Law Enforcement Dismantle Racketeering Ring Extorting and Controlling the NYC Fire Mitigation Industry

Officials today announced the unsealing of a two-count Indictment charging nine people with racketeering conspiracy and extortion conspiracy of the Fire Mitigation Industry in New York City. Eight of them were arrested yesterday and presented before U.S. Magistrate Judge Stewart D. Aaron in federal court in Manhattan

The defendants, who include members of the violent Bloods street gang, took control of First Response Cleaning Corp. (“First Response”), a Brooklyn-based company which provides clean-up services to properties damaged by fire. They then used First Response as a vehicle to extort other participants in the fire mitigation industry and to assert control over the industry using violence and threats of violence.

“We are smoking out corruption and violence in the fire mitigation industry with today’s charges,” U.S. Attorney Damian Williams said. “As alleged, the defendants used threats and violence to take over a company and then an industry. Thanks to our law enforcement partners’ work, today’s arrests bring an end to the defendants’ violent scheme.

As alleged in the Indictment unsealed yesterday in Manhattan federal court and statements made in court filings[1]:

First Response is an emergency mitigation services (or “EMS”) company which provides clean-up services to properties damaged by fire. When properties suffer fire damage, property owners often hire an EMS company to clean up the damaged property. Property owners also often rely upon adjusters—either a “public adjuster” or an “independent adjuster”—to investigate, process, and submit the insurance claims to their insurer. A public adjuster is paid by the property owner with a percentage of the settlement paid out by the insurer on the insurance claim, while an independent adjuster works for and is paid by the insurer.

Beginning in 2019, the defendants, identiified as JATIEK SMITH, a/k/a “Tiek,” SEQUAN JACKSON, a/k/a “Supa,” ANTHONY MCGEE, a/k/a “Touch,” KAHEEN SMALL, a/k/a “Biz,” DAMON DORE, a/k/a “Demo,” HASIM SMITH, a/k/a “Hoodie,” RAHMIEK LACEWELL, a/k/a “Ready,” and MANUEL PEREIRA, a/k/a “Manny,” many of whom are members of the Bloods street gang, worked together to take control of First Response. JATIEK SMITH was the leader of the crew.

After taking control of First Response, SMITH and the others then used force and threats of force against other EMS companies and public adjusters to exert control over the entire fire mitigation industry. Defendant OCTAVIO PERALTA was a public adjuster who participated in the enterprise’s efforts to defraud and who helped the conspirators solidify their control over the industry. The enterprise’s threats included threats to kill or shoot their victims and members of the victims’ families. With the backing of these threats of force, they imposed a system of rules upon other EMS companies and on public adjusters, including a strict rotation system in which the defendants dictated which companies got which losses. The enterprise also extorted money from EMS companies and public adjusters and required these other companies to pay if they wanted to continue to work without being attacked. On multiple occasions, the enterprise used force against other EMS companies and public adjusters to ensure that they submitted to the rules, including physically assaulting victims. They sometimes created video recordings of this violence and distributed the recordings within the industry to threaten other victims. The enterprise also helped submit false insurance claims for damaged properties and threatened violence or retaliation against potential witnesses who were believed to be cooperating with the federal investigation into the enterprise’s crimes.

The nine defendants are each charged with one count of conspiracy to commit racketeering and one count of conspiracy to commit extortion. Each count carries a statutory maximum of 20 years in prison, for a combined statutory maximum of 40 years in prison.

Mr. Williams praised the outstanding investigative work of the FBI, HSI, NYPD, and DOI, and also thanked the HSI Puerto Rico Gang Unit and the National Insurance Crime Bureau for their assistance with this investigation.

This case is being handled by the Office’s Violent and Organized Crime Unit. Assistant United States Attorneys Mollie Bracewell, Rushmi Bhaskaran, and Adam S. Hobson, are 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.