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Two New York Men Plead Guilty in $25 Million COVID-19 Fraud and Fentanyl Distribution Case
The defendants admitted to exploiting pandemic relief programs and participating in illicit drug trafficking.
In a significant federal case, two men from the Bronx, New York, have pleaded guilty to charges involving more than $25 million in fraudulently obtained COVID-19 unemployment benefits, with one of the defendants also admitting to involvement in a fentanyl distribution conspiracy. U.S. Attorney Philip R. Sellinger announced the admissions, which stem from a complex multi-agency investigation.
Natanael Valdez Brito, 35, known as “El Pocho,” and Alexander Arismendy Alix Hernandez, 23, entered their pleas before U.S. District Judge Michael A. Shipp in Trenton federal court. Valdez pleaded guilty to charges of conspiracy to distribute fentanyl, possessing with intent to distribute fentanyl and two counts of conspiracy to commit wire fraud. Hernandez pleaded guilty to one count of conspiracy to commit wire fraud.
The fraudulent scheme orchestrated by the defendants and their co-conspirators involved using stolen personal identifying information to file fake unemployment claims across multiple states during the COVID-19 pandemic. The affected states include Pennsylvania, New York, New Jersey, and Puerto Rico, with the fraudulent activities netting over $25 million in unemployment benefits. The deceit extended to attempting to defraud the IRS of more than $1.9 million in tax credit benefits, from which they successfully obtained approximately $129,446.
In addition to the wire fraud, Valdez was deeply involved in the narcotics trade. In mid-2021, he and his associates were implicated in the distribution of substantial quantities of fentanyl, sourced from Mexico and intended for sale in New Jersey and New York. During an operation on June 15, 2021, law enforcement officers arrested two of Valdez's associates as they attempted to sell approximately two kilograms of fentanyl in Clifton, New Jersey. A subsequent search of one associate's apartment revealed additional kilograms of the drug, alongside various documents used in the unemployment benefits fraud.
The wire fraud charges each carry a maximum penalty of 20 years in prison, while the drug-related charges could lead to up to 20 years in prison and a $1 million fine for each count. Sentencing for Valdez and Hernandez is scheduled for August 27, 2024.
The investigation was conducted by several federal agencies, including the FBI, IRS - Criminal Investigation, and the U.S. Postal Service - Office of Inspector General, with support from state labor departments. This case is also a part of the Organized Crime Drug Enforcement Task Forces (OCDETF) program, which focuses on dismantling the highest-level criminal organizations that threaten the United States.
