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Date: 04-22-2018

Case Style:

United States of America v. Dwayne E. Hans

Eastern District of New York Courthouse - Brooklyn, New York

Case Number: 17-CR-256

Judge: Sterling Johnson

Court: United States District Court for the Eastern District of New York (Kings County)

Plaintiff's Attorney: David K. Kessler

Defendant's Attorney: Michelle A. Gelernt - FPD

Description: Brooklyn, NY - Cyber Criminal Sentenced to 36 Months in Prison for Attempting to Steal More Than $3 Million From a Financial Institution and Government Agencies

Defendant Conducted Unauthorized Intrusion into a Government Website, and Attempted to Defraud the U.S. Department of Defense and Pension Benefit Guaranty Corporation

Dwayne C. Hans, was sentenced on April 18, 2018 by United States District Court Judge Sterling Johnson to 36 months’ imprisonment and ordered to pay $134,000.00 in restitution for orchestrating a series of frauds between July 2015 and October 2016, including by masquerading as an authorized representative of a U.S. financial institution and as a defense contractor. Hans previously pleaded guilty to one count of wire fraud and one count of computer intrusion.

Richard P. Donoghue, United States Attorney for the Eastern District of New York, William F. Sweeney, Jr., Assistant Director-in-Charge, Federal Bureau of Investigation (FBI), New York Field Office, and Robert A. Westbrooks, Inspector General, Pension Benefit Guaranty Corporation (PBGC), announced the sentence.

“Hans has been held accountable for engaging in brazen fraud schemes intended to steal millions of dollars by using U.S. government websites,” stated United States Attorney Donoghue. “Investigating and prosecuting cyber criminals is a priority of this Office, in order to protect the integrity of computer systems that help our government and the private sector operate.”

“Hans advanced his own interests at the expense of various government entities responsible for distributing taxpayer dollars,” stated FBI Assistant Director-in-Charge Sweeney. “We have a responsibility to uphold the public’s confidence in the security of both government and private sector computer networks. Today’s sentencing brings us one step closer to achieving this goal.”

“We want to thank our law enforcement partners and the U.S. Attorney’s Office for bringing to justice those who attempt to steal from the Pension Benefit Guaranty Corporation,” stated PBGC Inspector General Westbrooks. “The PBGC protects the retirement benefits of more than 40 million American workers and retirees. The Corporation does not receive tax dollars and relies upon premium income. Our office will remain vigilant in safeguarding PBGC insurance programs and the integrity of its web applications.”

Between July 2015 and December 2015, Hans submitted bids to the Defense Logistics Agency (DLA), an agency within the United States Department of Defense, for contracts in the names of two different companies he created. The contracts on which Hans bid related to the provision of various items to the DLA, including electrical measurement equipment. Hans falsely claimed that those companies had numerous employees and were capable of filling the contracts. In reality, the companies had no employees and no ability to service the contracts. The DLA awarded at least 52 contracts, worth approximately $533,209.70, to Hans’s companies and sent at least $11,999.32 to those companies.

In early 2016, Hans created numerous bank accounts in the name of a U.S. financial institution (Financial Institution 1). In April 2016, Hans accessed a website maintained by the United States General Services Administration that allowed companies that worked with the U.S. government to provide information about how the government should disburse money to those companies. Hans modified payment information in an entry associated with Financial Institution 1 in order to redirect payments to accounts he controlled. As a result, a U.S. government agency transferred approximately $1.521 million to Hans instead of to Financial Institution 1. Those transfers were ultimately detected and disrupted before Hans withdrew or transferred the money.

In addition, between April 2016 and June 2016, Hans used a computer to initiate electronic transfers of approximately $134,000 from two corporate bank accounts held by Financial Institution 1. Hans directed the fund transfers to purchase publicly traded stock, invest in real estate in Brooklyn and to pay utility bills.

Finally, between June 2016 and October 2016, Hans accessed a website maintained by the PBGC, a U.S. government agency that insures certain pension plans, through which the administrators of pension plans can submit claims for reimbursements. Hans, who was not the administrator of any pension plan, created an account on the PBGC website and then submitted requests to be reimbursed a total of $1.633 million for expenses related to three pension plans. The three plans for which Hans requested reimbursements did not exist, and he had incurred no such expenses. The PBGC detected the fraud before any payments were issued.

The government’s case is being handled by the Office’s National Security and Cybercrime Section.

Outcome: Defendant was sentenced to 36 months’ imprisonment and ordered to pay $134,000.00 in restitution.

Plaintiff's Experts:

Defendant's Experts:

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