DA VANCE ANNOUNCES CRIMINAL CHARGES AGAINST EIGHT DEFENDANTS FOR OXYCODONE, GAMBLING, AND TAX FRAUD SCHEMES
Manhattan District Attorney Cyrus R. Vance, Jr., recently announced the indictment of eight individuals for multiple schemes involving the distribution of oxycodone pills, illegal gambling, and tax and public benefits fraud. The defendants are charged in multiple New York State Supreme Court indictments with Criminal Sale of a Controlled Substance in the Second and Third Degrees, Conspiracy in the Fourth and Fifth Degrees, Promoting Gambling in the First Degree, and Criminal Tax Fraud in the Third, Fourth, and Fifth Degrees, among other charges. [1]
“As alleged in the indictments, these defendants exploited vicious cycles of addiction – specifically, online gambling and opioid narcotics – to enrich themselves,” said District Attorney Vance. “But, it didn’t stop there – several of these defendants are also accused of orchestrating elaborate schemes to funnel the proceeds of their illegal activities through shell companies and cash transactions to hide their income and defraud taxpayers. I thank our partners at the NYPD, the Office of the Special Narcotics Prosecutor, and the New York State Department of Taxation and Finance, for their remarkable collaboration over the course of this long-term investigation.”
NYPD Commissioner James P. O'Neill said: "From their illicit prescription pill operation to complex gambling and public fraud schemes, the alleged defendants named in this indictment demonstrated a prolonged disregard for our laws. I commend our investigators for their diligence in taking down this operation, as well as the vital support we received from the Manhattan District Attorney's Office and our other law enforcement partners."
Special Narcotics Prosecutor Bridget G. Brennan said: “These defendants exploited loose regulations and a high demand for addictive prescription pills, and used these pills as a form of currency to facilitate other criminal activity. I am pleased that my office’s Prescription Drug Investigation Unit was able to assist the Manhattan District Attorney’s Office in this investigation.”
New York State Acting Commissioner of Taxation and Finance Nonie Manion said: “These allegations of lying on a tax return to hide income—or willfully failing to file a return altogether—are egregious crimes that cannot go unpunished. These defendants are accused of not only stealing from New York State, but also of depriving their fellow residents of critical public services and programs. We will continue to work with Manhattan District Attorney Vance, and all levels of law enforcement, to make people think twice before attempting to carry out a tax fraud scheme.”
Oxycodone Scheme
As charged in one indictment, between October 2014 and July 2015, JOSEPH BYRNE, 54, ROBERT BLOOME, 52, and JOHN DESANTIS, 40, profited from the sale of hundreds of illicitly acquired prescription pills. BYRNE and BLOOME regularly filled prescriptions for oxycodone pills, usually between 90 and 180 pills per month. BYRNE and BLOOME sold the pills to each other and other people, including an undercover detective. DESANTIS ordered BYRNE to fill prescriptions and sell pills and received payments from BYRNE from the profits of the transactions.
Online Gambling Schemes
Between May 2014 and June 2015, a separate indictment charges JOSEPH BYRNE and STEVEN FEUERSTEIN, 56, and with conspiring to profit from illegal online gambling through two websites based in Costa Rica, BettorDays.ag and BETBTB.com. As part of the scheme, BYRNE acted as a sheet-holder under FEUERSTEIN’s master account. In this role, BYRNE was responsible for maintaining and recruiting bettors, acting as a runner, and distributing gambling proceeds. As master agent, FEUERSTEIN had authority to open, close, and adjust bettors’ accounts. FEUERSTEIN gave BYRNE and his bettors, which included an undercover NYPD detective, internet gambling accounts that they used to place bets. FEUERSTEIN and BYRNE received a share of the profits. During the time period charged, BYRNE and FEUERSTEIN accepted more than $125,000 in bets from the undercover detective alone.
On several occasions, when BYRNE owed the undercover detective money for winning bets, BYRNE paid the detective with oxycodone pills. BYRNE paid BLOOME $18 per pill but charged the undercover $26 per pill.
Between August 2015 and February 2016, a separate indictment revealed by the same undercover NYPD detective charges RALPH CASTORE, 70, ANTHONY RUSSO, 52, and MICHAEL COHEN, 28, with conspiring to profit from illegal gambling through the website ABCwagering.ag, which is based in Costa Rica. CASTORE acted as the master agent and funded the operation, RUSSO was a sub-agent who managed sheet-holders, including COHEN and the undercover NYPD detective. In this role, RUSSO gave user accounts to COHEN to place bets. CASTORE and RUSSO received a share of the profits. During the time period charged, RUSSO and CASTORE transacted more than $141,000 in bets involving the undercover detective.
Tax and Public Benefits Fraud
As charged in a separate indictment, between January 2010 and March 2016, BLOOME, DESANTIS, MELISSA LOMAGNO, 38, and BYRNE conspired to commit criminal tax violations. As charged in the indictment, BLOOME did not file a personal income tax return between 2010 and 2015, DESANTIS and LOMAGNO failed to report their income accurately on their personal income tax returns for the same time period. BYRNE is charged for his role in a check-cashing scheme with BLOOME and DESANTIS.
The defendants used various companies and bank accounts to make large cash withdrawals and hide their assets. For example, BLOOME, DESANTIS, and LOMAGNO received income from a company named Premier Links. BLOOME and DESANTIS transferred those funds to other shell companies. Additionally, Premier Links paid for health insurance for BLOOME, DESANTIS, and LOMAGNO and for LOMAGNO’s personal credit card bills. None of this income was reported on any of the defendants’ personal income tax returns.
In another example of income that was not reported on any of the defendants’ personal income tax returns, DESANTIS and BLOOME wrote fraudulent checks from shell companies they controlled to BYRNE and his company, Jomay Linens. BYRNE cashed these checks at a check-cashing business, kept $250 for himself, and gave the remainder to DESANTIS and BLOOME.
Finally, DESANTIS received checks totaling approximately $67,000 from the New York City Housing Authority on behalf of a tenant, which he deposited into bank accounts owned and controlled by BLOOME and DESANTIS. None of this income was reported on any of the defendants’ personal income tax returns. Additionally, BLOOME and LOMAGNO fraudulently obtained Medicaid public assistance benefits by stating that they had little or no income. During the time period charged in the indictment, BLOOME received approximately $15,600 and LOMAGNO received approximately $12,200 in fraudulent benefits. None of this income was reported on any of the defendants’ personal income tax returns.
The Manhattan District Attorney’s Office’s Asset Forfeiture Unit has also filed civil papers against the indicted defendants seeking the forfeiture of illegal proceeds gained through the alleged crimes.
Assistant District Attorney Brian D. Foley is handling the prosecution of the case with the assistance of Assistant District Attorney Kenneth Moore, under the supervision of Assistant District Attorney Judy Salwen, Principal Deputy Chief of the Rackets Bureau, Assistant District Attorney Michael Ohm, Deputy Chief of the Rackets Bureau, Jodie Kane, Chief of the Rackets Bureau, and Executive Assistant District Attorney Michael R. Sachs, Chief of the Investigation Division. Supervising Financial Investigator William Tamparo, Trial Preparation Assistants William Looney and Amanda Bauza, Investigative Analyst Abigail Sawyer, and former Trial Preparation Assistants Eve Zellinger and Rachel Schorr, former Investigative Analyst Ryan Bacci, Supervising Rackets Investigator Patrick O’Brien, Senior Investigator Robert Mistretta, Senior Investigator Daniel Frooks, Supervising Rackets Investigator Jeremy Rosenberg, Senior Investigator Dianne Keam, Chief Investigator Walter Alexander, former Senior Investigator Joseph Lamendola, former Senior Investigator Joseph Chimienti and former Senior Investigator Faith Tuohy, provided additional assistance with this case.
Assistant District Attorney Lynn Goodman, Chief of the Asset Forfeiture Unit, and Assistant District Attorney Madeleine Guilmain are handling the civil asset forfeiture action.
District Attorney Vance also thanked the following agencies and individuals for their assistance with the investigation: the NYPD’s Organized Crime Investigation Division (“OCID”), now Criminal Enterprise Investigations (“CEI”), and in particular, Detective Joseph Nicolosi and Sergeant Gregory Marotta; the New York State Department of Taxation and Finance, and in particular, the Criminal Investigations Division and Tax Auditor II William Welch; the New York City Human Resources Administration, and in particular Senior Investigator Jodi Vieira and Associate Fraud Investigator I Kimberly McKie; and the New York City Housing Authority, and in particular Housing Assistant Alla Zaltsman, Secretary IIA Stacia Paul, Management Auditor II Steven Hammer, and Attorney Menachem Simon.
[1] The charges contained in the indictment are merely allegations, and the defendants are presumed innocent unless and until proven guilty. All factual recitations are derived from documents filed in court and statements made on the record in court.
Defendant Information:
ROBERT BLOOME, D.O.B. 1/1/1964
Staten Island, NY
Charged:
• Criminal Sale of a Controlled Substance in the Second Degree, a
class A felony, one count
• Criminal Sale of a Controlled Substance in the Third Degree, a
class B felony, one count
• Welfare Fraud in the Third Degree, a class D felony, one count
• Grand Larceny in the Third Degree, a class D felony, one count
• Criminal Tax Fraud in the Third Degree, a class D felony, one count
• Conspiracy in the Fourth Degree, a class E felony, one count
• Criminal Tax Fraud in the Fourth Degree, a class E felony, one count
• Offering a False Instrument for Filing in the First Degree, a class
E felony, one count
• Repeated Failure to File Personal Income and Earnings Taxes, a
class E felony, two counts
• Conspiracy in the Fifth Degree, a class A misdemeanor, one count
• Criminal Tax Fraud in the Fifth Degree, a class A misdemeanor, one count
JOSEPH BYRNE, D.O.B. 5/9/1962
Staten Island, NY
Charged:
• Criminal Sale of a Controlled Substance in the Second Degree, a
class A felony, one count
• Criminal Sale of a Controlled Substance in the Third Degree, a
class B felony, one count
• Conspiracy in the Fourth Degree, a class E felony, one count
• Promoting Gambling in the First Degree, a class E felony, two counts
• Conspiracy in the Fifth Degree, a class A misdemeanor, two counts
RALPH CASTORE, D.O.B. 9/18/1946
Staten Island, NY
Charged:
• Promoting Gambling in the First Degree, a class E felony, three counts
• Conspiracy in the Fifth Degree, a class A misdemeanor, one count
MICHAEL COHEN, D.O.B. 2/6/1988
New York, NY
Charged:
• Conspiracy in the Fifth Degree, a class A misdemeanor, one count
JOHN DESANTIS, D.O.B. 7/16/1976
Staten Island, NY
Charged:
• Offering a False Instrument for Filing in the First Degree, a class
E felony, five counts
• Criminal Tax Fraud in the Fourth Degree, a class E felony, five counts
• Conspiracy in the Fourth Degree, a class E felony, one count
• Conspiracy in the Fifth Degree, a class A misdemeanor, one count
STEVEN FEUERSTEIN, D.O.B. 12/31/1959
Staten Island, NY
Charged:
• Promoting Gambling in the First Degree, a class E felony, two counts
• Conspiracy in the Fifth Degree, a class A misdemeanor, one count
MELISSA LOMAGNO, D.O.B. 11/18/1978
Staten Island, NY
Charged:
• Welfare Fraud in the Third Degree, a class D felony, one count
• Grand Larceny in the Third Degree, a class D felony, one count
• Offering a False Instrument for Filing in the First Degree, a class
E felony, four counts
• Conspiracy in the Fifth Degree, a class A misdemeanor, one count
• Criminal Tax Fraud in the Fifth Degree, a class A misdemeanor,
three counts
ANTHONY RUSSO, D.O.B. 6/7/1964
Asbury Park, NJ
Charged:
• Promoting Gambling in the First Degree, a class E felony, three counts
• Conspiracy in the Fifth Degree, a class A misdemeanor, one count