Category: Security

Source: US FBI

Edward Y. Kim, the Acting United States Attorney for the Southern District of New York, announced today that SUNG KOOK (BILL) HWANG, the founder and head of a private investment firm known as Archegos, was sentenced by U.S. District Judge Alvin K. Hellerstein to 18 years in prison concurrently on each count charged for leading a criminal enterprise that manipulated the prices of multiple stocks and defrauded at least nine investment banks. In July 2024, HWANG was convicted following a nine-week jury trial of racketeering conspiracy, securities fraud, market manipulation, and wire fraud.

Acting U.S. Attorney Edward Y. Kim said: “Bill Hwang weaponized his personal hedge fund, Archegos, to pursue financial fraud on a national scale.  For months on end, Hwang and his coconspirators used an array of lies and manipulative trading strategies to rig the stock market in Hwang’s favor.  Hwang’s crimes brought him to the brink of staggering wealth before his fraud collapsed and left investors, banks, and even Hwang’s own employees with billions of dollars in losses.  Today’s sentence sends a clear message that criminal manipulation schemes will be met with serious prison sentences.”

As reflected in the Indictment, court filings, and the evidence presented at trial:

Beginning in 2020, HWANG—along with his co-conspirators, including codefendant Patrick Halligan (Archegos’s Chief Financial Officer)—used the Archegos enterprise to pursue two interrelated criminal schemes, one involving manipulative trading in the marketplace and the other involving false and misleading statements to Archegos’s trading counterparties.  Although HWANG held himself out as an investor focused on company fundamentals with a three- to five-year investment horizon, which had been Archegos’s investment approach for years, by the fall of 2020, HWANG spent his time—and nearly all Archegos’s capital—on constant trading in the same core stocks.  HWANG began deploying strategies aimed to manipulate, control, and artificially affect the market for securities in Archegos’s portfolio.  Those techniques included purchasing or selling securities at particular times of day including marking the price of securities up at the close of trading to trigger payouts to Archegos and trading at times and in a manner to give the false impression of additional interest in the securities, transacting in certain securities in large amounts or high volume, and timing or coordinating certain transactions to maximize impact on the market.

HWANG’s manipulative trading was sustained and furthered by lies and misrepresentations made to Archegos’s counterparties.  As HWANG’s trading led to large position sizes, Archegos’s counterparties started to impose limits on Archegos’s trading.  To enable HWANG to continue to trade the same names at larger sizes, HWANG, Halligan, and others conspired to make repeated, materially false and misleading statements to Archegos’s counterparties about Archegos’s portfolio of securities.  These false and misleading statements were designed to fraudulently induce the counterparties into trading with and extending credit to Archegos, enabling and facilitating the market manipulation scheme, and to hide the true risk of doing business with Archegos.

By March 2021, HWANG’s manipulative trading scheme—which relied in part on continually increasing the size of Archegos’s positions in a handful of equities—had profoundly reshaped Archegos’s portfolio and risk profile. Now Archegos had concentrated its investments in a number of publicly traded stocks with markets that HWANG found he could distort, including of large companies, such as ViacomCBS and Discovery.  Archegos’s portfolio became highly vulnerable to external events that might deflate the artificial prices HWANG had created.  In late March 2021, the markets exposed HWANG’s price manipulation.  On March 22, 2021, ViacomCBS announced a seasoned equity offering.  Following that announcement, on March 23, 2021, HWANG directed nearly a billion dollars in additional purchases of stock in ViacomCBS and other companies whose stock HWANG had manipulated in a final effort to control the prices of those stocks and prevent them from declining and harming the value of his portfolio. On March 24, 2021, using what cash and trading capacity remained, HWANG made one final attempt to reverse market forces, but he failed.  When the markets closed, Archegos faced substantial margin calls that it could not meet, causing billions of dollars in losses to the counterparties that had financed HWANG’s trading.

Ultimately, the market manipulation and fraud schemes, and the billions of dollars in losses that they caused, victimized a wide swath of market participants, including counterparties that engaged in loans and securities trading with Archegos based on lies and deceit, ordinary investors who purchased and sold the relevant securities at artificial prices, and securities issuers who made business decisions based on the artificial prices of their stocks.  The schemes also caused millions of dollars of losses to innocent Archegos employees who had been required to allocate to Archegos a substantial amount of their pay as deferred compensation.

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In addition to the prison term, HWANG, 60, of Tenafly, New Jersey, was sentenced to three years of supervised release concurrently on each count and ordered to pay more than nine billion dollars in restitution.

Halligan, who was convicted at trial alongside HWANG of racketeering conspiracy, securities fraud, and wire fraud, is scheduled to be sentenced on January 27, 2025.

Mr. Kim praised the outstanding work of the Federal Bureau of Investigation.

This case is being handled by the Office’s Securities and Commodities Fraud Task Force.  Assistant U.S. Attorneys Matthew Podolsky, Alexandra Rothman, Samuel P. Rothschild, and Andrew Thomas are in charge of the prosecution.

Source: US FBI

I became a FBI special agent in 2011, and I have been in the Knoxville Field Office my entire career. I worked complex financial crimes for more than 11 years. I recently decided to try something new and moved to the special agent applicant coordinator position. I am also Knoxville’s crisis negotiation team leader.  

Describe your most memorable case or investigative success.  

My most memorable case was a financial crimes case. Southport Lane Management, LLC, through their principles, entered into a series of fraudulent transactions to acquire insurance companies in multiple states. They ran one of the first known regulated Ponzi schemes. The fraud significantly contributed to the failure of multiple insurance companies. The losses caused by Southport Lane’s actions exceeded $300 million dollars.  

This case was memorable because we had an incredible FBI case team that traveled all over the country to put together a very substantial investigation. The team worked with the Department of Justice, IRS-Criminal Investigation, and the U.S. Securities and Exchange Commission.

We worked hard on this investigation and put in a lot of hours over the four years it took to work the case. Case agents made countless trips from Knoxville to New York City, which was where Southport Lane was headquartered. FBI Knoxville seized more than $70 million. We were able to locate and physically see some of the overvalued assets, including an alleged Caravaggio painting and a vineyard. The investigation taught me a lot, allowed me to build lifelong friendships, and was a really rewarding experience

Source: US FBI

Source: US FBI

I began my FBI career as an honors intern in the International Operations Division and then became a foreign operations specialist for more than three years before transferring to the Cyber Division as a management and program analyst. In 2014, I entered the FBI Academy for new agent training and was assigned to investigate violent gangs and criminal enterprises with the FBI Indianapolis Safe Streets Task Force. 
  
What is the best career or life advice you have to give? 

Pick up the phone. Meet someone in person if you can. This organization is about people. Protecting people. Advocating for people. Connecting with people. Don’t default to sending emails. Learn how to have hard conversations and push against the impulse to take the easiest path. 

What drew you to the FBI? 

I was initially drawn to the FBI because I knew the organization has a positive impact on our communities, and I wanted to pursue a career where I felt like I was making a difference. I also felt the pull of being part of a team with a shared mission. Once I started working for the FBI, I also realized what incredible opportunities exist in this organization due to the scope of our responsibilities and our domestic and international footprint.  All you have to do is reach out and grab them. 

Source: US FBI

What is the best career or life advice you’ve been given?

The best life advice was given to me by my brother, Bill (retired FBI). From a young age, he always reminded me life wasn’t always going to be fair and life wasn’t always going to be easy. Additionally, to succeed in life, he coached me to have a very strong work ethic. He encouraged me to stay humble during my successes and to always remember where I came from. Keeping true to his life advice allowed me to accomplish my lifelong dream of service by becoming a police officer and FBI agent.

What does it mean to make room at the table? Why does it matter?

Having a seat at the table, to me, represents the opportunity someone is given to be heard and effect change within an organization. Thanks to the many female agents who successfully sat at the table to create change within the organization, we are finally seeing more chairs added to the table to represent the diverse workforce of the FBI.

Source: US FBI

BUFFALO, N.Y. — U.S. Attorney Trini E. Ross announced today that Levester Rose, 46, of Niagara Falls, NY, was arrested and charged by criminal complaint with possession with intent to distribute 40 grams or more of fentanyl, which carries a minimum penalty of five years in prison and a maximum of 40 years.

Assistant U.S. Attorney Timothy C. Lynch, who is handling the case, stated that according to the complaint, during an ongoing narcotics trafficking investigation in Niagara Falls, Rose was identified as an individual engaged in narcotics trafficking. Rose has a history of narcotics trafficking, with drug convictions in 1995, 2014, and 2020. On July 31, 2024, investigators executed a search warrant at a 26th Street residence in Niagara Falls, a premises known to be utilized by Rose. During the search, law enforcement recovered packages of suspected fentanyl.

The complaint is the result of an investigation by the Federal Bureau of Investigation, under the direction of Special Agent-in-Charge Matthew Miraglia, the North Tonawanda Police Department, under the direction of Chief Keith Glass, the  Niagara Falls Police Department, under the direction of Superintendent Nick Ligammari, and the Niagara County Sheriff’s Office, under the direction of Sheriff Michal Filicetti.  

The fact that a defendant has been charged with a crime is merely an accusation and the defendant is presumed innocent until and unless proven guilty.  

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Source: US FBI

BUFFALO, N.Y. – U.S. Attorney Trini E. Ross announced today that Steven Gonzalez a/k/a Steven Hernandez, a/k/a Steve, a/k/a Stevie, a/k/a Unc, 48, of Buffalo, NY, pleaded guilty before U.S. District Judge John L. Sinatra, Jr. to sex trafficking by coercion, which carries a mandatory minimum penalty of 15 years in prison, a maximum of life, and a $250,000 fine.

Assistant U.S. Attorneys Joel L. Violanti and Caitlin M. Higgins, who are handling the case, stated that between 2012 and March 2015, Gonzalez coerced a minor, identified as A.N., to engage in commercial sex acts. Gonzalez provided A.N. with cocaine in exchange for sex knowing that A.N. was physically addicted to cocaine. Gonzalez used A.N.’s addiction to cocaine and other drugs to keep A.N. dependent on himself and to coerce A.N. to engage in commercial sex acts with him directly.

In addition, between 2012 and 2013, Gonzalez coerced another minor identified as  B.E. to engage in commercial sex acts. Gonzalez provided B.E. with heroin in exchange for sex, knowing that B.E. was physically addicted to heroin. Gonzalez used B.E.’s addiction to keep B.E. dependent on himself and to coerce B.E. to engage in commercial sex acts with him directly.

The plea is the result of an investigation by the Federal Bureau of Investigation, under the direction of Special Agent-in-Charge Matthew Miraglia.

Sentencing is scheduled for November 26, 2024, before Judge Sinatra.  

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Source: US FBI

ROCHESTER, N.Y.-U.S. Attorney Trini E. Ross announced today that Deadrick D. Fulwiley a/k/a Deucy, 31, of Rochester, NY, who was convicted of conspiracy to possess with intent to distribute, and to distribute, 100 kilograms or more of marijuana, and possession of a machine gun, was sentenced to serve 20 years in prison by U.S. District Judge Frank P. Geraci, Jr. The sentence will be served concurrent to a 30-year sentence Fulwiley received in New York State Court for committing two homicides in July 2022 with Kelvin Vickers and Raheem Robinson. Vickers was also convicted of murdering Rochester Police Officer Anthony Mazurkiewicz and wounding Officer Sino Seng.

Assistant U.S. Attorney Douglas E. Gregory, who is handling the case, stated that between April and July 21, 2022, Fulwiley conspired with others to sell marijuana, utilizing drug houses on Sixth and St. Paul Streets in Rochester. In addition, marijuana was stored at Fulwiley’s Laser Street residence. On July 16 and July 21, 2022, search warrants were executed at the Sixth Street residence, during which more than 24 pounds of marijuana, drug ledgers, approximately $13,390 in cash, and several firearms and ammunition were seized, including a machine gun.

The sentencing is the result of an investigation by the Rochester Police Department, under the direction of Chief David Smith, the Bureau of Alcohol, Tobacco, Firearms, and Explosives, under the direction of Special Agent-in-Charge Bryan Miller, New York Field Division, the Federal Bureau of Investigation, under the direction of Special Agent-in-Charge Matthew Miraglia, and the Drug Enforcement Administration, under the direction of Special Agent-in-Charge Frank Tarentino, New York Field Division. 

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Source: US FBI

Director Christopher Wray has named Robert W. “Wes” Wheeler Jr. as the assistant director of the Critical Incident Response Group at FBI Headquarters in Washington, D.C. CIRG integrates the FBI’s tactical, negotiations, behavioral analysis, and crisis management resources into one cohesive structure. Mr. Wheeler most recently served as the special agent in charge of the Chicago Field Office.

Mr. Wheeler joined the FBI as a special agent in 1999. He was first assigned to the Sherman Resident Agency in Texas, a satellite of the Dallas Field Office, and worked a wide variety of criminal matters. In 2002, he was assigned counterterrorism duties in the Plano RA of the Dallas Field Office and also served with the North Texas Joint Terrorism Task Force.

In 2006, Mr. Wheeler joined the protection detail for the U.S. attorney general in Washington, D.C. In 2007, he began teaching new agents as an instructor at the FBI Academy in Quantico, Virginia. He also deployed to Kabul, Afghanistan, for several months in late 2009, working kidnapping matters as a member of the Major Crimes Task Force.

Mr. Wheeler joined CIRG’s Counter-Improvised Explosive Devices Section at Headquarters as a team leader in 2012. He was promoted to chief of the Counter-IED Readiness Unit in CIRG in 2015, and also served as the chief of the National Explosives Task Force.

In 2017, Mr. Wheeler was promoted to supervisory special agent over the National Capital Response Squad in the Washington Field Office. In 2018, he led a WFO international terrorism squad focused on the continental United States and Middle East-based threats. He was promoted in 2020 to assistant special agent in charge of WFO’s Mission Services Division, covering workforce development, applicants, security, and special inquiry background investigations.

In 2021, Mr. Wheeler returned to Headquarters as a section chief in the International Operations Division, focusing on global readiness and legal attaché operations in Europe, Eastern Europe, and Eurasia. He became chief of staff in the Cyber, Criminal, Response, and Service Branch in 2022. Mr. Wheeler was named special agent in charge of the Chicago Field Office in 2023.

Prior to joining the FBI, Mr. Wheeler was a special agent of the Georgia Bureau of Investigation.

Source: US FBI

Director Christopher Wray has named Robert R. Wells as the executive assistant director of the National Security Branch at FBI Headquarters in Washington. Mr. Wells will oversee all national security investigative and intelligence operations, including counterintelligence, counterterrorism, and weapons of mass destruction cases, as well as the Terrorist Screening Center. He most recently served as the assistant director of the Counterterrorism Division.

Mr. Wells began his career as an FBI special agent in 2003 and was first assigned to the Washington Field Office. Mr. Wells worked counterterrorism and counterintelligence matters and served as a crisis negotiator. He was promoted to supervisory special agent and was assigned to the Counterterrorism Division at Headquarters in 2010.

In 2011, Mr. Wells transferred to the Louisville Field Office in Kentucky and served as supervisory special agent of the Joint Terrorism Task Force. He was responsible for all international and domestic terrorism investigations handled by the field office, as well as the Weapons of Mass Destruction Program and special events.

Mr. Wells was promoted in 2015 to assistant section chief of the International Terrorism Operations Section of the Counterterrorism Division. In 2017, he was named assistant special agent in charge in the Washington Field Office, where he was responsible for all international terrorism investigations in Washington and Northern Virginia.

In 2018, Mr. Wells was promoted to chief of staff for the FBI deputy director. He led the deputy’s staff and helped with oversight of the criminal, national security, and intelligence programs in the FBI. In 2019, Mr. Wells was promoted to deputy assistant director over the China Branch of the Counterintelligence Division at Headquarters.

Director Wray appointed Mr. Wells as the special agent in charge of the Charlotte Field Office in North Carolina in 2020. Wray named him the assistant director of the Counterterrorism Division in 2022.

Prior to joining the FBI, Mr. Wells served as a U.S. probation officer in the Western District of Kentucky. He earned a bachelor’s degree in psychology from Western Kentucky University.