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May 23, 2025

Married Couple Sentenced for Laundering $1.4 Million in Proceeds From Jewelry Thefts and Unemployment Fraud During Pandemic

Source: US FBI

NEWS RELEASE SUMMARY – November 20, 2023

SAN DIEGO – Eduard Ghiocel and his wife, Floarea Ghiocel, were sentenced in federal court today to 36 months and 30 months, respectively, for laundering $1.4 million in proceeds from dozens of grand thefts, robberies and swindles targeting mostly elderly victims in San Diego County.

According to their plea agreements, the Ghiocels, along with co-conspirators Gabriel Ghiocel, Marius Ghiocel, Larisa Ghiocel, and Argentina Alexandru, conducted a series of 17 grand thefts and robberies of jewelry in elderly communities in San Diego. They then pawned the stolen jewelry and watches for cash in jewelry stores in Los Angeles.

In addition, Eduard and Floarea Ghiocel admitted submitting fraudulent unemployment claims to the California Employment Development Department (EDD) to obtain approximately $32,250 in California unemployment insurance benefits intended to help workers affected by the COVID-19 pandemic.

Eduard and Floarea Ghiocel admitted wiring proceeds from the jewelry thefts and the unemployment insurance fraud to Romania, as well as using the proceeds to purchase gold bars, gold coins, and high-end luxury vehicles from locations in Southern California and shipping these items to Romania. In total the Ghiocels sent almost $1.4 million to Romania, knowing the money was proceeds of theft, robbery, and fraud, the plea agreement said.

Eduard and Floarea Ghiocel agreed to forfeit proceeds of the crime including two Lamborghini Urus, a 2020 Ferrari Portofino, and a BMW X4 all seized by authorities in Romania. The forfeitures will be used pay restitution to victims of the crimes.

The co-conspirators remain at large.

This case is being prosecuted by Assistant U.S. Attorney Jessica Adeline Schulberg with assistance from the Department of Justice’s Office of International Affairs, FBI’s Legal Attaché in Bucharest, and Romanian authorities including the Directorate for Combating Organized Crime (DCCO) Service for Countering of Organized Criminal Groups, Brigade for Combating Organized Crime (BCCO) – Pitești, County Service for Countering Organized Crime – Teleorman, Romanian Gendarmerie Battalion, Romanian Ministry of Justice, and Romanian Criminal Investigative Directorate – Fugitive Unit.

DEFENDANT Case Number 23CR0386-LAB

Eduard Ghiocel (1) Age: 48 Romania

aka Eduard Alexandru, aka “Filica”

Floarea Ghiocel (2) Age: 49 Romania

aka Floarea Alexandru

SUMMARY OF CHARGES

Title 18 U.S.C. § 1956(h) and Title 18 U.S.C. § 1956(a)(2)(A) — Conspiracy to Transport Funds to Promote Unlawful Activity

Maximum penalty: Twenty years in prison and $500,000 fine or twice the value of the monetary instrument or funds involved in the transportation, transmission, or transfer, whichever is greater

AGENCY

Federal Bureau of Investigation

San Diego Police Department Economic Crimes Unit

IRS Criminal Investigation

California Employment Development Department Investigative Division

Department of Labor Office of Inspector General

U.S. Department of Homeland Security

May 23, 2025

U.S. Attorney’s Office to Co-Host “United Against Hate” Event Featuring Film Screening and Panel Discussion

Source: US FBI

CHARLOTTE, N.C. –The U.S. Attorney’s Office for the Western District of North Carolina will present a film screening and panel discussion on Thursday, September 26, 2024, from 6:30 p.m. to 8:00 p.m., at First Presbyterian Church of Charlotte. The U.S. Attorney’s Office is co-hosting the event as part of the Justice Department’s “United Against Hate” Week, taking place September 23 to 27, 2024.

The event will feature the documentary Repairing the World: Stories from the Tree of Life, which documents the Pittsburgh community’s response to the 2018 Tree of Life synagogue shooting. The documentary depicts the resilience, unity, and healing efforts of the community following the deadliest anti-Semitic attack in U.S. history. Through powerful storytelling and recollections shared by survivors, family members, and the community, the film explores the impact of hate crimes and the power of diverse people coming together after a devastating tragedy.

Following the film screening, representatives from the U.S. Attorney’s Office, the FBI in Charlotte, the Charlotte Mecklenburg Police Department, the Mecklenburg County District Attorney’s Office, and the Mecklenburg Metropolitan Interfaith Network will lead a panel discussion on hate crimes and the importance of reporting hate incidents to law enforcement. The panel will also share information on what individuals and communities can do to prevent and respond to acts of hate.

“Events like this help raise awareness about the impact of hate crimes,” said Dena J. King, U.S. Attorney for the Western District of North Carolina. “By sharing stories of loss, strength, and unity, we want to educate the public but also to facilitate a meaningful dialogue about hate crimes and taking a stand against hatred in all its forms. The United Against Hate initiative is part of my Office’s core mission to protect civil rights and increase the safety and security of individuals and communities across Western North Carolina.”

The Department of Justice launched the United Against Hate initiative in 2022, in response to the rising number of hate crimes across the country. The initiative brings together law enforcement, community organizations, and the public to address hate crimes through outreach and education and build trust with those most vulnerable to acts of hate.

In the Western District of North Carolina, the U.S. Attorney’s Office continues to actively engage with local communities since the initiative’s launch. Previous efforts have included a youth summit with Charlotte-Mecklenburg Schools, meetings with faith-based communities, and discussions focused on protecting houses of worship.

“While not all hate incidents rise to the level of a hate crime, the impact and trauma they can inflict is very real. Reporting these incidents allows law enforcement and prosecutors to investigate and take appropriate action when warranted,” said U.S. Attorney King. “My Office is committed to partnering with all communities to address their concerns. I also invite members of the community to join us in our efforts to make Western North Carolina a safer and more inclusive place for all.”

Event Details:

Date: Thursday, September 26, 2024

Time: 6:30 PM to 8:00 PM

Location: First Presbyterian Church of Charlotte

Fellowship Hall

200 West Trade Street

Charlotte, North Carolina

The event is free and open to the public. Register at https://fpc.tiny.us/repairingtheworld.

For more information about the U.S. Attorney’s Office United Against Hate initiative please visit our website.

For immediate assistance or to report a hate crime please call 9-1-1. To file a report with the FBI please call 1-800-CALL-FBI or submit a tip at tips.FBI.gov. Also report suspected civil rights violations and hate crimes to the Civil Rights Division through the Justice Department’s toll-free line at 800-253-3931 or online at www.civilrights.justice.gov.

May 23, 2025

Foreign National Sentenced to 40 Months Custody for $5 Million Unemployment Fraud Scheme

Source: US FBI

NEWS RELEASE SUMMARY – November 20, 2023

SAN DIEGO – Constantin Bobi Sandu, who admitted that he masterminded a scheme to steal more than $5 million in California unemployment benefits intended to help workers affected by the pandemic, was sentenced in federal court today to 40 months in prison.

According to his plea agreement, Sandu conspired with over 200 other individuals across California and in Romania to fraudulently obtain millions of dollars by fabricating documents, creating fictitious accounts and businesses, and filing bogus claims with California’s Economic Development Department, which administers the state’s unemployment benefits. Among other things, Sandu wired $16,000 in fraud proceeds to Romania to renovate his house.

Sandu also was ordered to forfeit $214,950 that he personally received from the offenses.

“This devious scheme diverted millions of dollars from those who truly needed it during the pandemic,” said U.S. Attorney Tara McGrath. “The public health emergency may be over, but we are still tracking, charging, and convicting the people who exploited it.”

“The FBI remains fully committed to ensuring people who intentionally stole government funds during the COVID-19 pandemic are brought to justice,” said FBI San Diego Special Agent in Charge Stacey Moy. “We continually collaborate with our law enforcement partners to thoroughly investigate all those responsible for stealing from the United States Government and its people during such a critical time in our lives, taking away valuable resources and services from those truly in need.”

“Mr. Sandu and his criminal organization committed financial crimes that hurt people here in California and stole funds intended for those in need,” said Special Agent in Charge Tyler Hatcher, IRS Criminal Investigation, Los Angeles Field Office. “IRS:CI is committed to partnerships with law enforcement organizations around the world, and we will follow the money to find the guilty and bring them to justice.”

This case was prosecuted by Assistant U.S. Attorney Jessica Adeline Schulberg.

DEFENDANT Case Number 23CR0386-LAB

Constantin Bobi Sandu, Age: 34 Romanian national

aka Constantin Sandu,

aka Bobi Sandu,

aka Ionut Mihai

SUMMARY OF CHARGES

Title 18, U.S.C. § 1349 and 1343 – Conspiracy to Commit Wire Fraud

Maximum penalty: Thirty years in prison, a fine of $1 million or both;

Title 18 U.S.C. § 1956(a)(2)(A) — Laundering Monetary Instruments

Maximum penalty: Twenty years in prison and $500,000 fine or twice the value of the monetary instrument or funds involved in the transportation, transmission, or transfer, whichever is greater;

Title 18 U.S.C. §§ 981(a)(1)(C) and 982(a)(1), and Title 28, U.S.C. § 2461(c) – Criminal Forfeitures

AGENCY

Federal Bureau of Investigation

San Diego Police Department Economic Crimes Unit

IRS Criminal Investigation

California Employment Development Department Investigative Division

Department of Labor Office of Investigator General

U.S. Department of Homeland Security

May 23, 2025

Hot Springs Man Sentenced to Over Eight Years in Federal Prison for Child Pornography Offense

Source: US FBI

Hot Springs, Arkansas – David Clay Fowlkes, First Assistant United States Attorney for the Western District of Arkansas, announced today that Alejandro Aurioles, age 32, of Hot Springs, Arkansas, was sentenced today to 97 months in federal prison without the possibility of parole followed by 10 years of supervised release on one count of accessing the Internet with the intent to view child pornography. The Honorable Chief Judge Susan O. Hickey presided over the sentencing hearing in the United States District Court in Hot Springs.

According to court records, on October 26, 2018, detectives with the Hot Springs Police Department received a Cybertip report of child pornographic images being downloaded to a Hot Springs telephone number. Detectives traced the phone number back to a cell phone associated with Aurioles. On or about December 21, 2018, Aurioles was arrested on a state charge and admitted to Hot Springs detectives that he had downloaded images of child pornography using his cell phone and sold those images to others on two occasions. During a search of his two cellular phones, thousands of child pornography images and videos of child sexual abuse were forensically recovered.

Aurioles was indicted in March of 2019 and entered a guilty plea to a related case in September of 2019.

This case was investigated by the Hot Springs Police Department and the FBI. Assistant United States Attorneys Kim Harris and Ben Wulff prosecuted the case for the United States.

This case was prosecuted as part of Project Safe Childhood, a nationwide initiative to combat the growing epidemic of child sexual exploitation and abuse launched in May 2006 by the Department of Justice. Led by U.S. Attorneys’ Offices and CEOS, Project Safe Childhood marshals federal, state and local resources to better locate, apprehend and prosecute individuals who exploit children via the Internet, as well as to identify and rescue victims. For more information about Project Safe Childhood, please visit www.justice.gov/psc.

May 23, 2025

Justice Department’s Tenth Distribution Provides Over $4 Billion in Nearly Full Recovery to More Than 40,000 Victims in Madoff Ponzi Scheme

Source: US FBI

Distribution of Over $131 Million Brings Madoff Victim Recovery to Nearly 94% of Fraud Losses

Edward Y. Kim, the Acting United States Attorney for the Southern District of New York; Brent S. Wible, the Principal Deputy Assistant Attorney General of the United States and head of the U.S. Department of Justice’s Criminal Division; and James E. Dennehy, the Assistant Director in Charge of the New York Field Office of the Federal Bureau of Investigation (“FBI”), announced today that the Madoff Victim Fund (“MVF”) began its tenth and final distribution to victims of the Bernard L. Madoff fraud scheme of over $131.4 million. These funds were forfeited by the U.S. government in connection with the Bernard L. Madoff Investment Securities LLC (“BLMIS”) fraud scheme.

In this distribution, payments will be sent to more than 23,000 victims across the globe, bringing their total recoveries to 93.71% of their fraud losses. Most of these victims were small investors who lost less than $500,000 in the fraud. Through its ten distributions, MVF has paid over $4.3 billion to 40,930 victims in 127 countries as compensation for losses they suffered from the collapse of BLMIS.

This distribution represents the culmination of a decade of work identifying thousands of victims around the world and unwinding layers of complex financial transactions to provide compensation to eligible victims.

Acting U.S. Attorney Edward Y. Kim said: “This Office has never stopped pursuing justice for victims of history’s largest Ponzi scheme. With this tenth and final distribution, we have succeeded in compensating 40,930 victims with close to 94% of their losses. As this extraordinary effort demonstrates, this Office and the U.S. Department of Justice Criminal Division’s Money Laundering and Asset Recovery Section are committed to protecting and assisting victims of crime, no matter how long it takes and no matter how complicated the endeavor.”

Principal Deputy Assistant Attorney General Brent S. Wible said: “The Criminal Division, through its Money Laundering and Asset Recovery Section (“MLARS”), is proud to administer the department’s remission program to compensate victims using forfeited assets. The unprecedented scope and complexity of the Madoff remission process shows the power of forfeiture to recover assets and to compensate victims — a primary goal of the department’s Asset Forfeiture Program. This tenth and final distribution, led by MLARS’s dedicated victim compensation team, achieves the department’s goal of compensating victims by returning over $4 billion in forfeited assets to more than 40,000 victims of Madoff’s crimes and achieving nearly full recovery for these victims.”

FBI Assistant Director in Charge James E. Dennehy said: “Today’s distribution represents an unprecedented conclusion of victim compensation from civil forfeiture actions related to the Madoff scheme with more than $4 billion repaid to over 40,000 victims. These victims implicitly trusted Madoff with their investments only to ultimately lose significant monies to his selfish plan. With the steadfast support from the Justice Department, the FBI will continue its tireless seizure of assets from criminals who steal from others and seek to recover those assets for victim losses.”

According to court documents and information presented in related proceedings, for decades, Bernard L. Madoff used his position as chairman of BLMIS, the investment advisory business he founded in 1960, to steal billions from his clients. On March 12, 2009, Madoff pleaded guilty to 11 federal felonies, admitting that he had turned his wealth management business into the world’s largest Ponzi scheme, benefitting himself, his family and select members of his inner circle.

On June 29, 2009, then-U.S. District Judge (now senior U.S. Circuit Judge), Denny Chin sentenced Madoff to serve 150 years in prison for running the largest fraudulent scheme in history. Of the over $4 billion that has been made available to victims, approximately $2.2 billion was collected as part of the historic civil forfeiture recovery from the estate of deceased Madoff investor Jeffry Picower. An additional $1.7 billion was collected as part of a deferred prosecution agreement with JPMorgan Chase Bank N.A. and civilly forfeited in a parallel action. The remaining funds were collected through a civil forfeiture action against investor Carl Shapiro and his family and from civil and criminal forfeiture actions against Bernard L. Madoff, Peter B. Madoff and their co-conspirators.

The MVF’s payouts would not have been possible without the extraordinary efforts of the U.S. Attorney’s Office for the Southern District of New York, the Criminal Division’s Money Laundering and Asset Recovery Section, and the FBI in the prosecution of Madoff’s crimes and the recovery of assets supporting the forfeiture in this case.

The MVF is overseen by Richard Breeden, former Chairman of the U.S. Securities and Exchange Commission, who serves as Special Master appointed by the Department of Justice to assist in connection with the victim remission proceedings. Mr. Breeden and his team at MVF have been essential in working with the Department to evaluate over 66,000 remission petitions involving billions in cash flows, and to compute each victim’s fraud losses to enable payments to be made.

This case is being handled by the Office’s Illicit Finance and Money Laundering Unit. Assistant U.S. Attorney Tara M. La Morte is in charge of the prosecution. The remission of these forfeited funds is being handled by the Office and the U.S. Department of Justice Criminal Division’s Money Laundering and Asset Recovery Section.

More information about MVF and its compensation to victims of BLMIS is available on the MVF website at www.madoffvictimfund.com, such as eligibility criteria, process updates, and frequently asked questions. Further questions may be directed to the MVF at 866-624-3670 or info@madoffvictimfund.com.

May 23, 2025

Former Sutter County Church Administrator Sentenced to Five Years in Prison for Fraud and Identity Theft

Source: US FBI

SACRAMENTO, Calif. — Chanell Easton, 38, of Oklahoma City, Oklahoma, was sentenced today by U.S. District Judge John A. Mendez to five years and one month in prison for a multi‑year embezzlement scheme, U.S. Attorney Phillip A. Talbert announced.

In October 2023, Easton pleaded guilty to 22 counts of wire fraud, and on March 5, 2024, and following a bench trial, she was found guilty of on two counts of aggravated identity theft.

According to court documents and evidence presented at trial, from 2013 to 2018, Easton worked as the church administrator at a church in Yuba City. During her employment, Easton stole over $360,000 from the church, including from its food pantry and youth ministry, during a years-long embezzlement scheme. Easton used credit cards associated with the church to make personal purchases — at a hair salon, retail stores, online retailers, a vacation rental service, and to buy VIP concert tickets — and then paid off the resulting balance with the church’s money. One of the credit cards Easton used during her scheme belonged to the church’s youth minister, and Easton used his identity to make thousands of dollars in unauthorized personal purchases on Zappos.com. Easton’s use of the youth minister’s identity allowed her to obscure her embezzlement and to shift suspicion away from herself, thereby allowing her fraudulent scheme to continue.

Easton also transferred money directly from the church’s bank accounts to her own personal account, paid down the balance of her own personal credit card, and paid her cellphone provider for her personal bills and for new phones. Easton also stole money from the church by writing checks to others for personal expenses and by writing checks to herself, on which she forged the signatures of the church’s treasurer or the head volunteer of the church’s food pantry.

A hearing to determine restitution was set for Nov. 19, 2024.

This case was the product of an investigation by the Federal Bureau of Investigation. Assistant U.S. Attorney Elliot Wong prosecuted the case.

May 23, 2025

Do Kwon Extradited to the United States From Montenegro to Face Charges Relating to Fraud Resulting in $40 Billion in Losses

Source: US FBI

Kwon Engaged in Extensive Fraud, Laundered Crime Proceeds, and Sought to Cover Up His Crimes After Terraform’s Cryptocurrencies Crashed

Daniel M. Gitner, Attorney for the United States, Acting under Authority Conferred by 28 U.S.C. § 515; Merrick B. Garland, the Attorney General of the United States; and James E. Dennehy, Assistant Director in Charge of the New York Field Office of the Federal Bureau of Investigation (“FBI”), announced today that DO HYEONG KWON was extradited from Montenegro and appeared in a federal courtroom in Manhattan earlier today to face federal fraud charges. Mr. Gitner also announced the unsealing of a Superseding Indictment against KWON. As alleged, KWON, the co-founder and former chief executive officer of Terraform Labs PTE, Ltd. (“Terraform”), engaged in multiple schemes to deceive investors in order to fraudulently inflate the value of Terraform’s cryptocurrencies. KWON arrived in the United States on December 31, 2024, and made his initial appearance in the Southern District of New York before U.S. Magistrate Judge Robert W. Lehrburger. KWON’s case is assigned to U.S. District Court Judge John P. Cronan, and will appear before Judge Cronan for an initial conference on January 8, 2025, at 10:30 a.m.

Attorney for the United States Daniel M. Gitner said: “A federal grand jury has indicted Do Kwon for misleading his investors in order to fraudulently inflate the value of Terraform’s cryptocurrencies, and laundering the proceeds of his crimes. As we allege, this fraud and the crash of Terraform’s cryptocurrencies in May 2022 erased over $40 billion in investor assets, causing devastating losses to countless investors in the United States and around the world. Kwon will now face justice in a federal courtroom in Manhattan.”

Attorney General Merrick B. Garland said: “Do Hyeong Kwon will now be held accountable in an American courtroom for, as alleged in court documents, his elaborate schemes involving Terraform’s cryptocurrencies, which resulted in over $40 billion in investor losses. We secured this extradition despite Kwon’s alleged attempt to cover his tracks by laundering proceeds of his schemes and trying to use a fraudulent passport to travel to a country that did not have an extradition treaty with the U.S. This extradition from Montenegro is an example of the Justice Department’s international partnerships, which enable the pursuit of criminals wherever they attempt to hide.”

FBI Assistant Director in Charge James E. Dennehy said: “Do Kwon, co-founder and former CEO of Terraform, allegedly defrauded investors by falsely advertising the company’s blockchain products as decentralized, reliable, and effective, and by engaging in market manipulation, ultimately resulting in more than $40 billion in investor losses. For at least four years, Kwon allegedly played puppet master to maintain this crafted illusion and ensnare investors. The FBI will tirelessly work to apprehend any individual who engages in fraudulent financial practices, even those who flee internationally to escape prosecution.”

As alleged in the Superseding Indictment unsealed today in Manhattan federal court:[1]

From at least in or about 2018, up to and including in or about 2022, KWON orchestrated schemes to defraud purchasers of Terraform cryptocurrencies. Among other things, KWON made false and misleading claims regarding the stability and efficacy of Terraform’s cryptocurrency stablecoin protocol, its use of blockchain technology, and its development of functioning and reliable financial technologies.

As KWON knew, however, core Terraform products did not work as KWON had claimed. Rather, KWON manipulated Terraform products to create the illusion of a functioning, stable, and decentralized financial system. KWON’s conduct inflated the value of Terraform’s cryptocurrencies, which KWON and entities he controlled possessed in large amounts and sold to investors in exchange for billions of dollars’ worth of other assets.

KWON’s misrepresentations included the following:

The Stablecoin Misrepresentations: KWON made misrepresentations about the effectiveness of the system that lay at the heart of Terraform’s cryptocurrency empire, the “Terra Protocol,” which purportedly used a computer algorithm to maintain the value of Terraform’s so-called “stablecoin” pegged to the U.S. dollar, TerraUSD (“UST”), at a value of $1 for one UST. But as KWON knew, after the Terra Protocol failed to cause the restoration of UST’s $1 peg in May 2021, KWON reached an agreement with executives at a high-frequency trading firm (the “Trading Firm”) so that the Trading Firm would purchase large amounts of UST in order to artificially support UST’s $1 peg.
The LFG Misrepresentations: KWON made misrepresentations about the governance of the Luna Foundation Guard Ltd. (the “LFG”), which KWON claimed was managed by an independent governing body and was tasked with deploying billions of dollars’ worth of financial reserves to defend UST’s peg. But as KWON knew, he controlled both the LFG and Terraform. In addition, KWON misappropriated hundreds of millions of dollars in assets from the LFG. KWON and others acting at his direction sought to launder those misappropriated funds through transactions designed to conceal and disguise the nature, location, source, ownership, and control of the funds.
The Mirror Misrepresentations: KWON made misrepresentations about the success and operation of an investing platform on Terraform’s blockchain (the “Terra blockchain”) called Mirror Protocol (“Mirror”), that purportedly allowed users to create, buy, and sell synthetic versions of stocks listed on U.S. securities exchanges. KWON claimed that Mirror operated in a decentralized manner and that he and Terraform played no role in Mirror’s governance. But as KNOW knew, he and Terraform secretly maintained control over Mirror, and used automated trading bots to manipulate the prices of synthetic assets that Mirror issued. KWON also caused Terraform to inflate key user metrics to deceive investors.
The Chai Misrepresentations: KWON falsely claimed that the Terra blockchain was being used to process billions of dollars in financial transactions for the Korean payment-processing application Chai. In doing so, KWON claimed that the Terra blockchain had “real world” applications or uses, as distinct from competing cryptocurrency platforms. But as KWON knew, Chai processed transactions through traditional financial processing networks, not the Terra blockchain.
The Genesis Coin Misrepresentations: KWON made misrepresentations about the use of a supply of one billion stablecoins programmed into the Terra blockchain at its creation (the “Genesis Stablecoins”), which were purportedly held in reserve for Terraform for certain specified uses. But KWON used at least $145 million worth of Genesis Stablecoins, among other things, to fund fake Chai blockchain transactions and trading bots to manipulate the prices of synthetic assets that Mirror issued.

At its peak in the spring of 2022, the total apparent market value of all UST and another Terraform cryptocurrency, LUNA, exceeded $50 billion. Much of this growth followed KWON’s misrepresentations about Terraform and its technology, including efforts in May 2021 by KWON and his associates to secretly manipulate the market for UST. By May 2022, the UST market was approximately nine times larger in terms of market capitalization and more than eight times larger in terms of daily trading volume relative to May 2021. In May 2022, UST’s peg began to break down as it had a year prior. While KWON was able to cover up the weaknesses of the Terra Protocol in May 2021, he was not able to do so in May 2022. As a result, the value of UST and LUNA crashed and investors suffered over $40 billion in losses. After the crash of UST and LUNA in May 2022, KWON caused the distribution of a misleading “third party audit” report to cover up his crimes, and sought to launder the proceeds of his fraud through different blockchains, cryptocurrency exchanges, and a Swiss bank account.

On or about March 23, 2023, KWON was arrested in Europe for trying to use a fraudulent passport to travel to a country that did not have an extradition treaty with the U.S.

KWON was previously charged in this District in an initial Indictment on March 23, 2023.

* * *

KWON, 33, a citizen of the Republic of Korea, is charged with two counts of commodities fraud, each of which carries a maximum sentence of 10 years in prison; two counts of securities fraud, each of which carries a maximum sentence of 20 years in prison; two counts of wire fraud, each of which carries a maximum sentence of 20 years in prison; two counts of conspiracy to commit commodities fraud, securities fraud, and wire fraud, each of which carries a maximum sentence of five years in prison; and one count of money laundering conspiracy, which carries a maximum sentence of 20 years in prison. In aggregate, KWON faces a maximum sentence of 130 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. Gitner praised the investigative and operational work of the FBI. He also thanked Jason Cunningham and Goran Krnaich of the Department of Justice’s Office of International Affairs, Interpol, and the Ministry of Justice, Supreme State Prosecutor’s Office, Special State Prosecutor’s Office, and Police Directorate of Montenegro for their assistance in the extradition of the defendant. Mr. Gitner further thanked the U.S. Securities and Exchange Commission, which previously filed a separate civil action against KWON, and the Commodity Futures Trading Commission.

This case is being handled by the Office’s Securities and Commodities Fraud Task Force. Assistant U.S. Attorneys Jared Lenow, Kimberly Ravener, and Andrew Thomas are in charge of the prosecution.

[1] As the introductory phrase signifies, the entirety of the text of the Superseding Indictment, and the description of the Superseding Indictment set forth herein, constitute only allegations, and every fact described should be treated as an allegation.

May 23, 2025

Three Charged with Conspiracy to Distribute Narcotics in Prison Following the Death of USP Atwater Staff

Source: US FBI

FRESNO, Calif. — An investigation into the death of a correctional officer led to the arrests of three defendants today who are charged by criminal complaint with conspiring to distribute controlled substances and introducing narcotic drugs to an inmate at the U.S. Penitentiary in Atwater, California, U.S. Attorney Phillip A. Talbert announced.

According to court documents, between July 15, 2024, and Aug. 9, 2024, Jamar Jones, 35, an inmate at USP Atwater; Stephanie Ferreira, 35, of Evansville, Indiana; and Jermen Rudd III, 37, of Wentzville, Missouri, conspired to introduce narcotics into USP Atwater for Jones to sell. As part of that scheme, Jones and Ferreira had Rudd mail a letter laced with narcotics to Jones that was fraudulently labeled as legal mail.

On Aug. 9, 2024, a correctional officer at USP Atwater opened that letter and minutes later began to feel ill. After evaluation by medical staff, he was subsequently taken to the hospital where he passed away. Another correctional officer also felt ill after coming into contact with the narcotics-laced letter but recovered.

This case is the product of an investigation by the Federal Bureau of Investigation, the U.S. Postal Inspection Service, and the Federal Bureau of Prisons, with assistance from the Drug Enforcement Administration. The U.S. Attorney’s Office for the Eastern District of California also received assistance from the U.S. Attorney’s Offices in the Eastern District of Missouri and the Southern District of Indiana. Assistant U.S. Attorney Robert Veneman-Hughes is prosecuting the case.

Following the arrests this morning, Ferreira is set to be arraigned on the complaint in the Southern District of Indiana, while Rudd will be arraigned on the complaint in the Eastern District of Missouri. Jones will appear next week in court in Fresno for his initial appearance.

If convicted of conspiracy to distribute and distribution of a controlled substance, Jones and Rudd face a maximum of 30 years in prison and a fine up to $250,000. If Jones is convicted of being an inmate obtaining or attempting to obtain narcotic drug, he faces a maximum of 20 years in prison and a fine up to $250,000. Ferreira, if convicted of conspiracy to distribute and distribution of a controlled substance, faces a maximum penalty of 20 years in prison and a fine up to $250,000. If convicted of providing or attempting to provide an inmate with a narcotic drug, Ferreira and Rudd face a maximum sentence of 20 years in prison and a fine up to $250,000. Any sentence, however, would be determined at the discretion of the court after consideration of any applicable statutory factors and the Federal Sentencing Guidelines, which take into account a number of variables. The charges are only allegations; the defendants are presumed innocent until and unless proven guilty beyond a reasonable doubt.

May 23, 2025

Genovese Crime Family Member Sentenced to 30 Months in Prison for Racketeering

Source: US FBI

Today, at the federal courthouse in Brooklyn, Carmelo Polito, also known as “Carmine Polito,” a former acting captain and soldier in the Genovese organized crime family, was sentenced to 30 months in prison by United States District Judge Eric N. Vitaliano for racketeering in connection with operating an illegal gambling business at the Gran Caffé in Lynbrook, Long Island, and attempting to extort an individual who owed him money stemming from a separate online sports betting business.

Breon Peace, United States Attorney for the Eastern District of New York, James E. Dennehy, Assistant Director in Charge, Federal Bureau of Investigation, New York Field Office (FBI) and Anne T. Donnelly, Nassau County District Attorney, announced the sentence.

“Today’s sentence makes clear to the defendant that the outcome for participating in illegal gambling and making extortionate threats is the loss of something very valuable — your freedom,” stated United States Attorney Peace. “Thanks to the outstanding work of prosecutors in my Office and law enforcement, the alliance of the Genovese and Bonanno organized crime families’ rackets was a bust.”

Mr. Peace expressed his appreciation to the New York City Police Department and the Nassau County Police Department for their invaluable assistance in the investigation.

“The cards did not favor Carmelo Polito’s illicit gambling parlor or his extortionate methods,” stated FBI Assistant Director in Charge Dennehy. “His illegitimate business and death threats financed the operations of two crime families. May today’s sentencing reaffirm the FBI’s commitment to doubling down on all organized crime activity plaguing our communities.

“This defendant, along with other associates of the Genovese family, operated illegal gambling businesses in Nassau County that funneled money straight into organized crime,” stated District Attorney Donnelly. “Extortion, threats, and violence have no place in Nassau County. I thank our partners at the U.S. Attorney’s Office and the FBI for their collaboration in dismantling this illicit operation and working to rid organized crime from our communities.”

Polito is a longtime, inducted member of the Genovese organized crime family. As detailed in earlier court filings, for years, numerous members and associates of the Genovese and Bonanno organized crime families operated several illegal gambling operations in the Eastern District of New York. Beginning in at least May 2012, the Genovese and Bonanno families jointly operated a lucrative illegal gambling parlor concealed inside a coffee shop called the Gran Caffé in Lynbrook. Polito and co-defendant Joseph Macario, also known as “Joe Fish,” on behalf of the Genovese crime family, and Anthony Pipitone, also known as “Little Anthony,” on behalf of Bonanno crime family, successfully negotiated a profit split for the gambling location, which ensured that each crime family benefited from the illegal gambling operation. In addition to the Gran Caffé, the Genovese crime family—through Polito, Macario, Joseph Rutigliano, also known as “Joe Box,” Salvatore Rubino, also known as “Sal the Shoemaker,” and others—operated illegal gambling parlors at establishments called Sal’s Shoe Repair and the Centro Calcio Italiano Club. Rutigliano and Rubino collected the proceeds for the Genovese crime family and distributed them up to higher ranking members, including Polito and Macario. Polito was surveilled distributing proceeds to higher ranking members on numerous occasions.

Polito and co-defendant Mark Feuer also operated an illegal online gambling scheme in which bets were placed on sporting events through a website called “PGWLines.” In connection with his operation of PGWLines, Polito attempted to extort an individual who lost several thousand dollars in bets using death threats and other threats of violence. For example, during a September 2019 call concerning the debtor, Polito instructed another individual to tell the debtor that Polito would “break” the debtor’s “face.” When the debtor still did not pay Polito, Polito instructed the same individual to relay a new message to the debtor: “Tell him I’m going to put him under the f——g bridge.”

Polito is the first defendant sentenced in this case and a related case against four members and associates of the Bonanno organized crime family of La Cosa Nostra. Macario, Rutigliano, Rubino and Feuer are awaiting sentencing.

The government’s case is being handled by the Office’s Organized Crime and Gangs Section. Assistant United States Attorneys Tanya Hajjar, Drew Rolle, Anna Karamigios and Sean M. Sherman are in charge of the prosecution, with the assistance of Paralegal Specialist Eleanor Jaffe-Pachuilo.

The Defendants:

CARMELO POLITO (also known as “Carmine Polito”)
Age: 64
Whitestone, Queens

Defendants Awaiting Sentencing:

JOSEPH MACARIO (also known as “Joe Fish”)
Age: 69
West Islip, Long Island

SALVATORE RUBINO (“Sal the Shoemaker”)
Age: 60
Bethpage, Long Island

JOSEPH RUTIGLIANO (also known as “Joe Box”)
Age: 65
Commack, Long Island

MARK FEUER
Age: 61
Oceanside, Long Island

E.D.N.Y. Docket No. 22-CR-356 (ENV)

May 23, 2025

Sacramento Man Pleads Guilty to Sexual Exploitation of a Child

Source: US FBI

SACRAMENTO, Calif. — Dakota Jeremiah Pevino, aka Dakota Jeremiah Viggiano, 36, of Sacramento, pleaded guilty today to sexual exploitation of a child, U.S. Attorney Phillip A. Talbert announced.

According to court documents, in July 2022, Pevino took a color photograph of a prepubescent minor victim posed in a sexually suggestive manner without any pants or underwear, with Pevino’s private parts visible in the in the foreground of the photograph. Pevino later knowingly sent this photograph to another person using the internet and an encrypted messaging application. In November of 2022, Pevino took another color photograph of the prepubescent minor victim posed in a sexually suggestive manner with the minor victim’s pants and underwear pulled down.

Additionally, Pevino sent video recordings of adult males sexually abusing prepubescent minors to another user on the Telegram application. Those video recordings accompanied chats of a sexual nature regarding minors.

This case is the product of an investigation by the Federal Bureau of Investigation, the Sacramento Valley Hi-Tech Crimes Task Force/Internet Crimes Against Children Task Force, and the Sacramento Sheriff’s Office. Assistant U.S. Attorney Christina McCall is prosecuting the case.

Pevino is scheduled to be sentenced by U.S. District Judge John A. Mendez on Jan. 7, 2025. Pevino faces a mandatory minimum sentence of 15 years in prison up to a maximum of 30 years in prison, a lifetime of supervised release, restitution, and a $250,000 fine. The actual sentence, however, will be determined at the discretion of the court after consideration of any applicable statutory factors and the Federal Sentencing Guidelines, which take into account a number of variables.

The FBI is seeking to identify potential victims of Pevino. If you believe that you and/or your minor dependent(s) were victimized by Pevino at any time or have information relevant to this investigation, please send an email with your name, contact information, and best time to reach you to Pevinovictims@fbi.gov.

This case was brought as part of Project Safe Childhood, a nationwide initiative launched in May 2006 by the Department of Justice to combat the growing epidemic of child sexual exploitation and abuse. Led by the United States Attorneys’ Offices and the Criminal Division’s Child Exploitation and Obscenity Section, Project Safe Childhood marshals federal, state, and local resources to locate, apprehend, and prosecute those who sexually exploit children, and to identify and rescue victims. For more information about Project Safe Childhood, please visit www.usdoj.gov/psc. Click on the “resources” tab for information about internet-safety education.