Category: US Department of Justice

Source: United States Department of Justice News

PROVIDENCE – A Texas man who participated in a conspiracy that fraudulently used the identities and images of two United States military Generals, and others, to defraud seniors in at least eleven states, including Rhode Island, of at least $1.5 million through online romance scams, was sentenced today to more than three years in federal prison, announced United States Attorney Zachary A. Cunha.

Fola Alabi, 52, of Richmond, Texas, previously admitted to a federal judge that he created companies and opened bank accounts that were used to launder the proceeds realized from the romance scams. According to court filings, the funds laundered by Alabi were often wired overseas to China and India.

According to information presented to the court, a member of the conspiracy befriended unsuspecting seniors online, often fraudulently posing as a General in the U.S. military who was serving overseas. The conspirator feigned a personal, and sometimes romantic, interest in his victims, and convinced them to send substantial sums of money, usually in the form of bank checks or cash, to addresses and companies in Texas that were controlled by Alabi. Alabi received the money and either deposited it or directed that it be deposited into one of several bank accounts that he controlled. He quickly withdrew or transferred the funds to other accounts, including some that were overseas, and used the funds to pay the mortgage of his house.

Among Alabi’s victims is a Rhode Island widow who was contacted by a member of the conspiracy falsely claiming to be a “General Miller,” a four-star General, who convinced the victim to provide $60,000 to finance shipment of his personal belongings to the United States. At  the fraudster’s direction, a check was made payable a company created by Alabi and mailed to Alabi’s Texas residence. The victim was prepared to send an additional significant sum of money to the purported “General Miller,” when it was determined by her bank and the Westerly Police Department that she was likely the victim of fraud. 

In brief victim impact statements delivered to the court, the two actual U.S. military Generals whose identities were used as part of the scheme acknowledged that they continue to be victimized by online romance scams through the use of their likeness and identities. One of the Generals urged seniors to be diligent and to be aware of the significant potential of being scammed.

Alabi, arrested in May 2022, pleaded guilty on January 13, 2023, to conspiracy and money laundering. He was sentenced today by U.S. District Court Judge William E. Smith to thirty-seven months in federal prison to be followed by three years of federal supervised release; pay restitution to identified victims of the romance scams totaling $1,495,421; and to forfeit funds contained in a bank account that he controlled containing $31,773, and to forfeit his Texas residence which was valued at the time of his arrest at $560,000.

The case was prosecuted by Assistant United States Attorneys Ly T. Chin and Sara Miron Bloom.

The matter was investigated by the United States Postal Inspection Service, FBI, United States Secret Service, and Homeland Security Investigations.

United States Attorney Cunha thanks the Westerly, RI, and Prescott Valley, AZ, Police Departments; Texas Department of Public Safety; West Virginia State Police; the Santa Clara, CA, County District Attorney’s Office; and Defense Criminal Investigative Service for their assistance in the investigation of this matter.

###

 

Source: United States Department of Justice News

A New York attorney pleaded guilty today to participating in a scheme to make approximately $3.8 million in U.S. dollar payments to maintain six real properties in the United States that were owned by Viktor Vekselberg, a sanctioned oligarch.

According to court documents, Robert Wise of Pelham, New York, pleaded guilty to one count of conspiring to commit international money laundering, which carries a maximum sentence of five years in prison. Wise also agreed to forfeit more than $3.7 million and to be satisfied by a payment of $210,441. Sentencing is scheduled for Nov. 6.

According to the allegations in the information filed in Manhattan federal court today and other public filings:

On April 6, 2018, the U.S. Department of the Treasury’s Office of Foreign Assets Control (OFAC) designated Vekselberg as a Specially Designated National (SDN) in connection with its finding that the actions of the Government of the Russian Federation in Ukraine constituted an unusual and extraordinary threat to the national security and foreign policy of the United States. On or about March 11, 2022, OFAC redesignated Vekselberg as an SDN and blocked Vekselberg’s yacht and private airplane.

Prior to his designation by OFAC, between approximately 2008 and 2017, Vekselberg, through a series of shell companies, acquired six real properties in the United States, specifically, (i) two apartments on Park Avenue in New York, New York, (ii) an estate in Southampton, New York, (iii) two apartments on Fisher Island, Florida, and (iv) a penthouse apartment also on Fisher Island, Florida (collectively, the Properties). As of the date of this information, the Properties were worth approximately $75 million. 

Voronchenko, Vekselberg’s longtime associate, retained Wise, an attorney who practiced in New York, New York, to assist in the acquisition of the Properties. Wise also managed the finances of the Properties, including by paying common charges, property taxes, insurance premiums, and other fees associated with the Properties in U.S. dollar transactions from Wise’s interest on lawyer’s trust account (IOLTA account).

In particular, prior to Vekselberg’s designation as an SDN, between approximately February 2009 and March 2018, shell companies owned by Vekselberg sent approximately 90 wire transfers totaling approximately $18.5 million to the IOLTA account. At the direction of Voronchenko and his family member who lived in Russia, Wise used these funds to make various U.S. dollar payments to maintain and service the Properties. 

Immediately after Vekselberg’s designation as an SDN, the source of the funds used to maintain and service the Properties changed. The IOLTA Account began to receive wires from a bank account in the Bahamas held in the name of a shell company controlled by Voronchenko, Smile Holding Ltd., and from a Russian bank account held in the name of a Russian national who was related to Voronchenko. Between approximately June 2018 and March 2022, approximately 25 wire transfers totaling approximately $3.8 million were sent to WISE’s IOLTA account. Although the source of the payments changed, the management of the payments remained the same as before: Wise used these funds to make various U.S. dollar payments to maintain and service the Properties, and he did so knowing that he was promoting sanctions violations. Additionally, after Vekselberg was sanctioned in 2018, Voronchenko, Wise, and others tried to sell both the Park Avenue apartment and the Southampton estate. No licenses from OFAC were applied for or issued for these payments or attempted transfers. 

An indictment charging co-conspirator Vladimir Voronchenko, aka Vladimir Vorontchenko, who is a fugitive, was unsealed on Feb. 7. A civil forfeiture complaint was filed against the Properties on Feb. 24.

The FBI and Homeland Security Investigations are investigating the case. The Justice Department’s National Security Division and Office of International Affairs, and OFAC provided valuable assistance.

Assistant U.S. Attorneys Jessica Greenwood, Joshua A. Naftalis, and Sheb Swett for the Southern District of New York are prosecuting the case.

The investigation was coordinated through the Justice Department’s Task Force KleptoCapture, an interagency law enforcement task force dedicated to enforcing the sweeping sanctions, export controls and economic countermeasures that the United States, along with its foreign allies and partners, has imposed in response to Russia’s unprovoked military invasion of Ukraine. Announced by the Attorney General on March 2, 2022, and under the leadership of the Office of the Deputy Attorney General, the task force will continue to leverage all of the department’s tools and authorities to combat efforts to evade or undermine the collective actions taken by the U.S. government in response to Russian military aggression.

Source: United States Department of Justice News

British American Tobacco (BAT) and its subsidiary, BAT Marketing Singapore (BATMS), one of the world’s largest manufacturers of tobacco products based in the United Kingdom, has agreed to pay combined penalties of more than $629 million to resolve bank fraud and sanctions violations charges with U.S. authorities, arising out of the companies’ scheme to do business in North Korea through a third-party company in Singapore, in violation of the bank fraud statute and the International Emergency Economic Powers Act (IEEPA). Separately, charges were unsealed today in the District of Columbia against a North Korean banker and Chinese facilitators for their roles in facilitating the illicit sale of tobacco products in North Korea.

According to court documents, BATMS pleaded guilty to a criminal information filed in the District of Columbia charging BAT and BATMS with conspiracy to commit bank fraud and conspiracy to violate IEEPA. BAT entered into a deferred prosecution agreement (DPA) related to the same charges.

Specifically, in 2007, BAT spun off its North Korea sales to a third-party company, issuing a press statement that it was no longer involved in North Korea tobacco sales. In reality, BAT continued to do business in North Korea through the third-party company and BATMS maintained control over all relevant aspects of the North Korean business. Between 2007 and 2017, BAT and BATMS ran the payments for the tobacco sold to North Korean entities through the third-party company, resulting in approximately $418 million of U.S. dollar cash and correspondent banking transactions from North Korea to the third-party company in Singapore – money that was then passed on to BATMS and BAT. To make these payments, North Korean purchasers used front companies so that U.S. banks – which processed the transactions – would not know about the connection to North Korea. Pursuant to the DPA and plea agreement, BAT and BATMS will pay a total of $629 million in penalties and fines.

“British American Tobacco and its subsidiary engaged in an elaborate scheme to circumvent U.S. sanctions and sell tobacco products to North Korea, allowing funds to illegally flow into the coffers of the Democratic People’s Republic of Korea (DPRK),” said Assistant Attorney General Matthew G. Olsen of the Justice Department’s National Security Division. “Today’s action, which involves the largest North Korean sanctions penalty in the history of the Justice Department, should serve as a clear warning to companies everywhere about the costs and consequences of violating U.S. sanctions.”

Today, the Department of the Treasury also announced a civil enforcement action against BAT and BATMS.

“Companies that seek to profit from circumventing sanctions by obscuring their involvement will be discovered and will pay a price,” said Under Secretary of the Treasury for Terrorism and Financial Intelligence Brian E. Nelson. “For years, BAT partnered with North Korea to establish and operate a cigarette manufacturing business and relied on financial facilitators linked to North Korea’s weapons of mass destruction proliferation network in the process of enriching itself. Firms that deal with blocked persons, even indirectly, will be held accountable for actions which undermine the integrity of the U.S. financial system.”

Separately today, a federal court in the District of Columbia unsealed charges against a North Korean banker, Sim Hyon-Sop, 39, and Chinese facilitators, Qin Guoming, 60, and Han Linlin, 41, both of Liaoning Province, in connection with a multi-year scheme to facilitate the sale of tobacco to North Korea.

“The United States is steadfast in its commitment to enforcing sanctions and withholding revenue for dictator Kim Jong-un,” said U.S. Attorney Matthew M. Graves for the District of Columbia. “The charges unsealed today illustrate that the Department of Justice will hold North Korean facilitators accountable for their illegal efforts to prop up the North Korean regime and assist it in obtaining funds to develop nuclear weapons.”

According to court documents, between 2009 and 2019, the defendants engaged in a scheme to purchase leaf tobacco for North Korean state-owned cigarette manufacturers and used front companies and false documentation to cause U.S. financial institutions to process at least 310 transactions worth approximately $74 million that they otherwise would have frozen, blocked, investigated or declined, had they known the transactions were connected to trade with North Korea. The transactions resulted in an estimated up to nearly $700 million in revenue for the North Korean manufacturers, one of which was owned by the North Korean military.

As alleged in the indictment, cigarette trafficking, including in counterfeit cigarettes, generates significant revenue for advancing North Korea’s Weapons of Mass Destruction (WMD) programs, including its nuclear weapons, which North Korea has been developing since at least 2006. Counterfeit cigarettes are a major source of income to the North Korean regime, as smuggled tobacco products are estimated to garner revenue of up to $20 on every $1 spent in cost.

In conjunction with today’s announcement, the U.S. Department of State is announcing a reward of $5 million for defendant Sim, and a reward of $500,000 for defendants Qin and Han, for information leading to the capture of these three charged defendants. On April 24, the Department of the Treasury designated defendant Sim as a Specially Designated National, preventing him from accessing the U.S. banking system.

“The FBI remains steadfast in its commitment to investigate North Korea’s evasion of sanctions placed on its government,” said Assistant Director Suzanne Turner of the FBI’s Counterintelligence Division. “This illegal conduct and the levied penalties show how serious of an offense it is to assist the North Korean regime to the detriment of the international community. To those contemplating similar actions, be forewarned: the full force of the FBI and its federal law enforcement partners will find you.”

If convicted, the defendants face a maximum statutory penalty of 30 years in prison for bank fraud. A federal district court judge will determine any sentence after considering the U.S. Sentencing Guidelines and other statutory factors.

The FBI Phoenix Field Office handled both investigations, and HSI Colorado partnered in the investigation on the individuals. The Justice Department’s Office of International Affairs provided valuable assistance.

Assistant U.S. Attorney Karen P. Seifert, with assistance from Assistant U.S. Attorney Steven Wasserman, Paralegal Specialists Brian Rickers and Paralegal Specialist Jorge Casillas for the District of Columbia, is prosecuting the cases. Trial Attorneys Beau Barnes and Emma Ellenrieder of the National Security Division’s Counterintelligence and Export Control Section partnered on these matters.

This case is part of a larger Justice Department strategy for countering nation-state threats, including the ongoing efforts of North Korea to evade sanctions and use the U.S. financial system to engage in illicit trafficking. Trial Attorney David Recker, former Assistant U.S. Attorney Michael Grady, and former FBI Special Agent David F. Williams, former FBI Special Agent Joy Gallante and former FBI Intelligence Analyst Nick Carlsen all participated in prior phases of the multi-year investigation.

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

I am Matt Olsen, the Assistant Attorney General for National Security at the Department of Justice. I am joined by my colleagues in the Justice Department: the U.S. Attorney for the District of Columbia, Matthew Graves, and FBI Assistant Director of the Counterintelligence Division, Suzanne Turner. We are also joined by Undersecretary of Treasury for Terrorism and Financial Intelligence, Brian Nelson, and Deputy U.S. Special Representative for North Korea, Jung Pak – who are both here to announce associated actions by their departments.

Today, in the culmination of a long-running investigation, the Justice Department is announcing a deferred prosecution agreement with British American Tobacco (BAT), one of the world’s largest producers of tobacco products, as well as a guilty plea by its subsidiary, BAT Marketing Singapore (BATMS). The agreement and the plea resolve charges for bank fraud and for violations of U.S. sanctions against North Korea.

Under the agreement, British American Tobacco will pay more than $629 million dollars in penalties.

This is the single largest North Korean sanctions penalty in the history of the Justice Department – and the latest warning to companies everywhere about the costs and consequences of violating U.S. sanctions.

Holding corporate wrongdoers who violate U.S. sanctions accountable is a priority for the Justice Department. U.S. sanctions are increasingly at the center of U.S. national security – at the Department of Justice we are responsible for putting teeth behind those sanctions.

The United States faces rising threats from authoritarian regimes, including North Korea, Russia, Iran and China. Sanctions and export controls are among the most powerful weapons in our arsenal – whether we are punishing North Korea for its rogue nuclear program, degrading Iran’s campaign of terrorism, responding to Russia’s illegal invasion of Ukraine, or countering the multi-faceted threats we face from the People’s Republic of China.

American and multi-national companies – especially those that do business in areas of the world on the front lines of our sanctions program – bear responsibility for preventing these hostile nation states from profiting from violations of U.S. law. Today’s announcement should make clear: corporations must invest in corporate compliance and in a leadership culture that takes responsibility for wrongdoing. And those who fail to do so will be held accountable.

The National Security Division is committed to pursuing and punishing companies that evade U.S. sanctions – and to imposing real consequences in cases such as this one. And the egregious conduct at issue here shows why.

British American Tobacco and its subsidiary engaged in an elaborate scheme to circumvent U.S. sanctions and sell tobacco products to North Korea through a corporate cut out in Singapore. This conduct was in clear violation of our bank fraud laws and the International Emergency Economic Powers Act – and this activity ultimately benefits the North Korean regime.

In 2007, British American Tobacco announced that it had ended all tobacco sales in North Korea as required by U.S. sanctions. In fact, the company continued to break the law by doing business in the DPRK using a third-party company under the control of its subsidiary. Between 2007 and 2017, this third-party company sold tobacco products to North Korea and received approximately $428 million dollars. This money was then funneled back to British American Tobacco.

As a result of these actions, the Singaporean subsidiary has pleaded guilty to conspiracy to commit bank fraud and conspiracy to violate U.S. sanctions. Its parent company, British American Tobacco is under a deferred prosecution agreement relating to the same charges.

At the same time, North Korean purchasers unlawfully made payments using front companies to hide the DPRK’s involvement from U.S. banks. Today we unsealed charges against three of them:  North Korean banker, Sim Hyon-Sop and two Chinese nationals, Qin Guoming and Han Linlin.

The cornerstone of U.S. sanctions on North Korea is that the DPRK’s murderous repression at home and relentless pursuit of nuclear capabilities threaten not just to its own people but the entire international community. Allowing funds to illegally flow into the coffers of the DPRK is an unconscionable act.

As today’s announcement shows, the National Security Division is working closely with partner agencies in a whole-of-government approach to sanctions enforcement. We are committed to leveraging the full range of authorities and investigative resources to counter this threat.

I would like to thank U.S. Attorney Graves and the attorneys in his office and in the National Security Division for their work in achieving this historic settlement. Under Matt Graves’ leadership, the DC U.S. Attorney’s Office has been a trailblazer on sanctions enforcement and a stalwart partner for U.S. in this work.

I also want to recognize the strong partnerships with the Departments of Treasury, State, and Homeland Security, which have allowed U.S. to work in unison to uphold our sanctions and export control laws. Finally, I want to acknowledge the dedicated agents of the FBI and HSI who have been at the forefront of investigating this important case.

Source: United States Department of Justice News

Baltimore, Maryland – A federal jury convicted Keith Poynter, Jr., age 29, of Baltimore, Maryland, yesterday on federal charges related to a series of armed commercial robberies, all committed in one day, and for discharging his weapon during one of the robberies.  

The conviction was announced by United States Attorney for the District of Maryland Erek L. Barron; Special Agent in Charge Thomas J. Sobocinski of the Federal Bureau of Investigation, Baltimore Field Office; Commissioner Michael Harrison of the Baltimore Police Department; and Chief Robert McCullough of the Baltimore County Police Department.

According to court documents and evidence presented during his four-day trial, Poynter conspired with others, including Benjamin Bunn, Jr. and Tiffany Gardner, to rob businesses in Baltimore City and Baltimore County.  Specifically, on December 6, 2019, Poynter and another man robbed a jewelry store in the 200 block of N. Howard Street.  The evidence showed that the other robber placed a machete in the door to prevent it from locking.  Poynter brandished a weapon and struck a glass countertop, causing the gun to fire.  Poynter then fired two more shots into another glass case and removed jewelry and other merchandise, all in the presence of store employees.  Poynter and the other man then got into a silver Acura TL, which was occupied and operated by Bunn and Gardner and left the area. 

According to trial testimony, a short time later, Poynter entered a jewelry store in the Security Square Mall in Baltimore County.  Poynter approached a store employee, brandished a handgun and demanded jewelry.  After taking the jewelry, Poynter left the store and got back into the silver Acura TL, where Bunn and Gardner waited.  The group then left the area.  Approximately two hours later, Poynter entered a pawn shop in the 6600 block of Reisterstown Road, brandished a firearm, demanded jewelry and threatened to shoot a customer.  Poynter took jewelry and other merchandise and left the store, again entering the silver Acura TL where Bunn and Gardner waited.

Poynter faces a maximum sentence of 20 years in federal prison for the robbery conspiracy, for each count of three counts of commercial robbery and for conspiracy to use a firearm in furtherance of a crime of violence.  Poynter faces a mandatory minimum of seven years and up to life in prison for each of two counts of using and brandishing a firearm during and in relation to a crime of violence; and a mandatory minimum of 10 years and up to life in federal prison for discharging a firearm during and in relation to a crime of violence.  U.S. District Judge Stephanie A. Gallagher has not yet scheduled sentencing for Poynter.

Benjamin Bunn, Jr., age 37, of Baltimore, pleaded guilty to his role in the robberies a few days before trial began and is scheduled to be sentenced on July 13, 2023.  Tiffany Gardner, age 27, of Baltimore, also pleaded guilty and was sentenced to five years in federal prison.

This case is part of Project Safe Neighborhoods (“PSN”), a program bringing together all levels of law enforcement and the communities they serve to reduce violent crime and gun violence, and to make our neighborhoods safer for everyone.  On May 26, 2021, the Department launched a violent crime reduction strategy strengthening PSN based on these core principles: fostering trust and legitimacy in our communities, supporting community-based organizations that help prevent violence from occurring in the first place, setting focused and strategic enforcement priorities, and measuring the results.

United States Attorney Erek L. Barron commended the FBI, the Baltimore Police Department  and the Baltimore County Police Department for their work in the investigation.  Mr. Barron thanked Assistant U.S. Attorney John W. Sippel, Jr. and Special Assistant U.S. Attorney Mark Meehan, who are prosecuting the case.

For more information on the Maryland U.S. Attorney’s Office, its priorities, and resources available to help the community, please visit https://www.justice.gov/usao-md/project-safe-neighborhoods-psn and https://www.justice.gov/usao-md/community-outreach.

# # #