An indictment was unsealed earlier today in federal court in Brooklyn charging attorney Jason Kurland, Christopher Chierchio, Francis Smookler, a former securities broker, and Frangesco Russo with wire fraud, wire fraud conspiracy, money laundering and money laundering conspiracy in connection with a scheme to defraud Kurland’s clients that resulted in $107 million in losses.  In addition, Kurland was charged with honest services fraud for his role in the scheme, and Russo and Smookler are charged with extortionate extension and collection of credit for threatening to kill an individual and his family for failure to repay a usurious loan. 

The defendants were arrested today and will be arraigned this afternoon via teleconference before United States Magistrate Judge Lois Bloom.

Seth D. DuCharme, Acting United States Attorney for the Eastern District of New York, and William F. Sweeney, Jr., Assistant Director-in-Charge, Federal Bureau of Investigation, New York Field Office (FBI), announced the arrests and charges.

“Defendant Kurland allegedly violated the law and his oath as a lawyer when he allowed co-conspirators to pillage his clients’ bank accounts for their own enrichment,” stated Acting United States Attorney DuCharme.  “In addition, Russo and Smookler allegedly threatened to torture an individual’s wife and children. The defendants callously thought they could line their pockets with lottery winnings without consequence, but today their luck ran out.” 

“Lottery winners can't believe their luck when they win millions of dollars, and the men we arrested this morning allegedly used that euphoric feeling to their advantage,” stated FBI Assistant Director-in-Charge Sweeney.  “The FBI New York discovered how these victims were persuaded to put large chunks of their cash into investments that benefited the defendants. Rather than try their luck at the lottery, these men resorted to defrauding the victims to get rich, but their gamble didn't pay off.”

The Scheme to Defraud the Lottery Victims

As set forth in court filings, Kurland is a self-dubbed “Lottery Lawyer” purporting to represent dozens of lottery winners throughout the country with total winnings of approximately $3 billion.  One of the winners won the $1.5 billion Mega Millions lottery, another won the $245 million Powerball jackpot, and the third won the $150 million jackpot (together, the “Lottery Victims”).  The Lottery Victims each paid Kurland and his law firm hundreds of thousands of dollars, in part so that he could advise them on how to safely invest their money.  After gaining their trust with primarily traditional investments, Kurland steered his clients to invest in various entities and business deals controlled and directed by Russo, Smookler and Chierchio, and received kickbacks in return – which Kurland failed to disclose to his clients.  The defendants then used the money from the Lottery Victims’ investments to keep their scheme going and to enrich themselves.  A portion of these funds was funneled back to the Lottery Victims and falsely presented to them as “interest payments” on their investments, other funds went to Kurland as kickbacks, and millions of dollars were stolen to support the defendants’ lavish lifestyles – private jets, expensive vacations and luxury vehicles including two yachts.  The funds that the defendants actually invested in various entities and deals were, in large part, eventually lost. 

In intercepted calls cited in court documents, the defendants can be heard discussing their scheme, attempting to cover their tracks and expressing concern about what might happen to them if they were caught by law enforcement.                  

The Scheme to Extort Altieri

Russo’s and Smookler invested some of the Lottery Victims’ money with Gregory Altieri, a jewelry merchant, and then extended him a $250,000 “street loan.”  Conversations recorded during the government’s investigation revealed that Russo and Smookler expected to be repaid over $400,000 for the $250,000 loan, and the threats Russo and Smookler made to Altieri in their attempt to collect it.  Russo informed Altieri that he had a “few tactical shotguns . . . with lasers,” and Smookler told Altieri that if he did not fully repay the loan, “it’s just going to be unbelievable.”  Russo compared himself to the mob-affiliated character in “Uncut Gems,” a movie that ends with the indebted diamond dealer shot dead.  On another call, Russo told Altieri, “They’re gonna pop your head off in front of your f------ kids.  This guy has no clue what he’s getting into.”  Smookler told Altieri, “You watch my man, you f-----d me, now watch what I am gonna do to you, I’m coming brother.  Full f-----g steam ahead.” 

Russo and Smookler also threatened to harm Altieri’s family if Altieri did not repay the loan.  Smookler told Altieri that, “[W]e are gonna find your wife today.  That’s happening.”  Russo informed Altieri that the people coming for him are “going to make you watch as they rip your son’s teeth out of his mouth, watch, they’re going to do worse things to your wife.” 

The government has taken steps to recover funds stolen in connection with the charged scheme to defraud the Lottery Victims, including executing warrants to seize 13 bank accounts associated with the defendants’ scheme, and placing liens on three properties that Smookler and Russo allegedly purchased and/or renovated with stolen funds.   

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

The government’s case is being handled by the Office’s Business & Securities Fraud Section.  Assistant United States Attorneys Andrey Spektor and Lindsay K. Gerdes are in charge of the prosecution, assisted by Assistant United States Attorney Brian D. Morris of the Office’s Asset Forfeiture Unit and by a Special Agent of the Office’s Business & Securities Fraud Section.

The Defendants:

CHRISTOPHER CHIERCHIO

Age:  52

Staten Island, NY

JASON KURLAND

Age:  46

Dix Hills, NY

FRANGESCO RUSSO

Age:  38

Roslyn, NY

FRANCIS SMOOKLER

Age:  45

Oyster Bay, NY    

E.D.N.Y. Docket No. 20-CR-306 (NGG)

An indictment was unsealed today in federal court in Brooklyn charging Gregory Altieri, the president of LNA Associates, with one count of wire fraud for allegedly running a two-year, $200 million Ponzi scheme based on nonexistent wholesale jewelry deals and false promises of inflated returns.  Altieri was arrested today and will be arraigned this morning via video conference before United States Magistrate Judge James Orenstein.

Seth D. DuCharme, Acting United States Attorney for the Eastern District of New York, and William F. Sweeney, Jr., Assistant Director-in-Charge, Federal Bureau of Investigation, New York Field Office (FBI), announced the arrest and charge.

According to the indictment, beginning in August 2017, Altieri solicited between $75 million to $85 million from over 80 investors from Queens, Staten Island, Long Island and elsewhere, allegedly to purchase jewelry at “closeout” prices and resell it at a high profit.  Altieri promised returns of between 30 and 70 percent in a matter of months.  While Altieri initially purchased some jewelry with investors’ money, in approximately May 2018 he began to use new investors’ money to pay earlier investors, representing to the latter group that they were receiving returns on their investments.  These purported “returns” were used by Altieri to convince the earlier investors to keep their money with LNA Associates, by “rolling over” their investments into new investments based on false promises to use this money to purchase additional jewelry.  By January 2020, when Altieri stopped making paybacks to investors, he owed them approximately $200 million based on the falsely inflated promised returns.   

“As alleged, Altieri defrauded investors, including retirees living off their pensions, by representing that he was buying and reselling jewelry for big profits, which was a lie,” stated Acting United States Attorney DuCharme.  “This Office is committed to protecting the investing public from con artists who would prey upon our community.”

“Stealing millions based on false promises made to retirees who rely on their pensions is contemptible. We allege Mr. Altieri knew he was going to have problems paying off his first round of investors, but he kept his con going anyway.  As a result of his actions, the FBI has provided him with stainless steel jewelry for his wrists today, and a guarantee of working to hold him and others who commit similar frauds accountable for their behavior,” stated FBI Assistant Director-in-Charge Sweeney. 

The charge in the indictment is an allegation, and the defendant is presumed innocent unless and until proven guilty.  If convicted, Altieri faces a maximum sentence of 20 years’ imprisonment.

The government’s case is being handled by the Office’s Business & Securities Fraud Section.  Assistant United States Attorneys Andrey Spektor and Lindsay K. Gerdes are in charge of the prosecution, assisted by EDNY Special Agent Martin Sullivan. 

The Defendant

GREGORY ALTIERI

Age:  53

Melville, New York

E.D.N.Y. Docket No. 20-CR-249 (BMC)