money into and out of the state. Cory Leshner admitted that he joined the conspiracy in April 2007.
Leshner admitted that he assisted Scarfo and Pelullo in managing family trusts and limited liability companies on behalf of Scarfo and Pelullo as part of the scheme to defraud FPFG. Leshner said that Pelullo directed Leshner in the use of various bank accounts through which Pelullo received hundreds of thousands of dollars between July 2007 and April 2008 as part of the scheme. The money included the proceeds of the fraud that Pelullo allegedly received as part of a fraudulent “consulting” agreement between his shell company, Seven Hills Management, and co-defendant William Maxwell, a Texas attorney who served as “special counsel” to FPFG as part of the scheme. The money also involved proceeds received from the fraudulent sale of Scarfo and Pelullo’s worthless companies to FPFG in 2007. The receipt of the fraudulent proceeds often occurred in the form of wire transfers from accounts in Pennsylvania to accounts in New Jersey.
Leshner also said that he was a law school student during the scheme. Leshner graduated from law school in 2010 and became an attorney in Pennsylvania in 2011. As part of his plea agreement, Leshner agreed to notify the Pennsylvania Supreme Court of his guilty plea and to accept any disciplinary action brought by disciplinary officials as a result of the guilty plea and sentence. Leshner also agreed to not seek the reinstatement of his license to practice law while serving any sentence of imprisonment imposed in the case.
Nicodemo S. Scarfo, Pelullo, and five other defendants charged in November 2011—including attorneys William Maxwell, David Adler, Gary McCarthy, and Donald Manno, as well as John Maxwell—are scheduled for trial beginning October 28, 2013. Todd Stark, also charged in the indictment, previously pleaded guilty to providing ammunition to Scarfo and Pelullo, convicted felons.
The conspiracy count to which Cory Leshner pleaded guilty carries a maximum potential penalty of five years in prison and a $250,000 fine, or twice the gross gain or loss from the offense. Sentencing is scheduled for January 17, 2014.
U.S. Attorney Fishman praised special agents of the FBI, under the direction of Special Agent in Charge Aaron T. Ford in Newark; the Department of Labor, Office of Inspector General, Office of Labor Racketeering and Fraud Investigations, under the direction of Acting Special Agent in Charge Cheryl Garcia, New York Region; and the Bureau of Alcohol, Tobacco, Firearms, and Explosives, under the direction of Thomas J. Cannon in Newark. He also thanked the FBI under the direction of Special Agent in Charge Edward J. Hanko in Philadelphia for its vital assistance and the U.S. Securities and Exchange Commission for its role.
The government is represented by Assistant U.S. Attorneys Steven D’Aguanno and Howard Wiener of the New Jersey U.S. Attorney’s Office Organized Crime/Gangs Unit and Criminal Division in Camden and Trial Attorney Adam Small of the Organized Crime and Gang Section of the Justice Department’s Criminal Division.
With respect to the defendants awaiting trial, the charges and allegations contained in the indictment are merely accusations, and the defendants are presumed innocent unless and until proven guilty.

Two New Jersey Investors Plead Guilty to Their Roles in Bid-Rigging Schemes at Municipal Tax Lien Auctions

WASHINGTON—Two financial investors who purchased municipal tax liens pleaded guilty today for their roles in a conspiracy to rig bids at auctions conducted by New Jersey municipalities for the sale of those tax liens, the Department of Justice announced.
A felony charge was filed today in U.S. District Court for the District of New Jersey in Newark, against Robert U. Del Vecchio, Sr., of Hawthorne, New Jersey. According to the charge, from in or about 2000 until approximately December 2008, Del Vecchio, Sr. participated in a conspiracy to rig bids at auctions for the sale of municipal tax liens in New Jersey by agreeing to allocate among certain bidders which liens each would bid on. Additionally, a felony charge was filed today in the U.S. District Court for the District of New Jersey in Newark, against Michael Mastellone, of Cedar Knolls, New Jersey, for participating in a similar conspiracy from in or about 2000 until approximately February 2009. The department said that Del Vecchio, Sr. and Mastellone proceeded to submit bids in accordance with the agreements and purchased tax liens at collusive and non-competitive interest rates.
“By conspiring to rig the bids of municipal tax liens, the conspirators profited at the expense of those already struggling financially,” said Scott D. Hammond, Deputy Assistant Attorney General for the Antitrust Division’s criminal enforcement program. “Protecting Americans from these types of bid-rigging schemes remains a high priority for the division.”
The department said the primary purpose of the conspiracy was to suppress and restrain competition in order to obtain selected municipal tax liens offered at public auctions at non-competitive interest rates. When the owner of real property fails to pay taxes on that property, the municipality in which the property is located may attach a lien for the amount of the unpaid taxes. If the taxes remain unpaid after a waiting period, the lien may be sold at auction. State law requires that investors bid on the interest rate delinquent property owners will pay upon redemption. By law, the bid opens at 18 percent interest and, through a competitive bidding process, can be driven down to zero percent. If a lien remains unpaid after a certain period of time, the investor who purchased the lien may begin foreclosure proceedings against the property to which the lien is attached.
According to the court documents, Del Vecchio, Sr. and Mastellone were involved in the conspiracy with others not to bid against one another at municipal tax lien auctions in New Jersey. Since the conspiracy permitted the conspirators to purchase tax liens with limited competition, each conspirator was able to obtain liens that earned a higher interest rate. Property owners were therefore made to pay higher interest on their tax debts than they would have paid had their liens been purchased in open and honest competition, the department said.
A violation of the Sherman Act carries a maximum penalty of 10 years in prison and a $1 million fine for individuals. The maximum fine for a Sherman Act violation may be increased to twice the gain derived from the crime or twice the loss suffered by the victims if either amount is greater than the $1 million statutory maximum.
Today’s pleas are the 13th and 14th guilty pleas resulting from an ongoing investigation into bid rigging or fraud related to municipal tax lien auctions. Nine individuals—Isadore H. May, Richard J. Pisciotta, Jr., William A. Collins, Robert W. Stein, David M. Farber, Robert E. Rothman, Stephen E. Hruby, David Butler, and Norman T. Remick—and three companies—DSBD LLC, Crusader Servicing Corp., and Mercer S.M.E. Inc.—have previously pleaded guilty as part of this investigation.
Today’s charges were brought in connection with the President’s Financial Fraud Enforcement Task Force. The task force was established to wage an aggressive, coordinated, and proactive effort to investigate and prosecute financial crimes. With more than 20 federal agencies, 94 U.S. attorneys’ offices, and state and local partners, it is the broadest coalition of law enforcement, investigatory, and regulatory agencies ever assembled to combat fraud. Since its formation, the task force has made great strides in facilitating increased investigation and prosecution of financial crimes; enhancing coordination and cooperation among federal, state, and local authorities; addressing discrimination in the lending and financial markets and conducting outreach to the public, victims, financial institutions, and other organizations. Over the past three fiscal years, the Justice Department has filed nearly 10,000 financial fraud cases against nearly 15,000 defendants including more than 2,900 mortgage fraud defendants. For more information on the task force, please visit www.StopFraud.gov.
This ongoing investigation is being conducted by the Antitrust Division’s New York Office and the FBI’s Atlantic City, New Jersey Resident Agency. Anyone with information concerning bid rigging or fraud related to municipal tax lien auctions should contact the Antitrust Division’s New York Office at 212-335-8000, visit www.justice.gov/atr/contact/newcase.htm, or contact the Atlantic City Resident Agency of the FBI at 609-677-6400.