Skip to main content

Prosecuting Fraud

The Office prosecutes a wide variety of significant fraud cases involving both individual and corporate defendants, including frauds affecting the integrity of the financial markets.

Tweet from SBF - "FTX is fine. Assets are fine."
Securities and Commodities Fraud Prosecutions

The Securities and Commodities Fraud Task Force continues its long tradition of leadership in the prosecution of securities and commodities fraud and other cases affecting the integrity of the financial markets. For example:

  • Founder and Chief Executive of International Crypto Exchange Convicted of Masterminding a Multi-Billion-Dollar Fraud: On November 2, 2023, less than a year after the collapse of FTX, the crypto exchange that he founded, Sam Bankman-Fried was convicted at trial of masterminding a wide-ranging scheme to misappropriate billions of dollars of customer funds deposited with FTX and mislead investors and lenders to FTX and to Alameda Research, Bankman-Fried’s crypto hedge fund.  The proof at trial established that Bankman-Fried used billions of dollars of stolen FTX customer funds to pay for his personal luxuries, to make investments and millions of dollars of political contributions to federal political candidates and committees, and to repay billions of dollars in loans owed by Alameda.  Bankman-Fried also defrauded lenders to Alameda Research and equity investors in FTX by concealing his misuse of customer deposits in financial information that was provided to them.  On March 28, 2024, Bankman-Fried was sentenced to 25 years in prison. 
  • Former U.S. Congressman Convicted of Insider Trading: In March 2023, Stephen Buyer, a former Congressman from Indiana, was convicted at trial of multiple counts of securities fraud based on insider trading.  After leaving Congress, Buyer worked as consultant advising on confidential business transactions.  In 2018 and 2019, Buyer engaged in two separate, but interrelated insider trading schemes to steal material non-public information that he obtained through his consulting work and to use that stolen information to profit in the stock market.  In September 2023, Buyer was sentenced to 22 months in prison.
  • Do Kwon Extradited To The United States From Montenegro To Face Charges Relating To Fraud Resulting In $40 Billion In Losses: Do Kwon, the founder of Terraform Labs, was charged with orchestrating schemes to defraud purchasers of Terraform cryptocurrencies. 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 but ultimately contributed to the collapse of the crypto ecosystem, leaving investors and users with billions in losses. Kwon was extradited to the United States in January 2025, and is scheduled to stand trial in January 2026.
  • Founder And Head Of Archegos Capital Management Bill Hwang Sentenced To 18 Years In Prison For Orchestrating Massive Market Manipulation And Fraud Schemes: In July 2024, Bill Hwang and Patrick Halligan were convicted following a nine-week jury trial of racketeering conspiracy, securities fraud, market manipulation, and wire fraud. Hwang and Halligan ran Hwang’s private investment fund, Archegos, through a pattern of fraud and manipulation. Hwang used manipulative trading techniques to alter the prices of certain stocks in the marketplace and Hwang, Halligan, and their conspirators intentionally deceived Archegos’s trading counterparties to obtain margin loans and trading capacity, often by misrepresenting the composition and concentration of Archegos’s portfolio. The scheme collapsed in March 2021, causing billions of dollars in losses to market participants, Archegos’s trading counterparties, and innocent Archegos employees. Hwang was sentenced to 18 years in prison, and Halligan was sentenced to 8 years in prison.
  • Celsius Founder And Former CEO Alexander Mashinsky Pleads Guilty To Multi-Billion Dollar Fraud And Market Manipulation Schemes: Alexander Mashinsky, the former CEO of Celsius Network LLC, was charged with securities fraud and commodities fraud in connection with a yearslong scheme to mislead customers and market participants regarding the market value and interest in Celsius’s proprietary crypto token CEL.  Mashinsky did so by manipulating the price of CEL through causing Celsius to spend hundreds of millions of dollars purchasing CEL in the open market with the objective of artificially supporting and inflating the price of CEL.  At various times during Mashinky’s tenure, Mashinsky and his co-conspirators also caused Celsius to use its own customer deposits to fund these market purchases of CEL in order to prop up CEL’s price, without disclosing this fact to Celsius’s customers.  Mashinsky pled guilty in December 2024, and will be sentenced in April 2025.
  • Former Chief Investment Officer Of Global Bond Investment Firm Charged With Over $600 Million Investment Adviser Fraud: In November 2024, the Office charged Kenneth Leech II with defrauding clients of the investment-management company WAMCO by engaging in a $600-million criminal “cherry picking” scheme.  To compensate for losses in his marquee investment strategy, Leech assigned trades that performed well during their first day into client accounts associated with that investment strategy, and assigned trades that performed poorly over their first day into the accounts of other clients, who were not aware that Leech was causing them losses to favor others.  Leech’s victims included institutional and retail investors who trusted Leech to manage their savings and pension plans. 
  • Man Convicted For $110 Million Cryptocurrency Scheme : In April 2024, Avraham Eisenberg was convicted of commodities fraud, commodities market manipulation, and wire fraud in connection with the manipulation of Mango Markets decentralized cryptocurrency exchange. Eisenberg engaged in a scheme to fraudulently obtain approximately $110 million worth of cryptocurrency from Mango Markets and its customers by artificially manipulating the price of certain perpetual futures contracts. Eisenberg is scheduled to be sentenced in April 2025.
  • Criminal Charges Filed in Multi-Year Fraud Scheme in the Market for Carbon Credits: In October 2024, the Office charged Kenneth Newcome and Tridip Goswami for participating in a scheme to commit fraud in the carbon markets, which resulted in their company, CQC Impact Investors LLC (“CQC”), fraudulently obtaining carbon credits worth tens of millions of dollars and fraudulently securing an investment of over $100 million. From at least in or about 2021, through 2023, Newbombe, the CEO of CQC, and Goswami, the Head of CQC’s Carbon & Sustainability Accounting Team (“CSAT”), along with others at CQC, including Jason Steele, the company’s Chief Operating Officer, submitted false and misleading data to the issuer of voluntary carbon units (“Issuer-1”), tricking Issuer-1 into giving CQC VCUs for emission reductions that, according to Issuer-1’s methodology for calculating such reductions, had not in fact been achieved. Members of the conspiracy manipulated data to make it appear as if certain of the carbon reduction projects were far more successful in reducing carbon emissions than was actually the case.
  • British Investor And Billionaire Businessman Joseph Lewis Pleads Guilty To Insider Trading Scheme: In January 2024, Joseph Lewis, a billionaire businessman and investor, pled guilty to securities fraud.  Lewis controlled board of director seats at various companies and deputized employees to serve on the company boards.  Through these employees, Lewis received material, non-public information about the companies.  On multiple occasions over the course of several years, Lewis misused and misappropriated this confidential information to provide stock tips to various individuals, including his employees, romantic partners, and friends.  These individuals, in turn, traded on the tips provided by Lewis for vast personal gain.  In April 2024, Lewis was sentenced to three years’ probation and a $5 million fine. 
Complex Fraud Prosecutions

The Office’s Complex Frauds and Cybercrime Unit as well as prosecutors assigned to the Office’s White Plains Division have pursued a wide range of significant fraud cases involving both individual and corporate defendants.  For example:

  • Former NBA Players and Doctors Prosecuted For Defrauding the NBA Players’ Health and Welfare Benefit Plan:  In November 2023, former NBA players Ronald Glen Davis and William Bynum were convicted after trial for their roles in a prosecution charging more than 20 defendants in connection with a sprawling scheme to defraud the National Basketball Association Players' Health and Welfare Benefit Plan out of more than $5 million.  In August 2023, former NBA player Terrence Williams, the leader of the scheme, was sentenced to 10 years in prison.  
  • Leaders of Multibillion-Dollar Cryptocurrency Scheme “OneCoin” Prosecuted:  In September 2023, Sebastian Greenwood, one of the co-founders of OneCoin, a fake cryptocurrency multi-level marketing scheme, was sentenced to 20 years in prison for his role in stealing more than $4 billion from at least 3.5 million victims.  In 2019, Mark Scott, a former equity partner at international law firm Locke Lord LLP, was convicted at trial for his role in laundering hundreds of millions of dollars of fraud proceeds on behalf of the leadership of OneCoin.  In January 2024, Scott was sentenced to 10 years in prison.  Ruja Ignatova, the co-founder of OneCoin, remains at large and was added to the Federal Bureau of Investigation’s Top Ten Most Wanted List in June 2022.
  • Prosecution of Founders of AirBit Cryptocurrency Ponzi Scheme:  In September 2023, Pablo Renato Rodriguez and Gutemberg Dos Santos, the co-founders of AirBit Club, were each sentenced to 12 years in prison for orchestrating a massive global pyramid scheme.  Victims of the scheme were induced to invest in AirBit Club based on the false promise of guaranteed profits in exchange for cash investments in club “memberships.”  Promoters falsely promised Victims that AirBit Club earned returns on cryptocurrency mining and trading and that Victims would earn passive, guaranteed daily returns on any membership purchased.  Additional co-defendants have pled guilty and been sentenced. 
  • CEO of Paycheck Protection Program Lender Sentenced to 54 Months In Prison in First of Its Kind Prosecution for Fraud on the Small Business Administration:  In July 2023, Rafael Martinez was sentenced to 54 months in prison for his role in a scheme to submit fraudulent loan and lender applications related to the Paycheck Protection Program (“PPP”) administered by the U.S. Small Business Administration (“SBA”).  Martinez was the CEO of MBE Capital, which fraudulently obtained more than $70 million in fees from the SBA after lying to the SBA and others to become certified as a PPP lender that issued loans totaling almost $1 billion.  Martinez is the first individual convicted of defrauding the SBA as a PPP lender.
  • “Lottery Lawyer” Sentenced to 13 Years in Prison For Defrauding Lottery Winner Clients of More than $100 Million:  In June 2023, Jason Kurland, a partner at a New York law firm, was sentenced to 13 years in prison, following his conviction at trial on charges arising from a scheme to defraud lottery winners who had hired Kurland as their attorney of more than $100 million.  Kurland was charged alongside three co-conspirators, all of whom pled guilty to their crimes.
  • Lawyers and Doctor Convicted for Roles in Massive Trip-and-Fall Fraud Scheme:  In April 2023, George Constantine and Andrew Dowd, an attorney and an orthopedic surgeon, were each sentenced to 102 months in prison, after conviction at trial, for their role in a long-running conspiracy to defraud businesses and insurance companies by staging trip-and-fall accidents and filing fraudulent lawsuits arising from those staged accidents.  A third defendant, another attorney, pled guilty and was sentenced to 24 months in prison.  The defendants filed hundreds of fraudulent lawsuits, conducted hundreds of medically unnecessary surgeries, and attempted to defraud victims of more than $31 million.
  • Prosecution of Danske Bank:  In December 2022, Danske Bank A/S, a global financial institution headquartered in Denmark, pleaded guilty in the Southern District of New York to conspiring to commit bank fraud and agreed to forfeit $2 billion to resolve the United States’ investigation into Danske Bank’s fraud on U.S. banks.  The guilty plea followed an investigation by the Office’s Money Laundering and Transnational Criminal Enterprises Unit, in conjunction with the Department of Justice. Between 2008 and 2016, Danske Bank defrauded U.S. banks regarding Danske Bank Estonia’s customers and anti-money laundering controls.  This fraud was designed to facilitate access to the U.S. financial system for Danske Bank Estonia’s high-risk customers, who resided outside of Estonia – including in Russia and who otherwise would not have been able to access U.S. banks.
  • Israel’s Largest Bank Admits to Conspiring with U.S. Taxpayers to Hide Assets Offshore:  In April 2020, Bank Hapoalim (Switzerland) Ltd., the Swiss subsidiary of Israel’s largest bank, pled guilty to criminal charges arising from its participation in a conspiracy with U.S. taxpayers to hide more than $7.6 billion in more than 5,500 secret Swiss and Israeli bank accounts, evading U.S. taxes.  At the same time, Bank Hapoalim B.M., the Israeli parent bank, entered into a deferred prosecution agreement.  As part of the resolution, Bank Hapoalim agreed to pay almost $875 million in restitution to the Internal Revenue Service.

The descriptions of charges set forth above constitute only allegations as to individuals who have not been found guilty, and defendants are presumed innocent unless and until proven guilty.