KANSAS CITY, Mo. – A Kansas City, Mo., man with an extensive history of violent crime was sentenced in federal court today for trafficking crack cocaine and illegally possessing a firearm.

Mitchell B. Byrd, 43, was sentenced by U.S. District Judge Greg Kays to 30 years in federal prison without parole. Today’s sentence is an upward variance from the recommended federal sentencing guidelines, as advocated by the government due to his extensive criminal history involving drugs and firearms, including two murder convictions, and his involvement in three separate knife attacks while incarcerated in this case.

On Aug. 13, 2021, Byrd pleaded guilty to possessing crack cocaine with the intent to distribute and to possessing a firearm in furtherance of a drug-trafficking crime.

Detectives with the Kansas City, Mo., Police Department’s gang squad utilized a confidential informant to make a series of three controlled purchases of crack cocaine from Byrd in September 2018. Following the third transaction, on Sept. 20, 2018, officers executed a search warrant at a residence used by Byrd for drug trafficking. Officers found a loaded Glock .40-caliber semi-automatic pistol on a glass table in the living room, within reach of Byrd, who was the only occupant of the house. Officers also found a clear plastic bag on the table that contained approximately 2.9 grams of marijuana and $121 in cash.

On the mantel above the fireplace, detectives found a square plate with a razor blade and 4.865 grams of crack cocaine. Detectives found three cell phones in the living. In a bedroom, detectives found a bag that contained 36.595 grams of crack cocaine and $1,100 in cash.

The court found that Byrd breached the terms of his plea agreement by attempting to assault another inmate with a large knife. While in federal custody in this case, Byrd worked with two other inmates to attempt to kill an inmate by stabbing him at least 13 times. About a month later, Byrd and another associate of the 246 gang were involved in a stabbing incident with two other inmates. A few months later, he tried to stab another inmate. Byrd also threatened to kill or have someone kill two law enforcement officers who collected a DNA sample from him pursuant to a federal search warrant.

In 2018, one year after his early release from his state sentences for two murder convictions, Byrd was included in a rap video titled “Wit My Killas (in my feelings freestyle)” with several other 246 gang members who have been indicted in a separate case for drug trafficking, illegally possessing firearms and violent crimes. The song, which is about shooting and killing people who have issues with the gang, was posted on YouTube in July 2018.

In advocating for an upward variance in today’s sentence, the government noted that Byrd has also committed numerous crimes while he was on court supervision, and has an alarming record of probation violations, conduct violations while incarcerated, and committing new offenses while incarcerated.

This case was prosecuted by Assistant U.S. Attorney Ashleigh A. Ragner and Mary Kate Butterfield. It was investigated by the Kansas City, Mo., Police Department and the FBI.

Project Safe Neighborhoods

The U.S. Attorney’s Office is partnering with federal, state, and local law enforcement to specifically identify criminals responsible for significant violent crime in the Western District of Missouri. A centerpiece of this effort is Project Safe Neighborhoods, a program that brings together all levels of law enforcement to reduce violent crime and make neighborhoods safer for everyone. Project Safe Neighborhoods is an evidence-based program that identifies the most pressing violent crime problems in the community and develops comprehensive solutions to address them. As part of this strategy, Project Safe Neighborhoods focuses enforcement efforts on the most violent offenders and partners with locally based prevention and reentry programs for lasting reductions in crime.

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BOSTON – A West Springfield man pleaded guilty today in federal court in Springfield to embezzling of over $1.4 million from his employer.

Gerald Burke, 36, pleaded guilty to eight counts of bank fraud, two counts of mail fraud and three counts of filing a false tax return. U.S. District Court Judge Mark A. Mastroianni scheduled sentencing for July 27, 2022. Burke was charged on April 8, 2022.

Until 2018, Burke was employed as the controller of a privately owned metal stamping company in Chicopee and was responsible for the company’s finances, including directing payroll and signing checks on behalf of the company. From October 2011 until his termination in 2018, Burke embezzled $1.4 million by authorizing additional payroll payments to himself and by writing checks to himself and his credit card company from the company account. Burke failed to report any of his illegal income to the IRS over the nearly seven-year duration of the embezzlement scheme, thereby evading more than $160,000 in federal taxes.                               

The charge of bank fraud provides for a sentence of up to 30 years in prison, five years of supervised release, a fine of up to $1 million, restitution and forfeiture. The charge of mail fraud provides for a sentence of up to 20 years in prison, three years of supervised release, a fine of up to $250,000, restitution and forfeiture. The charge of filing a false tax return provides for a sentence of up to three years in prison, one year of supervised release, a fine of up to $250,000, restitution and forfeiture. Sentences are imposed by a federal district court judge based upon the U.S. Sentencing Guidelines and statutes which govern the determination of a sentence in a criminal case.

United States Attorney Rachel S. Rollins; Joseph R. Bonavolonta, Special Agent in Charge of the Federal Bureau of Investigation, Boston Division; and Joleen D. Simpson, Special Agent in Charge of the Internal Revenue Service’s Criminal Investigation in Boston made the announcement today. Assistant U.S. Attorney Christopher Morgan of Rollins’ Springfield Branch Office is prosecuting the case.

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NEWARK, N.J. – Four individuals were charged with conspiring to launder money taken from victims across the United States, many of whom were elderly, as a part of a series of romance scams, U.S. Attorney Philip R. Sellinger announced today.

William Kwabena Goeh, 47, of Somerset, New Jersey; Nana Yaw Marfo, 37, of Virginia; and Shannon Braxton, 45, and Chevon Braxton, 42, both of Maryland, are each charged by complaint with one count of money laundering conspiracy. Goeh was arrested this morning in New Jersey, had his initial appearance by videoconference before U.S. Magistrate Judge James B. Clark III, and was released on $100,000 unsecured bond.

Marfo was arrested this morning in Virginia and is scheduled to have his initial appearance this afternoon before the U.S. Magistrate Judge Ivan Davis in the Eastern District of Virginia. The Braxtons were both arrested this morning in Maryland and are scheduled to have their initial appearances before U.S. Magistrate Judge Gina L. Simms in the District of Maryland. Marfo and the Braxtons are scheduled to have their initial appearances in the District of New Jersey on.

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

The defendants used bank accounts and accounts at credit unions to launder the proceeds of money obtained by victims of romance scams. Several victims throughout the United States fell victim to romance scams after meeting individuals online who they thought were interested in a romantic relationship. The victims, many of whom were elderly, sent thousands of dollars to accounts controlled by Goeh, Marfo, the Braxtons, and others, believing the money was being sent for the benefit of their online romantic interest. Goeh and Marfo opened up business bank accounts in the names of various entities to conceal the romance scam fraud proceeds. Goeh received at least $530,000; Marfo received at least $4.7 million; Shannon Braxton received at least $500,000; and Chevon Braxton received at least $1.3 million. The Braxtons withdrew a large portion of the fraud proceeds as cash, while Goeh and Marfo wired thousands of dollars overseas, including to accounts in China, the United Arab Emirates, Italy, Singapore, and Mauritius.      

The money laundering conspiracy charge has a maximum term of 20 years in prison and a maximum fine of $500,000 or twice the value of the funds involved in the transfer, whichever is greater.

U.S. Attorney Sellinger credited special agents of the FBI, under the direction of Special Agents in Charge George M. Crouch Jr. in Newark and Eric B. Smith in Cleveland, Ohio; special agents of the U.S. Department of Labor’s Office of Inspector General, under the direction of Special Agent in Charge Irene Lindow in Chicago, Illinois, and the U.S. Secret Service, under the direction of Special Agent in Charge Paul Duran in San Antonio, Texas, with the investigation leading to the charges.  U.S. Attorney Sellinger also thanks the U.S. Attorney’s Office for the Northern District of Ohio for its assistance. 

The government is represented by Assistant U.S. Attorney Jamie L. Hoxie of the U.S. Attorney’s Office’s Cybercrime Unit in Newark.

The charges and allegations contained in the complaints are merely accusations and the defendants are considered innocent unless and until proven guilty. 

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Damian Williams, the United States Attorney for the Southern District of New York and Michael J. Driscoll, the Assistant Director-in-Charge of the New York Field Office of the Federal Bureau of Investigation (“FBI”), announced the unsealing today of an indictment charging SUNI MUNSHANI with operating multiple long-running schemes to defraud a Connecticut-based technology company (the “Victim Company”) of millions of dollars.  As part of the schemes, MUNSHANI and his co-conspirators created companies and then caused the Victim Company to enter into lucrative contracts with those companies, which MUNSHANI and his co-conspirators then used to siphon money from the Victim Company.  SUNI MUNSHANI’s brother, SURESH MUNSHANI, who controlled a bank account used to receive fraud proceeds from the Victim Company and then returned the majority of such proceeds back to SUNI MUNSHANI, was also charged.         

SUNI MUNSHANI was arrested earlier today in the District of Connecticut, and SURESH MUNSHANI was arrested earlier today in the Southern District of New York.  The defendants were presented this afternoon before U.S. Magistrate Judge Ona T. Wang.  The case is assigned to U.S. District Judge Jed S. Rakoff.

U.S. Attorney Damian Williams said:  “We allege Mr. Munshani spent the better part of his seven years as CEO of a company setting up contracts with fake companies that he created and with a company in which he held an undisclosed ownership interest, and then pocketed the checks. Much of the money paid to these companies was for services that were never rendered. Not only do we allege Mr. Munshani benefited from this scheme, his brother did as well. The self-described tech entrepreneur’s pervasive fraud has landed him in federal court facing multiple felony charges.”

According to the allegations contained in the Indictment and statements made during court proceedings[1]:

Between 2011 and 2019, SUNI MUNSHANI, a self-described technology entrepreneur, was the CEO of the Victim Company, which provided data security services to its clients.  Within six months of his appointment as CEO, MUNSHANI began an approximately seven-year scheme to defraud the Victim Company through fraudulent agreements with a purported third-party contractor (“Individual-1”) and a company purportedly controlled by that third-party (the “Individual-1 Company”).  In fact, MUNSHANI and his brother, SURESH MUNSHANI controlled the Individual-1 Company.  To facilitate the scheme, SUNI MUNSHANI, among other things, created an email account purportedly controlled by Individual-1 but in fact controlled by him.  He then used that email account to correspond with the Victim Company concerning services purportedly rendered to the Victim Company by Individual-1 and by the Individual-1 Company.  In fact, Individual-1 and the Individual-1 Company did not provide these services to the Victim Company.  Nevertheless, MUNSHANI caused the Victim Company to pay at least approximately $3 million dollars to Individual-1 and the Individual-1 Company, which funds enriched SUNI MUNSHANI and SURESH MUNSHANI.  In furtherance of the scheme, SUNI MUNSHANI also caused the Victim Company to issue a check for an additional approximately $3.5 million, which MUNSHANI claimed related to a tax liability of the Victim Company.  In fact, no such tax liability existed and MUNSHANI, again with the assistance of SURESH MUNSHANI, also stole this money from the Victim Company.

In addition, between 2013 and 2019, MUNSHANI carried out another scheme to defraud the Victim Company through services agreements between the Victim Company and a software development company (the “Development Company”).  As part of the scheme, MUNSHANI obtained an undisclosed ownership interest in the Development Company and used his personal email account to assist the CEO of the Development Company (“Co-Conspirator-1”) in negotiating favorable terms in its contracts with the Victim Company.  During the scheme, the Development Company transferred at least approximately $2 million to MUNSHANI.

In yet another scheme, between 2018 and October 2020, MUNSHANI defrauded the Victim Company through licensing and reseller agreements between the Victim Company and two other companies (the “Licensing Company” and the “Reseller Company,” respectively).  As part of the scheme, MUNSHANI conspired with others to create the Licensing Company and the Reseller Company and, without disclosing his involvement in the companies to the Victim Company, assisted the companies in their negotiations with the Victim Company.  Thereafter, MUNSHANI attempted to steer an approximately $6.7 million contract to the Licensing Company, and received payments amounting to at least $200,000 from the Reseller Company.   

*          *          *

SUNI MUNSHANI, 60, of Easton, Connecticut, is charged with three counts of conspiring to commit wire fraud, and SURESH MUNSHANI, 57, of Manhattan, New York, is charged with one count of conspiring to commit wire fraud.  Each count carries a maximum sentence of 20 years in prison.

The statutory maximum sentences are prescribed by Congress and provided here for informational purposes only, as any sentencing of the defendants would be determined by the judge.

Mr. Williams praised the outstanding investigative work of the FBI’s New York Office.

The prosecution of this case is being handled by the Office’s Complex Frauds and Cybercrime Unit.  Assistant U.S. Attorney Timothy V. Capozzi is in charge of the prosecution.

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

 


[1] As the introductory phrase signifies, the Indictment, and the description of the Indictment set forth herein, constitute only allegations, and every fact described should be treated as an allegation.

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ALEXANDRIA, Va. – A federal court convicted a Port Clinton, Ohio, woman yesterday on charges of production and distribution of child sexual abuse material.

According to court records and evidence presented at trial, during in 2020, Ashley Kolhoff, 22, produced sexually explicit images of the minor victim and posted them to a website dedicated to facilitating child exploitation. Over the course of multiple days, Kolhoff distributed the images of the victim to nine other members of the website while she engaged in a series of graphic conversations discussing the users’ desire to sexually abuse the victim.

Kolhoff faces a mandatory minimum of 15 years in prison when sentenced on July 12, 2022. A federal district court judge will determine any sentence after taking into account the U.S. Sentencing Guidelines and other statutory factors.

Jessica D. Aber, U.S. Attorney for the Eastern District of Virginia; Kenneth A. Polite, Jr., Assistant Attorney General of the Justice Department’s Criminal Division; and Raymond Villanueva, Special Agent in Charge of U.S. Immigration and Customs Enforcement’s Homeland Security Investigations (HSI) Washington, D.C., made the announcement after U.S. District Judge Leonie M. Brinkema announced the verdict.

Special Assistant U.S. Attorney Whitney Kramer and Assistant U.S. Attorney Seth Schlessinger are prosecuting the case.

This case was brought as part of Project Safe Childhood, a nationwide initiative launched in May 2006 by the Department of Justice to combat the growing epidemic of child sexual exploitation and abuse. Led by U.S. Attorney’s Offices and the Child Exploitation and Obscenity Section (CEOS), Project Safe Childhood marshals federal, state, and local resources to better locate, apprehend, and prosecute individuals who exploit children via the internet, as well as to identify and rescue victims. For more information about Project Safe Childhood, please visit www.justice.gov/psc

In 2021, EDVA launched “UnMasked,” a community-based educational outreach and prevention program in Virginia dedicated to raising awareness and educating the community about the prevalence of online sexual exploitation involving children and young adults. UnMasked is a multi-disciplinary partnership of local, state, federal, and non-profit stakeholders. The core curriculum is provided by the National Center for Missing and Exploited Children’s (NCMEC) NetSmartz program. To report an incident involving online sexual exploitation, call 1-800-843-5678 or submit a report at report.cybertip.org. To request an UnMasked event at your school or organization, please contact EDVA’s Community Outreach Coordinator at [email protected].

A copy of this press release is located on the website of the U.S. Attorney’s Office for the Eastern District of Virginia. Related court documents and information are located on the website of the District Court for the Eastern District of Virginia or on PACER by searching for Case No. 1:21-cr-158.

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Leonard C Boyle, United States Attorney for the District of Connecticut, announced that DAYQUAN FITZGERALD-WILLIAMS, 26, formerly of Connecticut and currently residing in North Carolina, waived his right to be indicted and pleaded guilty today via videoconference before U.S. District Judge Victor A. Bolden to conspiracy to commit bank fraud.

According to court documents and statements made in court today, Fitzgerald-Williams used his position as a bank employee, first at Citizens Bank and then at Santander Bank, to access customer information and provide that information to others who obtained funds from the accounts through unauthorized transactions.  Between late 2018 and early 2020, as a mortgage development officer at Santander Bank, Fitzgerald-Williams searched bank records for older customers who had at least $100,000 in their accounts.  He then passed along customer identifying and account information to others who used that information to cause approximately 70 fraudulent checks totaling approximately $1.6 million to be issued and more than $2 million in ACH transactions to be made or attempted.  Not all of the fraudulent checks or ACH transactions ultimately cleared customers’ accounts.

During the conspiracy, Fitzgerald-Williams also attempted to negotiate a fraudulent check in the amount of $34,700 made payable to him.

At sentencing, which is not scheduled, Fitzgerald-Williams faces a maximum term of imprisonment of 30 years.

Fitzgerald-Williams is released pending sentencing.

This matter is being investigated by the U.S. Secret Service and prosecuted by Assistant U.S. Attorney Jennifer R. Laraia. 

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BOSTON – The main supplier and drug distributor of two Boston-area drug trafficking organizations (DTO) pleaded guilty yesterday to cocaine trafficking conspiracy.

Kenji Drayton, 41, of Boston, pleaded guilty to conspiracy to distribute and possess with intent to distribute cocaine and conspiracy to distribute and possess with intent to distribute 500 grams or more of cocaine. U.S. District Court Judge Denise J. Casper scheduled sentencing for Aug. 10, 2022. 

Drayton was charged with 23 others in June 2020 as part of Operation Snowfall.

According to the charging documents, beginning in November 2018, law enforcement investigated a DTO – for which Drayton was a principal drug supplier – that was comprised of Boston-based street gang members and associates in the Commonwealth Development in Brighton, formerly known as Fidelis Way, a multi-apartment public housing development. It is alleged that the DTO assumed control over multiple apartments, where they stored, cooked, packaged and sold drugs – most of which was cocaine or cocaine base, which the DTO supplied to customers, wholesalers and distributors. As a result, the DTO caused a blight of the development and reduced the quality of life of the other residents. 

The second part of the investigation targeted large-scale drug suppliers and their associates. It is alleged that the DTO continued to distribute cocaine and cocaine base throughout the COVID-19 pandemic and shutdown. Intercepted communications in spring 2020 revealed Drayton complained about drug supply shortages resulting from the pandemic. On one call, Drayton discussed a co-conspirator’s travels to California to obtain significant quantities of cocaine for the DTO. 

Drayton served as one of the main up-the-chain drug suppliers and distributors within each of the identified DTOs. Drayton purchased, sold and distributed wholesale quantities of cocaine as part of each DTO and is estimated to have distributed a total of over 3.5 kilograms of cocaine.  

Drayton is the second defendant to plead guilty in the Fidelis-Way related drug conspiracy, and the 11th defendant to plead guilty in the other charged drug conspiracy case. The remaining defendants have pleaded not guilty and are pending trial. One defendant, Derek Hart, remains at large.

The charge of conspiracy to distribute and to possess with intent to distribute 500 grams or more of cocaine provides for a sentence of at least five years and up to 40 years in prison, at least four years and up to life of supervised release and a fine of up to $5 million. The charge of conspiracy to distribute and to possess with intent to distribute cocaine provides for a sentence of up to 20 years in prison, supervised release for at least three years up to life and a fine of up to $1 million. Sentences are imposed by a federal district court judge based upon the U.S. Sentencing Guidelines and statutes which govern the determination of a sentence in a criminal case.

First Assistant United States Attorney Joshua S. Levy; Brian D. Boyle, Special Agent in Charge of the Drug Enforcement Administration, Boston Field Division; Douglas Bartlett, Acting U.S. Marshal for the District of Massachusetts; Colonel Christopher Mason, Superintendent of the Massachusetts State Police; and Boston Police Acting Commissioner Gregory Long made the announcement. Assistance with the investigation was provided by the Braintree, Cambridge, Canton, Randolph and Weymouth Police Departments; the Suffolk, Norfolk and Bristol County District Attorneys’ Offices; and the Suffolk, Plymouth and Norfolk County Sheriffs’ Office. Assistant U.S. Attorneys Kaitlin R. O’Donnell and Timothy E. Moran of the Organized Crime & Gang Unit are prosecuting the case.

This effort 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.

The details contained in the charging documents are allegations. The remaining defendants are presumed innocent unless and until proven guilty beyond a reasonable doubt in a court of law.

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BIRMINGHAM, Ala. – A federal judge today sentenced a Blount County man on gun and drug charges, announced U.S. Attorney Prim F. Escalona and Drug Enforcement Administration Special Agent in Charge Brad L. Byerley.

U.S. District Court Judge Karon O. Bowdre sentenced Stephen Matthew Laughlin aka “Country”, 38, to 286 months in prison followed by five years of supervised release for possession with the intent to distribute methamphetamine and possession of a firearm in furtherance of a drug trafficking crime.  Laughlin pleaded guilty in December 2021.

According to the plea agreement and evidence at sentencing, on September 29, 2021, law enforcement conducted a joint operation of a safety and driver license inspection checkpoint in Blount County.  An officer approached Laughlin’s vehicle when it stopped at the checkpoint and asked Laughlin to produce his driver’s license, registration, and proof of insurance. The officer walked to the rear of the vehicle to check the status of the tag and noticed a large metal piece sticking up off the trailer hitch. The metal piece obstructed the view of the vehicle tag and was in violation of Alabama state law.  The officer returned to the driver’s window and asked Laughlin to pull to the side of the road and wait for the officer to issue a warning citation for the violation.  As the officer walked to his patrol unit, he asked a K-9 deputy to use his narcotics detection K-9 to conduct a free air sniff of the truck. The K-9 positively alerted for the presence of the odor of drugs coming from the truck.  The officer asked Laughlin to exit the vehicle so officers could conduct a probable cause search of the vehicle based on the positive K-9 alert. Laughlin then became argumentative with the officers, put his truck in drive and fled the scene. A Drug Enforcement Administration (DEA) Task Force Officer (TFO), who was at the checkpoint, began to pursue Laughlin. Laughlin accelerated to speeds exceeding eighty miles per hour and  threw a red bag out of the driver’s side window. Another officer stopped and retrieved the bag, which was found to contain methamphetamine. Spike strips were deployed by officers. Laughlin ran over the spike strips and eventually stopped, surrendering to law enforcement officers. During the search of Laughlin’s vehicle, officers found a PPS43C Pioneer Arms Corp 9mm semi-automatic pistol and an Anderson Manufacturing AM-15 .223 caliber rifle in a soft rifle case located behind the driver’s seat on the bench seat. The drugs seized from Laughlin totaled 997.1 grams of 94% pure methamphetamine.

The DEA investigated the case.  Assistant U.S. Attorney Allison Garnett prosecuted the case.

 

              

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A criminal complaint was unsealed today in federal court in Brooklyn charging Frank James with conducting a violent attack on a mass transportation vehicle in violation of 18 U.S.C. §§ 1992(a)(7) and (b)(1).  The charge, terrorist attacks or other violence against a mass transportation system, relates to the April 12, 2022, mass shooting on the New York City subway in Sunset Park, Brooklyn.  James was arrested earlier today by New York City police officers in Manhattan and will make his initial appearance tomorrow before United States Magistrate Judge Roanne L. Mann.

Breon Peace, United States Attorney for the Eastern District of New York, Michael J. Driscoll, Assistant Director-in-Charge, Federal Bureau of Investigation, New York Field Office (FBI), John DeVito, Special Agent-in-Charge, U.S. Bureau of Alcohol, Tobacco, Firearms and Explosives, New York (ATF) and Keechant L. Sewell, Commissioner, New York City Police Department (NYPD), announced the arrest and charge.

“As alleged, the defendant committed a heinous and premeditated attack on ordinary New Yorkers during their morning subway commute,” stated United States Attorney Peace.  “All New Yorkers have the right to expect that they will be safe as they travel throughout our great city and use our vital transportation systems.  I am grateful to our law enforcement partners, the first responders and the everyday New Yorkers who stepped up during this crisis and showed the best of our city.  And, we continue to pray for the victims and their loved ones as they recover from this traumatic event, both physically and emotionally.” 

Mr. Peace praised the outstanding efforts of the FBI’s New York Joint Terrorism Task Force, which consists of investigators and analysts from the FBI, the NYPD, and over 50 other federal, state, and local agencies.

“Yesterday, as everyday New Yorkers commuted through Brooklyn on our subway system, Frank James – as alleged – committed a horrific act that resulted in an around-the-clock effort by the FBI’s Joint Terrorism Task Force in New York, the NYPD, and the ATF to find him and bring him to justice. Thanks to the incredible work by all involved to identify James and get the proper information out to the public, he’s in federal custody and New Yorkers can breathe a little easier in our city today,” stated FBI Assistant Director-in-Charge Driscoll. 

“Today’s arrest of Frank James was in large part due to the vigilance and a concerted effort by New Yorkers to aid law enforcement in the apprehension of violent criminals. We at ATF applaud the public’s engagement and participation in providing vital information to apprehend James, and we hope for a speedy recovery for all victims. ATF will continue to utilize our nationwide Crime Gun Intelligence capabilities to support our partners in the continued investigation of Tuesday’s horrific attack on the NYC subway,” stated ATF Special Agent-in-Charge DeVito.

“Today, after nearly 30 hours of dogged police work, Frank James was arrested by the NYPD without incident,” stated NYPD Commissioner Sewell.  “From the moment Mr. James committed this appalling crime, the police began shrinking his world until he had nowhere to turn – and the people of our city were working right alongside us. So together with our law enforcement partners at the FBI, the ATF, the U.S. Marshals Service, and the U.S. Attorney’s Office for the Eastern District of New York, I want to thank New Yorkers for their vigilance and their help in taking this violent criminal off our streets.”

As set forth in the complaint, during rush hour on the morning of April 12, 2022, James used a Glock 17 pistol he purchased in Ohio to conduct a mass shooting on an N subway train in Brooklyn.  James, dressed in an orange reflective jacket, yellow hard hat, and surgical mask, set off a smoke-emitting device in one of the train cars before firing at subway riders.  James had arrived in New York earlier that day in a rental van driven from Pennsylvania.  He parked the van on Kings Highway, approximately two blocks from the entrance to an N-train station, near where the shooting took place.  After the attack, James abandoned a bag containing, among other items, fireworks, a plastic container containing gasoline, and a torch.

In videos he posted publicly on YouTube before the attack, James made various statements about the New York City subway system.  Among other things, James addressed statements to New York City’s mayor: “What are you doing, brother?  What’s happening with this homeless situation?” and “Every car I went to wa[s] loaded with homeless people.  It was so bad, I couldn’t even stand.”  James also made statements, in sum and substance, about various conspiracy theories, including that: “And so the message to me is: I should have gotten a gun, and just started shooting motherf—ers.” 

Following the attack, members of law enforcement executed court-authorized search warrants for properties associated with James in Pennsylvania.  Agents recovered, among other items: 9mm ammunition; a threaded 9mm pistol barrel, which allows for a silencer or suppresser to be attached;.223 caliber ammunition, which is used with an AR-15 semi-automatic rifle; a taser; a high-capacity rifle magazine; and a blue smoke cannister. 

If convicted the defendant faces a maximum sentence of life imprisonment.

The charge in the complaint is an allegation, and the defendant is presumed innocent unless and until proven guilty.

Anyone with information about Mr. James or this incident is asked to call the FBI at 1-800-CALLFBI. Digital tips may also be submitted by visiting www.fbi.gov/brooklynshooting.

The government’s case is being handled by the Office’s National Security and Cybercrime Section.  Assistant U.S. Attorneys Douglas M. Pravda, Alexander A. Solomon, Craig R. Heeren, David K. Kessler, Ian C. Richardson, Artie McConnell, Alexander Mindlin, Sara Winik, Ellen Sise, and Meredith A. Arfa, and Paralegal Specialists Wayne Colon and Benjamin Richmond, handled the investigation, with assistance provided by Trial Attorney Larry Schneider of the National Security Division’s Counterterrorism Section.

The Defendant:

FRANK JAMES
Age:  62
Milwaukee, Wisconsin

E.D.N.Y. Docket No. 22-MJ-429

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ALBUQERQUE, N.M. – Michael Deherrera, 26, of Belen, New Mexico, was sentenced in federal court on April 11 to five years in prison for carjacking and being a felon in possession of a firearm.

Deherrera was indicted by a federal grand jury on July 29, 2020. According to the plea agreement, on Feb. 3, 2020, DeHerrera carjacked a victim by threating her with a screwdriver in Bernalillo County, New Mexico. DeHerrera began to drive away with the victim still in the car, causing her to jump from the moving vehicle to escape. DeHerrera also admitted that on Feb. 18, 2020, he possessed a firearm before attempting to dispose of it by throwing it from the window of a moving vehicle.

At the time DeHerrera possessed the firearm, he had a prior felony conviction for armed robbery. As a convicted felon, DeHerrera could not legally possess a firearm or ammunition.

The FBI Albuquerque Field Office and the Bureau of Indian Affairs investigated this case with assistance from the U.S. Marshals Service and the Bernalillo County Sheriff’s Office. Assistant U.S. Attorney Fredrick T. Mendenhall is prosecuting the case.

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KNOXVILLE, Tenn. – On April 13, 2022, a federal jury convicted a registered sex offender, Everett Eugene Miller, Jr., 55, of Sunbright, Tennessee, of enticement of a minor for sex, transporting a minor in interstate commerce for sex, committing those offenses while being required to register as a sex offender, and attempting to escape from the custody of the U.S. Marshals Service.  As a result of the convictions, the defendant is subject to a prison sentence of 20 years up to life.  Sentencing will be scheduled at a later date before the Honorable Katherine A. Crytzer, United States District Judge.

According to the evidence at trial, the investigation began when the Morgan County Sheriff’s Office received an anonymous tip that Miller, an over-the-road truck driver, was transporting a minor across state lines.  When asked, the minor revealed that the defendant had transported her across-state lines and had coerced her to have sex with him in the sleeper cab of his truck.  The Federal Bureau of Investigation (FBI) conducted consensual forensic exams of the minor’s cellular telephones, one of which the defendant had provided to the minor without her mother’s knowledge.  A forensic exam pursuant to a search warrant was also performed on the defendant’s cellular telephone.  The forensic exams revealed evidence which confirmed that the defendant had communicated extensively with the minor and that he had transported her across country.  Additionally, witness testified that, after the defendant had been arrested and was detained in federal custody, he tried to escape from custody while at a medical facility to which he had been transported for a heart procedure. 

The FBI conducted the investigation with assistance from the Morgan County Sheriff’s Office. 

Assistant U.S. Attorneys Matthew T. Morris and Jennifer Kolman represented the United States in court.

This case was brought as part of Project Safe Childhood (PSC), a nationwide initiative to combat the growing epidemic of child sexual exploitation and abuse launched in May 2006 by the Department of Justice.  Led by U.S. Attorneys’ Offices and the Criminal Division’s Child Exploitation and Obscenity Section, PSC marshals federal, state and local resources to better locate, apprehend and prosecute individuals who exploit children via the Internet, as well as to identify and rescue victims. For more information about PSC, please visit www.projectsafechildhood.gov.

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COEUR D’ALENE – Adam Christopher Johnson, of Clarkston, Washington, was sentenced to 100 months in federal prison for conspiracy to distribute methamphetamine. Chief U.S. District Judge David C. Nye also ordered Johnson to serve five years of supervised release following his prison sentence. Johnson pleaded guilty to the charge on April 20, 2021.

According to court records, Johnson, 35, conspired with Helene Martensen, 51, Chandler Lee Black, 21, and Richard Lee Black, 43, to distribute methamphetamine in the Lewiston, Idaho area. Lewiston Police Department detectives, assigned to the Quad Cities Drug Task Force, arrested Richard Black in January 2020, when he was found in possession of distribution quantities of methamphetamine, empty baggies, a digital scale, and cash. Several months later, in June 2020, after a significant collaborative effort, the FBI North Idaho Violent Crime Task Force stopped Martensen’s vehicle and found that she and Johnson possessed two pounds of methamphetamine. The key evidence, however, was obtained through FBI search warrants for cell phones and cell phone records. These records showed the effort of each conspirator to sell illegal drugs and firearms in the Lewis and Clark Valley, and on the Nez Perce Indian Reservation.

Martensen was sentenced on March 17, 2021, to 90 months in federal prison, Chandler Black was sentenced on July 7, 2021, to 78 months in federal prison, and Richard Black was sentenced on March 2, 2022, to 120 months in federal prison.

Chief U.S. District Judge David C. Nye also ordered Johnson to serve five years of supervised release following his prison sentence. Johnson pleaded guilty to the charge on April 20, 2021.

U.S. Attorney Rafael M. Gonzalez, Jr. of the District of Idaho, made the announcement and commended the cooperative efforts of the Federal Bureau of Investigation, Nez Perce County Prosecutor’s Office, Lewiston Police Department, Nez Perce Tribe Police Department, Idaho State Police, Nez Perce County Sheriff’s Office, Clarkston Police Department, Asotin County Sheriff’s Office, Whitman County Sheriff’s Office, and the Bureau of Alcohol, Tobacco, Firearms and Explosives, which led to charges.

The Quad Cities Drug Task Force is a multi-jurisdictional group of law enforcement officers working together to target drug trafficking in Lewiston and Moscow, Idaho, and Clarkston and Pullman, Washington.

The North Idaho Violent Crime Task Force (NIVCTF) is an FBI led task force with law enforcement officers from Lewiston Police Department, Nez Perce County Sheriff’s Office, Grangeville Police Department, Nez Perce Tribe Police Department, Idaho State Police, and Post Falls Police Department. The mission of the NIVCTF is to identify and target for prosecution criminal enterprise groups and individuals responsible for crimes of violence and the manufacture and distribution of illegal narcotics.

This prosecution is part of an Organized Crime Drug Enforcement Task Forces (OCDETF) investigation. OCDETF identifies, disrupts, and dismantles the highest-level drug traffickers, money launderers, gangs, and transnational criminal organizations that threaten the United States by using a prosecutor-led, intelligence-driven, multi-agency approach that leverages the strengths of federal, state, and local law enforcement agencies against criminal networks.

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(Reuters) -Rent the Runway on Wednesday forecast full-year revenue below Wall Street estimates, sending the apparel rental firm’s shares down 4% in extended trading.

The downbeat outlook comes at a time when fashion retailers are expected to benefit from a post-COVID recovery in demand for dress and formal attire, as the United States gears up for the most number of ceremonies since 1984 after the pandemic delayed weddings and other social events.

Rent the Runway expects full-year revenue between $295 million and $305 million, below estimates of $305.02 million, according to IBES data from Refinitiv.

The company reported a 91% jump in revenue to $64.1 million for the fourth quarter, above estimates of $63.22 million.

Active subscribers for the company’s fashion rental service rose over 110% to 115,240 in the quarter.

With Wednesday’s after-hours decline, the stock is down more than 70% from its October initial public offering price.

(Reporting by Akash Sriram and Deborah Sophia iin Bengaluru; Additional reporting by Noel Randewich in New York; Editing by Maju Samuel)

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By Stephen Culp

NEW YORK – Wall Street rallied to end sharply higher on Wednesday, powered by a recovery in interest-sensitive growth stocks as investors digested hot inflation data and a mixed bag of quarterly results.

Falling U.S. Treasury yields helped the tech-heavy Nasdaq lead all three major U.S. stock indexes higher, with semiconductors outperforming the broader market. [US/]

The Nasdaq jumped over 2% while the S&P 500 and the Dow gained more than 1%.

“Bond yields may have gotten ahead of themselves and they’re dropping lower today,” said David Carter, managing director at Wealthspire Advisors in New York. “This helps almost all equities, but particularly growthy areas like tech.”

JPMorgan Chase & Co set the first-quarter earnings season off to an inauspicious start, reporting a 42% drop in quarterly profit. The downbeat results from the biggest U.S. lender sent its shares down 3.2%.

On the brighter side, Delta Air Lines’ results beat expectations and it forecast a current-quarter return to profit due to “historically high” demand. Its 6.2% share jump was contagious; the broader S&P 1500 airline index surged 6.8%.

“It’s great that demand is so strong,” Carter added. “However, drive inflation higher, which will force the Fed to continue to raise rates, resulting in a weaker stock market.”

“Business is good. Almost too good.”

Strong demand also drove the Labor Department’s producer price index to a blistering 11.2% year-on-year growth rate, the hottest annual reading since the Labor Department started tracking annual data in 2010.

Core PPI and other major indicators have risen beyond the Federal Reserve’s average annual 2% inflation target.

GRAPHIC: U.S. inflation gauges https://graphics.reuters.com/USA-STOCKS/zjvqkdrwavx/inflation.png

Minutes from the most recent Fed policy meeting and subsequent remarks from its members have market participants setting easy odds for a series of 50-basis-point interest rate hikes in the coming months, as the central bank treads the delicate tightrope of curbing inflation without provoking a recession.

“It’s obvious now that the Fed is singing off the same song sheet, more tightening is coming,” Carter said. “Much of this, however, is priced in and expected.”

The Dow Jones Industrial Average rose 344.23 points, or 1.01%, to 34,564.59, the S&P 500 gained 49.14 points, or 1.12%, to 4,446.59 and the Nasdaq Composite added 272.02 points, or 2.03%, to 13,643.59.

Among the 11 major sectors of the S&P 500, consumer discretionary stocks enjoyed the largest percentage gains, jumping 2.5%.

Analyst estimates for the corporate earnings season have grown less optimistic. Aggregate annual S&P 500 earnings growth for the first three quarters of 2022 is estimated at 5.4% as of Wednesday, down from 7.5% at the beginning of the year.

On Thursday, the holiday-shortened week will end with results from a swath of big banks, including Morgan Stanley, Citigroup Inc, Goldman Sachs Group Inc, and Wells Fargo & Co.

Advancing issues outnumbered declining ones on the NYSE by a 2.92-to-1 ratio; on Nasdaq, a 2.87-to-1 ratio favored advancers.

The S&P 500 posted 19 new 52-week highs and 11 new lows; the Nasdaq Composite recorded 48 new highs and 168 new lows.

Volume on U.S. exchanges was 10.52 billion shares, compared with the 12.33 billion average over the last 20 trading days.

(Reporting by Stephen Culp; additional reporting by Bansari Mayur Kamdar and Praveen Paramasivam in Bengaluru; Editing by Lisa Shumaker)

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By David Shepardson

(Reuters) – U.S. health officials on Wednesday extended by 15 days a U.S. mandate requiring travelers to wear masks on airplanes, trains and in transit hubs, saying they needed time to assess the impact of a recent rise in COVID-19 cases.

Industry groups and Republican lawmakers want the administration to immediately end the 14-month-old mask mandate. The latest extension would keep the requirements, which had been set to expire April 18, in place through May 3 amid an increase in COVID cases.

The U.S. Centers for Disease Control and Prevention (CDC) first issued a public health order requiring masks in interstate transportation and at transit hubs, including airplanes, mass transit, taxis, ride-share vehicles and trains effective in February 2021. The Transportation Security Administration (TSA) issued a security directive to enforce the CDC order.

The CDC said Wednesday the extension was prompted by a rise in cases and to “give it time to assess the potential impact of the rise of cases on severe disease, including hospitalizations and deaths, and healthcare system capacity.”

White House press secretary Jen Psaki cited the case increase in explaining the extension.

“So what they’re trying to do is give a little bit more time to assess its potential impact the rise of the cases had on severe disease, including hospitalization and deaths and healthcare system capacity.” She added “at the end of that two weeks they can determine what’s next after that.”

The TSA said on Wednesday it would extend the order through May 3 after the CDC “continues to monitor the spread of the Omicron COVID-19 variant, especially the BA.2 subvariant that now makes up more than 85% of U.S. cases.”

Both the CDC and TSA mask requirements have been repeatedly extended.

Airlines for America, a trade group, on Wednesday in a letter continued to urge Biden’s administration “to lean into science and research, which clearly support lifting the mask mandate. It makes no sense to require masks on a plane when masks are not recommended in places like restaurants, bars or crowded sports facilities.”

The group said airplane air is among the safest indoor environments “due to the superior ventilation and hospital grade filters.”

Delta Air Lines Chief Executive Officer Ed Bastian told CNBC earlier Wednesday it was time to end the mask mandate and that people need to “make their own decisions and take personal accountability for their health onboard our planes.”

The group cited the CDC’s guidance that nearly all Americans live in counties where they can avoid wearing masks indoors. The CDC in February eased its guidance for face coverings.

The U.S. Senate voted 57-40 last month to overturn the public health order requiring masks on airplanes and other forms of public transportation, drawing a veto threat from Biden.

Republican Senator Roger Wicker said Wednesday the administration “continues to force unnecessary and contradictory mask mandates on the public,” while Democratic Senator Ed Markey applauded the extension “given the recent rise in COVID-19 cases.”

The mask requirements have resulted in friction sometimes on U.S. airplanes. The Federal Aviation Administration said that since January 2021, there have been a record 7,060 unruly passenger incidents reported – and 70% involved masking rules.

Transport Workers Union President John Samuelsen, which represents 65,000 airline workers, said the union respects the CDC mask decision “but we cannot ignore that the mask mandate has driven an unprecedented rise in assaults by unruly passengers against airline workers.”

Separately, the Biden administration on Wednesday renewed the government’s COVID-19 public health emergency, allowing millions of Americans to keep getting free tests, vaccines and treatments for at least three more months.

The administration is also considering lifting requirements that international visitors get a negative COVID-19 test within a day of travel, as many countries have dropped testing requirements, but is not taking any immediate steps. The United States requires foreign air travelers to be vaccinated.

(Reporting by David Shepardson in Berkeley, California; Editing by Will Dunham, Chizu Nomiyama and Bernard Orr)

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(Reuters) -Federal Reserve Governor Christopher Waller on Wednesday said the U.S. central bank needs to raise rates aggressively to fight inflation, but not so abruptly as to stress markets, destroy jobs and push the economy into recession.

“I don’t see value in trying to shock the markets; we are not in a Volcker kind of moment,” Waller told CNBC in an interview. In the early 1980s, when inflation was last as high as it is now, Fed Chair Paul Volcker jacked up rates as much as four percentage points at a time.

But Volcker, Waller noted, had to battle inflation that had been building for six or seven years; the current Fed is dealing with a surge in inflation that only began early last year.

“Right now our main concern is getting these prices down and we can do that without causing a recession,” Waller said, noting that he supports raising interest rates by a half-a-percentage point in May and “possibly more” in June and July.

“We don’t need to be shocking anything just to cause a shock…if inflation doesn’t cool off, we’ll keep going; we’ll do what it takes to get inflation back down” he said. “But we can do that in an orderly way without causing a lot of financial market stress.”

The Fed raised interest rates last month for the first time in three years, but uncertainty stemming from Russia’s invasion of Ukraine kept it from raising rates more than a quarter-of-a-percentage point.

Data since then – including a report on Tuesday showing consumer prices rose 8.5% in March, the biggest yearly rise since late 1981 – supports bigger rate hikes ahead, Waller said.

“I think we want to get to above neutral certainly by the later half of this year, and get closer to neutral as soon as possible,” Waller said, noting that while inflation has “pretty much” peaked, the Fed still needs to tighten policy to reduce demand and take pressure off of prices.

Traders continue to bet the Fed will raise interest rates by a half-point at both its May and June meetings, but in recent days have retreated from bets on a third half-point hike this year.

Fed Governor Lael Brainard on Tuesday signaled she was heartened by a moderation in core inflation in March that could point to some cooling ahead, even as rising food and gas prices drove overall consumer prices up 8.5%.

Rate futures prices last week were pricing in about a 75% chance the Fed’s policy rate would end the year in the range of 2.5% to 2.75%.

On Wednesday traders were betting that year-end range was only slightly more likely than ending 2022 in a range of 2.25% to 2.5%, around the rate that most Fed policymakers see as neutral and that could be achieved with two half-point rate hikes in coming meetings.

Waller’s remarks stood in contrast to his former boss St. Louis Fed President James Bullard, who supports raising rates to 3.5% by the end of the year and told the Financial Times that it is “fantasy” to think that inflation can be vanquished with more modest moves.

To reach Bullard’s target would require half-point hikes at all six remaining Fed meetings this year.

(Reporting by Ann Saphir; Editing by Jonathan Oatis, Andrea Ricci and David Gregorio)

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By Christopher Bing and Raphael Satter

WASHINGTON -Advanced hackers have shown they can take control of an array of devices that help run power stations and manufacturing plants, the U.S. government said in an alert https://www.cisa.gov/uscert/ncas/alerts/aa22-103a on Wednesday, warning of the potential for cyber spies to harm critical infrastructure.

The U.S. Cybersecurity and Infrastructure Security Agency and other government agencies issued a joint advisory saying the hackers’ malicious software could affect a type of device called programmable logic controllers made by Schneider Electric and OMRON Corp.

OMRON did not immediately return a message seeking comment. A Schneider spokesperson confirmed it had worked with U.S. officials to defend against the hackers, calling it “an instance of successful collaboration to deter threats on critical infrastructure before they occur.”

The controllers are common across a variety of industries – from gas to food production plants – but Robert Lee, chief executive of cybersecurity firm Dragos, which helped uncover the malware, said researchers believed the hackers’ intended targets were liquefied natural gas and electric facilities.

In its alert, the Cybersecurity Agency urged critical infrastructure organizations, “especially Energy Sector organizations,” to implement a series of recommendations aimed at blocking and detecting the cyber weapon, named Pipedream.

Although the government warning was vague – it did not say which hackers were behind the malware or if it had actually been used – it sent concern coursing across the industry.

In a sign of how seriously the discovery was being taken, CISA said it was making its announcement alongside the Energy Department, the National Security Agency and the FBI.

Programmable logic controllers, or PLCs, are embedded in a huge number of plants and factories and any interference with their operation has the potential to cause harm, from shutdowns to blackouts to chemical leaks, wrecked equipment or even explosions.

Lee said the tool developed by the mystery hackers was “highly capable” and had likely been in the works for several years.

“It is as dangerous as people are making it out to be,” Lee said in an interview.

Western cybersecurity officials are already on edge over Russia’s invasion of Ukraine and the deployment of malware aimed at causing electrical outages.

Sergio Caltagirone, Dragos’ vice president of threat intelligence, said Pipedream could be understood as a “toolbox” of different hacking tools. Each component offers a different way to subvert normal controls, giving the hackers a variety of options to launch attacks.

For example, Caltagirone said that one of the tools within Pipedream would have allowed the attackers to damage Schneider Electric’s PLC in such a way that it would need to be entirely replaced.

“Because of existing supply chain challenges it could take longer to get replacement controllers after such an attack,” Caltagirone said. “What this means is a liquefied natural gas facility might be out of commission for months.”

(Reporting by Christopher Bing and Raphael Satter in Washington and James Pearson in London; additional reporting by Matthieu Protard in Paris; Editing by Leslie Adler and Howard Goller)

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By Pete Schroeder

WASHINGTON – With Sarah Bloom Raskin last month dropping out of the running for the Federal Reserve’s top regulatory role, President Joe Biden’s administration is hunting again for a new candidate.

Raskin failed to garner enough support from moderate Democrats to be confirmed. Most notably, West Virginia Senator Joe Manchin said he would not back her, citing worries she would discourage banks from lending to oil and gas companies.

The Fed Vice Chair for Supervision role is one of the most powerful banking regulators in government, and the next official is likely to take on a sweeping portfolio including climate finance risk, fintechs, and fair lending.

Here are the candidates likely to be in the mix, according to analysts and Washington insiders.

MICHAEL BARR, FORMER TREASURY OFFICIAL

Michael Barr, currently a professor at the University of Michigan Law School, was a central figure at the Treasury under President Barack Obama when Congress passed the 2010 Dodd-Frank financial reform law.

As assistant secretary for financial institutions, Barr helped shape the Wall Street overhaul and now is a leading candidate to be nominated for the Fed role, according to two sources familiar with the matter.

Barr had previously been in the mix for another bank regulatory post, heading up the Office of the Comptroller of the Currency. But opposition from some progressives, who cited his work with some fintech firms after leaving government, helped sink his consideration.

Barr did not respond to a request for comment.

RAPHAEL BOSTIC, ATLANTA FED PRESIDENT

With his appointment as president of the Atlanta Fed in 2017, Bostic became the first Black person to hold a regional Fed president role. He has been outspoken on racial diversity and economic inequality issues, both of which are key policy priorities for the Biden administration.

An economist by training, Bostic previously held roles at the U.S. central bank in Washington, where he won praise for his work on community lending rules, and at the U.S. Department of Housing and Urban Development.

However, Bostic represents a bit of an unknown regarding financial regulation, analysts said. Even so, some banks were keen on Bostic for the role when his name was first floated last year, according to two industry executives.

A spokesperson for Bostic did not immediately provide comment.

NELLIE LIANG, TREASURY UNDERSECRETARY

Liang, a former Fed official who is now Treasury’s undersecretary for domestic finance, was instrumental in building the regulatory framework after the 2007-2009 recession and financial crisis. She spent decades at the Fed as a staffer, ultimately becoming the first director of the central bank’s Division of Financial Stability.

She left the Fed in 2017 to join the Brookings Institution think tank, where she criticized Republican efforts to trim capital and liquidity requirements for large banks, among other changes.

Liang was nominated for a seat on the Fed’s Board of Governors during the Trump administration, but she withdrew in 2019 after Republicans blocked her nomination over worries she would be too tough on Wall Street.

However, some progressives are unhappy that Liang has not taken a tougher stance on cryptocurrencies, “so it is unclear whether she would be in any future conversation about this role,” Isaac Boltansky, policy director for brokerage BTIG, wrote in a note on Monday.

A spokesperson for Liang did not immediately respond to a request for comment.

MICHAEL HSU, ACTING COMPTROLLER OF THE CURRENCY

Currently acting comptroller of the currency, Hsu previously led big bank supervision at the Fed. In his current role, he has pushed Democratic priorities, including climate change risk and has warned banks against “over-confidence” coming out of the COVID-19 pandemic.

While he would be a good fit for Fed supervision, Washington insiders said, it’s unclear if his stance on climate financial risk would be palatable to Manchin, a moderate who represents coal-producing West Virginia in the Senate.

A spokeswoman for Hsu did not immediately respond to a request to comment.

FORMER TREASURY UNDERSECRETARY MARY MILLER

A new name floated on Monday was Mary Miller, who was at the Treasury from 2010 to 2014. She recently served as the interim senior vice president for finance and administration at Johns Hopkins University.

During her stint at the Treasury, Miller was responsible for Treasury debt management, fiscal operations, and the recovery from the financial crisis. She played a central role in implementing the 2010 Dodd-Frank financial reform law, helping agencies write complex regulations like the “Volcker Rule” and standing up the new Financial Stability Oversight Council.

Miller could not immediately be reached for comment.

RICHARD CORDRAY, FORMER HEAD OF THE CONSUMER FINANCIAL PROTECTION BUREAU (CFPB)

A former Ohio attorney general, Cordray served as the first director of the CFPB.

Under his leadership the agency took an aggressive stance in going after abusive mortgage and payday lenders, earning praise from progressives and criticism from Republicans who said he was overstepping the agency’s statutory remit.

After leaving the agency, Cordray ran unsuccessfully for Ohio governor. He currently runs the Education Department’s federal student aid programs. Cordray was in the running for the supervision post late last year, Reuters reported.

Cordray did not respond to a request for comment.

(Reporting by Pete Schroeder)

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WASHINGTON – The International Monetary Fund said its executive board on Wednesday approved the creation of a new facility to help low-income and vulnerable middle-income countries deal with longer-term challenges such as climate change and pandemics.

IMF Managing Director Kristalina Georgieva announced approval of the Resilience and Sustainability Trust in a statement after the board meeting, and said it would take effect from May 1.

She said the trust would amplify the impact of last year’s $650 billion allocation of IMF Special Drawing Rights by allowing richer members to channel their emergency reserves to countries where the needs are greatest. The target was to build a trust of at least $45 billion, she said.

(Reporting by Andrea Shalal and David Lawder; Editing by Leslie Adler)

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(Corrects date)

By Hyunjoo Jin

SAN FRANCISCO – San Francisco police were left scratching their heads after they pulled over a car earlier this month for driving without headlights at night and found no one inside.

In what otherwise would have been a great April Fools’ Day joke, San Francisco police officers pulled over a driverless car operated by General Motor Co’s Cruise unit on April 1 and found no one behind the wheel. The resulting video footage has gone viral online.

The two officers, who were not identified, pulled the car over and were puzzled by the lack of humans inside, according to a video posted on Instagram that has been viewed almost 80,000 times.

“Ain’t nobody in it. This is crazy,” said one of the officers, who tried to open the vehicle door before walking back to his cruiser. The car subsequently drove through the intersection and stopped again in the next block as bystanders laughed.

The video illustrated what Cruise Chief Executive Kyle Vogt previously said was one of the biggest challenges for autonomous vehicles – how to interact with humans.

Cruise, which blamed human error for the lack of headlights, said it works closely with the police on how to interact with its vehicles and has a dedicated phone number for police to call. Once the officer was clear of the vehicle, Cruise said the car relocated to the nearest safe location.

Cruise is operating a small number of vehicles to give full driverless rides to the public free of charge at night in San Francisco. The company is seeking the last regulatory approval required to launch commercial driverless service in the densely populated city.

Ironically, Cruise CEO Vogt last month had said a scenario where a police officer pulls over a driverless car has to go smoothly.

“You are kind of papering over all the weird stuff that can happen when there’s no driver,” he said at a Morgan Stanley conference.

The San Francisco police department said the officers were able to make contact with the vehicle’s remote operator and a maintenance team took control. Cruise was lucky in another respect.

“No citation was issued during the traffic stop,” the police department said.

Social media had fun with the incident.

“Insane that no citation was issued,” Twitter user Theodectes said. “Why was this driverless car behaving as if it was completely drunk?”

“IT WAS DRIVING WITHOUT ITS HEADLIGHTS!!! Cops weren’t confused, they we’re probably questioning why cutting edge technology somehow can’t turn its own lights on,” Albino Guidedog said on YouTube.

(The story refiles to correct date.)

(Reporting by Hyunjoo Jin, editing by Ben Klayman and Bill Berkrot)

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By Sohini Podder and Carolina Mandl

(Reuters) – BlackRock Inc showed assets under management back below $10 trillion, hurt by the market rout in the first quarter, and cautioned that fees could come under pressure over the rest of the year because of volatile markets.

Still, BlackRock posted a better-than-expected quarterly profit as the world’s largest asset manager benefited from investors continuing to pour money into its various index-traded and active funds.

“Our clients are trying to understand the implications of the rapidly changing investment environment,” said Laurence D. Fink, chairman and chief executive, who pointed to Russia’s invasion of Ukraine as creating “a supply shock in commodities that is further increasing inflation.”

Adjusted profit rose to $1.46 billion, or $9.52 per share, in the three months ended March 31, from $1.2 billion, or $8.04 per share, a year earlier. Analysts on average had expected a profit of $8.75 per share, according to Refinitiv IBES data.

The New York-based firm ended the quarter with $9.57 trillion in assets under management. While that was up from $9.01 trillion a year earlier it was down from its record $10 trillion in the fourth quarter 2021.

The quarterly drop occurred mainly due to the sell-off in equities and fixed income markets, although there were also some outflows in retail fixed income and cash management. That was driven by redemptions from offshore prime and U.S. government money market funds, BlackRock said, in line with the broader money market fund industry.

As investors anticipate that the U.S. Federal Reserve will aggressively hike rates to combat sky-high inflation, bond yields have shot higher and the yield curve has inverted, which many see as an omen for a pending recession.

“Across the board, you’re seeing portfolios are being navigated around fixed income,” Fink said, adding that clients “are reevaluating where they should be across the yield curve.”

Flows into the asset manager’s funds remained positive, attracting total net flows of $86 billion in the first quarter, down from $172 billion a year earlier, primarily due to seasonal cash management outflows of $27 billion.

BlackRock predicted recent market volatility could result in lower performance fees from liquid alternatives and long-only products during the remainder of the year, according to Chief Financial Officer Gary Shedlin.

Despite the results beat, BlackRock’s shares closed down marginally at $715.74. They fell nearly 17% in the first quarter.

“The risk for this year is that visibility is low, and there’s a lot of uncertainty and that’s a negative for the stock,” said Cathy Seifert, an analyst at CFRA, adding over the longer term, there still remains several positive growth catalysts at the firm.

Total revenue rose about 7% to $4.69 billion, helped by higher investment advisory and administration fees. That compared with estimates of $4.73 billion.

(Reporting by Sohini Podder in Bengaluru and Carolina Mandl in New York; Editing by Megan Davies, Sriraj Kalluvila, Andrea Ricci, Cynthia Osterman and Bernard Orr)

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WELLINGTON – Tighter lending criteria and rising interest rates, coupled with inflation, continue to weigh on house prices and sales activity in New Zealand, the Real Estate Institute of New Zealand (REINZ) said on Thursday.

Seasonally adjusted nationwide median house prices fell 4.8% in March from February but remain up 7.4% year on year, according to REINZ.

The number of residential property sales decreased 33.5% in March, from 10,151 in March 2021 to 6,752.

(Reporting by Lucy Craymer; editing by Jonathan Oatis)

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By Pavel Polityuk and Oleksandr Kozhukhar

KYIV/LVIV, Ukraine – Ukraine warned on Wednesday that Russia was ramping up efforts in the South and East as it seeks full control of Mariupol, in what would be the first major city to fall, while Western governments committed more military help to bolster Kyiv.

The Kremlin’s nearly seven-week-long incursion, the biggest attack on a European state since 1945, has not gone to plan.

Russia has been forced to pull back from some northern areas even as attacks across the country have turned Ukrainian cities to rubble and caused more than 4.6 million people to flee abroad.

Russia’s defence ministry on Wednesday said 1,026 soldiers from Ukraine’s 36th Marine Brigade, including 162 officers, had surrendered in Mariupol, which has been besieged for weeks, and that the port was fully under its control.

Capturing its Azovstal industrial district, where the marines have been holed up, would give the Russians full control of Ukraine’s main Sea of Azov port, reinforce a southern land corridor and expand its occupation of the country’s East.

Ukraine’s general staff said Russian forces were attacking Azovstal and the port, but a defence ministry spokesman said he had no information about any surrender.

“Russian forces are increasing their activities on the southern and eastern fronts, attempting to avenge their defeats,” Ukrainian President Volodymyr Zelenskiy said in a Wednesday night video address.

Reuters journalists accompanying Russian-backed separatists saw flames billowing from the Azovstal area on Tuesday, a day after Ukraine’s 36th Marine Brigade said its troops had run out of ammunition.

The United States announced on Wednesday an extra $800 million in military assistance including artillery systems, armoured personnel carriers and helicopters. This took total U.S. military aid to more than $2.5 billion. France and Germany also pledged more.

Russia will view U.S. and NATO vehicles transporting weapons on Ukrainian territory as legitimate military targets, Deputy Foreign Minister Sergei Ryabkov told the TASS news agency.

It will impose tit-for-tat sanctions on 398 members of the U.S. House of Representatives and 87 Canadian senators, Interfax cited the foreign ministry as saying, after Washington targeted 328 members of Russia’s lower house of parliament.

Britain announced new financial measures on separatists.

‘LIBERATE US FROM WHAT?’

Ukraine says tens of thousands of people are believed to have been killed in Mariupol and accuses Russia of blocking aid convoys to civilians marooned there.

Its mayor, Vadym Boichenko, said Russia had brought in mobile crematoria “to get rid of evidence of war crimes” – a statement that was not possible to verify.

Moscow has blamed Ukraine for civilian deaths and accused Kyiv of denigrating Russian armed forces.

In the village of Lubianka northwest of Kyiv, from where Russian forces had tried and failed to subdue the capital before being driven away, a message to Ukrainians had been written on the wall of a house that had been occupied by Russian troops.

“We did not want this … forgive us,” it said.

The Kremlin says it launched a “special military operation” to demilitarise and “liberate” Ukraine, a message villagers said had been repeated to them by the Russian troops.

“To liberate us from what? We’re peaceful… We’re Ukrainians,” Lubianka resident Viktor Shaposhnikov said.

Polish President Andrzej Duda said on a visit to Kyiv with his Lithuanian, Latvian and Estonian counterparts that those who had committed and ordered crimes must be brought to justice.

Germany’s president did not join them as he had planned.

Zelenskiy said there had been no official approach and one of his officials denied a newspaper report he had rejected the visit due to Steinmeier’s recent good relations with Moscow.

BIDEN’S GENOCIDE COMMENTS

The Kremlin denounced President Joe Biden’s description of Moscow’s actions in Ukraine as amounting to genocide, with spokesman Dmitry Peskov saying this was unacceptable coming from the leader of a country he said had committed crimes of its own.

The White House said a legal process will be undertaken.

An initial report by a mission of experts set up by the Organization for Security and Cooperation in Europe documents a “catalogue of inhumanity” by Russian troops in Ukraine, according to the U.S. ambassador to the OSCE.

“This includes evidence of direct targeting of civilians, attacks on medical facilities, rape, executions, looting and forced deportation of civilians to Russia,” Michael Carpenter said.

Russia has denied targeting civilians and has said Ukrainian and Western allegations of war crimes are fabricated.

The Kyiv district police chief said 720 bodies had been found in the region around the capital from where Russian forces had retreated, with more than 200 people missing.

International Criminal Court Prosecutor Karim Khan said after visiting Bucha, a town where bound bodies of people apparently shot at close range were found, that Ukraine was a “crime scene” and this was within ICC jurisdiction.

“We have to pierce the fog of war to get to the truth,” Khan said on Twitter.

The mayor of the northeastern city of Kharkiv, Ukraine’s second largest, said bombing had increased significantly on Wednesday and satellite photos from Maxar Technologies showed long columns of armoured vehicles in the region.

At least seven people were killed, including a two-year-old boy, and 22 wounded in Kharkiv over the past 24 hours. Ukrainian forces shot down two Russian planes attacking towns in the region, regional Governor Oleh Synehubov said earlier.

Reuters could not immediately verify his statement but filmed people in Kharkiv quietly carrying bodies from an apartment block hit by shelling.

(Additional reporting by Elizabeth Piper in Kyiv, Max Hunder in London, David Ljunggren in Ottawa and Reuters bureaus; Writing by Philippa Fletcher and Costas Pitas; Editing by Alex Richardson, Mark Heinrich and Cynthia Osterman)

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By David Shepardson

(Reuters) -The Centers for Disease Control and Prevention (CDC) said on Wednesday it will revise its COVID-19 travel recommendations for international destinations and shrink the number of countries the government recommends avoiding.

About 90 countries and regions https://www.cdc.gov/coronavirus/2019-ncov/travelers/map-and-travel-notices.html#travel-1, including most of Europe, Brazil, Turkey, Russia, South Korea, Singapore, Hong Kong, Israel and Australia are currently rated by CDC as “Level 4: Very High” and the CDC recommends Americans, even if vaccinated, to avoid travel to those countries.

“This new system will reserve Level 4 travel health notices for special circumstances, such as rapidly escalating case trajectory or extremely high case counts,” the CDC said in a statement, adding that it will be effective Monday.

Last month, industry group U.S. Travel urged the CDC to end “avoid travel” advisories for all vaccinated individuals and urged the Biden administration to avoid the future “use of travel bans from specific countries.”

The letter added that the “CDC should ensure that Americans are not dissuaded from traveling to any place with COVID-19 case rates that are equal to, or less than, the case rates prevailing in the U.S.”

The CDC in recent weeks has been dropping a number of countries from the “Level 4” rating including Saudi Arabia, Myanmar, Peru, Ecuador, Columbia, Bolivia, Botswana, and Haiti.

Airlines and other travel groups have been pressing the Biden administration to lift the pre-departure COVID negative test requirements for international air travelers — as many other countries have done.

Airline say the testing rules dissuade some Americans from international flights because of the cost of testing and the fear of being stranded abroad if they contract COVID. Administration officials say the issue has been under review in recent weeks but health officials have announced no changes.

(Reporting by David Shepardson in Berkeley, California; Editing by Leslie Adler and David Gregorio)

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By Jan Wolfe

WASHINGTON -U.S. President Joe Biden has authorized the release of a new tranche of records from Donald Trump’s presidency to the congressional committee probing last year’s attack on the U.S. Capitol, according to a government letter released on Wednesday.

In the letter, U.S. National Archivist David Ferriero said Biden had declined to use a presidential power known as executive privilege to keep the Trump records confidential.

The letter is consistent with Biden’s earlier statements that it is in the country’s best interests for Congress to obtain Trump White House records relating to the events of Jan. 6, 2021.

Ferriero’s letter said the U.S. National Archives will deliver the latest batch of records to the committee on April 28. The letter did not say what types of records would be transmitted, but the committee has previously obtained speech drafts, call and visitor logs, handwritten notes and other files.

The National Archives, a federal agency that maintains presidential records, has already turned over hundreds of pages of documents to the House of Representatives Select Committee investigating the Jan. 6, 2021, attack.

Trump and his allies have waged an ongoing legal battle seeking to block access to documents and witnesses. Trump has sought to invoke executive privilege, which protects the confidentially of some internal White House communications.

The U.S. Supreme Court in January rejected a request by Trump to block the release of a tranche of White House records sought by the congressional panel.

Only one of the court’s nine members, conservative Justice Clarence Thomas, publicly noted disagreement with the decision.

The Select Committee has said it needs the records to understand any role Trump may have played in fomenting the violence that unfolded on Jan. 6, 2021. His supporters stormed the Capitol in a failed bid to prevent Congress from certifying Biden’s 2020 presidential election victory over Trump.

(Reporting by Jan Wolfe; editing by Jonathan Oatis and David Gregorio)

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