MIL Security Engine-1

Source: US FBI

FRESNO, Calif. — Andrew Adler, 31, of Greenwich, Connecticut, pleaded guilty today to conspiracy to commit wire fraud when he defrauded investors out of $20 million in loans made to the failed Fresno-based, start-up company Bitwise Industries, Acting U.S. Attorney Michele Beckwith announced.

According to court records, between December 2022 and May 2023, Adler and his business partner, David Hardcastle, 61, of Fresno, gave Bitwise approximately $20 million in hard money loans through their special purpose entity Startop Investments LLC. Adler and Hardcastle used a syndicate of investors to fund the loans. In order to mislead the investors, Adler and Hardcastle altered the original loan documents to make it appear as though Bitwise was obligated to pay significantly less interest on the loans than was true. They also forged the signature of Bitwise’s Co-CEO, Jake Soberal, on the altered documents. This made the loans appear less risky and, therefore, more appealing to the investors.

Adler and Hardcastle received tens of thousands of dollars in origination fees for the loans and stood to make millions more in secret profits from the higher, undisclosed interest rates had the loans been fully repaid. Bitwise, however, did not repay the loans before collapsing, and the investors in the loans lost nearly all of their money. On Feb. 3, 2025, Hardcastle was arrested and arraigned on an indictment charging him with conspiracy to commit wire fraud and wire fraud.

This case is the product of an investigation by the FBI. Assistant U.S. Attorneys Joseph D. Barton and Cody S. Chapple are prosecuting the case.

Adler is scheduled to be sentenced by U.S. District Judge Jennifer L. Thurston on June 2, 2025. Adler faces maximum statutory penalties of 20 years in prison and a $250,000 fine for the conspiracy to commit wire fraud charge. If convicted, Hardcastle faces a maximum of 20 years in prison and a $250,000 fine for conspiracy to commit wire fraud and for each of the substantive wire fraud charges. Sentences are 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.

Hardcastle is charged in a separate indictment and those charges remain pending. Those charges are only allegations, and he is presumed innocent until and unless proven guilty beyond a reasonable doubt.

Source: US FBI

LOS ANGELES – A Southern California man has been sentenced to 51 months in federal prison for punching an Asian American woman in the head while shouting racial slurs and then leaving her bloodied in a Culver City street in 2021, the Justice Department announced today.

Jesse Allen Lindsey, 38, who was transient at the time of the attack, was sentenced on Monday by United States District Judge Michael W. Fitzgerald.

Lindsey pleaded guilty in December 2024 to one count of a hate crime. He has been in federal custody since July 2024.

On June 14, 2021, at approximately 1 a.m., Lindsey began following the victim on her walk to work. According to the government’s sentencing position, Lindsey shouted racial slurs, cursed at the victim, and told her, “You don’t belong here.” He then violently punched her in the head. While the victim lay face down in the street, defendant shouted, “You hear what I said, [N-word]? I said good morning, bitch!”

Emergency personnel later transported the victim to a hospital to treat injuries to her head and ear. She was unable to work for a month and suffered years of psychological trauma, prosecutors said.

At sentencing, Judge Fitzgerald called the attack a “shocking and horrible crime” and noted Lindsey’s “serious criminal record.” Lindsey has 13 criminal convictions for firearms and narcotics offenses, domestic battery, grand theft, and attempted extortion. He also has at least 14 violations of probation or pretrial release and 19 additional arrests or contacts with law enforcement, the government said at Monday’s sentencing hearing.

Lindsey fled California after seeing news reports about the attack. Law enforcement officers eventually located Lindsey in a California state prison serving time for an unrelated conviction. 

During an interview with law enforcement about the assault, Lindsey eventually admitted to punching the victim, but falsely claimed self-defense, the government’s sentencing position stated. Lindsey said the “little Asian person” was “mouthy” and looked like a “gangbanger.” Referencing the Asian actor known for his martial arts ability, Lindsey claimed the victim might pull “some Jet Li [expletive].” The victim was a middle-aged Asian woman who stood five feet tall and weighed approximately 120 pounds. Lindsey was over six feet tall and weighed approximately 250 pounds.

The FBI investigated this matter and received substantial assistance from the Culver City Police Department.

Assistant United States Attorney Lindsey Greer Dotson prosecuted this case.

Source: US FBI

LOS ANGELES – A San Bernardino County man pleaded guilty today to illegally possessing sensitive technologies that he downloaded from his Southern California-based employers and used them to market his own competing company to a China-based company.   

Liming Li, 66, of Rancho Cucamonga, pleaded guilty to one count of possession of trade secrets.

“Protecting U.S. companies’ sensitive intellectual property is critical to our country’s success in a global economy,” said Acting United States Attorney Joseph T. McNally. “The defendant here stole intellectual property in order to benefit companies in China. Stealing proprietary information undermines our economic security and the U.S. Attorney’s Office will aggressively prosecute individuals that engage in this conduct.” 

“Mr. Li’s greed allowed him to be used by a Chinese company without regard for the negative implications to the economy or national security of the United States,” said Akil Davis, the Assistant Director in Charge of the FBI’s Los Angeles Field Office. “The FBI is well-aware that China is actively seeking and stealing American intellectual property at a rapid pace and those who willingly hand it over, as Mr. Li has done and now acknowledged, will face serious consequences.”

According to his plea agreement, from 1996 to 2013, Li worked for a Southern California-based business identified in court documents as “U.S. Company #1,” which specialized in precision measuring instruments and metrological technology and equipment. The company designed and sold a range of products such as micrometers, calipers, coordinate measuring machines (CMMs), and optical measurement systems.

Li worked at U.S. Company #1 as a senior software engineer, then as a program manager. From 2013 to 2018, Li worked as chief technologist at a wholly-owned subsidiary of U.S. Company #1. During his employment at U.S. Company #1 and its subsidiary, Li worked on the development of the source code for one of the company’s software programs, which was considered its proprietary information.

In July 2013, Li signed an employee handbook and confidentiality agreement with U.S. Company #1 that required him to turn over all writings, records, files, technology, trade secrets or data containing any proprietary information belonging to the company. The agreement also prohibited Li from copying the company’s proprietary information without written permission.

Li admitted in his plea agreement that he occasionally downloaded the company’s proprietary information onto his personal devices without permission. Li failed to return all the proprietary information belonging to U.S. Company #1 after its subsidiary terminated him in January 2018. 

In February 2018, Li operated a consulting company named JSL Innovations Inc. and in March 2020, he signed an employment agreement with Suzhou Universal Group Technology Co. Ltd., a China-based chain-and-bearing manufacturer. Li continued to work for Suzhou Universal until his arrest in May 2023. During this period, Li continued to knowingly possess U.S. Company #1’s proprietary information and – more than once – accessed this information without that company’s authorization. 

Li admitted that he used the proprietary information for his own economic benefit and that it would injure U.S. Company #1’s interests.

United States District Judge John A. Kronstadt scheduled a May 8 sentencing hearing, at which time Li will face a statutory maximum sentence of 10 years in federal prison. 

The FBI investigated this matter with substantial assistance from the Department of Commerce, Office of Export Enforcement, Bureau of Industry and Security.

The case against Li was brought under the auspices of the Disruptive Technology Strike Force, which is co-led by the Departments of Justice and Commerce. The Strike Force seeks to counter efforts by hostile nation-states to illicitly acquire sensitive U.S. technology to advance their authoritarian regimes and facilitate human rights abuses. 

Assistant United States Attorney Aaron B. Frumkin of the Cyber and Intellectual Property Crimes Section, Solomon D. Kim of the Major Frauds Section, and David T. Ryan of the National Security Division are prosecuting this case.

Source: US FBI

LOS ANGELES – An alleged leader of a transnational drug trafficking enterprise co-helmed by former Canadian Olympic snowboarder Ryan Wedding has been sent to the United States from Mexico to face federal charges alleging that he ran a continuing criminal enterprise, committed murder and attempted murder, and conspired to possess, distribute, and export cocaine, the Justice Department announced today. 

Andrew Clark, 34, a Canadian citizen who was residing in Mexico, was arrested by Mexican authorities in October 2024 and is scheduled to be arraigned on Monday in United States District Court in Phoenix on charges contained in a 16-count superseding indictment out of the Central District of California. Alongside Wedding, Clark allegedly controlled a billion-dollar drug enterprise with supply routes that transported ton-quantities of cocaine from Colombia to Canada by way of Mexico and Southern California.

From March to August 2024, Wedding and Clark allegedly conspired with others to export, possess, and distribute more than 1,800 kilograms of cocaine. In addition, using a network of virtual currency wallets, Wedding, Clark, and their co-conspirators transferred approximately a quarter of a billion dollars from April to September 2024. In one day, investigators seized more than $3 million dollars from one cryptocurrency wallet. 

“The defendant, as described in the superseding indictment, played a key role in running a violent, international drug trafficking organization that was responsible for multiple murders,” said Acting United States Attorney Joseph T. McNally. “We are grateful to have him in the United States where he will face justice. When law enforcement officials around the globe work together, there is nowhere criminals can hide.”

The superseding indictment alleges that Wedding and Clark, whose aliases include “The Dictator,” directed the November 20, 2023, murders of two individuals and the attempted murder of a third victim in Ontario, Canada. Wedding and Clark also allegedly ordered the murder of a fourth individual on May 18, 2024. Clark and another co-defendant are also charged with the April 1, 2024, murder of a fifth individual in Ontario, Canada.

Clark is the second-named defendant in the superseding indictment that charges a total of 16 defendants. With Clark’s expected court appearance, a total of eight defendants will have been arraigned in this case. Clark’s co-conspirators are scheduled to begin trial on May 6.

An indictment contains allegations that a defendant has committed a crime. Every defendant is presumed to be innocent until and unless proven guilty beyond a reasonable doubt in court.

If convicted, Clark would face a mandatory minimum penalty of life in federal prison on the continuing criminal enterprise charge. The murder and attempted murder charges carry a mandatory minimum penalty of 20 years in federal prison. The drug trafficking charges carry mandatory minimum penalties of 10 years in prison.

The FBI investigated this matter with the Los Angeles Police Department, the Drug Enforcement Administration’s Los Angeles Field Division, and the Royal Canadian Mounted Police – Federal Policing. In addition, significant assistance was provided by U.S. law enforcement partners, including Homeland Security Investigations – Detroit and United States Customs and Border Protection – Buffalo; Canadian law enforcement partners, including Niagara Regional Police Service, Ontario Provincial Police, Toronto Police Service, and Peel Regional Police; Mexican law enforcement partners, including the Attorney General’s Office (Fiscalía General de la República) and the Criminal Investigation Agency (Agencia de Investigación Criminal); and Colombian law enforcement partners, including Colombian National Police – Directorate of Criminal Investigation and Interpol, Special Interagency Investigation Group (Policía Nacional de Colombia – Dirección de Investigación Criminal e Interpol, Grupo Especial de Investigación Interagenciales). This investigation was conducted with the support of the Organized Crime Drug Enforcement Task Force (OCDETF).

Assistant United States Attorneys Lyndsi Allsop and Maria Jhai of the Violent and Organized Crime Section and Ryan Waters of the Asset Forfeiture and Recovery Section are prosecuting this case. The Justice Department’s Office of International Affairs provided substantial assistance.

This case is part of an Organized Crime Drug Enforcement Task Forces (OCDETF) operation. OCDETF identifies, disrupts, and dismantles the highest-level criminal organizations that threaten the United States using a prosecutor-led, intelligence-driven, multi-agency approach. Additional information about the OCDETF Program can be found at https://www.justice.gov/OCDETF. 

Source: US FBI

LOS ANGELES – Working with U.S. Immigration and Customs Enforcement and other federal law enforcement partners, federal prosecutors in recent weeks filed charges against 126 defendants who allegedly illegally re-entered the United States after being removed, the Justice Department announced today.

Many of the defendants charged in this operation were previously convicted of felony offenses before they were removed from the U.S., offenses that include manslaughter and crimes against children.

Filed as part of immigration enforcement activities  across the region over the past week, the criminal cases charge each defendant with being an illegal alien found in the United States following a previous removal from the United States. The criminal complaints and indictments were filed in federal court in Los Angeles, Santa Ana, and Riverside. The recently filed illegal re-entry cases resulted in nearly three dozen arrests over the past week.

The crime of being found in the United States following removal carries a base sentence of up to two years in federal prison, defendants who were removed after being convicted of a felony face a maximum 10-year sentence, and defendants removed after being convicted of an aggravated felony face a maximum of 20 years in federal prison.

“The U.S. Attorney’s Office is enforcing long-standing immigration laws, and Illegal aliens who defy lawful removal orders by returning to this nation will be prosecuted,” said Acting United States Attorney Joseph T. McNally. “These charges promote respect for the immigration laws. The individuals charged over the past week include sex offenders, narcotics dealers, violent criminals, and others who pose a danger to the public.”

“This result represents a brand new, whole-of-government approach to immigration enforcement,” said Homeland Security Investigations (HSI) Los Angeles Acting Special Agent in Charge John Pasciucco. “Our primary goal, along with our federal law enforcement partners, is to ensure those who commit transnational crimes such as drug trafficking, financial fraud and child exploitation can no longer commit it in the U.S.”

Some of the recently filed cases are summarized below with information contained in court documents. Most of these defendants were arrested February 23. Each of these defendants are Mexican nationals.

• Ricardo Reynoso-Garcia, 59, of Arleta, was convicted in federal court of illegal reentry into the United States in September 2013 and sentenced to 46 months in prison. He was separately removed four other times between 1984 and 2018. Reynoso-Garcia was convicted in Los Angeles Superior Court of voluntary manslaughter in January 1995 and sentenced to 24 years in prison. He also was convicted in U.S. District Court of fraud and misuse of visas in April 2017 and sentenced to 18 months in prison.
• Oscar Parra-Reyes, 50, of El Monte, was removed four previous times between 1995 and 2006. He was convicted in Los Angeles Superior Court in February 1993 for sale/transportation of marijuana and sentenced to two years in prison. He subsequently was convicted in Los Angeles Superior Court of unlawful sexual intercourse with a minor, corporal injury to a child’s parent and being a felon in possession of a firearm.
• Luis Roberto Calderon Collantes, 52, of Rialto, was removed from the United States in August 2021 following his February 2017 conviction in San Bernardino County Superior Court for transporting methamphetamine, a felony offense for which he was sentenced to five years in California state prison. In March 2024, Collantes was found in the United States when FBI agents identified his fingerprints on a package of fentanyl they obtained through an undercover purchase on the dark web, a package investigators believe originated from his Rialto home.
• Valentin Vidal-Lopez, 35, of Granada Hills, was removed from the United States in April 2018. He was convicted of attempted murder in January 2011 in Los Angeles County Superior Court and was sentenced to 10 years in California state prison. According to court documents, immigration authorities were notified on January 26 that Vidal-Lopez was in the custody of the Ventura County Sheriff’s Office after his arrested on the charges of resisting, delaying or obstructing a peace officer, DUI alcohol, and possessing a forged driver’s license. At the time of his arrest, Vidal-Lopez allegedly ignored officer commands to step out of his vehicle and then began to drive away. Vidal-Lopez allegedly continued to ignore officer commands and verbally threatened to fight the officers. When taken into custody, Vidal-Lopez allegedly possessed a driver’s license and a Social Security card in other people’s names, along with a bogus lawful permanent resident card, commonly known as a “green card.”
• Erasmo Hermosillo-Martin, 69, of Inglewood, was removed from the United States to Mexico in March 1994. He was convicted of kidnapping and terrorist threats in May 1991 in Los Angeles County Superior Court and was sentenced to five years and eight months in California state prison. On January 14, law enforcement was notified via the HSI Tipline that Hermosillo-Martin had returned to the United States.
• Angel Navarro-Camarillo, 42, was removed from the United States four times between 2007 and 2021. He was convicted in Orange County Superior Court in August 2004 for lewd and lascivious acts upon a child under 14 and sentenced to five years’ probation and 202 days in jail. In October 2005, but his probation was revoked, and he was sentenced to three years in prison. Navarro-Camarillo was convicted in U.S. District Court in February 2019 for being an illegal alien found in the United States following removal and was sentenced to 46 months in prison.
• Isidro Jimenez-Ibanez, 51, of Coachella, was arrested February 24. Jimenez-Ibanez was removed in 1995 following a conviction for possession for sale of methamphetamine in Riverside County Superior Court. According to the criminal complaint, Jimenez-Ibanez returned to the United States and was convicted in 2023 of assault with a deadly weapon in Riverside County.

Criminal complaints and indictments contain allegations. All defendants are presumed innocent until proven guilty beyond a reasonable doubt in a court of law.

The illegal re-entry cases filed as part of the past week’s immigration enforcement activities are being investigated by U.S. Immigration and Customs Enforcement and Homeland Security Investigations.

The FBI; the Drug Enforcement Administration; the United States Marshals Service; U.S. Customs and Border Protection; the Bureau of Alcohol, Tobacco, Firearms and Explosives; and the State Department’s Diplomatic Security Service provided substantial support during the enforcement activities this week.

The criminal cases are being prosecuted by Assistant United States Attorneys in the Domestic Security and Immigration Crimes Section and the General Crimes Section.

Source: US FBI

SANTA ANA, California – Joseph Neal Sanberg, 45, of Orange, the co-founder and largest shareholder of the financial and sustainability services company Aspiration Partners, Inc., was arrested today on a federal criminal complaint alleging that he conspired to defraud two investor funds of at least $145 million.

Sanberg’s coconspirator, Ibrahim Ameen AlHusseini, 51, of Venice, pleaded guilty today to an information charging him with wire fraud for falsifying documents and information to assist Sanberg. According to his plea agreement, signed on February 7, 2025, and unsealed today, AlHusseini personally received approximately $12.3 million in payments from the scheme. AlHusseini is scheduled for sentencing on September 29, 2025. 

Sanberg is scheduled to make his initial appearance this afternoon in United States District Court in Santa Ana. AlHusseini was arrested on a criminal complaint on October 7, 2024, and has been released on bond since November 13, 2024. That criminal complaint was previously dismissed against AlHusseini to facilitate his cooperation in the prosecution of others, including Sanberg.

“Our prosecutors and law enforcement partners have worked methodically to secure a guilty plea from one of the main offenders in this case and have now charged another member of the conspiracy,” said Acting United States Attorney Joseph McNally. “We will continue to ensure that markets and businesses receive an honest and level playing field in which to operate.”

According to the complaint against Sanberg and AlHusseini’s plea agreement, Sanberg obtained $145 million in loans secured by AlHusseini, who Sanberg knew did not have sufficient financial assets to cover those loans if Sanberg defaulted.  Sanberg hid this fact from investors, then defaulted on the loans, which resulted in at least a $145 million in losses.

In January 2020, Sanberg began negotiating a $55 million loan from Investor Fund A to Sanberg, in which Sanberg pledged 10.3 million shares of Aspiration Partners stock as collateral. Because Aspiration Partners was a non-public company without a liquid market to sell its stock, Investor Fund A required Sanberg to find a buyer for the 10.3 million shares of Aspiration Partners stock as a hedge against the risk that the shares could not be sold on the open market.

To secure the $55 million loan, Sanberg recruited AlHusseini, who served on Aspiration Partners’ board of directors, to enter into a put option agreement with Investor Fund A that obligated AlHusseini to buy the 10.3 million shares of Aspiration Partners stock in the event of Sanberg’s default. A put option is an investment contract in which the option buyer has the right to require the option seller to buy an asset from the option buyer at a pre-determined price. Under the option, AlHusseini was obligated to purchase the 10.3 million shares in Aspiration Partners for $55 million from Investor Fund A.

Aware that AlHusseini lacked sufficient assets to cover the put option obligation, as required by the deal, Sanberg and AlHusseini hid that fact and lied to Investor Fund A, court documents state. Among other things, Sanberg and AlHusseini enlisted a graphic designer in Lebanon to create fake brokerage account and bank account statements that falsely inflated AlHusseini’s financial assets by between approximately $80 million and $200 million.

Unaware of the fraud, Investor Fund A extended the $55 million loan to Sanberg and purchased the put option from AlHusseini. AlHusseini received approximately $6 million of the $55 million loan at the time of the loan’s execution as consideration (also known as a “premium payment”) for guaranteeing Sanberg’s repayment of the loan.

Unsealed court documents also state that, in November 2021, Sanberg refinanced the $55 million loan against his 10.3 million shares of Aspiration Partners stock with Investor Fund B. Investor Fund B loaned $145 million to Sanberg against the same 10.3 million shares of stock as collateral. Investor Fund B and AlHusseini agreed to a new put option agreement in which AlHusseini was obligated to pay $65 million to Investor Fund B if Sanberg defaulted on the $145 million loan. The terms of the agreement required AlHusseini to have sufficient assets to pay $65 million in the event of Sanberg’s default.

Because AlHusseini lacked sufficient assets to cover his obligation, Sanberg and AlHusseini again submitted falsified brokerage account and bank account statements to Investor Fund B to secure the $145 million loan. AlHusseini received a premium payment of approximately $6.3 million as consideration for guaranteeing Sanberg’s repayment of the refinanced loan.

Sanberg thereafter defaulted on the $145 million loan in November 2022 and again in the spring of 2023. Investor Fund B exercised its put option requiring AlHusseini to buy the pledged shares of Aspiration Partners stock, which he has not done. As a result of Sanberg and AlHusseini’s fraud, Investor Fund B has suffered at least $145 million in losses.

Investor Fund A and Investor Fund B are investment funds that loaned investors’ capital to high-net-worth borrowers. 

A criminal complaint contains allegations. A defendant is presumed innocent until proven guilty beyond a reasonable doubt in a court of law.

If convicted of the charge in the complaint, Sanberg would face a maximum penalty of 20 years in prison. AlHusseini faces a maximum penalty of 20 years in prison.

The FBI and the United States Postal Inspection Service are investigating the case. 

Assistant United States Attorneys Brett A. Sagel, Nisha Chandran, and Jenna Williams of the Corporate and Securities Fraud Strike Force, along with Theodore M. Kneller and Adam L.D. Stempel for the Fraud Section of the Justice Department’s Criminal Division, are prosecuting this case.

Source: US FBI

      LITTLE ROCK—Zachary Bradley will spend 35 years in federal prison for production of child pornography, transfer of obscene materials to a minor, and attempted sex trafficking of a minor. Jonathan D. Ross, United States Attorney for the Eastern District of Arkansas, announced the sentence, which was handed down on Thursday, June 20, 2024, by Chief United States District Judge Kristine G. Baker.

      On approximately October 6, 2021, the minor victim’s stepfather made a report to the Beebe Police Department that the minor victim was raped by Bradley. An investigation revealed that Bradley provided the minor victim with marijuana and alcohol and that he passed out. Once the minor victim woke up, Bradley was performing sexual acts on him. Bradley told the minor victim that if he would continue to engage in sex acts with him, he would give him an allowance.

      The investigation further revealed that Bradley had multiple videos on his phone that contained child pornography of another minor, believed to be approximately 13 years old. Another video located on Bradley’s phone was a FaceTime conversation between Bradley and the minor. The video depicted a display of the minor’s genitals to Bradley during the conversation. An additional video from a FaceTime conversation depicted Bradley with his shorts pulled down to reveal his genitals to the minor.

      On December 8, 2021, Bradley, 33, of Beebe, was indicted by a federal grand jury on seven counts: Counts One, Two, Four, Five, and Six: production of child pornography, Count Three: transfer of obscene material to a minor, and Count Seven: attempted sex trafficking of a minor. On July 27, 2023, Bradley, pleaded guilty to all seven counts in the Indictment.

      The maximum penalty Bradley faced on Counts One, Two, Four, Five, and Six was not less than 15 years and not more than 30 years in prison. The maximum penalty Bradley faced on Count Three was not more than 10 years in prison. For Count Seven, Bradley faced a maximum penalty of not less than 10 years to life in prison.

      Chief Judge Baker also sentenced Bradley to a lifetime of supervised release. Bradley faced a maximum of supervised release of five years to life and a fine of $250,000.  There is no parole in the federal system.

      The investigation was conducted by the Federal Bureau of Investigation, with assistance from the Beebe Police Department and Arkansas State Police Crimes Against Children Division. The case was prosecuted by Assistant United States Attorney Kristin Bryant.

# # #

Additional information about the office of the

United States Attorney for the Eastern District of Arkansas, is available online at

https://www.justice.gov/edar

X (formerly known as Twitter):

@USAO_EDAR 

Source: US FBI

NEWARK, N.J. – An indictment was unsealed today charging four Vietnamese nationals for their involvement in a series of computer intrusions that caused victim companies to collectively suffer more than $71 million in losses, U.S. Attorney Philip R. Sellinger announced.

According to the indictment, Ta Van Tai, aka “Quynh Hoa,” aka “Bich Thuy;” Nguyen Viet Quoc, aka “Tien Nguyen;” Nguyen Trang Xuyen; and Nguyen Van Truong, aka “Chung Nguyen,” were members of a sophisticated international cybercrime group known as “FIN9.”  From at least May 2018 through October 2021, the defendants hacked the computer networks of victim companies throughout the United States and used their access to steal or attempt to steal non-public information, employee benefits, and funds. The defendants caused their victims to suffer more than $71 million in losses.

“The FIN9 defendants were prolific international hackers who, for years, allegedly used phishing campaigns, supply chain attacks and other hacking methods to steal millions from their victims. They did all of this while hiding behind keyboards, VPNs, and fake identities, and even then, the Department of Justice found them. My office remains committed to its pursuit of justice for victims, and cybercriminals everywhere should take notice.”

U.S. Attorney Philip R. Sellinger

“Cyber actors cloak themselves in the virtual world, hiding in a space most people can’t see and don’t understand,” FBI – Newark Special Agent in Charge James E. Dennehy said. “However smart these hackers believe they are at disguising themselves, these members of the FIN9 group couldn’t conceal their exfiltration of data from their victims’ companies. FBI Newark’s Cyber Task Force and our law enforcement partners use precision and innovative techniques to expose these people for what they are –  simple thieves. We ask any business or company facing a similar attack to reach out to us immediately to protect your systems and to stop these criminals from moving on to the next victim.”

According to documents filed in this case and statements made in court:

Members of FIN9, including the defendants, obtained unauthorized access to the computer networks of victim companies through phishing campaigns or other methods, such as supply chain attacks – a type of cyberattack that seeks to damage an organization by targeting the computer networks of trusted third-party vendors who offer services or software vital to the supply chain. After gaining access to their victims’ networks, FIN9 members, including the defendants, used that access to exfiltrate or attempt to exfiltrate non-public information, employee benefits, and/or funds. For example, the defendants accessed employee benefit rewards programs maintained by their victims and re-directed digital employee benefits, such as gift cards, to accounts controlled by defendants. The defendants also stole gift card information stored on the computer networks of certain victims.

The defendants additionally stole personally identifiable information and credit card information associated with employees and customers of their victim companies. In an effort to hide their own identities, the defendants would, at times, use that information in furtherance of the conspiracy by, for example, registering online accounts at cryptocurrency exchanges or server hosting companies in the names of individuals whose identities were stolen. Tai, Xuyen, and Truong sold stolen gift cards to third parties, including through an account registered with a fake name on a peer-to-peer cryptocurrency marketplace, in order to conceal and disguise the source of the stolen money. 

Tai, Quoc, Xuyen, and Truong are charged with one count of conspiracy to commit fraud, extortion, and related activity in connection with computers; one count of conspiracy to commit wire fraud; and two counts of intentional damage to a protected computer. If convicted, they face up to five years in prison for the conspiracy to commit fraud, extortion, and related activity in connection with computers; up to 20 years in prison for the conspiracy to commit wire fraud; and up to 10 years in prison on each count of intentional damage to a protected computer. Tai, Xuyen, and Truong were charged with one count of conspiracy to commit money laundering, which carries a mandatory maximum penalty of 20 years in prison. Tai and Quoc were also charged with one count of aggravated identity theft, which carries a mandatory consecutive term of two years in prison, and one count of conspiracy to commit identity fraud, which carries a maximum penalty of 15 years in prison. 

U.S. Attorney Sellinger credited the FBI Newark’s Cyber squad, under the direction of Special Agent in Charge James E. Dennehy in Newark. He also thanked the FBI Little Rock Cyber squad, under the direction of Special Agent in Charge Alicia D. Corder.

The government is represented by Assistant U.S. Attorneys Anthony P. Torntore and Vinay S. Limbachia of the U.S. Attorney’s Cybercrime Unit in Newark.  

The charges and allegations contained in the indictment are merely accusations, and the defendants are presumed innocent unless and until proven guilty.

Source: US FBI

FORT SMITH – A Fort Smith man, Neil Ravi Mehta, age 32, was sentenced today to 57 months in federal prison followed by three years of supervised release and ordered to pay $659,825.52 in restitution, on one count of Possession of an Unregistered Firearm that was a Destructive Device, one count of Fraud and False Statements related to Tax Returns, and one count of False Declaration Before a Court.

In a separate case, Federal Armament LLC, which was owned by Neil Ravi Mehta, was sentenced to five years of probation and ordered to pay a fine of $500,000.00 on one count of Unlawfully Importation and Receipt of Firearms and one count of Filing False or Misleading Electronic Export Information. Federal Armament LLC was also ordered to forfeit the illegally imported firearms.

The Honorable Judge P.K. Holmes, III presided over the sentencing hearings, which were held in the U.S. District Court in Fort Smith.

According to court documents in the Neil Ravi Mehta case, on January 31, 2023, federal law enforcement officers executed a search warrant on Mehta’s residence in Fort Smith, Arkansas. Mehta was present at the residence when officers announced their intent to enter the residence but fled from the residence prior to officers making entry into the residence. Mehta was later arrested after a six-day manhunt, in which the public’s assistance was solicited in locating the defendant, who was assumed to be armed and dangerous.

During the execution of the search warrant, officers discovered and seized a destructive device located in the top left corner of the kitchen island of the residence. The destructive device was not registered as required by law and therefore unlawfully possessed by Mehta.

As to the tax charge, Mehta substantially underreported his income by failing to report millions of dollars of business activities for Federal Armament LLC, a business headquartered in Fort Smith, Arkansas which engaged in the manufacturing and selling ammunition, firearms, and other related items. None of the gross receipts of Federal Armament LLC were reported on any of Mehta’s IRS Forms 1040 for 2018, 2019, 2020, and 2021.

As to the charge of False Declaration Before a Court, on December 14, 2021, a deposition under oath was taken from Mehta in connection with a civil suit brought against Mehta and Federal Armament LLC by the United States Department of Labor alleging violations of the Fair Labor Standards Act. During the deposition Mehta made false statements under oath regarding matters that were material to the civil suit.

According to court documents in the Federal Armament LLC case, on January 31, 2023, federal law enforcement officers executed a search warrant on Federal Armament LLC in Fort Smith, Arkansas. During the search warrant officer located and seized 3,185 firearms that Federal Armament LLC unlawfully imported due to excess magazine capacity or because the firearms lacked required engraving marks.

As to the export charge, on June 27, 2022, Federal Armament LLC submitted to the U.S. Department of Commerce a license application for approval to export certain firearms to Poland. The export license application contained false and misleading information by naming an individual as contact person who was neither employed by nor acting as the contact person for Federal Armament LLC.  

U.S. Attorney David Clay Fowlkes of the Western District of Arkansas made the announcement.

This was a joint investigation involving the following federal law enforcement agencies:  the Federal Bureau of Investigation (FBI); the Bureau of Alcohol, Tobacco, Firearms and Explosives (ATF); the U.S. Department of Commerce (DOC), Bureau of Industry and Security (BIS), Office of Export Enforcement (OEE); the Internal Revenue Service-Criminal Investigation (IRS-CI); and the U.S. Department of Labor, Office of the Inspector General (DOL-OIG).

First Assistant U.S. Attorney Kenneth Elser and Assistant U.S. Attorney Steven Mohlhenrich prosecuted the case.

Related court documents may be found on the Public Access to Electronic Records website @ www.pacer.gov