Month: March 2023

Source: United States Department of Justice News

PROVIDENCE – A North Kingstown self-employed contractor who “flipped houses,” and his wife, have both been charged in federal court with executing schemes to conceal substantial assets from the U.S. Bankruptcy Court in Providence, as well as money laundering and wire fraud, announced United States Attorney Zachary A. Cunha.

Court documents allege that Ernest P. Ricci and his wife, Brenda L. Ricci, have been accruing large, outstanding debts to creditors and to the IRS dating back to 2004, and that they have engaged in conduct designed to evade their creditors since 2011. It is alleged that, in October 2017, Ernest Ricci filed a Chapter 7 Bankruptcy Petition to protect a $1.5 million dollar home in Florida that he and his wife used as both rental property and a vacation home. Bank records indicate that Ricci has failed to make any mortgage payments on the property since at least 2012.

Ricci and his wife are alleged to have concealed assets and knowingly made false representations and omissions in filings with the U.S. Bankruptcy Court.  Specifically, according to court documents,  Ricci swore under oath that he had been unemployed for many years; that he had no income, no bank accounts, and no assets or properties other than the Florida home; and that he garnered no compensation of any kind from his wife’s company. In those bankruptcy filings, Ricci at first claimed liabilities in excess of $200,000,000 against assets of $1.3 million. He later amended his filings to claim liabilities of more than $2.3 million.

In reality, however, it is alleged that Ricci, before filing for bankruptcy, Ricci transferred all the assets of his business: Premier Home Restoration LLC (Premier) in order to shield those assets from his creditors. While Ricci claimed in bankruptcy filings that, following the transfer of the company’s assets, he performed services for Premier without compensation, according to court documents, an investigation determined that, in fact, Ricci continued to control Premier, ran its day-to-day operations, and made use of company financial resources to maintain his lifestyle.  Among other falsehoods, it is alleged that Ricci failed to truthfully disclose his monthly income; rental income from his Florida property and income from property he owned in New Hampshire; failed to disclose an actual Rolex watch as an asset (he allegedly went so far as to produce a fake watch for the Bankruptcy Trustee to examine); and failed to disclose ownership of a boat he was offering for sale as late as February 2023. Additionally, Ernest and Brenda Ricci allegedly falsely claimed, under oath, that Ernest Ricci held a $200,000 mortgage in the name of another person for the New Hampshire property that, in fact, he owned and for which he was collecting rent.

It is further alleged that, after the Bankruptcy Trustee was declared to be the equitable owner of Premier, Ernest and Brenda Ricci fraudulently applied for COVID-related Paycheck Protection Program (PPP) and Economic Injury Disaster Loans (EIDL) from the Small Business Administration, supposedly to pay Premier employees and to company expenses. When filing, they failed to disclose that the Trustee was the owner of Premier, and that they were involved in bankruptcy proceedings.

It is alleged that, after fraudulently obtaining the EDIL and PPP funds, Ernest and Brenda Ricci committed money laundering by conducting a series of financial transactions designed to conceal the location, ownership, and control of the PPP and EDIL proceeds, and to use those funds to purchase rental property in Warwick, RI, in the name of another person.

Additionally, it is alleged that Ernest Ricci fraudulently applied for and received COVID-related unemployment benefits from the Rhode Island Department of Labor and Training at the same time he collected approximately $84,370 rental property income from his New Hampshire property.

Court documents detail a number of alleged stalling tactics, frivolous pleadings, and fraudulent claims by Ernest Ricci, including claims that he was indigent, during the years’ long bankruptcy proceedings. Documents also detail numerous combative communications allegedly sent by Ernest to the bankruptcy Trustee, some laced with profanities.

Ernest and Brenda Ricci were arrested by FBI agents on Friday and charged by way of federal criminal complaints filed by the United States Attorney’s Office. Ernest P. Ricci is charged with Bankruptcy Fraud; Wire Fraud; and Money Laundering; Brenda L. Ricci is charged with Aiding and Abetting Bankruptcy Fraud; Aiding and Abetting Concealment of Assets in Bankruptcy; Aiding and Abetting Wire Fraud; and Aiding and Abetting Money Laundering.

The case is being prosecuted by Assistant U.S. Attorney John P. McAdams.

The matter was investigated by the FBI, Internal Revenue Service Criminal Investigation, and the United States Bankruptcy Trustee.

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Source: United States Department of Justice News

One defendant pleaded guilty on March 26 in an international fraud scheme that preyed on elderly Americans, and the lead defendant in the case was extradited from Spain yeterday in connection with the same scheme.

Ezennia Peter Neboh, 48, of Madrid, Spain, made his initial appearance in Miami yesterday to face federal charges. Neboh, and his co-defendants, Kennedy Ikponmwosa, 51, and Prince Amos Okey Ezemma, 49, also of Madrid; and Iheanyichukwu Jonathan Abraham, 44, Emmanuel Samuel, 39, and Jerry Chucks Ozor, 43, of London, were previously charged in the Southern District of Florida with conspiracy to commit mail fraud as well as counts of mail fraud and wire fraud. Samuel pleaded guilty March 26 in Miami to conspiracy to commit mail and wire fraud.

According to court documents, the defendants allegedly operated an inheritance fraud scheme. As part of that scheme, they sent personalized letters to elderly consumers in the United States over the course of more than five years. The letters falsely claimed that the sender was a representative of a bank in Spain and that the recipient was entitled to receive a multimillion-dollar inheritance left for the recipient by a family member who purportedly had died years before in Spain. According to the indictment, the defendants told a series of lies to consumers including that, before they could receive their purported inheritance, they were required to send money for delivery fees, taxes, and payments to avoid questioning from government authorities. The defendants collected money sent in response to the fraudulent letters through a complex web of U.S.-based former victims, whom the defendants convinced to receive money and forward to the defendants or persons associated with them. According to the indictment, victims who sent money never received any purported inheritance funds.  

“Schemes that prey on the elderly are particularly insidious,” said Principal Deputy Assistant Attorney General Brian M. Boynton, head of the Justice Department’s Civil Division. “The Department of Justice’s Consumer Protection Branch will pursue and prosecute transnational criminals who defraud U.S. consumers, wherever they are located. I thank the Kingdom of Spain, including the Spanish National Police and the Ministry of Justice, for their tireless efforts in assisting U.S. authorities to find and arrest these individuals so that they may face charges here in the United States.”

“The U.S. Postal Inspection Service has a long tradition of protecting citizens from these types of schemes and bringing those responsible to justice,” said Postal Inspector in Charge Juan A. Vargas for the U.S. Postal Inspection Service (USPIS) Miami Division. “This extradition and guilty plea are a testament of the dedicated partnership between the Department of Justice’s Consumer Protection Branch, Homeland Security Investigations (HSI), and the U.S. Postal Inspection Service, to protect our citizens from these scams.”

“We are one step closer to ensuring that those who conned elderly victims for pure financial greed are brought to justice,” said Special Agent in Charge Scott Brown of HSI Arizona. “The recent extradition of one defendant and the guilty plea of another defendant involved in this inheritance fraud scheme demonstrates the commitment of HSI and our law enforcement partners to target offenders wherever they may live and ensure that those offenders answer for their crimes.”

According to court documents, Samuel admitted to defrauding over $6 million from more than 400 victims, many of whom he knew were elderly or otherwise vulnerable.  He is scheduled to be sentenced by the Honorable Kathleen M. Williams on June 13, 2023, and faces a maximum penalty of 20 years’ imprisonment. 

The Consumer Protection Branch, USPIS, and HSI are investigating the case. 

Senior Trial Attorney Phil Toomajian and Trial Attorneys Josh Rothman and Brianna Gardner of the Justice Department’s Consumer Protection Branch are prosecuting the case. The Justice Department’s Office of International Affairs, the U.S. Attorney’s Office for the Southern District of Florida, Europol, the Spanish National Police, the United Kingdom’s National Crime Agency, and the Portuguese Judicial Police all provided critical assistance.

The Department urges individuals to be on the lookout for these types of schemes. An inheritance scam is a form of an imposter scam in which fraudsters pretend to be someone they are not, often a lawyer, banker, or foreign official. These fraudsters will try to get people excited about a large windfall and may use legitimate-looking legal documents as part of the scam. Be wary of unexpected contact from individuals offering a large inheritance. Do not send money or provide information to anyone you do not know. Seek advice from a trusted individual or an independent professional if you are in doubt.

If you or someone you know is age 60 or older and has experienced financial fraud, experienced professionals are standing by at the National Elder Fraud Hotline: 1-833-FRAUD-11 (1-833-372-8311). This U.S. Department of Justice hotline, managed by the Office for Victims of Crime, can provide personalized support to callers by assessing the needs of the victim and identifying relevant next steps. Case managers will identify appropriate reporting agencies, provide information to callers to assist them in reporting, connect callers directly with appropriate agencies, and provide resources and referrals, on a case-by-case basis. Reporting is the first step. Reporting can help authorities identify those who commit fraud and reporting certain financial losses due to fraud as soon as possible can increase the likelihood of recovering losses. The hotline is open Monday through Friday from 10:00 a.m. to 6:00 p.m. ET. English, Spanish and other languages are available.

More information about the Department’s efforts to help American seniors is available at its Elder Justice Initiative webpage. For more information about the Consumer Protection Branch and its enforcement efforts, visit its website at https://www.justice.gov/civil/consumer-protection-branch. Elder fraud complaints may be filed with the FTC at www.ftccomplaintassistant.gov or at 877-FTC-HELP. The Department of Justice provides a variety of resources relating to elder fraud victimization through its Office for Victims of Crime, which can be reached at https://www.ovc.gov.

An indictment is merely an allegation. All defendants are presumed innocent until proven guilty beyond a reasonable doubt in a court of law.

Source: United States Department of Justice News

“The FBI conducts investigations when someone crosses the line from expression of protected personal beliefs to violations of federal law,” said Special Agent in Charge Michael E. Hensle of the FBI Milwaukee Field Office.  “We remained vigilant during this investigation and worked with our law enforcement partners to methodically and thoroughly address every aspect of this act of violence.  The arrest today represents these efforts and highlights the work done by law enforcement to protect the safety of our citizens.”

According to the complaint, on Mother’s Day, Sunday, May 8, 2022, at approximately 6:06 a.m., law enforcement responded to an active fire at an office building located in Madison, Wisconsin. Once inside the building, police observed a mason jar under a broken window; the jar was broken, and the lid and screw top were burned black. The police also saw a purple disposable lighter near the mason jar. On the opposite wall from the window, the police saw another mason jar with the lid on and a blue cloth tucked into the top; the cloth was singed. The jar was about half full of a clear fluid that smelled like an accelerant. Outside of the building, someone spray painted on one wall, “If abortions aren’t safe then you aren’t either” and, on another wall, a large “A” with a circle around it and the number “1312.”  During the investigation, law enforcement collected DNA from the scene of the attack.

In March 2023, law enforcement identified Roychowdhury as a possible suspect. Local police officers observed Roychowdhury dispose of food in a public trash can; the officers recovered the leftover food and related items, and law enforcement collected DNA from the food. On March 17, 2023, law enforcement advised that a forensic biologist examined the DNA evidence recovered from the attack scene and compared it to the DNA collected from the food contents. The forensic biologist found the two samples matched and likely were the same individual.

In March 2023, Roychowdhury travelled from Madison, Wisconsin, to Portland, Maine, and he purchased a one-way ticket from Boston to Guatemala City, departing Tuesday morning, March 28, 2023. Law enforcement arrested Roychowdhury at Boston Logan International Airport. Roychowdhury will have a detention hearing in Boston.

Roychowdhury is scheduled to appear in U.S. District Court in Boston today. A date for his appearance in federal court in Madison has not been set.

If convicted, Roychowdhury faces a mandatory minimum penalty of five years and a maximum of 20 years in prison. The charge against him is the result of an investigation by the Madison Police Department, Wisconsin State Capitol Police Department, ATF, the FBI’s Joint Terrorism Task Force, Homeland Security Investigations, Dane County Sheriff’s Office, with the assistance of the FBI Boston Field Office, Boston Police Department, Massachusetts State Police, U.S. Coast Guard, Federal Air Marshal Service, and Transportation Security Administration.

Assistant U.S. Attorney Elizabeth Altman for the Western District of Wisconsin and Trial Attorney Justin Sher of the National Security Division’s Counterterrorism Section are prosecuting the case. Assistant U.S. Attorney Amanda Beck for the District of Massachusetts handled the appearance in Boston.

An indictment is merely an allegation, and the defendant is presumed innocent until proven guilty beyond a reasonable doubt in a court of law.

Source: United States Department of Justice News

The Justice Department announced today that it has jointly filed a proposed agreement with the City of Seattle that recognizes the city’s consistent compliance with the core requirements of a 2012 consent decree regarding the Seattle Police Department (SPD). The agreement includes important obligations that the city must take to continue the reform process.

The proposed agreement, which must be approved by the U.S. District Court for the Western District of Washington, describes the city’s and the SPD’s achievements in implementing the consent decree. For five years, the city has consistently complied with significant portions of the consent decree, including requirements regarding use of force (outside of the crowd management context), crisis intervention, stops and detentions, supervision and the city’s Office of Police Accountability.

The proposed agreement would replace the consent decree, but would require that the city continue to measure whether the reforms required by the consent decree remain effective. The city must also complete work in two remaining areas, use of force in crowd management and accountability.

“For over a decade, the Justice Department has worked to ensure that the City of Seattle and the Seattle Police Department undertake reforms necessary to bring about constitutional policing,” said Assistant Attorney General Kristen Clarke of the Justice Department’s Civil Rights Division. “Our consent decree has provided the strong medicine needed to help cure problems and improve the way policing is carried out across the City of Seattle. Today we recognize the progress that has been made, the significant reforms instituted and the central role that the community has played and will continue to play in ensuring fair, non-discriminatory and effective policing moving forward.”

“The joint motion filed today acknowledges the significant progress of the City of Seattle and its Police Department, and very clearly lays out what must happen before all requirements of the consent decree may be terminated,” said First Assistant U.S Attorney Tessa M. Gorman for the Western District of Washington. “This proposed agreement allows the City of Seattle to focus on these remaining critical areas so that reforms in those areas become ingrained in the ways the Seattle Police Department engages with the community.”

The city has made notable progress in the areas where it has consistently complied with the consent decree for more than five years, and has adopted reforms that go beyond the explicit requirements of the consent decree. For example:

• Reduced Use of Force: SPD changed its policies and training regarding use of force, including how use of force is reported, reviewed and investigated. As a result, force is used in less than one-quarter of one percent of all events to which officers respond. SPD has reduced the use of serious force by 60%.
• Improved Response to Behavioral Health Crises: SPD reduced the use of force in crisis incidents to less than two percent of such incidents, and the majority of force used (65%) is low-level. SPD changed its response to people having behavioral health crises, including developing an advanced crisis intervention program, adopting a model where police and civilian mental health practitioners respond jointly and coordinating with King County to dispatch non-police mobile crisis teams to behavioral health incidents.
• Improved Response to Investigative Stops: SPD changed its policy, training and practices for investigative stops. The court monitor’s review has found that officers complied with legal and policy requirements in nearly all instances it assessed.
• New Bias-free Policing Policy and Training: SPD adopted a bias-free policing policy and, in consultation with the Community Police Commission, developed bias-free policing training. It also changed its procedures for addressing bias-related complaints.
• New Supervision Model: SPD changed its supervision practices, providing new training and adopting a new staffing model to ensure that all patrol officers have a consistent, highly-trained supervisor.

The proposed agreement, which must be approved by the U.S. District Court for the Western District of Washington, calls for continued work in the following areas:

• Use of Force/Crowd Management: SPD will develop new crowd management policies and provide them to the court and independent Court Monitor for approval. These policies include ways to report and review uses of force during crowd management.
• Accountability: Under the proposed agreement, the independent Court Monitor will review the city’s accountability system and propose any improvements.

This matter is handled by the Special Litigation Section of the U.S. Department of Justice’s Civil Rights Division and the U.S. Attorney’s Office’s Civil Division.

The Civil Rights Division continues to prioritize constitutional policing and currently has pending investigations into police departments across the country, including in Minneapolis, Phoenix, New York City and Louisiana. The consent decree, proposed agreement, as well as additional information about the Civil Rights Division, are available on its website at https://www.justice.gov/crt/special-litigation-section.    

Source: United States Department of Justice News

Damian Williams, the United States Attorney for the Southern District of New York, and Michael J. Driscoll, the Assistant Director in Charge of the New York Field Office of the Federal Bureau of Investigation (“FBI”), announced the unsealing of an Indictment charging JOHN ROESSER, a former attorney, with abusing the bankruptcy system by making false statements under penalty of perjury and submitting falsified records.  By February 2022, after years as a partner at major law firms, ROESSER owed the Internal Revenue Service (“IRS”) millions of dollars in income taxes and filed for Chapter 11 bankruptcy.  Through multiple false statements, ROESSER lied to the Bankruptcy Court and the IRS about his purported receipt of millions of dollars in order to receive the protections of bankruptcy and keep his assets – including a multi-million-dollar residence and an Aston Martin sports car – while not paying his bills.  ROESSER was arrested this morning in Bronxville, New York, and will be presented today in Manhattan federal court.

U.S. Attorney Damian Williams said: “Bankruptcy is a lifeline for many people who need its protections to keep their lives together.  The defendant allegedly corrupted and degraded a system that helps so many.  As alleged, he manipulated the bankruptcy system by lying and falsifying bank records so that he could use its protections to keep his assets and to avoid paying his bills.  And he should have known better — he used to be a lawyer.  This Office will always bring to justice those who use their status to abuse the public’s trust and to try to put themselves above the law.”

FBI Assistant Director Michael J. Driscoll said: “As alleged, Roesser committed bankruptcy fraud when he lied to both the Bankruptcy Court and the IRS about his receipt of millions of dollars so he could retain his assets – which included a multi-million-dollar residence and a luxury sports car – while avoiding paying his bills.  The FBI will continue to investigate and bring to justice those who attempt to fraudulently exploit our nation’s legitimate financial protections to satisfy their own selfish desires.”

As alleged in the Indictment:[1]

From in or about March 2013 through in or about January 2018, ROESSER was a partner at three multinational law firms.  During his time as a partner at these law firms, ROESSER earned substantial income — and incurred substantial income tax liability.  ROESSER resigned from the New York bar in or about June 2020 after admitting to misappropriating client funds.

By 2022, ROESSER owed the IRS, and others, over three million dollars.  He also owned a house that he estimated was worth millions of dollars and an Aston Martin Rapide, a luxury sports car.  Instead of paying his debts, in February 2022, ROESSER filed for Chapter 11 bankruptcy in the United States Bankruptcy Court for the Southern District of New York.  See In re John Roesser, No. 22 Bk. 22049 (Bankr. S.D.N.Y.) (the “Bankruptcy”).  In a Chapter 11 bankruptcy, a debtor may remain “in possession,” meaning that the debtor keeps possession and control of his assets during the bankruptcy.  But a debtor-in-possession must propose a viable plan of reorganization, which creditors then vote on.  If a debtor fails to comply with the requirements of Chapter 11, a Chapter 11 bankruptcy can be converted to a Chapter 7 bankruptcy or dismissed.  In a Chapter 7 bankruptcy, an appointed trustee usually converts a debtor’s assets into cash for distribution among creditors.  If a bankruptcy is dismissed, the debtor loses the protections of bankruptcy; for example, creditors can take steps to seize a debtor’s assets.

ROESSER told the Bankruptcy Court and the IRS that he would soon receive millions of dollars and be able to pay his debts while keeping his house.  Then, ROESSER filed a false declaration and submitted falsified records in the Bankruptcy indicating that he had received millions of dollars.  This was false.  ROESSER was concealing that he had not received millions of dollars after all, in a fraudulent effort to retain control of his assets while avoiding payment of his debts.

On or about March 3, 2023, after some of the above false statements were withdrawn by ROESSER’s attorney in the Bankruptcy, ROESSER’s Chapter 11 bankruptcy was dismissed.  Without the protections of bankruptcy, creditors can now take steps to seize ROESSER’s assets to pay his debts.

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ROESSER, 52, of Bronxville, New York, is charged with one count of falsification of records in bankruptcy, which carries a maximum sentence of 20 years in prison, and one count of false oaths and claims in bankruptcy, which carries a maximum sentence of five years in prison.

The maximum potential sentences are prescribed by Congress and are provided here for informational purposes only, as any sentencing of the defendant will be determined by a judge.

Mr. Williams praised the outstanding investigative work of the FBI.

The case is being prosecuted by the Office’s Complex Frauds and Cybercrime Unit.  Assistant U.S. Attorney Steven J. Kochevar is in charge of the prosecution.

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