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ITMG Insider Threat Cases – July 15, 2021

Former CEO and COO of JHL Biotech Charged with Conspiracy to Steal Trade Secrets and Commit Wire Fraud Exceeding $101 Million 

Today, the court unsealed an indictment returned by a federal grand jury in San Francisco charging Racho Jordanov, the co-founder and former Chief Executive Office of JHL Biotech, and Rose Lin, another of the company’s co-founders and former Chief Operating Officer, with conspiracy to commit trade secret theft and wire fraud, international money laundering, and related charges including obstruction of justice, announced Acting United States Attorney Stephanie M. Hinds, Internal Revenue Service ̶ Criminal Investigations, Special Agent in Charge Michael Daniels, and Federal Bureau of Investigation, Special Agent in Charge Craig D. Fair.  


Ph.D. Chemist Convicted of Conspiracy to Commit Economic Espionage, Theft of Trade Secrets, and Wire Fraud 

Following a twelve-day trial, Dr. Xiaorong You, a/k/a Shannon You, 59, of Lansing, Michigan, was convicted of conspiracy to commit economic espionage, conspiracy to steal trade secrets, possession of stolen trade secrets, economic espionage, and wire fraud. Dr. You was originally indicted in February 2019 for trade secret offenses and wire fraud, and a superseding indictment adding economic espionage and conspiracy to commit economic espionage issued in August 2020. Sentencing has been set for November 1, 2021 at 10:30 a.m., before the Honorable J. Ronnie Greer, in the United States District Court for the Eastern District of Tennessee at Greeneville. 


Nigerian National Arrested for Scheme to Conduct Cyber Intrusions to Steal Payroll Deposits 

Audrey Strauss, the United States Attorney for the Southern District of New York, William F. Sweeney Jr., Assistant Director-in-Charge of the New York Field Office of the Federal Bureau of Investigation (“FBI”), and Jonathan D. Larsen, Special Agent in Charge of the New York Field Office of the Internal Revenue Service, Criminal Investigation (“IRS-CI”), announced today the arrest of CHARLES ONUS for charges in connection with a scheme to conduct cyber intrusions of multiple user accounts maintained by a company that provides human resources and payroll services to employers across the United States, in order to steal payroll deposits.  ONUS was previously arrested on April 14, 2021, in San Francisco and detained, and he will be presented later today in Manhattan federal court before Magistrate Judge Sarah L. Cave.  The case is assigned to U.S. District Judge Paul G. Gardephe.   


Cryptocurrency Fraudster Sentenced for Money Laundering and Securities Fraud in Multi-Million Dollar Investment Scheme 

A Swedish man was sentenced today to 15 years in prison for securities fraud, wire fraud and money laundering charges that defrauded thousands of victims of more than $16 million. 

Roger Nils-Jonas Karlsson, 47, pleaded guilty on March 4. According to court documents, Karlsson ran an investment fraud scheme from 2011 until his arrest in Thailand in June 2019. Karlsson induced victims to purchase shares in the scheme called “Eastern Metal Securities” using cryptocurrency such as Bitcoin and other online payment platforms. Karlsson promised victims astronomical returns tied to the price of gold. Instead, the funds provided by victims were transferred to Karlsson’s personal bank accounts, and he then used proceeds to purchase expensive homes, a racehorse and a resort in Thailand. Karlsson’s fraud targeted financially insecure investors, causing severe financial hardship for many of them. Meanwhile, Karlsson went to great lengths to prolong his scheme, including rebranding, offering updates and account statements that provided assurances to the victims of the states of their assets, and offering explanations for the payout delays – including falsely claiming to be working with the Securities and Exchange Commission (SEC).

U.S. Attorney Announces Extradition and Guilty Plea of Israeli Securities Trader for Participating in a Global Insider Trading Ring 

Audrey Strauss, the United States Attorney for the Southern District of New York, and William F. Sweeney Jr., the Assistant Director-in-Charge of the New York Field Office of the Federal Bureau of Investigation (“FBI”), announced the unsealing today of a 15-count superseding indictment charging DOV MALNIK and TOMER FEINGOLD with offenses relating to their roles as securities traders in a wide-ranging international insider trading ring who made millions of dollars in illicit profits by trading based on misappropriated inside information.  MALNIK, a citizen of Israel and Lithuania, was arrested in Switzerland on October 7, 2020, was extradited on June 10, 2021, from Switzerland, and pled guilty today before U.S. Magistrate Judge Stewart D. Aaron.  FEINGOLD remains at large.  The case is assigned to U.S. District Judge Victor Marrero. 


Vestavia Hills Father and Son Arrested in Bank Fraud Scheme 

Today, a father and son were arrested and charged in a bank fraud scheme in which they provided fraudulent information to financial institutions for the purpose of purchasing boats, luxury vehicles, and heavy equipment, announced U.S. Attorney Prim F. Escalona and Federal Bureau of Investigation Special Agent in Charge Johnnie Sharp, Jr. 

A 26-count indictment filed in U.S. District Court charges Christopher A. Montalbano, 38, of Vestavia, and Gus Anthony Montalbano, 75, of Vestavia, with conspiracy to commit bank fraud, false statements on a loan application, and money laundering.  Christopher Montalbano was also charged with aggravated identity theft and bank fraud. Christopher Montalbano and Gus Montalbano were arrested at their respective homes in Vestavia. 


Romanian National Co-Defendant Pleads Guilty for His Role in a Conspiracy to Steal Checks Intended for Religious Institutions 

Greenbelt, Maryland – Daniel Velcu, age 43, of Baltimore, Maryland, pleaded guilty today to a federal bank and wire fraud conspiracy, in which the conspirators received approximately $1,244,056.77 in stolen checks intended for religious institutions.  

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