Month: June 2024

Source: United States Department of Justice Criminal Division

A Texas man was sentenced today to 37 months in prison, three years of supervised release and to pay $529,551 in restitution to the United States for evading taxes on income he earned from his business.

According to court documents, John L. Petrone owned and operated a business that sold an herbal extract known as “kratom,” along with other related products. Petrone did not file individual income tax returns for 2014 through 2019, nor did he pay income taxes for those years, despite earning hundreds of thousands of dollars from his business. During that time period, Petrone attempted to evade his income taxes by opting not to withhold federal taxes from his paychecks, operating the business under different names, dealing in cash, using business bank accounts to pay for personal expenses and lying to the IRS during an audit. In addition, Petrone did not pay his business’s employment taxes. 

Through his actions, Petrone caused a tax loss to the IRS of over $529,000. 

Acting Deputy Assistant Attorney General Stuart M. Goldberg of the Justice Department’s Tax Division made the announcement.

IRS Criminal Investigation investigated the case.

Assistant Chief David Zisserson and Trial Attorney Andres Chinchilla of the Tax Division prosecuted the case, with assistance and support from the U.S. Attorney’s Office for the Western District of Texas.

Source: United States Department of Justice Criminal Division

Note: Concurrent with the return of the indictment, the U.S. Department of State’s Rewards for Justice program is offering a reward of up to $10 million for information on Stigal’s location or his malicious cyberactivity. Anyone possessing such information should contact Rewards for Justice here.

A federal grand jury in Maryland returned an indictment yesterday charging Amin Timovich Stigal (Амин Тимович Стигал), 22, a Russian citizen, with conspiracy to hack into and destroy computer systems and data. In advance of the full-scale Russian invasion of Ukraine, targets included Ukrainian Government systems and data with no military or defense-related roles. Later targets included computer systems in countries that were providing support to Ukraine, including the United States. Stigal remains at large.

“As alleged, the defendant conspired with Russian military intelligence on the eve of Russia’s unjust and unprovoked invasion of Ukraine to launch cyberattacks targeting the Ukrainian government and later targeting its allies, including the United States.” said Attorney General Merrick B. Garland. “The Justice Department will continue to stand with Ukraine on every front in its fight against Russia’s war of aggression, including by holding accountable those who support Russia’s malicious cyber activity.”

“The GRU has repeatedly applied in cyberspace Russia’s statecraft of indiscriminate destruction and intimidation,” said Assistant Attorney General Matthew G. Olsen. “The Department will do its part to prevent and disrupt such malicious behavior that relies upon online services or infrastructure in the U.S., or that targets U.S. victims. We will also identify, pursue, and eventually hold to account those responsible for Russia’s malicious actions, including the cybercriminals that the Russian government cultivates in furtherance of its malign agenda.”

“Amin Timovich Stigal attempted to leverage malware to aid the Russian military in the invasion of Ukraine,” said FBI Deputy Director Paul Abbate. “Today’s indictment demonstrates the FBI’s unwavering commitment to combat malicious cyber activities by our adversaries, and we will continue to work with our international partners to thwart attempts to undermine and harm our allies.”

“Malicious cyber actors who attack our allies should know that we will pursue them to the full extent of the law,” said U.S. Attorney Erek L. Barron for the District of Maryland. “Cyber intrusion schemes such as the one alleged threaten our national security, and we will use all the technologies and investigative measures at our disposal to disrupt and track down these cybercriminals.”

“The indictment of Amin Stigal is yet another example of the FBI’s commitment to combating cyber threats both at home and internationally,” said Special Agent in Charge William J. DelBagno of the FBI Baltimore Field Office. “To those adversaries who seek to compromise our international partners’ systems, know you will be identified and you will face consequences for your actions. The FBI vows to continually pursue justice and disrupt malicious cyber actors.”

According to court documents, in Jan. 2022, Stigal and members of the Main Intelligence Directorate of the General Staff (GRU) of the Russian Federation (the Conspirators) conspired to use a U.S.-based company’s services to distribute malware known in the cybersecurity community as “WhisperGate” to dozens of Ukrainian government entities’ computer systems and destroy those systems and related data in advance of the Russian invasion of Ukraine. The United States government previously joined with allies and partners in May 2022 to attribute this cyber-attack to the Russian military and to condemn the attack and similar destructive cyber activities against Ukraine.

On Jan. 13, 2022, the Conspirators attacked multiple Ukrainian government networks, including the Ukrainian Ministry of International Affairs, the State Treasury, the Judiciary Administration, the State Portal for Digital Services, the Ministry of Education and Science, the Ministry of Agriculture, the State Service for Food Safety and Consumer Protection, the Ministry of Energy, the Accounting Chamber for Ukraine, the State Emergency Service, the State Forestry Agency, and the Motor Insurance Bureau. The Conspirators infected computers on these and other networks with malware called WhisperGate, which was designed to look like ransomware. However, as the indictment alleges, WhisperGate was actually a cyberweapon designed to completely destroy the target computer and related data.

In conjunction with these attacks, the Conspirators compromised several of the targeted Ukrainian computer systems, exfiltrated sensitive data, including patient health records, and defaced the websites to read: “Ukrainians! All information about you has become public, be afraid and expect the worst. This is for your past, present and future.” That same day, the Conspirators offered the hacked data for sale on the internet. The effort was aimed at sowing concern among the broader Ukrainian population regarding the safety of government systems and data.

In August 2022, the Conspirators also hacked the transportation infrastructure of a Central European country that was supporting Ukraine. The indictment further alleges that from Aug. 5, 2021, through Feb. 3, 2022, the Conspirators leveraged the same computer infrastructure they used in the Ukraine-related attacks to probe computers belonging to a federal government agency in Maryland in the same manner as they had initially probed the Ukrainian Government networks.

If convicted, Stigal faces a maximum penalty of five years in prison. A federal district court judge will determine any sentence after taking into account the U.S. Sentencing Guidelines and other statutory factors.

The FBI Baltimore Field Office is investigating the case.

Assistant U.S. Attorneys Aaron S.J. Zelinsky and Robert I. Goldaris for the District of Maryland are prosecuting the case, with valuable assistance from the National Security Division’s National Security Cyber Section.

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 Criminal Division

An indictment was unsealed in the District of North Dakota today charging a federal inmate and eight co-conspirators with international methamphetamine, heroin, and fentanyl trafficking.

According to court documents, since January 2022, Jesus Amurahaby Celestin-Ortega, also known as Flaco, 26, allegedly engaged in drug-related and money laundering conspiracies, and a continuing criminal enterprise, while incarcerated at a federal prison on unrelated drug and firearm charges. Celestin-Ortega allegedly operated a criminal network using a contraband cellphone from inside the federal prison to import and distribute more than 500 grams of methamphetamine, more than one kilogram of heroin, and more than 400 grams of fentanyl. Celestin-Ortega allegedly directed and coordinated the importation of the substances into the United States and their distribution within North Dakota, Minnesota, California, Colorado, Georgia, Missouri, Texas, Arizona, and elsewhere. Celestin-Ortega also allegedly conspired to launder drug proceeds from the United States to Mexico.

Celestin-Ortega’s eight co-conspirators—Trinidad Torres Meraz, 58, of Riverside, California; Edgar Hernandez, also known as Ivan Edgar Hernandez Vasquez, 43; Maria De La Cruz Estrada Moreno, 40, of El Paso, Texas; Jesse Rocha, 25, of Denver; Rafael Bueno-Nava, 49, of Fridley, Minnesota; Ryan James Stevens, 41, of Arvada, Colorado; Christian Ivan Gonzalez, 31, of Phoenix; and Martina Lucia Mendez, 26, of Gilbert, Arizona—are charged with participating in the distribution conspiracy. Five of the co-conspirators—Torres Meraz, Estrada Moreno, Bueno-Nava, Stevens, and Mendez—also allegedly conspired to import methamphetamine, heroin, and fentanyl from Mexico into the United States. Three of the conspirators—Torres Meraz, Estrada Moreno, and Bueno-Nava—are charged with additional money laundering conspiracy charges. Celestin-Ortega and six of the co-conspirators have been arrested on the indictment and have made their initial appearances in court. Hernandez and Mendez remain fugitives. 

If convicted, the defendants face a maximum penalty of life in prison on the drug distribution conspiracy counts and the importation conspiracy counts, and a maximum penalty of 20 years in prison on the money laundering conspiracy counts.

Principal Deputy Assistant Attorney General Nicole M. Argentieri, head of the Justice Department’s Criminal Division; U.S. Attorney Mac Schneider for the District of North Dakota; Executive Associate Director Katrina W. Berger of Homeland Security Investigations (HSI); Special Agent in Charge Steven T. Bell of the Drug Enforcement Administration (DEA) Omaha Field Division; Inspector in Charge Bryan S. Musgrove of the U.S. Postal Inspection Service (USPIS) Denver Division; and Special Agent in Charge Thomas F. Murdock of IRS Criminal Investigation (IRS-CI) made the announcement.

This case is part of an Organized Crime and Drug Enforcement Task Forces operation.

HSI, DEA, USPIS, IRS-CI, Grand Forks Narcotics Task Force, North Dakota Bureau of Criminal Investigation, and Grand Forks Police Department are investigating the case, with critical support from the Federal Bureau of Prisons’ National Gang Unit. The Criminal Division’s Narcotic and Dangerous Drug Section’s Special Operations Unit and the Office of Enforcement Operations also provided essential support and coordination.

Trial Attorneys Lernik Begian and Tara Arndt of the Criminal Division’s Narcotic and Dangerous Drug Section and Assistant U.S. Attorneys Christopher C. Myers and Matthew P. Kopp for the District of North Dakota are prosecuting the case.

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 Criminal Division

The Justice Department’s Office of Community Oriented Policing Services (COPS Office) announced today it will engage with the Uvalde Police Department (UPD) through the COPS Office Collaborative Reform Initiative’s Critical Response program.

The COPS Office, in conjunction with Jensen Hughes, a Critical Response provider, will provide a range of technical assistance services and opportunities associated with UPD’s training, leadership, and community partnerships. The goal of this technical assistance is to enhance UPD’s strategic training plan, leadership development programs, and community trust-building initiatives.

“Since releasing its report ‘Critical Incident Review: Active Shooter at Robb Elementary’, the Justice Department has continued to work with the Uvalde community, offering a range of technical assistance on topics that were identified in the report,” said Acting Associate Attorney General Benjamin C. Mizer. “Today’s announcement will formalize that effort and enable the Department to enhance its efforts to help both the community and the police department implement the recommendations contained in the report.”

“The COPS Office remains committed to the Uvalde community and the Uvalde Police Department on the issues, challenges, and deficiencies the report identified,” said Director Hugh T. Clements, Jr. of the COPS Office. “I know that the work we are going to do moving forward will be a tremendous resource as the UPD continues with the important work they are dedicated to carrying out.”

The Collaborative Reform Initiative encompasses three programs offering expert services to state, local, territorial, and Tribal law enforcement agencies: the Collaborative Reform Initiative Technical Assistance Center, Critical Response, and Organizational Assessment programs (complete details of these programs can be found at www.cops.usdoj.gov/collaborativereform). Managed out of the COPS Office, this continuum of services is designed to build trust between law enforcement agencies and the communities they serve; improve operational efficiencies and effectiveness; enhance officer safety and wellness; build agencies’ capacity for organizational learning and self-improvement; and promote community policing practices nationwide.

The Critical Response program is designed to provide targeted technical assistance (TA) to state, local, territorial, and Tribal law enforcement agencies experiencing high-profile events, major incidents, or sensitive issues of varying need. Critical Response is highly customizable by providing flexible assistance to law enforcement agencies that have recently experienced a critical incident or identified an issue of significant community concern in their department’s operations. The TA generally falls into three categories: (1) immediate delivery of TA to address a pressing and acute need, (2) data analysis, and (3) after-action reviews to understand and learn from law enforcement and public safety responses to critical incidents or issues.

The COPS Office is the federal component of the Justice Department responsible for advancing community policing nationwide. The only Justice Department agency with policing in its name, the COPS Office was established in 1994 and has been the cornerstone of the nation’s crime fighting strategy with grants, a variety of knowledge resource products, and training and technical assistance. Through the years, the COPS Office has become the go-to organization for law enforcement agencies across the country and continues to listen to the field and provide the resources that are needed to reduce crime and build trust between law enforcement and the communities served. The COPS Office has been appropriated more than $20 billion to advance community policing, including grants awarded to more than 13,000 state, local, territorial, and Tribal law enforcement agencies to fund the hiring and redeployment of approximately 138,000 officers.

Source: United States Department of Justice Criminal Division

The Justice Department announced today that it has reached an agreement with Low Taek Jho, also known as Jho Low, members of his family, and trust entities Low established (collectively, the “Low Parties”) that resolves two civil forfeiture cases.

The department previously brought the cases against assets that it alleges were acquired by Low and his family using funds allegedly embezzled from 1Malaysia Development Berhad (1MDB), Malaysia’s sovereign investment development fund. The Low Parties have also agreed to cooperate in the transfer to Malaysia of certain other assets located in Hong Kong, Switzerland, and Singapore that are linked to 1MDB funds. Under the agreement, the department will coordinate with foreign partners to facilitate the liquidation and return of these assets to Malaysia.  

According to the civil forfeiture complaints, from 2009 through 2015, more than $4.5 billion in funds belonging to 1MDB were allegedly misappropriated by high-level officials of 1MDB and their associates, including Low, through a criminal conspiracy involving international money laundering and bribery. 1MDB was created by the government of Malaysia to promote economic development in Malaysia through global partnerships and foreign direct investment. Its funds were intended to be used to improve the well-being of the Malaysian people.

The agreement resolves the civil forfeiture action against a luxury apartment in Paris and artwork located in Switzerland by artists Andy Warhol and Claude Monet, which Low purchased for approximately $35 million in total. In addition, parties agreed to return to Malaysia real property and cash in bank accounts valued at approximately $67 million located in Hong Kong, Switzerland, and Singapore. The United States will release a total of $3.5 million to the trust entities to pay for legal fees and costs associated with the properties. Under the agreement, none of these fees may be returned to Low or his family members. 

Prior to this settlement, in total, the United States has returned or assisted in the return to Malaysia of over $1.4 billion in assets associated with the international money laundering, embezzlement, and bribery scheme.

Low separately faces charges in the Eastern District of New York for allegedly conspiring to launder billions of dollars embezzled from 1MDB and for conspiring to violate the Foreign Corrupt Practices Act by allegedly paying bribes to various Malaysian and Emirati officials, and in the District of Columbia for allegedly conspiring to make and conceal foreign and conduit campaign contributions during the United States presidential election in 2012. This agreement does not release any entity or individual from filed or potential criminal charges.

The FBI’s International Corruption Squads in New York City and Los Angeles and IRS Criminal Investigation are investigating the case.  

Trial Attorneys Barbara Levy, Sean Fern, Jonathan Baum, and Joshua Sohn of the Criminal Division’s Money Laundering and Asset Recovery Section (MLARS) and Assistant U.S. Attorney Jonathan Galatzan for the Central District of California are prosecuting the case, with significant assistance from the Justice Department’s Office of International Affairs and MLARS’ Program Management Staff.

The Justice Department also appreciates the significant assistance provided over the course of this investigation by the Attorney General’s Chambers of Malaysia, the Royal Malaysia Police, the Malaysian Anti-Corruption Commission, the Attorney-General’s Chambers of Singapore, the Singapore Police Force-Commercial Affairs Department, the Office of the Attorney General and the Federal Office of Justice of Switzerland, and French authorities.

The Kleptocracy Asset Recovery Initiative is led by a team of dedicated prosecutors in MLARS, in partnership with federal law enforcement agencies, and often with U.S. Attorneys’ Offices, to forfeit the proceeds of foreign official corruption. Individuals with information about possible proceeds of foreign corruption located in or laundered through the United States should contact federal law enforcement or send an email to kleptocracy@usdoj.gov or https://tips.fbi.gov/.