District of New Jersey

NEWARK N.J. – An Elizabeth, New Jersey, man today admitted recruiting straw buyers and submitting bogus loan applications as part of large-scale mortgage fraud scheme involving properties in northern New Jersey, U.S. Attorney Paul J. Fishman announced.

Miguel LaRosa, 48, pleaded guilty before U.S. District Judge Susan D. Wigenton in Newark federal court of an information charging him with one count of conspiracy to commit wire fraud. 

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

LaRosa admitted that, from March 2011 through November 2012, he conspired with others to fraudulently obtain mortgages using falsified loan applications, supporting documents and closing documents. In addition to recruiting straw buyers to purchase properties, LaRosa and others created misleading certifications that bank accounts contained a specific amount of money when they actually contained less, prepared false appraisal reports, back-dated deeds and used unlicensed title agents to close transactions and disburse the mortgage proceeds.

Overall, the conspiracy in which LaRosa was involved resulted in more than $6 million in fraudulent loans and exposed lenders and the Federal Housing Administration to more than $2 million in potential losses. 

The conspiracy to commit wire fraud charge is punishable by a maximum potential penalty of 30 years in prison and a $1 million fine. Sentencing is scheduled for March 10, 2016. 

U .S. Attorney Fishman credited law enforcement agents of the FBI Newark Mortgage Fraud Task Force, under the direction of Special Agent in Charge Richard M. Frankel; postal inspectors of the U.S. Postal Inspection Service, under the direction of Inspector in Charge Maria L. Kelokates; special agents of the U.S. Department of Housing and Urban Development, Office of Inspector General, under the direction of Special Agent in Charge Christina Scaringi; special agents of the Federal Housing Finance Agency, Office of Inspector General, under the direction of Special Agent in Charge Steven Perez; special agents of the Office of the Special Inspector General for the Troubled Asset Relief Program (SIGTARP), under the direction of Special Inspector General Christy Romero; special agents of IRS–Criminal Investigation, under the direction of Special Agent in Charge Jonathan D. Larsen; and the Hudson County Prosecutor’s Office, under the direction of Prosecutor Esther Suarez, for their roles in the investigation leading to today’s plea.

The government is represented by Assistant U.S. Attorneys Lakshmi Srinivasan Herman and Andrew Kogan of the U.S. Attorney’s Office Economic Crimes Unit and Acting Chief Barbara Ward of the Asset Forfeiture Unit in Newark.

This case was brought in coordination with President Barack Obama’s Financial Fraud Enforcement Task Force. President Obama established the interagency Financial Fraud Enforcement Task Force to wage an aggressive, coordinated, and proactive effort to investigate and prosecute financial crimes. The task force includes representatives from a broad range of federal agencies, regulatory authorities, inspectors general, and state and local law enforcement who, working together, bring to bear a powerful array of criminal and civil enforcement resources. The task force is working to improve efforts across the federal executive branch and, with state and local partners, to investigate and prosecute significant financial crimes, ensure just and effective punishment for those who perpetrate financial crimes, combat discrimination in the lending and financial markets, and recover proceeds for victims of financial crimes.

Defense Counsel: Dennis S. Cleary Esq., Newark

NEWARK, N.J. – Two associates of the DeCavalcante organized crime family of La Cosa Nostra today admitted their roles in distributing more than 500 grams of cocaine, U.S. Attorney Paul J. Fishman announced.

John Capozzi, 34, of Union, New Jersey, and Mario Galli, 23, of Toms River, New Jersey, each pleaded guilty before U.S. District Judge William H. Walls to an information charging them with one count of distribution of more than 500 grams of cocaine.

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

Capozzi and Galli were arrested and charged by complaint in March 2015, along with eight members of the DeCavalcante crime family. They both admitted that between Dec. 12, 2014, and March 2015, in conjunction with other family associates, they sold more than one-half a kilo of cocaine to an undercover FBI agent for at least $78,000.  

The drug distribution count to which Capozzi and Galli each pleaded guilty carries a mandatory minimum of five years, a maximum of 40 years in prison and a $5 million fine. Sentencing for both defendants is scheduled for March 21, 2016.         

U.S. Attorney Fishman credited special agents of the FBI, under the direction of Special Agent in Charge Richard M. Frankel in Newark; the N.J. State Commission of Investigation, under the direction of Acting Executive Director Lee C. Seglem; the Waterfront Commission of New York Harbor, under the direction of Executive Director Walter M. Arsenault; and the Union County Prosecutor’s Office, under the direction of Acting Union County Prosecutor Grace H. Park.

The government is represented by Senior Litigation Counsel V. Grady O’Malley and Assistant U.S. Attorney James Donnelly of the U.S. Attorney’s Office’s Organized Crime/Gangs Unit.

Defense counsel:

Capozzi: Neil G. Duffy III Esq., Union, New Jersey

Galli: James N. Butler Jr. Esq., Asbury Park, New Jersey

Paid Healthcare Providers to Falsely Claim Tests Were Necessary, Defrauding Medicare of More than $1 million

NEWARK, N.J. – A Somerset, New Jersey, man was arrested this morning and charged with using the non-profit The Good Samaritans of America to defraud the Medicare program by convincing hundreds of senior citizens to submit to unnecessary genetic testing, U.S. Attorney Paul J. Fishman announced.

Seth Rehfuss, 41, was charged by criminal complaint with one count of healthcare fraud.  He is scheduled to appear later today before U.S. Magistrate Judge Joseph A. Dickson in Newark federal court.

According to the complaint:

From July 2014 and continuing through the present, Seth Rehfuss and others used The Good Samaritans of America to gain access to low-income senior housing complexes. Rehfuss and other members of the scheme claimed that The Good Samaritans of America was a “trusted non-profit” that assisted senior citizens in navigating federal benefit programs. In reality, The Good Samaritans of America was a front to present information about genetic testing. Rehfuss used advertisements for free ice cream to ensure attendance at the presentations.

In order to convince senior citizens to submit to genetic testing, Rehfuss used fear-based tactics during the presentations, including suggesting the senior citizens would be vulnerable to heart attacks, stroke, cancer and suicide if they did not have the genetic testing. In addition, Rehfuss claimed that the genetic testing allowed for “personalized medicine.”

As part of the scheme, defendant Rehfuss and others frequently took DNA swabs in the community rooms where the presentations took place or made arrangements to visit the senior citizen’s apartment on another day to take the DNA swab. Regardless of the timing or location of the swabbing, the DNA swab was collected without the involvement of any healthcare provider and without any determination by a healthcare provider that such testing was medically necessary or appropriate.  

In order to get the tests authorized, Rehfuss used advertisements on Craigslist to recruit healthcare providers for the scheme. After entering into contractual relationships with The Good Samaritans of America, the healthcare providers received requisition forms that often included a patient’s personal information, Medicare information, medication lists and diagnosis codes. The healthcare providers were paid thousands of dollars per month to sign their names to requisition forms authorizing testing for patients they never examined and were in no way involved in the patients’ care or treatment. As a result, Rehfuss caused the Medicare program to pay more than $1 million to two clinical laboratories, from which defendant Rehfuss obtained commissions of tens of thousands of dollars.

The investigation revealed that Rehfuss and others were actively working towards expanding the scheme outside of New Jersey into other states, including: Georgia, Delaware, Virginia, Maryland, Pennsylvania, South Carolina, Michigan, Mississippi, Florida, Tennessee and Arizona.

The healthcare fraud charge carries a maximum potential penalty of 10 years in prison and a $250,000 fine, or twice the gross gain or loss from the offense.

U.S. Attorney Fishman credited special agents of the U.S. Department of Health and Human Services – Office of the Inspector General, under the direction of Special Agent in Charge Scott J. Lampert, along with investigators from the United States Attorney’s Office for the District of New Jersey and the U.S. Marshals Service Asset Forfeiture Program, with the investigation leading to the charges.

The pending charges against Rehfuss are merely allegations, and he is considered innocent unless and until proven guilty.

The government is represented by Assistant U.S. Attorney Danielle M. Corcione of the U.S. Attorney’s Office Health Care and Government Fraud Unit.

U.S. Attorney Paul J. Fishman reorganized the health care fraud practice at the New Jersey U.S. Attorney’s Office shortly after taking office, including creating a stand-alone Health Care and Government Fraud Unit to handle both criminal and civil investigations and prosecutions of health care fraud offenses. Since 2010, the office has recovered more than $640 million in health care fraud and government fraud settlements, judgments, fines, restitution and forfeiture under the False Claims Act, the Food, Drug, and Cosmetic Act and other statutes.

Defense counsel: TBD

NEWARK, N.J. – A Pennsylvania woman was convicted today for her role in a long-running, large-scale scheme involving the fraudulent sale of telecommunications equipment belonging to a company she worked for as a consultant, U.S. Attorney Paul J. Fishman announced.

Following an 11-day trial before U.S. District Judge Peter G. Sheridan in Trenton federal court, Juanita L. Berry, 47, of Phoenixville, Pennsylvania, was convicted of four counts of wire fraud, which caused more than $3.5 million in losses, and two counts of tax evasion for evading taxes in 2010 and 2011. The jury deliberated for 75 minutes before returning the guilty verdicts.

According to documents filed in this case and the evidence at trial:

From 2008 to 2011, Berry worked as a consultant for an Indiana company that installed and removed telecommunications systems, first as a sales representative and later as the company’s vice president for major accounts. Initially, Berry worked out of the company’s Levittown, Pennsylvania, facility and, later, out of its Dayton, New Jersey, facility. The “brains” of the telecommunications systems the company installed and removed were the electronic circuit boards of varying complexity that range in price between several hundred to tens of thousands of dollars.

Berry owned a company named J. Starr Communications Inc., (J. Starr) through which she arranged her consulting agreement and allegedly operated her fraudulent scheme.

Without the knowledge or authorization of the telecommunications company’s management, Berry sold both used cards and new cards with other telecommunications equipment owned by the company as though such equipment belonged to her or J. Starr. She then pocketed the proceeds from such fraudulent sales. Berry deceived employees at the Levittown and Dayton facilities into thinking that the shipments of used cards were part of the telecommunications company’s normal course of business. Between 2008 and 2011, the Florida company that purchased the cards from Berry or J. Starr wired in excess of $3.5 million in payment to J. Starr’s bank account. 

U.S. Attorney Fishman credited special agents of the FBI, under the direction of Special Agent in Charge Richard M. Frankel in Newark; and special agents of IRS-Criminal Investigation, under the direction of Special Agent in Charge Jonathan D. Larsen, for the investigation leading to today’s conviction.

The government is represented by Senior Litigation Counsel Andrew Leven and Assistant U.S. Attorney Lucy Muzzy of the U.S. Attorney’s Office in Newark.

Defense counsel: David E. Schafer Esq., Lawrenceville, New Jersey                                                                                                                      

NEWARK, N.J. – The owner and two employees of a New Jersey defense contracting business were charged today in connection with an alleged scheme to fraudulently acquire lucrative manufacturing contracts with the U.S. Department of Defense (DoD), U.S. Attorney Paul J. Fishman announced.

Ferdi Murat Gul, a/k/a “Fred Gull,” 39, of Turkey, was charged with one count of wire fraud conspiracy, one count of conspiring to violate the Arms Export Control Act and five counts of violating the act. Fatih Civi, a/k/a “Frank Civi,” 44, of Paterson, New Jersey, and Serap Basci, a/k/a “Sarah Basci,” 29, of Clifton, New Jersey, both naturalized U.S. citizens born in Turkey, were arrested today and each charged in a separate complaint with one count of wire fraud conspiracy and one count of conspiring to violate the Arms Export Control Act for their roles in conspiring with Gul to defraud the DoD and to export military technical drawings to Turkey without prior approval from the U.S. Department of State. Civi and Basci made their initial court appearance earlier today before U.S. Magistrate Judge Joseph A. Dickson in Newark federal court.  Gul remains at large.

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

Gul is the principal owner, chief executive officer, and general manager of two companies: Bright Machinery Manufacturing Group Inc. (BMM), a defense contracting company in Paterson, New Jersey; and FMG Machinery Group (FMG), a purported manufacturing company with addresses in Paterson, New Jersey, and Long Island City, New York. Gul also has an ownership interest in HFMG Insaat (HFMG), a manufacturing company located in Turkey. Civi is BMM’s production manager; Basci is BMM’s sales and purchasing manager, and is responsible for handling the company’s government sales, commercial sales, and purchasing activities.

Over the past five years, BMM allegedly obtained hundreds of contracts with the DoD by falsely claiming that the military parts it contracted to produce would be manufactured in the United States.  From October 2010 through June 2015, the total value of the contracts awarded to BMM under this scheme was $7.3 million.

The complaint alleges that Gul routinely submitted to DoD electronic bids that contained false representations about BMM’s purported domestic manufacturing operations. He submitted quotes to the DoD claiming that BMM would provide military goods manufactured in the United States, when in fact the company relied almost exclusively on Gul’s Turkish-based production facilities at HFMG. Gul routinely and unlawfully exported drawings and technical data, some of which was subject to U.S. export control laws, in order to secretly manufacture military parts in Turkey. Gul, Civi, and Basci then supplied those foreign-made parts to unwitting DoD customers in the United States. 

The conspirators allegedly took substantial measures to conceal their illicit manufacturing activities and ongoing fraud. Gul and Basci routinely submitted forged certifications and fabricated information by e-mail to DoD representatives in New Jersey, which falsely represented that BMM and its U.S.-based subcontractors performed necessary quality control procedures in their purported domestic manufacture of military parts. Civi routinely met with DoD representatives at BMM’s Paterson facility to review and confirm the same false information that had been electronically submitted by Gul and Basci. DoD personnel were deceived into authorizing payment to BMM for military parts that were not, in fact, manufactured in the United States, in direct violation of DoD protocol and, in some instances, U.S. export control laws. The conspirators’ shipping and banking transactions were conducted in a manner to eliminate any direct links between the conspirators’ foreign manufacturing process at HFMG and their U.S. based-operations at BMM.

BMM fraudulently acquired 346 contracts from the DoD, purportedly for the domestic manufacture of military parts. Some of these contracts included the manufacture of parts for torpedoes used in U.S. Navy submarines, bomb ejector racks and armament utilized in U.S. Air Force aircraft, and firearms and mine clearance systems used by U.S. military personnel abroad.  In several instances, subsequent testing by the DoD revealed that parts supplied by the conspirators had numerous design flaws and non-conformities and were unusable. 

The count of wire fraud conspiracy carries a maximum penalty of 20 years in prison and a fine of $250,000.  The count of conspiracy to violate the Arms Control Export Act carries a maximum penalty of five years in prison and a fine of $250,000. The counts of violating the Arms Control Export Act carry a maximum penalty of 20 years in prison and a $1 million fine.

The Arms Export Control Act prohibits the export of defense articles and defense services without first obtaining a license from the U.S. Department of State and is one of the principal export control laws in the United States.

U.S. Attorney Fishman credited special agents of the U.S. Department of Defense, Defense Criminal Investigative Service Northeast Field Office, under the leadership of Special Agent in Charge Craig W. Rupert, and special agents of the Department of Homeland Security, Homeland Security Investigations, Counter Proliferation Investigations, under the supervision of Acting Special Agent in Charge Kevin Kelly, with the investigation leading to today’s charges.

The government is represented by Assistant U.S. Attorneys Dennis C. Carletta of the U.S. Attorney’s Office National Security Unit, and Sarah Devlin of the office’s Asset Forfeiture Unit, in Newark, along with the assistance of Trial Attorney David Recker of the Justice Department’s National Security Division.

The charges and allegations contained in the federal criminal complaint are merely accusations, and the defendants are presumed innocent unless and until proven guilty.

NEWARK, N.J. – A MS-13 gang member from Somerset County, New Jersey, today admitted relaying instructions to murder government witnesses from incarcerated gang members, New Jersey U.S. Attorney Paul J. Fishman and Assistant Attorney General Leslie R. Caldwell of the Justice Department’s Criminal Division announced.

Jose Romero-Aguirre, a/k/a “Conejo,” 29, of North Plainfield, New Jersey, pleaded guilty before U.S. District Judge Stanley R. Chesler to Count 26 of an indictment charging him with conspiracy to commit murder in furtherance of a racketeering enterprise known as La Mara Salvatrucha, or MS-13.

According to the documents filed and statements made in court:

MS-13 is a national and international gang composed primarily of immigrants or descendants from El Salvador.  Branches, or “cliques,” of MS-13 operate throughout the United States, including Plainfield, New Jersey. MS-13 members are required to commit acts of violence to maintain membership and discipline within the gang.

According to statements made by Romero-Aguirre in court, he was a member of the Plainfield Locos Salvatrucha (PLS) clique of MS-13 from at least August 2011. Romero-Aguirre admitted that he conspired with other members of MS-13 to engage in racketeering activity, including acts of murder, robbery, extortion and drug trafficking. 

Romero-Aguirre admitted that one of the central rules of MS-13 forbids any member from ever providing information about the gang’s criminal activity to the police. According to Romero-Aguirre, MS-13 members began investigating the arrest of several members of his clique in or around July 2011. Romero-Aguirre participated in phone calls with other incarcerated MS-13 members and discussed the need to find and kill the witnesses responsible for these arrests. Romero-Aguirre agreed to relay the murder instructions from the incarcerated members to the other MS-13 members at large, including a message that the MS-13 members had 24 days to eliminate one of the government witnesses. Romero-Aguirre also admitted that he agreed to pass these murder instructions because he believed it would preserve his own position within MS-13.     

The conspiracy charge to which Romero-Aguirre pleaded guilty carries a maximum potential penalty of ten years in prison and a $250,000 fine. He remains detained pending his sentencing, which is currently scheduled for March 16, 2016.

Twelve additional members and associates of the PLS clique of MS-13 are scheduled for trial in front of U.S. District Judge Stanley R. Chesler on February 9, 2016. The charges include several counts of murder, attempted murder, robbery, extortion, witness retaliation and sexual assault.  

U.S. Attorney Fishman credited special agents of Immigration and Customs Enforcement’s (ICE) Homeland Security Investigations (HSI), Newark Division, under the direction of Acting Special Agent in Charge Kevin Kelly, and the FBI, under the direction of Special Agent in Charge Richard M. Frankel in Newark, for the investigation leading to today’s plea. They also thanked the Union County Prosecutor’s Office, under the direction of Acting Prosecutor Grace H. Park, and the Plainfield Police Department, for their work on the case.

The government is represented by Assistant United States Attorneys James Donnelly and Jamari Buxton of the U.S. Attorney’s Office Criminal Division in Newark as well as Trial Attorney Kevin L. Rosenberg with the Justice Department Criminal Division’s Organized Crime and Gang Section.

Defense counsel: Christopher L. Patella Esq., Bayonne, New Jersey

NEWARK, N.J. – A former lieutenant with the Miami-Dade Police Department, Internal Affairs, was sentenced today to 120 months in prison for his role in a narcotics conspiracy, including purchasing six firearms for a drug trafficking organization and smuggling those weapons through security checkpoints at the Miami International Airport, U.S. Attorney Paul J. Fishman announced. 

Ralph Mata, 46, a/k/a “the Milk Man,” of Broward County, Florida, previously pleaded guilty before U.S. District Court Judge Susan D. Wigenton to an information charging him with one count of aiding and abetting a narcotics conspiracy, one count of conspiring to distribute cocaine and one count of engaging in monetary transactions in property derived from unlawful activity. Judge Wigenton imposed the sentence today in Newark federal court.

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

From June 2012 through November 2012, Mata purchased at least six firearms from a gun store in Florida, which ultimately were provided to members of the Juan Arias Drug Trafficking Organization. Using his prior experience as a lieutenant assigned to the Miami International Airport, as well as his law enforcement contacts at the airport, Mata and others smuggled the six firearms through airport security checkpoints and onto a commercial airliner destined for the Dominican Republic.  

Mata also provided advice, guidance and counsel to Juan Arias regarding the means and methods the drug trafficking organization should use to import and distribute cocaine. Mata transported narcotics proceeds for the organization.

He also engaged in monetary transactions in property derived from the sale of narcotics. On March 28, 2013, Mata traveled from Miami to New Jersey and received approximately $60,000 in narcotics proceeds from Juan Arias and others. Using a portion of that $60,000, Mata made separate $10,000 cash deposits at two different bank locations in Fort Lee, New Jersey. As payment for his assistance to the drug trafficking organization, Mata accepted a total of approximately $100,000 in cash and gifts from the Juan Arias drug trafficking organization.

In addition to the prison term, Judge Wigenton sentenced Mata to five years of supervised release and fined $15,000. As part of his plea, Mata must forfeit the $75,405 seized on April 9, 2014.

U.S. Attorney Fishman credited special agents of the FBI’s Garret Mountain Resident Office, under the direction of Special Agent in Charge Richard M. Frankel in Newark; special agents of the Drug Enforcement Administration, under the direction of Special Agent in Charge Carl J. Kotowski; and special agents of IRS-Criminal Investigation, under the direction of Special Agent in Charge Jonathan D. Larsen, with the investigation leading to today’s sentencing. He also thanked the Miami FBI, the Miami-Dade Police Department, the Miami-Area Corruption Task Force and the U.S. Immigration and Custom Enforcement’s Homeland Security Investigations, New York, for their assistance with the investigation. 

This case was conducted under the auspices of the Organized Crime Drug Enforcement Task Force (OCDETF), a partnership between federal, state and local law enforcement agencies. The principal mission of the OCDETF program is to identify, disrupt and dismantle the most serious drug trafficking, weapons trafficking and money laundering organizations, and those primarily responsible for the nation’s illegal drug supply. 

The government is represented by Assistant U.S. Attorneys Mary E. Toscano, Deputy Chief of the General Crimes Unit, Criminal Division, and José R. Almonte of the Special Prosecutions Division in Newark and Barbara Ward, Acting Chief, Asset Forfeiture and Money Laundering Unit. 

Defense counsel: Jay V. Surgent Esq., Parsippany, New Jersey, and Bruce H. Fleisher Esq., Miami

NEWARK, N.J. – A former Essex County corrections officer was sentenced today to 24 months in prison for accepting bribes in exchange for smuggling contraband, including cell phones and tobacco, into the Essex County Correctional Facility, a federal pretrial detention facility, U.S. Attorney Paul J. Fishman announced.

John Grosso, 42, of Belleville, New Jersey, previously pleaded guilty before U.S. District Judge Stanley R. Chesler to an information charging him with one count of conspiring to commit extortion under color of official right. Judge Chesler imposed the sentence today in Newark federal court.

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

Grosso, a former corrections officer at the Essex County Correctional Facility, admitted that in December 2013, he agreed to accept cash bribes in return for his assistance smuggling cell phones and cigarettes to an inmate. Grosso met with the inmate’s relative in Secaucus, New Jersey, to accept the contraband and bribe before delivering the items to the inmate.

In addition to the prison term, Judge Chesler sentenced Grosso to one year of supervised release.

U.S. Attorney Fishman credited special agents of the FBI, under the direction of Special Agent in Charge Richard M. Frankel in Newark, and the Internal Affairs Division of Essex County Correctional Facility, under the leadership of Warden Roy Hendricks, with the investigation leading to today’s sentencing.

The government is represented by Assistant U.S. Attorneys Rahul Agarwal of the U.S. Attorney’s Office Special Prosecutions Division and Robert L. Frazer of the Criminal Division, Organized Crime/Gangs Unit, in Newark.

Defense counsel: Elizabeth H. Smith Esq., Mendham, New Jersey

NEWARK, N.J. – An East Orange, New Jersey, man was sentenced today to 97 months in prison for stealing a car while carrying a firearm in January 2014, U.S. Attorney Paul J. Fishman announced.

Alsharif Scriven, 27, previously pleaded guilty before U.S. District Judge Susan D. Wigenton to an information charging him with one count of theft of a motor vehicle by force, violence and intimidation and one count of using a firearm in furtherance of a crime of violence. Judge Wigenton imposed the sentence today in Newark federal court. 

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

In the early evening of Jan. 8, 2014, an individual was parking his 2012 Honda Accord at his Newark residence. When the victim exited the vehicle to open the garage door, Scriven, who was carrying a firearm, jumped into the open driver’s side door and attempted to steal the car. After a struggle with the victim, Scriven ultimately took control of the vehicle and drove away.

In addition to the prison term, Judge Wigenton sentenced Scriven to serve five years of supervised release.

U.S. Attorney Fishman credited criminal investigators of the U.S. Attorney’s Office in Newark, as well as the Essex County Prosecutor’s Office, under the direction of Acting Prosecutor Carolyn A. Murray, the Union County Prosecutor’s Office under the direction of Acting Prosecutor Grace H. Park, the Essex County Police Department and the Union County Police Department, with the investigation leading to today’s sentencing.   

The government is represented by Assistant U.S. Attorney Josh Hafetz of the U.S. Attorney’s Office in Newark.

Defense counsel: Chester Keller Esq., First Assistant Federal Public Defender, Newark

NEWARK, N.J. – An Essex County, New Jersey, man was sentenced today to 255 months in prison for his role in three gunpoint carjackings and an attempted carjacking within a one-week period and to firing his gun during one of the robberies, U.S. Attorney Paul J. Fishman announced.

Corey Thermitus, 23, of Newark, previously pleaded guilty before U.S. District Judge William H. Walls to an information charging him with three counts of theft of a motor vehicle by force, violence and intimidation; one count of attempted theft of a motor vehicle by force, violence and intimidation; and one count of discharging a firearm in furtherance of a violent crime. Judge Walls imposed the sentence today in Newark federal court.

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

On Dec. 21, 2012, Thermitus was a passenger in a car that had stopped on a street in the Ironbound section of Newark. Thermitus and several other men exited the car and approached two people standing next to a Toyota Corolla that had just parked. Thermitus brandished a gun at the victims, while another man searched the victims and took the keys to the Toyota Corolla. Once the men had the keys, Thermitus and the other men fled the scene in both vehicles.

He also admitted that on Dec. 26, 2012, he and another man were in the area of 6th Avenue and N. 9th Street in Newark, when they approached a Nissan Altima. Thermitus approached the passenger side of the vehicle, where one of the victims was seated, and attempted to open the door, but the victim resisted and attempted to hold the door closed. Thermitus then told an accomplice to shoot a second victim who was standing next to the car. In response, both victims stepped away from the Nissan Altima and the other man fled the area in the vehicle.

Thermitus admitted that on Dec. 28, 2012, he took a Honda Accord at gunpoint from a victim who was seated in the car in the driveway of a Newark residence. Once the victim got out of the car, Thermitus and two other men fled the area in the Honda Accord. Approximately one hour later, the three men traveled to Midland Place in Newark in the carjacked Accord, where he and one of the other men attempted to carjack a Nissan Pathfinder at gunpoint. Thermitus and another man approached the Nissan Pathfinder while one of the victims in the vehicle was parking it in the garage of a residence. Thermitus pointed a gun at the victim and demanded the victim get out of the vehicle. The victim resisted and drove down the driveway and down the street to escape the carjacking attempt. Moments later, the victim returned to the residence to find Thermitus and the other two men attempting to escape in the carjacked Honda Accord. When another person came outside of one of the residences on the street to check on the commotion, Thermitus fired a shot at the person. The three men fled the scene in the carjacked Honda Accord. No one was injured in the attack.

In addition to the prison term, Judge Walls also sentenced Thermitus to five years of supervised release.

U.S. Attorney Fishman credited special agents of the FBI, under the direction of Special Agent in Charge Richard M. Frankel in Newark; the Essex County Prosecutor’s Office, under the direction of Acting Prosecutor Carolyn A. Murray; and the Newark Police Department, under the direction of Director Eugene Venable and Chief Anthony Campos, with the investigation leading to today’s sentencing.

The government is represented by Senior Litigation Counsel V. Grady O’Malley and Assistant U.S. Attorney Dara Aquila Govan of the Organized Crimes/Gangs Unit in Newark.

Defense counsel: Peter Carter Esq., Assistant Federal Public Defender, Newark

TRENTON, N.J. – Two Staten Island, New York, men were sentenced today for their roles in one of the largest credit card fraud schemes ever charged by the Justice Department, U.S. Attorney Paul J. Fishman announced.

Khawaja Ikram, 43, and Mohammad Khan, 51, were sentenced to 25 and 12 months in prison, respectively. Ikram previously pleaded guilty before U.S. District Judge Anne E. Thompson to an information charging him with one count of conspiracy to commit bank fraud. Khan previously pleaded guilty before U.S. Magistrate Judge Madeline C. Arleo to an information charging him with conspiracy to defraud the United States. Judge Thompson imposed both sentences today in Trenton federal court.

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

Ikram and Khan were originally charged in February 2013 as part of a conspiracy to fabricate more than 7,000 false identities to obtain tens of thousands of credit cards. Members of the conspiracy doctored credit reports to pump up the spending and borrowing power associated with the cards. They then borrowed or spent as much as they could, based on the phony credit history, but did not repay the debts – causing more than $200 million in confirmed losses to businesses and financial institutions.

The scheme involved a three-step process in which the defendants would make up a false identity by creating fraudulent identification documents and a fraudulent credit profile with the major credit bureaus; pump up the credit of the false identity by providing false information about that identity’s creditworthiness to those credit bureaus; and finally, run up large loans.

The scope of the criminal fraud enterprise required Ikram, Khan and other conspirators to construct an elaborate network of false identities. Across the country, the conspirators maintained more than 1,800 “drop addresses,” including houses, apartments and post office boxes, which they used as the mailing addresses of the false identities.

Ikram and Khan admitted they helped obtain credit cards in the name of third parties – many of which were fictional – then directed the credit cards to be mailed to addresses controlled by members of the conspiracy. They also admitted they knew the cards would be used fraudulently at businesses, with Khan admitting to personally using the cards.

In addition to the prison terms, Judge Thompson ordered Ikram and Khan to serve five and three years of supervised release, respectively. Ikram was also fined $10,000.

U.S. Attorney Fishman praised special agents of the FBI’s Cyber Division, under the direction of Special Agent in Charge Richard M. Frankel; postal inspectors, under the direction of Inspector in Charge Maria L. Kelokates; and special agents of the U.S. Secret Service, under the direction of Special Agent in Charge Carl Agnelli, for the investigation leading to today’s sentencing. He also thanked the U.S. Social Security Administration for its role in the investigation.

The government is represented by Assistant U.S. Attorneys Daniel V. Shapiro and Zach Intrater of the U.S. Attorney’s Office Economic Crimes Unit and Barbara Ward, Acting Chief of the office’s Asset Forfeiture and Money Laundering Unit in Newark.

This case was brought in coordination with President Barack Obama’s Financial Fraud Enforcement Task Force. The task force was established to wage an aggressive, coordinated and proactive effort to investigate and prosecute financial crimes. With more than 20 federal agencies, 94 U.S. Attorneys’ offices and state and local partners, it’s the broadest coalition of law enforcement, investigatory and regulatory agencies ever assembled to combat fraud. Since its formation, the task force has made great strides in facilitating increased investigation and prosecution of financial crimes; enhancing coordination and cooperation among federal, state and local authorities; addressing discrimination in the lending and financial markets and conducting outreach to the public, victims, financial institutions and other organizations. Over the past three fiscal years, the Justice Department has filed nearly 10,000 financial fraud cases against nearly 15,000 defendants including more than 2,900 mortgage fraud defendants. For more information on the task force, please visit www.stopfraud.gov.

Defense counsel:

Ikram: Neil G. Duffy III Esq., Union, New Jersey

Khan:  Stephan Mahler Esq., Kew Gardens, New York

TRENTON, N.J. – Four New York men were sentenced to prison for participating in the armed robberies of New York and New Jersey electronics stores, U.S. Attorney Paul J. Fishman announced.

Carl Williams, 32, of Brooklyn, New York, and Leonard Arrington, 29, of Roslyn Heights, New York, were sentenced today to 168 months and 102 months in prison, respectively. Terrell McQueen, 31, and Kajuan Crawley, 28, both of Brooklyn, were sentenced yesterday to 168 and 150 months in prison, respectively. U.S. District Judge Anne Thompson imposed all four sentences in Trenton federal court.

Carl Williams previously pleaded guilty before U.S. District Judge Joel A. Pisano in Trenton federal court to a superseding indictment charging him with conspiracy to commit Hobbs Act robberies and brandishing a firearm in furtherance of a crime of violence. Arrington pleaded guilty before Judge Pisano to an information containing the same charges. McQueen and Crawley pleaded guilty before Judge Joel Pisano to separate superseding informations charging them each with one count of conspiracy to commit Hobbs Act robberies.

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

From May 30, 2012, through Jan. 16, 2013, Carl Williams, Arrington, McQueen, Crawley and others conspired to commit a series of gunpoint electronic store robberies in New Jersey and New York. McQueen provided the firearms used in the New Jersey robberies, coordinated the resale of the stolen merchandise and distributed the profits from the robberies to the other perpetrators. During each robbery, conspirators would assign “look-outs” to remain outside while the rest of the group, armed with a gun, entered the store, locked the front doors, and tied-up employees and customers with zip ties.

Following the June 21, 2012, armed robbery of a Radio Shack in Rockville Center, New York, several conspirators, including Crawley, were apprehended by officers with the Nassau County Police Department, but Carl Williams, Arrington and others managed to escape. Afterwards, Carl Williams and Arrington robbed electronics stores in New Jersey.

On Sept. 20, 2012, Arrington, brandishing a firearm, walked into a T-Mobile store in Linden, New Jersey, with Carl Williams. Crawley, out on bail after his arrest following the June 21, 2012 robbery, served as a look-out. Arrington and Williams tied up the employees in the back of the store, stole approximately 50 to 60 cell phones and fled in a Land Rover. McQueen, Eric Williams, 34, of Brooklyn, and others then delivered the stolen phones to a cell phone store in Brooklyn.

On Oct. 2, 2012, Arrington, brandishing a firearm, entered a T-Mobile store in Woodbridge, New Jersey, with another man. After locking the front door, the men tied up the employees in the back of the store and stole approximately 40 cell phones. One of the robbers then called the getaway driver, who drove them away in a Land Rover. Afterwards, McQueen, Eric Williams and others delivered the stolen phones to the same Brooklyn store.

In addition to the prison terms, Judge Thompson sentenced Arrington to serve five years of supervised release. Carl Williams, McQueen and Crawley were each sentenced to three years of supervised release.

U.S. Attorney Fishman praised special agents of the FBI, under the direction of Special Agent in Charge Richard M. Frankel, with the investigation. He also thanked the Linden and Woodbridge Police Departments in New Jersey, as well as the New York City and Nassau County Police Departments and the Kings County District Attorney’s Office in New York for their work in this case.           

The government is represented by Assistant U.S. Attorney Osmar J. Benvenuto of the U.S. Attorney’s Office Criminal Division. 
                                                                                      

Defense counsel:

Williams: Mark Berman Esq., River Edge, New Jersey

Arrington: Dennis Cleary Esq., Newark, New Jersey

McQueen: Anthony J. Pope Esq., Newark

Crawley: Maria Noto Esq., Matawan, New Jersey

NEWARK, N.J. – A disbarred New York attorney was convicted today by a federal jury for his role in a ticket resale fraud scheme and a real estate investment fraud conspiracy that bilked multiple victims out of more than $3 million from 2011 to the present, U.S. Attorney Paul J. Fishman announced.

Pasquale Stiso, a/k/a “Pat Stiso,” 55, of New Rochelle, New York, was convicted of all ten counts of a superseding indictment charging him with one count of conspiracy to commit wire fraud, six substantive counts of wire fraud, and three counts of money laundering. He was convicted following a seven-day trial before U.S. District Judge William J. Martini in Newark federal court. The jury deliberated for 90 minutes before returning the verdict.

According to documents filed in this case and evidence at trial:

Since 2011, co-defendant Paul Mancuso, 49, of Glen Rock, New Jersey, held himself out as an investor, broker, and developer of various purported investments. Mancuso obtained from his victims substantial investments for various projects that, in fact, either did not exist at all or in which Mancuso had no actual involvement. Stiso held himself out as an individual who was working with Mancuso on various purported projects. Many of the victims of Stiso and Mancuso’s schemes lost all or substantially all of the money they invested with Mancuso and Stiso. Many even lost all or most of their life savings.

Stiso and Mancuso falsely represented to some victims that they would purchase event tickets, such as tickets to New York Giants football games, New York Yankees playoff games, the Super Bowl, and other sporting events and concerts, at a lower or wholesale rate, and then resell them to members of the public at an inflated rate, creating profits for their investors. In reality, Stiso and Mancuso did not buy tickets with their victims’ money.

In one of the real estate schemes, Stiso and Mancuso falsely represented to victims that they were investors in a real estate development project in Valley Cottage, New York, and that investor money would be used to purchase an interest in real property. The real property interest would then be resold at an increased price, creating profits for their investors. In reality, Stiso and Mancuso did not invest in any such real estate project with their victims’ money. Instead, they engaged in monetary transactions designed to funnel, and in many instances launder, the victims’ investments for their own benefit, including paying illegal gambling debts and money owed to loan sharks. Stiso and Mancuso were heavily involved in illegal gambling pursuits and both owed substantial sums of money to loan sharks and one of their bookmakers.

The charge of wire fraud conspiracy and the substantive counts of wire fraud each carry a maximum potential penalty of 20 years in prison and a maximum fine of $250,000 or twice the gross gain or loss associated with the offense, whichever is greatest. Each money laundering count carries a maximum potential penalty of 10 years in prison and a maximum fine of $250,000 or twice the gross gain or loss associated with the offense, whichever is greatest. Stiso’s sentencing is scheduled for March 3, 2016.

Mancuso previously pleaded guilty in federal court to conspiring with Stiso to commit wire fraud and is scheduled for sentencing on Jan 12, 2016.

U.S. Attorney Fishman credited special agents of the FBI, under the direction of Special Agent in Charge Richard M. Frankel; special agents of IRS-Criminal Investigation, under the direction of Special Agent in Charge Jonathan D. Larsen; and criminal investigators of the U.S. Attorney’s Office with the investigation leading to today’s verdict.

The government is represented by Assistant U.S. Attorneys Francisco J. Navarro and Anthony J. Mahajan of the U.S. Attorney’s Office Criminal Division in Newark.

Defense counsel:        Henry E. Klingeman Esq., Newark

                                    Ernesto Cerimele Esq., Newark

NEWARK, N.J. – Fifteen people were charged today for their respective roles in one of Newark’s largest and most successful heroin distribution organizations, which operated out of a residential building on Johnson Avenue and sold millions of dollars’ worth of the drug, U.S. Attorney Paul J. Fishman announced.

Among those arrested and charged today are the two alleged leaders of the operations – Almalik Anderson and Quawee Jones (see chart below), who are charged with engaging in a continuing criminal enterprise. They are also charged, along with the 13 other defendants, with one count each of conspiracy to distribute heroin. The nine defendants who are in custody are scheduled to have their initial court appearances later today before U.S. Magistrate Judge Steven C. Mannion in Newark federal court. Six defendants remain at large.

“The charges in the complaint describe a 24/7 illegal drug bazaar that has operated in the middle of a residential neighborhood for years,” U.S. Attorney Fishman said. “This location is just a few doors away from the playing fields of Malcolm X. Shabazz High School and the playground and basketball courts of Terrell James Park. Law abiding citizens shouldn’t have to worry about drug dealing where their children are trying to learn and play. Today’s arrests culminate a coordinated effort by our office, the FBI and local law enforcement to shut down this scourge, and to help reclaim the neighborhood.”

“Almalik Anderson operated a multi-million dollar heroin business out of a residential building in Newark which was ‘closed’ for business today by the FBI and our partners on the Safe Streets Task Force,” Richard M Frankel, FBI special agent in charge, Newark, said. “We are confident taking Anderson and his crew off the streets of Newark will have direct impact on reducing violent crime in the city.”

According to the complaint:

This drug-trafficking group operated out of a residential building at 25 Johnson Ave., Newark. The defendants allegedly ran a sophisticated operation that took advantage of the building’s location on a dead-end street, making it difficult for law enforcement to infiltrate the distribution network despite a constant streams of buyers entering the building at all hours of the day and night. “Lookouts” were paid by the defendants to alert them to any police activity coming onto the block from the only access point on Clinton Avenue. Police could not infiltrate the building without lookouts detecting their presence and signaling the sellers. Members of the drug trafficking organization set up an escape route whereby residents were paid to keep their doors unlocked. The dealers in the hallways would run through the building and exit via fire escapes at the rear of the building or simply hide within the apartments before police could apprehend them. In addition to being paid to keep their doors unlocked, residents were also paid not to report to law enforcement the drug-trafficking activity that was open and notorious within the building’s public areas.

The drug operation worked out of the first floor hallway of the building nearly 24 hours a day and was well-known among heroin users, who came from long distances in several different counties throughout New Jersey. The defendants allegedly worked in carefully planned “shifts” of approximately five distributors in order to handle the constant flow of heroin buyers. The heroin sold was of a high quality and, thus, attracted numerous buyers. The heroin was sold in various “brands,” which were stamped onto the glassine envelopes that contained the heroin, allowing buyers to identify and purchase the brands that they preferred. The defendants sold on average one to two kilograms of heroin per week between February 2015 and November 2015, the investigation revealed.

Based upon the quantities sold, information from court-authorized wiretaps of the two leaders’ phones, and other evidence obtained in the case, the profit from the heroin distribution at 25 Johnson Avenue is estimated to be between $4 million and $7 million a year. The charges are the result of an investigation led by the FBI, which included court-authorized wiretaps, numerous undercover recorded purchases of heroin from at least 15 different individuals inside the building, and seizures of heroin and guns.

The count of running a continuing criminal enterprise carries a minimum sentence of 20 years and a maximum sentence of life in prison. The count of conspiracy to distribute one kilogram or more of heroin carries a minimum sentence of 10 years and a maximum sentence of life in prison.

U.S. Attorney Fishman credited special agents of the FBI and task force officers assigned to the FBI’s Safe Streets Task Force, of FBI Special Agent in Charge Richard M. Frankel, for the investigation leading to the charges. He also thanked police officers and detectives of the Newark Police Department, under the direction of Director Eugene Venable and Chief Anthony Campos; the Essex County Sheriff’s Office under the direction of Armando B. Fontoura; the N.J. State Parole Board, under the direction of Chairman James T. Plousi; and the Orange Police Department, under Director John Wade Jr., for their work on the investigation.

The government is represented by Assistant U.S. Attorney Robert Frazer of the Organized

Crime/Gangs Unit in the Criminal Division in Newark.

The charges and allegations contained in the federal criminal complaint are merely accusations, and the defendants are presumed innocent unless and until proven guilty.

Defendant

Age

Residence

Charge

Almalik Anderson, a/k/a “S,” a/k/a “Sco”

36

Newark

Continuing criminal enterprise;

Conspiracy to distribute heroin

Quawee Jones, a/k/a “Hatman”

32

Newark

Continuing criminal enterprise;

Conspiracy to distribute heroin

Kasim Bacon, a/k/a “City”

37

unknown

Conspiracy to distribute heroin

Maurice Green, a/k/a “Crack”

21

Newark

Conspiracy to distribute heroin

Davin Lee, a/k/a “Kiss”

26

Newark

Conspiracy to distribute heroin

Christopher Williams, a/k/a “Whooty”

28

Newark

Conspiracy to distribute heroin

*Elijah Henderson, a/k/a “Fresh”

27

Newark

Conspiracy to distribute heroin

*Shakir Amos, a/k/a “Ya Ya”

29

Newark

Conspiracy to distribute heroin

*Omar Johnson, a/k/a “Flip”

30

Newark

Conspiracy to distribute heroin

*Shaahid Cureton, a/k/a “Dilly”

31

Newark

Conspiracy to distribute heroin

*Darryle Robinson, a/k/a “Silk”

39

Newark

Conspiracy to distribute heroin

Melvin Ellison, a/k/a “Mellie”

25

Newark

Conspiracy to distribute heroin

*Darren Brown, a/k/a “D-Block”

28

Newark

Conspiracy to distribute heroin

Temir Hill, a/k/a “Goldie”

29

Newark

Conspiracy to distribute heroin

Salik Amos, a/k/a “Slim”

21

Newark

Conspiracy to distribute heroin

*denotes still at large

TRENTON, N.J. – Three New York men were sentenced today for their roles in a scheme to cross state lines and violently coerce a recalcitrant husband to grant his wife a religious divorce, U.S. Attorney Paul J. Fishman announced.

Avrohom Goldstein, 36, of Brooklyn, New York, was sentenced to 45 months in prison. Ariel Potash, 42, of Monsey, New York, was sentenced to 14 months in prison. Sholom Shuchat, 31, of Brooklyn, was sentenced to time served. All three defendants previously pleaded guilty before U.S. District Judge Freda L. Wolfson to separate informations charging them each with one count of traveling in interstate commerce to commit extortion. Judge Wolfson imposed all three sentences today in Trenton federal court.

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

On Oct. 9, 2013, Avrohom Goldstein, Potash, Shuchat and a group of conspirators – including Avrohom’s  brother, Moshe Goldstein, 32, his father, Jay Goldstein, 61, David Hellman, 33, Simcha Bulmash, 32, and Binyamin Stimler, 40, all of Brooklyn – traveled from New York to a warehouse in Edison, New Jersey, with the intent of forcing a Jewish husband to give his wife a “get,” a document which, according to Jewish Law, must be presented by a husband to his wife to effect their divorce.

Avrohom Goldstein, Potash and Shuchat admitted that when they arrived at the warehouse, the group met with an individual who, unbeknownst to them, was an undercover FBI agent posing as the husband’s brother in law. Avrohom Goldstein and others discussed a plan to confine, restrain and threaten the victim. Shuchat was there to witness and authenticate the get, which Potash would later deliver to the wife.

The group was then arrested by a team of FBI agents and charged by criminal complaint – along with rabbis Mendel Epstein, 70, of Lakewood, New Jersey, and Martin Wolmark, 57, of Monsey – in connection with the scheme.

Avrohom Goldstein also admitted that on Aug. 22, 2011, he and others went to a residence in Brooklyn where they restrained, assaulted and injured another recalcitrant husband and his roommate in an attempt to extort a divorce from the husband.

In addition to the prison term, Judge Wolfson sentenced Avrohom Goldstein, Potash, and Shuchat to each serve two years of supervised release.

Moshe Goldstein previously pleaded guilty to one count of traveling in interstate commerce to commit extortion and was sentenced Nov. 16, 2015 to four years in prison. Hellman and Bulmash previously pleaded guilty to one count of traveling in interstate commerce to commit extortion and were sentenced Nov. 17, 2015 to 44 and 48 months in prison, respectively. Wolmark, who pleaded guilty to conspiracy to travel in interstate commerce to commit extortion, is scheduled for sentencing on Dec. 14, 2015.

Epstein, Jay Goldstein and Stimler were all convicted at trial on April 21, 2015. Epstein, who was convicted of conspiracy to commit kidnapping, is scheduled for sentencing on Dec. 15, 2015. Stimler and Jay Goldstein, both convicted of conspiracy to commit kidnapping and attempted kidnapping, are scheduled for sentencing on Dec. 15, 2015 and Dec. 16, 2015, respectively.                                                                                                           

U.S. Attorney Fishman credited special agents of the FBI, under the direction of Special Agent in Charge Richard M. Frankel in Newark, for the investigation leading to today’s sentencing. He also thanked the Lakewood, New Jersey, Police Department for its role.

The government is represented by Assistant U.S. Attorneys R. Joseph Gribko and Sarah Wolfe of the U.S. Attorney’s Office in Trenton.

Defense counsel:

Goldstein: Charles Edward Waldron Esq., Lawrenceville, New Jersey

Potash: Jacob Laufer Esq., New York

Shuchat: Ellen B. Resnick Esq., New York

TRENTON, N.J. – A Union County, New Jersey certified public accountant who ran a tax return preparation business with his wife was sentenced today to four years in prison for his role in a multi-year tax fraud scheme, in which he filed hundreds of false tax returns with the IRS to generate fraudulently inflated refunds for clients, some of which he took for himself, U.S. Attorney Paul J.  Fishman announced. 

Following a two-week trial before U.S. District Judge Anne E. Thompson in June 2015, Courtney Johnson, 45, of Union Township, New Jersey, was convicted of six counts of aiding and assisting in the preparation of false federal income tax returns. Judge Thompson imposed the sentence today in Trenton federal court. Johnson’s wife, Carol Johnson, 45, who ran the business with him, previously pleaded guilty to misprision of a felony and was sentenced Nov. 5, 2015, to three years of probation. The Johnsons operated tax preparation businesses in South Orange and Jersey City, New Jersey.

According to documents filed in this case and the evidence at trial:

Courtney Johnson prepared and filed federal individual income tax returns that were materially false and fraudulent. The returns attached schedules for fictitious businesses that the taxpayers did not own or operate, inflated charitable contributions, fabricated itemized deductions – all to generate fraudulently inflated refunds.

Judge Thompson also sentenced Courtney Johnson to one year of supervised release, fined him $50,000 and ordered him to pay $10,280 in restitution. She ordered Carol Johnson to pay $93,385 in restitution.

U.S. Attorney Fishman credited special agents of IRS-Criminal Investigation, under the direction of Special Agent in Charge Jonathan D. Larsen, with the investigation leading to today’s guilty verdict.

The government is represented by Assistant U.S. Attorneys Jane H. Yoon and Jillian J. Reyes of the Criminal Division in Newark.

Defense counsel:

Courtney Johnson: Thomas R. Ashley Esq., Newark

Carol Johnson: Leslie Sinemus Esq., South Orange, New Jersey

NEWARK, N.J. – U.S. Attorney Paul J. Fishman announced today that the government has intervened in a False Claims Act lawsuit and filed a complaint against a Morris County, New Jersey, couple and their diagnostic imaging companies for knowingly submitting false claims to Medicare for thousands of falsified diagnostic test reports and the underlying tests.

Nita K. Patel, 53, and Kirtish N. Patel, 53, both of Rockaway, New Jersey, owners and operators of Biosound Medical Services Inc. and Heart Solution PC of Parsippany, New Jersey, each pleaded guilty Nov. 17, 2015, to informations charging them with health care fraud related to this conduct.

The civil complaint alleges that defendants created fraudulent diagnostic test reports, forged physician signatures on these reports, and then billed Medicare for the fraudulent reports and the underlying tests that were used solely to create these reports. The complaint alleges that defendants billed Medicare for neurological tests that they conducted without the required physician supervision. The complaint also alleges that defendants knowingly submitted false claims for neurological tests conducted without physician supervision.

The lawsuit was filed under the qui tam, or whistleblower, provisions of the False Claims Act. The Act allows private citizens with knowledge of fraud to bring civil actions on behalf of the government and to share in any recovery. The False Claims Act also permits the government to intervene in such lawsuits, as it has done in this case. 

U.S. Attorney Fishman credited special agents of the FBI, under the direction of Special Agent in Charge Richard M. Frankel; and the U.S. Department of Health and Human Services – Office of the Inspector General, under the direction of Special Agent in Charge Scott J. Lampert, with the investigation leading to the filing of today’s complaint.

The government is represented by Assistant U.S. Attorney Charles Graybow of the U.S. Attorney’s Office Health Care and Government Fraud Unit. 

U.S. Attorney Paul J. Fishman reorganized the health care fraud practice at the New Jersey U.S. Attorney’s Office shortly after taking office, including creating a stand-alone Health Care and Government Fraud Unit to handle both criminal and civil investigations and prosecutions of health care fraud offenses. Since 2010, the office has recovered more than $640 million in health care fraud and government fraud settlements, judgments, fines, restitution and forfeiture under the False Claims Act, the Food, Drug, and Cosmetic Act and other statutes.

The case is captioned U.S. ex rel. Jane Doe v. Heart Solution, PC, et al., No. 14-3644 (D.N.J.). 

Defense counsel:

Kirtish Patel: Anthony Fusco, Jr., Esq., Passaic, New Jersey

Nita Patel: Frank Arleo, Esq., West Orange, New Jersey

Counsel for Relator:

Timothy J. McInnis, Esq., New York, New York

NEWARK, N.J. – A doctor with a practice in Rockville Centre, New York, was sentenced today to 46 months in prison for accepting bribes in exchange for test referrals as part of a long-running and elaborate scheme operated by Biodiagnostic Laboratory Services LLC (BLS), of Parsippany, New Jersey, its president and numerous associates, U.S. Attorney Paul J. Fishman announced.

Brett Halper, 41, of Glen Head, New York, previously pleaded guilty before U.S. District Judge Stanley R. Chesler to an information charging him with one count of accepting bribes. Judge Chesler imposed the sentence today in Newark federal court.

Including Halper, 38 people – 26 of them doctors – have pleaded guilty in connection with the bribery scheme, which its organizers have admitted involved millions of dollars in bribes and resulted in more than $100 million in payments to BLS from Medicare and various private insurance companies. The investigation has so far recovered more than $11.5 million to date through forfeiture.

According to documents filed in this and related cases and statements made in court:

Halper admitted that from January 2011 through April 2013, he accepted bribes in return for referring patient blood specimens to BLS and was often paid in excess of $5,000 per month. Halper’s referrals generated approximately $2,900,000 in lab business for BLS.

In addition to the prison term, Judge Chesler sentenced Halper to serve two years of supervised release and fined him $100,000. Halper must also forfeit $325,000.

U.S. Attorney Fishman credited special agents of the FBI, under the direction of Special Agent in Charge Richard M. Frankel; the U.S. Department of Health and Human Services, Office of Inspector General, under the direction of Special Agent in Charge Scott J. Lampert; IRS–Criminal Investigation, under the direction of Special Agent in Charge Jonathan D. Larsen; and inspectors of the U.S. Postal Inspection Service, under the direction of Inspector in Charge Maria L. Kelokates, with the investigation leading to today’s sentence.

The government is represented by Assistant U.S. Attorney Joseph N. Minish, Senior Litigation Counsel Andrew Leven, and Jacob T. Elberg, Chief of the U.S. Attorney’s Office Health Care and Government Fraud Unit in Newark, as well as Assistant U.S. Attorney Barbara Ward, Acting Chief of the office’s Asset Forfeiture and Money Laundering Unit.

U.S. Attorney Paul J. Fishman reorganized the health care fraud practice at the New Jersey U.S. Attorney’s Office shortly after taking office, including creating a stand-alone Health Care and Government Fraud Unit to handle both criminal and civil investigations and prosecutions of health care fraud offenses. Since 2010, the office has recovered more than $635 million in health care fraud and government fraud settlements, judgments, fines, restitution and forfeiture under the False Claims Act, the Food, Drug and Cosmetic Act and other statutes.

Defense counsel: Marc Agnifilo Esq., New York

NEWARK, N.J. – A plastic surgeon with a practice in Basking Ridge, New Jersey, was convicted today by a federal jury of fraudulently diverting millions in corporate earnings for his personal use, costing the United States nearly $3 million in tax revenue between 2006 and 2010, U.S Attorney Paul Fishman announced.

David Evdokimow, 55, of Harding Township, New Jersey, was convicted of all eight counts of a superseding indictment charging him with one count of conspiring to defraud the United States, four counts of personal income tax evasion and three counts of corporate tax evasion. He was convicted following three-week trial before U.S. District Judge Noel L. Hillman in Camden federal court. The jury deliberated for a day before returning the verdict.

According to the superseding indictment and evidence at trial:

Evdokimow ran his medical practice through a corporation called De’Omilia Plastic Surgery P.C. (De’Omilia). He conspired with others to conceal millions of dollars of taxable income from the IRS by forming shell corporations and then having trusted associates open bank accounts for those corporations. Evdokimow then convinced these trusted associates to give him their signatures or signature stamps so that he had full access to the shell company bank accounts while at the same time being able to conceal his connection to those accounts. He and the other conspirators then funneled millions of dollars in De’Omilia income into the bank accounts of the shell corporations and falsely claimed that these transfers were legitimate business expenses.  Evdokimow also used bank accounts in the name of De’Omilia to pay his personal expenses, and falsely claimed those were business expenses too.

Evdokimow used the shell corporation and De’Omilia bank accounts to pay for more than $5.8 million in personal expenses, including designer apparel, jewelry, vacations, artwork, and multiple residences, all of which he falsely claimed as business expenses.

Evdokimow also opened accounts at several banks in order to cash checks received directly from patients for professional medical services. Between 2009 and 2011, Evdokimow cashed over $360,000 in checks from patients, which he failed to report on his federal income tax returns.

Evdokimow was convicted of concealing over $5.8 million in income from tax years 2006 to 2010. By concealing this income, Evdokimow evaded paying almost $3 million in taxes during that period.

Each of the counts with which Evdokimow is charged carries a maximum potential penalty of five years in prison and a $250,000 fine. Sentencing is scheduled for Feb. 24, 2016.

U.S. Attorney Fishman credited special agents of IRS-Criminal Investigation, under the direction of Acting Special Agent in Charge Jonathan D. Larsen, with the investigation leading to today’s verdict.

The government is represented by Assistant U.S. Attorneys Paul Murphy and Justin Herring of the U.S. Attorney’s Office Criminal Division in Newark.

Defense counsel: James Kridel Esq., Clifton, New Jersey

TRENTON, N.J. – A Monmouth County, New Jersey, man was sentenced today to 14 months in prison for possessing sexually explicit images of a 12-year old Pennsylvania girl with whom he had an online relationship, U.S. Attorney Paul J. Fishman announced.

Chad Weber, 23, of Colt’s Neck, New Jersey, previously pleaded guilty before U.S. District Judge Anne E. Thompson to an information charging him with one count of possessing images of child pornography. Judge Thompson imposed the sentence today in Trenton federal court.

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

In April 2013, law enforcement agents learned Weber had been communicating with a 12-year-old girl from Pennsylvania. The agents obtained and reviewed copies of various chat logs and other internet-based messages, which reflect Weber’s online communications with the victim between February 2013 and April 2013. Many of these communications were sexually explicit. Weber and the victim also traded sexually explicit photographs of each other through the internet and discussed the photographs in online chats. During some of these communications, Weber acknowledged that the victim was 12 years old. Weber admitted possessing these sexually explicit photographs of the minor victim on his cell phone and computer.

In addition to the prison term, Judge Thompson sentenced Weber to 10 years of supervised release. As part of his guilty plea, Weber must pay restitution of $5,570, forfeit the computer and cell phone he used to commit the offense and register as a sex offender.

U.S. Attorney Fishman credited special agents of the U.S. Department of Homeland Security Immigration and Customs Enforcement, Homeland Security Investigations, under the direction of Special Agent in Charge Kevin Kelly in Newark, for the investigation leading to today’s sentencing.

The government is represented by Assistant U.S. Attorney Molly Lorber of the U.S. Attorney’s Office Criminal Division in Trenton.

Defense counsel: Brian P. Reilly Esq., Assistant Federal Public Defender, Trenton

TRENTON, N.J. – Two Brooklyn, New York, men were each sentenced today to more than three and a half years in prison for crossing state lines as part of a plan to violently coerce a recalcitrant husband to grant his wife a religious divorce, U.S. Attorney Paul J. Fishman announced.

David Hellman, 33, and Simcha Bulmash, 32, were sentenced to 44 and 48 months in prison, respectively. Both defendants previously pleaded guilty before U.S. District Judge Freda L. Wolfson to separate informations charging them each with one count of traveling in interstate commerce to commit extortion. Judge Wolfson imposed both sentences today in Trenton federal court.

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

On Oct. 9, 2013, Hellman, Bulmash and a group of conspirators – including Avrohom Goldstein, 36, Moshe Goldstein, 32, Jay Goldstein, 61, Binyamin Stimler, 40, Sholom Shuchat, 31, all of Brooklyn, and Ariel Potash, 42, of Monsey, New York – traveled from New York to a warehouse in Edison, New Jersey, with the intent of forcing a Jewish husband to give his wife a “get,” a document which, according to Jewish Law, must be presented by a husband to his wife to effect their divorce.

Hellman and Bulmash admitted that when they arrived at the warehouse, the group met with an individual who, unbeknownst to them, was an undercover FBI agent posing as the husband’s brother in law. Hellman and Bulmash admitted that they discussed a plan and prepared to confine, restrain and threaten the victim. 

The group was then arrested by a team of FBI agents and charged by criminal complaint – along with rabbis Mendel Epstein, 70, of Lakewood, New Jersey, and Martin Wolmark, 57, of Monsey – in connection with the scheme.

Hellman and Bulmash also admitted that on Aug. 22, 2011, they went to a residence in Brooklyn where they restrained, assaulted and injured another recalcitrant husband and his roommate in an attempt to extort a divorce from the husband.

In addition to the prison term, Judge Wolfson sentenced both Hellman and Bulmash to serve two years of supervised release.

Avrohom Goldstein, Moshe Goldstein, Potash and Shuchat each pleaded guilty to one count of traveling in interstate commerce to commit extortion. Moshe Goldstein was sentenced yesterday to four years in prison. Avrohom Goldstein, Potash and Shuchat are scheduled for sentencing Nov. 19, 2015. Wolmark, who pleaded guilty to conspiracy to travel in interstate commerce to commit extortion, is scheduled for sentencing on Dec. 14, 2015.

Epstein, Jay Goldstein and Stimler were all convicted at trial on April 21, 2015. Epstein, who was convicted of conspiracy to commit kidnapping, is scheduled for sentencing on Dec. 15, 2015. Stimler and Jay Goldstein, both convicted of conspiracy to commit kidnapping and attempted kidnapping, are scheduled for sentencing on Dec. 15, 2015 and Dec. 16, 2015, respectively.

U.S. Attorney Fishman credited special agents of the FBI, under the direction of Special Agent in Charge Richard M. Frankel in Newark, for the investigation leading to today’s sentencing. He also thanked the Lakewood, New Jersey, Police Department for its role.

The government is represented by Assistant U.S. Attorneys R. Joseph Gribko and Sarah Wolfe of the U.S. Attorney’s Office in Trenton.

Defense counsel:

Hellman: Michael Bachner Esq., New York

Bulmash: Robert C. Gottlieb Esq., New York

NEWARK, N.J. – A Rockaway, New Jersey, husband and wife who owned a mobile diagnostic testing company today admitted receiving more than $4.3 million from Medicare and private insurance companies for diagnostic testing and reports that were never interpreted by a  licensed physician, U.S. Attorney Paul J. Fishman announced.

Nita K. Patel, 53, and Kirtish N. Patel, 53, pleaded guilty today before U.S. District Judge William H. Walls in Newark federal court to separate informations charging them each with one count of health care fraud.

According to the documents filed in the case and statements made in Court:

From 2006 through June 2014, Nita and Kirtish Patel owned and operated Biosound Medical Services Inc. and Heart Solutions (collectively, “Biosound”), of Parsippany, New Jersey, which were mobile diagnostic companies and approved Medicare providers. The companies provided mobile diagnostic testing, including ultrasounds, echocardiograms and nerve conduction studies that were used to diagnose heart defects, blood clots, abdominal aortic aneurysms and other serious medical conditions. 

Biosound technicians would travel to the office of a primary care physician in the New York and New Jersey area to conduct diagnostic testing. Biosound was responsible for sending the tests to a “reading physician” – an appropriate specialist who would interpret the results. After the reading physician prepared a report, Biosound was responsible for providing it to the referring physician. Biosound was paid millions of dollars by Medicare and other payors for the diagnostic testing, the reading physician’s interpretation of the results and the reports.

Kirtish Patel admitted to, from October 2008 through June 2014, fraudulently interpreting and writing diagnostic reports produced by Biosound despite having no medical license and knowing that the reports would be used by the referring physicians to make important patient treatment decisions. Nita Patel admitted assisting her husband in forging physician signatures on the fraudulently produced reports to make them appear legitimate. Nita and Kirtish Patel also admitted falsely representing to Medicare that the neurological testing performed by Biosound was being supervised by a licensed neurologist.

According to the informations, more than half of the diagnostic reports generated by Biosound between October 2008 and June 2014 were never actually reviewed or interpreted by a physician. Nita and Kirtish Patel were paid more than $4,386,133.75 by Medicare and private insurance companies for the fraudulent reports, which they used for personal expenses, including multiple residences and luxury vehicles.

The health care fraud charge to which Nita and Kirtish Patel pleaded guilty carries a maximum potential penalty of 10 years in prison and a $250,000 fine, or twice the gross gain or loss from the offense. Sentencing for both defendants is scheduled for March 15, 2016.

U.S. Attorney Fishman credited special agents of the FBI, under the direction of Special Agent in Charge Richard M. Frankel in Newark, and the U.S. Department of Health and Human Services – Office of the Inspector General, under the direction of Special Agent in Charge Scott J. Lampert, with the investigation leading to today’s pleas.

The government is represented by Assistant U.S. Attorney Danielle Alfonzo Walsman of the U.S. Attorney’s Health Care and Government Fraud Unit.

U.S. Attorney Paul J. Fishman reorganized the health care fraud practice at the New Jersey U.S. Attorney’s Office shortly after taking office, including creating a stand-alone Health Care and Government Fraud Unit to handle both criminal and civil investigations and prosecutions of health care fraud offenses. Since 2010, the office has recovered more than $640 million in health care fraud and government fraud settlements, judgments, fines, restitution and forfeiture under the False Claims Act, the Food, Drug, and Cosmetic Act and other statutes.

Defense counsel:

Kirtish Patel: Anthony Fusco Jr. Esq., Passaic, New Jersey

Nita Patel: Frank Arleo Esq., West Orange, New Jersey

CAMDEN, N.J. – A California woman today admitted her role in a large-scale conspiracy to steal 94,000 credit and debit cards from customers at approximately 80 Michaels’ Stores in 19 states and to then use that information to make fraudulent withdrawals from the bank accounts of those customers, U.S. Attorney Paul J. Fishman announced.

Crystal Banuelos, 28, of Bloomington, California, pleaded guilty before U.S. District Judge Joseph H. Rodriguez in Camden federal court to Count One of the indictment, conspiracy to commit bank fraud, and Count Three of the indictment, aggravated identity theft.

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

The conspirators installed devices that acquired customers’ bank account and personal identification number (PIN) information on point of sale (POS) terminals at stores operated by Michaels. The stolen account information was used to produce counterfeit bank cards, which were used with the stolen PINs to withdraw funds from the compromised bank accounts.

The conspirators allegedly replaced 88 POS terminals in 80 different stores operated by Michaels across 19 states, including New Jersey, with counterfeit POS devices. Each counterfeit device was equipped with wireless technology, which the conspirators used to retrieve the stolen information. From February 2011 to April 2011, conspirators stole approximately 94,000 debit and credit card account numbers.

From April 2011 to May 2011, Banuelos, her co-defendant, Angel Angulo, and others obtained counterfeit cards with the corresponding PIN numbers written on them from other conspirators. They used the cards and PIN numbers to withdraw money using automated teller machines (ATMs) from hundreds of bank accounts. On May 14, 2011, Banuelos and Angulo possessed 179 counterfeit cards in New Jersey.

The charge of conspiracy to commit bank fraud carries a maximum potential penalty of 30 years in prison and a $1 million fine. The charge of aggravated identity theft carries a mandatory penalty of two years in prison, to be served consecutively to any other sentence. Banuelos also consented to an order of forfeiture in the amount of $480,300, representing the proceeds of the offense. Her sentencing is scheduled for Feb. 23, 2016.

U.S. Attorney Fishman credited special agents of the U.S. Secret Service, under the direction of Special Agent in Charge David Beach, for the investigation leading to today’s guilty plea.

The government is represented by Assistant U.S. Attorney Daniel Shapiro of the Computer Hacking and Intellectual Property Section of the U.S. Attorney’s Office Economic Crimes Unit.

Defense counsel: Edward Sapone Esq., New York

NEWARK, N.J. – An Elizabeth, New Jersey, man was sentenced today to 22 years in prison for robbing seven New Jersey banks at gunpoint and attempting to rob an eighth bank at the time of his arrest on July 30, 2012, U.S. Attorney Paul J. Fishman announced.

Claude Williams, 64, previously pleaded guilty before U.S. District Judge Kevin McNulty to Count One, Count Fourteen and Count Fifteen of an indictment charging him with conspiracy to commit bank robbery, bank robbery and using a firearm during a crime of violence. Judge McNulty imposed the sentence today in Newark federal court.

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

Williams admitted that, between Sept. 26, 2011 and July 30, 2012, he robbed seven banks and attempted to rob an eighth bank, all at gunpoint. He used a similar procedure for each robbery: after entering the bank armed with a handgun and wearing a bandana, hooded sweatshirt or jacket and white gloves, Williams would vault over the counter and demand money from bank tellers at gunpoint.

Williams admitted robbing, or attempting to rob, the following New Jersey banks:

Date

Bank

Location

Sept. 26, 2011

Financial Resources Federal Credit Union

Somerset

Nov. 21, 2011

Somerset Savings Bank

Somerville

Feb. 27, 2012

Provident Bank

Piscataway

April 17, 2012

Provident Bank

Clifton

May 22, 2012

Provident Bank

Piscataway

June 20, 2012

Fulton Bank

Metuchen

July 12, 2012

Unity Bank

Middlesex

July 30, 2012

Unity Bank

North Plainfield

Prior to the July 12, 2012 robbery, an unarmed, off-duty police officer was parked across from the Unity Bank. The officer observed Williams leave the bank, get into the rear of the getaway car and crouch down to hide. After noting the license plate number, the officer followed the car. During the plea hearing, Williams admitted that he exited the getaway car, walked toward the officer’s car and pointed his firearm at the officer, forcing the officer to leave the scene.

On July 30, 2012, Williams was arrested after law enforcement observed him driving in the vicinity of the Unity Bank in North Plainfield on July 27, 2012 and July 28, 2012. He admitted that he planned to rob the bank at gunpoint.

In addition to the prison term, McNulty sentenced Williams to serve five years of supervised release.

Andrea Dorsey, 56, of Plainfield New Jersey, who admitted that she served as a lookout and getaway driver for three of the robberies, was sentenced to 87 months in prison on March 13, 2014. Teresa Webb, 45, of Plainfield, who admitted that she was the getaway driver for one of the robberies, was sentenced to 54 months in prison on May 30, 2013.

U.S. Attorney Fishman credited special agents of the FBI, under the direction of Special Agent in Charge Richard M. Frankel in Newark, with the investigation leading to today’s sentencing. He also thanked the Somerset County Prosecutor’s Office and the Middlesex Borough, Piscataway, Clifton, Metuchen, North Plainfield and Plainfield Police Departments for their roles.

The government is represented by Assistant U.S. Attorneys Osmar J. Benvenuto and Courtney M. Oliva of the U.S. Attorney’s Office Criminal Division in Newark.

Defense counsel:  Kenneth W. Kayser Esq., Irvington

TRENTON, N.J. – A Brooklyn, New York, man was sentenced today to 48 months in prison for crossing state lines as part of a plan to violently coerce a recalcitrant husband to grant his wife a religious divorce, U.S. Attorney Paul J. Fishman announced.

Moshe Goldstein, 32, previously pleaded guilty before U.S. District Judge Freda L. Wolfson to an information charging him with traveling in interstate commerce to commit extortion. Judge Wolfson imposed the sentence today in Trenton federal court.

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

On Oct. 9, 2013, Moshe Goldstein and a group of conspirators – including his brother Avrohom Goldstein, 36, his father, Jay Goldstein, 61, David Hellman, 33, Simcha Bulmash, 32, Binyamin Stimler, 40, Sholom Shuchat, 31, all of Brooklyn, and Ariel Potash, 42, of Monsey, New York – traveled from New York to a warehouse in Edison, New Jersey, with the intent of forcing a Jewish husband to give his wife a “get,” a document which, according to Jewish Law, must be presented by a husband to his wife to effect their divorce.

During his plea hearing, Moshe Goldstein admitted that when he and the other conspirators arrived at the warehouse, they met with an individual who, unbeknownst to them, was an undercover FBI agent posing as the “husband’s” brother in law. They discussed a plan and prepared to confine, restrain and threaten the victim. 

The group was then arrested by a team of FBI agents and charged by criminal complaint – along with rabbis Mendel Epstein, 70, of Lakewood, New Jersey, and Martin Wolmark, 57, of Monsey – in connection with the scheme.

Moshe Goldstein also admitted that on Aug. 22, 2011, he and others went to a residence in Brooklyn where they restrained, assaulted and injured another recalcitrant husband and his roommate in an attempt to extort a divorce from the husband.

In addition to the prison term, Judge Wolfson sentenced Moshe Goldstein to serve two years of supervised release.

Avrohom Goldstein, Hellman, Bulmash, Potash and Shuchat each pleaded guilty to one count of traveling in interstate commerce to commit extortion. Hellman and Bulmash are scheduled for sentencing on Nov. 17, 2015. Avrohom Goldstein, Potash and Shuchat are scheduled for sentencing Nov. 19, 2015. Wolmark, who pleaded guilty to conspiracy to travel in interstate commerce to commit extortion, is scheduled for sentencing on Dec. 14, 2015.

Epstein, Jay Goldstein and Stimler were all convicted at trial on April 21, 2015. Epstein, who was convicted of conspiracy to commit kidnapping, is scheduled for sentencing on Dec. 15, 2015. Stimler and Jay Goldstein, both convicted of conspiracy to commit kidnapping and attempted kidnapping, are scheduled for sentencing on Dec. 15, 2015 and Dec. 16, 2015, respectively.

U.S. Attorney Fishman credited special agents of the FBI, under the direction of Special Agent in Charge Richard M. Frankel in Newark, for the investigation leading to today’s sentencing. He also thanked the Lakewood, New Jersey, Police Department for its role.

The government is represented by Assistant U.S. Attorneys R. Joseph Gribko and Sarah Wolfe of the U.S. Attorney’s Office in Trenton.

Defense counsel: Roger Stavis Esq., New York

Traded on Information in Violation of Confidentiality Agreements, Netting More Than $3.9 Million During Three-Year Scheme

NEWARK, N.J. – A federal grand jury today indicted the owner and operator of a stock trading operation for his alleged participation in a multi-year insider trading scheme that netted more than $3.9 million in illicit profits, U.S. Attorney Paul J. Fishman announced.

Steven Fishoff, 58, of Westlake Village, California, is charged by indictment with one count of conspiracy to commit securities fraud and four counts of securities fraud.

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

On numerous occasions, Fishoff and his conspirators obtained material nonpublic information related to publicly traded companies and traded on that information before it became public. Between June 2010 and July 2013, Fishoff or one of his traders – conspirators Ronald Chernin, 66, of Oak Park, California; Steven Costantin, 54, of Farmingdale, New Jersey, or a business associate referred to in the indictment as “Trader A”– expressed interest in participating in numerous stock offerings by publicly traded companies. Before providing confidential information to these individuals concerning the companies or the terms of the proposed sales, however, the investment bankers first required that Fishoff, Chernin, Costantin, Trader A, and their associated trading entities, agree to be “brought over the wall,” or “wall-crossed,” standard industry terms that meant they were required to keep the information confidential and could not buy or sell the stock based on the information.

Fishoff, Chernin, Costantin, or Trader A agreed to these disclosure and trading restrictions, then flagrantly breached the agreements. In many instances where Fishoff was not personally wall-crossed in an offering, Chernin, Costantin, and Trader A tipped Fishoff by telephone or by email about the offering prior to the public announcement. Even where Fishoff ostensibly was a party to the confidentiality agreement, through his affiliation with the wall-crossed trading entity, Fishoff breached the agreement by trading on the confidential information and by providing the information to his friends, Paul Petrello, 53, of Boca Raton, Florida, and a conspirator referred to in the indictment as “CC-1,” so that Petrello and CC-1 could engage in parallel trading through their own respective trading entities. There were also instances where Fishoff’s traders, Chernin or Costantin, violated the terms of the confidentiality agreements by using Fishoff trading entities to execute trades themselves before the offering. Fishoff and his conspirators shared the illicit profits from their insider trading scheme.

The conspiracy count with which Fishoff is charged carries a maximum potential penalty of five years in prison and a fine of $250,000. The securities fraud counts each carry a maximum potential penalty of 20 years in prison and a fine of $5 million.

U.S. Attorney Fishman credited special agents of the FBI, under the direction of Special Agent in Charge Richard M. Frankel in Newark, for the investigation leading to today’s indictment.  He also thanked the U.S. Securities and Exchange Commission’s Market Abuse Unit, under the direction of Robert Cohen and Joseph Sansone.

The government is represented by Assistant U.S. Attorney Shirley U. Emehelu of the Special Prosecutions Division and Assistant U.S. Attorney Nicholas P. Grippo of the Economic Crimes Unit of the U.S. Attorney’s Office in Newark, as well as Unit Chief Barbara Ward and Assistant U.S. Attorney Sarah Devlin of the Office’s Asset Forfeiture and Money Laundering Unit.

These charges are part of efforts underway by President Obama’s Financial Fraud Enforcement Task Force (FFETF) which was created in November 2009 to wage an aggressive, coordinated and proactive effort to investigate and prosecute financial crimes. With more than 20 federal agencies, 94 U.S. attorney’s offices and state and local partners, it’s the broadest coalition of law enforcement, investigatory and regulatory agencies ever assembled to combat fraud. Since its formation, the task force has made great strides in facilitating increased investigation and prosecution of financial crimes; enhancing coordination and cooperation among federal, state and local authorities; addressing discrimination in the lending and financial markets and conducting outreach to the public, victims, financial institutions and other organizations. Over the past three fiscal years, the Justice Department has filed more than 10,000 financial fraud cases against nearly 15,000 defendants including more than 2,700 mortgage fraud defendants. For more information on the task force, visit www.stopfraud.gov.

The charges and allegations contained in the indictment are merely accusations, and defendant is presumed innocent unless and until proven guilty.

Defense counsel:  Steven D. Feldman Esq., New York

CAMDEN, N.J. – A Franklinville, New Jersey, man was sentenced today to 57 months in prison for mailing fraudulent invoices for non-existent workbooks to more than 73,000 schools throughout the United States, U.S. Attorney Paul J. Fishman announced.

Robert S. Armstrong, 45, previously pleaded guilty before U.S. District Judge Noel L. Hillman to Count Two of a superseding indictment charging him with mail fraud. Judge Hillman imposed the sentence today in Camden federal court.

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

Armstrong admitted that from July 2014 through September 2014, he sent more than 73,000 fraudulent invoices to schools throughout the United States seeking payment for non-existent workbooks. Armstrong opened mail boxes in Sewell, New Jersey, and Las Vegas, Nevada, under the name of his business, Scholastic School Supply LLC. Armstrong then drafted fraudulent invoices typically seeking payments of $647.50 for batches of math or language workbooks that the schools never ordered or received. In order to make the invoices appear legitimate, Armstrong included phony International Standard Book Numbers (ISBN), which are unique identifying numbers assigned to each book published in the United States.

Armstrong used a bulk mailing company to mail the phony invoices to more than 73,000 schools. Each invoice included a payment envelope preaddressed to Scholastic School Supply’s Sewell or Las Vegas address.

In response to the phony invoices, hundreds of schools throughout the United States sent payments to Scholastic School Supply. Armstrong deposited the checks from the victim schools into at least seven accounts that he had opened at various banks in the name of Scholastic School Supply. As of March 12, 2015, 938 schools sent a total of $612,774 in checks to Scholastic School Supply.

Armstrong originally pleaded guilty to Count One of the superseding indictment on June 12, 2015 and agreed to serve a stipulated sentence of 44 months in prison. According to the Federal Rules of Criminal Procedure, when the parties agree to a stipulated sentence, the judge has the opportunity to accept or reject the plea agreement. Judge Hillman rejected the agreement, and Armstrong entered a new plea agreement on Sept. 15, 2015 in which he pleaded guilty to Count Two of the superseding indictment and agreed to a stipulated sentence of 51 to 63 months in prison.

In addition to prison term, Judge Hillman sentenced Armstrong to serve three years of supervised release. A restitution hearing will be held on Dec. 22, 2015.

U.S. Attorney Fishman credited law enforcement officers of the U.S. Postal Inspection Service, under the direction of Inspector in Charge David W. Bosch in Philadelphia; the Gloucester County Prosecutor’s Office, under the direction of Prosecutor Sean F. Dalton; the Gloucester County Office of Consumer Protection, under the direction of Harold H. Spence Jr., Director of Consumer Affairs; the Washington Township Police Department, under the direction of Raphael Muniz, Chief of Police; and the Franklin Township Police Department, under the direction of Lawrence W. Roberts, Chief of Police.

The government is represented by Assistant U.S. Attorney Diana Carrig of the U.S. Attorney’s Office Criminal Division in Camden and Assistant U.S. Attorney Meredith Williams of the U.S. Attorney’s Office Criminal Division in Newark.

Defense counsel: Rocco C. Cipparone Jr. Esq., Haddon Heights, New Jersey.

NEWARK, N.J. – A Ringwood, New Jersey, man today admitted transporting an American black bear he illegally killed in New Jersey across state lines to New York, and covering up the crime by creating false records and staging a fake kill site, U.S. Attorney Paul J. Fishman announced.

Martin Kaszycki, 36, pleaded guilty before U.S. Magistrate Judge Leda D. Wettre in Newark federal court to an information charging him with two counts of violating the Lacey Act by transporting a bear he had illegally killed in Newfoundland, New Jersey, to Sterling State Forest in New York, and covering up the crime by making false statements and staging a fake kill site.

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

On Oct. 5, 2012, Kaszycki killed a 450-pound, male, America black bear from an elevated tree stand, with a bow and arrow, out of hunting season, after setting out bait for the bear within 300 feet of the stand near his place of business in Newfoundland, all in violation of New Jersey state laws. He then drove the bear across state lines to New York, where he falsely told a New York weigh station employee that he had killed the bear in New York’s Sterling State Forest, causing the employee to record the false information on a New York state Bear Data Form.

On Oct. 8, 2012, Kaszycki drove the hide and skull of the bear to a taxidermy shop in Pennsylvania to arrange for the parts to be mounted for a trophy display and falsely represented to a taxidermist that he had hunted the bear in New York, causing the taxidermist to record that information on a New York State Department of Environmental Conservation Taxidermist Bear Report.

When N.J. Division of Fish and Wildlife Officers confronted Kaszycki about the bear on Oct. 10, 2012, at his place of business, Kaszycki told them he had killed the bear in New York. Later that night, Kaszycki drove the guts of the bear to Sterling State Forest in New York, where he placed them in the woods to stage a fake kill site. When confronted again the next day by state officials about the bear, he led those officials to the staged kill site and told them it was the location where he had killed the bear.

The Lacey Act prohibits the interstate transport of wildlife taken or possessed in violation of any state law or regulation as well as the making of a false record for wildlife that has been or is intended to be transported in interstate commerce. New Jersey state laws prohibit the hunting of an American black bear out of season. New Jersey laws also prohibit the hunting of these bears while elevated in a standing tree within 300 feet of a baited area or with a bow and arrow.                               

As part of his plea agreement, Kaszycki must pay a fine of $5,000 to the U.S. Fish and Wildlife Service Lacey Act Reward Fund. He must also forfeit the skull and hide of the bear and pay $1,250 to the Woodlands Wildlife Refuge for the care and release of orphaned and injured American black bears in New Jersey.

The charge to which Kaszycki pleaded guilty carries a maximum penalty of one year in prison and a $100,000 fine. He was released on unsecured $10,000 bond with the condition that he surrender his hunting license and refrain from hunting pending his sentencing hearing, which is currently scheduled for Feb 17, 2016.

U.S. Attorney Fishman credited special agents of the U.S. Fish and Wildlife Service, Office of Law Enforcement, under the direction Resident Agent in Charge Preston Fant, as well as the N.J. Division of Fish and Wildlife, with the investigation leading to today’s guilty plea.

The government is represented by Assistant U.S. Attorney Kathleen P. O’Leary of the U.S. Attorney's Office Health Care and Government Fraud Unit in Newark.

Defense counsel: Peter L. Festa Esq., Paterson, New Jersey

CAMDEN, N.J. - A Toms River, New Jersey, woman today admitted filing false tax returns and using her accounting business to cheat her clients out of their tax refunds, U.S. Attorney Paul J. Fishman announced.

Doreen Gentile, 61, pleaded guilty before U.S. District Judge Joseph H. Rodriguez in Camden federal court to Count 2 and Count 27 of an indictment, charging her with mail fraud and filing a false income tax return.

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

Gentile owned and operated her accounting business, Doreen A. Gentile & Associates, LLC (“DAG & Associates”), out of her home in Toms River. Gentile admitted that as part of her scheme, she would show her clients a tax return that indicated that they had no tax or refund due, owed a minimal amount of tax, or were due a refund that was far less than the amount to which they were entitled. Gentile then prepared a second set of tax returns, signed without her clients’ permission, that she submitted to the IRS or the State of New Jersey for the full tax refund.

Based on the second set of returns, the IRS or the State of New Jersey issued tax refund checks care of DAG & Associates and mailed them to the DAG & Associates post office box in Toms River. Gentile then deposited the tax refund checks into the DAG & Associates bank account without her clients’ permission. Afterwards, Gentile used the funds to pay for personal expenses.

Gentile also admitted that from 2006 through 2009, she failed to report to the IRS all of her income generated from DAG & Associates, including funds she stole as part of her refund scheme, resulting in tax losses of approximately $188,811.

The mail fraud count to which Gentile pleaded guilty carries a maximum potential penalty of 20 years in prison and a $250,000 fine. The count of filing a false income tax return carries a maximum potential penalty of three years in prison and a $100,000 fine. As part of her plea agreement, Gentile must also forfeit $905,004 representing proceeds of her scheme. Sentencing is scheduled for Feb. 22, 2016.

U.S. Attorney Fishman credited special agents of IRS – Criminal Investigation, under the direction of Special Agent in Charge Jonathan Larsen, and special agents of the Social Security Administration, Office of Inspector General, under the direction of Special Agent in Charge Edward J. Ryan,  the for investigation leading to today’s plea.

The government is represented by Senior Litigation Counsel Jason M. Richardson of the U.S. Attorney=s Office Criminal Division in Camden.

Defense counsel: Christopher O’Malley Esq., Camden

NEWARK, N.J. – A Bronx, New York, man was sentenced today to 120 months in prison for soliciting a girl to produce sexually explicit images and using Craigslist to advertise sexual encounters with the girl, U.S. Attorney Paul J. Fishman announced.

Gabriel Toro, 31, previously pleaded guilty before U.S. District Judge William J. Martini to an information charging him with one count of online enticement of a minor to engage in criminal sexual conduct. Judge Martini imposed the sentence today in Newark federal court.

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

Toro admitted that between December 2011 and August 2014, he used the internet to induce a 14-year-old girl to engage in criminal sexual conduct, including taking pictures of her genitals for him. Toro also admitted to distributing images of the girl to another individual and posting advertisements on Craigslist for individuals to have sex with the girl in exchange for money.

In addition to the prison term, Judge Martini sentenced Toro to a lifetime term of supervised release. Toro must register as a sex offender.

U.S. Attorney Fishman credited special agents of Immigration and Customs Enforcement’s (ICE) Homeland Security Investigations (HSI), Newark Division, under the direction of Acting Special Agent in Charge Kevin Kelly, with the investigation leading to today’s sentencing.

The government is represented by Assistant U.S. Attorney Danielle Alfonzo Walsman of the U.S. Attorney’s Office Criminal Division in Newark.

Defense counsel: James Friedman Esq., Newark

NEWARK, N.J. – A Hudson County, New Jersey, man today admitted his role in an armed robbery spree of banks and commercial establishments in Bergen and Hudson counties in July 2013, U.S. Attorney Paul J. Fishman announced.

Gary Bohanan, 46, of North Bergen, New Jersey, pleaded guilty before U.S. District Judge Claire C. Cecchi in Newark federal court to one count of conspiracy to commit armed bank robberies and Hobbs Act robberies, two counts of armed bank robbery, and two counts of armed Hobbs Act robbery.

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

On July 10, 2013, Bohanan and Ramon Lopez, 25, of Union City, who were both wearing masks, entered a McDonald’s restaurant in North Bergen. Bohanan brandished a handgun and demanded money from the employees of McDonald’s. Bohanan and Lopez then took $1,600 in cash from the cash registers and fled in a car driven by Josephine Chenet, 45, formerly of North Bergen.

On July 18, 2013, Bohanan, Angel Feliu, 22, of North Bergen, Lopez, and Chenet watched Le Chateau restaurant in West New York, New Jersey, for the purpose of robbing it. Bohanan and the other individuals waited for a restaurant employee to close the restaurant, followed her home, and then robbed her at gunpoint of $6,000 in cash, representing the proceeds from the restaurant.

On July 22, 2013, Bohanan, Feliu and Chenet robbed the Sovereign Bank (now Santander Bank) in Secaucus, New Jersey. Both men wore latex gloves and masks.  Once inside the Sovereign Bank, Bohanan brandished a black handgun, jumped over the counter and proceeded to empty two drawers of money into a black bag, while pointing the handgun at bank tellers. As Bohanan emptied the drawers, Feliu stood guard.  Bohanan and Feliu then fled the bank and shared the proceeds of the robbery with Lopez and Chenet.

On July 26, 2013, Bohanan, Feliu and Chenet robbed the TD Bank, located in Fairview, New Jersey. Bohanan and Feliu entered the bank at 9:48 a.m. Bohanan and Feliu both wore latex gloves and masks. Feliu, however, was captured by the bank’s video surveillance system before he put the mask on his face. During the robbery, Feliu brandished a knife at employees and customers, and Bohanan brandished what appeared to be a black handgun, but what was later identified as an air pistol. Bohanan then jumped over the counter and emptied two drawers of money into a black bag, while pointing the air pistol at bank tellers. As Bohanan emptied the drawers, Feliu stood guard and held bystanders back by brandishing the knife. After the robbery, Bohanan and Feliu fled on foot; however, they were followed by concerned citizens and victims of the bank robbery. Bohanan then came upon a van, pointed the air pistol at the driver, and ordered the driver out of the van.  Bohanan then attempted to flee the area by driving away in the van, but he crashed it into a nearby structure. Bohanan was found hiding under a truck and arrested in possession of a black bag containing an air pistol and money covered with red dye.

The two counts of armed bank robbery to which Bohanan pleaded guilty each carry a maximum penalty of 25 years in prison and a fine of $250,000. The two counts of Hobbs Act robbery each carry a maximum penalty of 20 years in prison. The count of conspiracy carries a maximum penalty of five years in prison. Sentencing is scheduled for Feb. 24, 2016.

Feliu previously pleaded guilty to one count of conspiracy to commit armed bank robberies and Hobbs Act robberies and two counts of armed bank robbery. Lopez previously pleaded guilty in a separate proceeding to one count of conspiracy to commit armed bank robberies and Hobbs Act robberies and two counts of Hobbs Act robberies. Bohanan, Feliu, and Lopez are detained pending sentencing. Charges that had been pending against Chenet for her role in the robberies were dismissed following her death on June 22, 2014.

U.S. Attorney Fishman praised special agents of the FBI, under the direction of Special Agent in Charge Richard M. Frankel, with the investigation leading to today’s guilty plea. He also thanked the Fairview, North Bergen and Secaucus police departments for their contributions to the case.

The government is represented by Assistant U.S. Attorney Francisco J. Navarro of the U.S. Attorney’s Office Criminal Division in Newark.

Defense counsel: Carl J. Herman Esq., West Orange, New Jersey

TRENTON, N.J. - The former managing clerk for a prominent, international law firm today admitted stealing sensitive, confidential information for use in a five-year insider trader scheme that yielded net profits of more than $5.6 million, U.S. Attorney Paul J. Fishman announced.

Steven Metro, 41, of Katonah, New York, pleaded guilty before U.S. District Judge Michael A. Shipp in Trenton federal court to the first two counts of an indictment charging him with securities fraud and conspiracy to commit securities and tender offer fraud.

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

From 2009 to 2013, Metro stole material nonpublic information from his then-employer, Simpson Thacher & Bartlett LLP, one of the nation’s premier mergers and acquisitions firms. The information related to corporate transactions, such as mergers and acquisitions or tender offers, in which the firm represented a party or financial advisor to the transaction. As the firm’s managing clerk, Metro did not personally work on most of these transactions. Instead, Metro stole the inside information by scouring the firm’s computer system for client names and the keywords “merger agreement,” “bid letter,” “engagement letter,” and “due diligence.”

After obtaining the inside information, Metro would meet his friend, Frank Tamayo, 42, of Brooklyn, New York, at a bar, coffee shop, or other location near their respective workplaces in midtown Manhattan. During these meetings, Metro provided Tamayo material information pertaining to, among other things, the names and/or ticker symbols of the companies whose securities should be purchased. Tamayo would write the security’s ticker symbol on a small piece of paper or napkin and commit the rest of the inside information to memory.

Afterwards, Tamayo would meet Vladimir Eydelman, 43, formerly of Colts Neck, New Jersey, usually at a location near Eydelman’s workplace, such as at the large clock in New York City’s Grand Central Terminal. Tamayo would show Eydelman the paper or napkin with the ticker symbol of the company whose securities should be purchased. After Eydelman memorized the ticker symbol, Tamayo would place the paper or napkin into his mouth and chew it until it was destroyed.

After receiving the inside information provided by Metro, whom Eydelman knew as Tamayo’s “source,” Eydelman then purchased securities for himself, family members, friends, and/or clients, including Tamayo. Eydelman quickly sold the shares and covered any positions once the relevant deal was publicly announced and the stock price rose.

Throughout the course of the approximately five-year scheme, Tamayo reinvested the approximately $7,000 in profits that Metro made on the first deal, and updated Metro on the running balance of his profits from the insider trading scheme. As of October 2013, by which time the conspirators had traded ahead of at least 13 planned corporate transactions, Metro’s share of the profits had reached approximately $168,000. Metro sought to “cash out” his share of the accrued profits from the insider trading scheme, pressing Tamayo to “liberate some cash” during a meeting in January 2014. Eydelman paid approximately $7,000 in cash to Tamayo in February 2014, with the expectation that Tamayo would use the cash to compensate his law firm source – i.e., Metro – for providing them the inside information.

By exploiting the information that Metro took from the firm, Metro, Tamayo and Eydelman netted more than $5.6 million in illicit profits over five years.

The securities fraud charge to which Metro pleaded guilty carries a maximum potential penalty of 20 years in prison a $5 million fine. The conspiracy charge carries a maximum potential penalty of five years in prison and a $250,000 fine. Metro must also forfeit any proceeds from the offense. His sentencing is scheduled for Feb. 17, 2016.

Tamayo and Eydelman have both pleaded guilty to their roles in the scheme and await sentencing.

U.S. Attorney Fishman credited special agents of the FBI, under the direction of Special Agent in Charge Richard M. Frankel in Newark, for the investigation leading to today’s guilty plea.  He also thanked the U.S. Securities and Exchange Commission’s Market Abuse Unit, under the direction of Robert Cohen and Joseph Sansone.

The government is represented by Assistant U.S. Attorney Shirley U. Emehelu of the Special Prosecutions Division of the U.S. Attorney’s Office in Newark, and R. Joseph Gribko of the U.S. Attorney’s Office in Trenton, as well as Unit Acting Chief Barbara Ward and Assistant U.S. Attorney Jafer Aftab of the Office’s Asset Forfeiture and Money Laundering Unit.

These charges are part of efforts underway by President Obama’s Financial Fraud Enforcement Task Force (FFETF) which was created in November 2009 to wage an aggressive, coordinated and proactive effort to investigate and prosecute financial crimes. With more than 20 federal agencies, 94 U.S. attorney’s offices and state and local partners, it’s the broadest coalition of law enforcement, investigatory and regulatory agencies ever assembled to combat fraud. Since its formation, the task force has made great strides in facilitating increased investigation and prosecution of financial crimes; enhancing coordination and cooperation among federal, state and local authorities; addressing discrimination in the lending and financial markets and conducting outreach to the public, victims, financial institutions and other organizations. Over the past three fiscal years, the Justice Department has filed more than 10,000 financial fraud cases against nearly 15,000 defendants including more than 2,700 mortgage fraud defendants. For more information on the task force, visit www.stopfraud.gov.

Defense counsel:  James R. Froccaro Jr. Esq., Port Washington, New York

NEWARK, N.J. – A Mercer County, New Jersey, man was arrested today and charged with coercing a minor to engage in sexually explicit conduct and with receiving images of child sexual abuse, U.S. Attorney Paul J. Fishman announced.

Curtis E. Thompson, 30, of Lawrenceville, New Jersey, is charged by complaint with one count of the production of child pornography and one count of receiving child pornography. He is scheduled to appear later today before U.S. Magistrate Judge Leda Dunn Wettre in Newark federal court.

According to the complaint:

In April 2015, Thompson used a Facebook account in the name of Frank Lucas to become “friends” with the victim, a minor. On June 11, 2015, the victim told Thompson that the victim was under the age of 18. Thompson used the Facebook account to solicit and persuade the victim to record videos of the victim and others engaging in sexually explicit conduct, and to send those videos to Thompson. Thompson also coerced the victim to engage in sexually explicit conduct and allow Thompson to watch in real time through a video streaming service. Thompson requested additional videos of the victim and others engaged in sexually explicit conduct in exchange for payments from Thompson wired via MoneyGram to the victim and others. Thompson sent the payments on various dates in June 2015.

The charge of production of child pornography carries a maximum potential penalty of 30 years in prison, a mandatory minimum penalty of 15 years in prison and a $250,000 fine. The charge of receiving child pornography carries a mandatory minimum penalty of five years and a maximum of 20 years in prison and a $250,000 fine.

U.S. Attorney Fishman credited special agents with the FBI, under the direction of Special Agent in Charge Richard M. Frankel, with the investigation leading to today’s charges.

The government is represented by Assistant U.S. Attorney Svetlana M. Eisenberg of the U.S. Attorney’s Office General Crimes Unit in Newark.

Anyone with information which may be relevant to this investigation is encouraged to contact the FBI online at: NK-VICTIM-ASSISTANCE@ic.fbi.gov

The charges and allegations contained in the complaint are merely accusations, and the defendant is presumed innocent unless and until proven guilty

 

TRENTON, N.J. - An Atlantic City, New Jersey, man today admitted engaging in a conspiracy to distribute heroin with members of the “Dirty Block” criminal street gang that allegedly used threats, intimidation and violence to maintain control of the illegal drug trade in Atlantic City.

Tyrone Ellis, a/k/a “Rome,” 33, pleaded guilty before U.S. District Judge Anne Thompson in Trenton federal court to a superseding information charging him with one count of conspiracy to distribute and to possess with intent to distribute 100 grams or more of heroin, and one count of possessing a firearm and ammunition while being a previously convicted felon.

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

Ellis acted as a supplier of pre-packaged heroin to Mykal Derry, the leader of the Dirty Block criminal street gang. Ellis also distributed heroin to a smaller group of mid-level heroin distributors who sold the heroin to customers all over the Atlantic City area and in surrounding towns.

Ellis was arrested on March 26, 2013, in Vineland, New Jersey. At the time of his arrest, a loaded Glock .40 caliber handgun belonging to Ellis was recovered from a bedroom in the residence and more than $37,000 in cash was seized from various locations inside the residence and in an attached garage.

Tyrone Ellis’ guilty plea marks the 34th felony conviction of the 34 defendants arrested by the FBI and state and local law enforcement officers working with the FBI in March 2013. Ellis and approximately 15 other defendants are awaiting sentencing; the remaining defendants have all been sentenced to prison terms.

The drug conspiracy carries a minimum penalty of five years in prison, a maximum penalty of 40 years in prison, and a maximum potential fine of $5 million.  Sentencing is scheduled for Feb. 2, 2016.

U.S. Attorney Fishman credited special agents of the FBI’s Newark Division, Atlantic City Resident Agency, under the direction of Special Agent in Charge Richard M. Frankel; the Atlantic County Prosecutor’s Office, under the direction of Prosecutor James P. McClain; the Atlantic City Police Department, under the direction of Chief Henry White; and the South Jersey Safe Streets Violent Incident and Gang (Safe Streets) Task Force, with the investigation leading to today’s guilty plea.

He also thanked the N.J. State Police; the Atlantic County Sheriff’s Office; the Northfield Police Department; the Vineland Police Department; the Brigantine Police Department; and the Millville Police Department for their contributions.

The government is represented by Assistant U.S. Attorneys Patrick C. Askin and Justin C. Danilewitz and Special Assistant U.S. Attorney Edmond Mallqui-Burgos.

Defense counsel:  Rocco Cipparone Esq., Haddon Heights, New Jersey

NEWARK, N.J. – A Newark, New Jersey, man was sentenced today to 360 months in prison for sexually abusing two girls and recording the conduct on his cellphone, U.S. Attorney Paul J. Fishman announced.

Justin Kinney, 26, previously pleaded guilty before U.S. District Judge Stanley R. Chesler to an indictment charging him with two counts of producing child pornography. Judge Chesler imposed the sentence today in Newark federal court.

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

On Oct. 25, 2012, law enforcement executed a search warrant on Kinney’s laptop computer and cellphone, which revealed several files of child pornography that appeared to be taken with Kinney’s cellphone. Kinney admitted that two of the images, dated Aug. 19, 2012 and Oct. 10, 2012, were taken by him while he sexually abused two girls.

In addition to the prison term, Judge Chesler sentenced Kinney to a lifetime term of supervised release. Kinney is required to register as a sex offender.

U.S. Attorney Fishman credited special agents of Immigration and Customs Enforcement’s (ICE) Homeland Security Investigations (HSI), Newark Division, under the direction of Acting Special Agent in Charge Kevin Kelly and the Essex County Prosecutor’s Office, under the direction of Acting Prosecutor Carolyn A. Murray, with the investigation leading to today’s sentencing.

The government is represented by Assistant U.S. Attorneys Danielle M. Corcione and Danielle Alfonzo Walsman of the U.S. Attorney’s Office Criminal Division in Newark.

Defense counsel:  Assistant Federal Public Defender John H. Yauch Esq., Newark

NEWARK, N.J. –  Two men today admitted extorting thousands of dollars in corrupt payments in connection with arranging approvals to provide landfill materials for a Hudson County Improvement Authority (“HCIA”) project, U.S. Attorney Paul J. Fishman announced.

Gerard Pica, 65, of Middletown, New Jersey, pleaded guilty before U.S. District Judge Jose L. Linares to Count Four of an indictment charging him with conspiracy to commit extortion under color of official right. James Castaldo, 60, of Beachwood, New Jersey, pleaded guilty before Judge Linares to Count One of the indictment charging him with conspiracy to commit extortion under color of official right. 

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

The HCIA was overseeing the construction of a nine-hole public golf course located at Lincoln Park West in Jersey City, New Jersey (the “LPW project”). As part of its construction, the LPW project required several hundred thousand cubic yards of soil, fill material and crushed stone to be incorporated into the site, as well as to serve as road bedding during the construction of the golf course. As the overseer of the LPW project, one of the functions of the HCIA – either directly or through a designated contractor – was to serve as a gatekeeper for any material to be delivered to the LPW site. It was the HCIA’s responsibility to solicit, evaluate and decide which contractors’ proposals to accept for the provision of soil and fill material for the LPW project.

Castaldo ran Renda Enterprises LLC, which provided interstate transportation and broker services that moved or received recycled waste and other materials. Pica had been employed by the HCIA as an environmental scientist and had the ability to influence the HCIA’s decisions regarding the selection of contractors to provide soil and fill material to the LPW project. An individual referred to in the indictment as “Employee 1” also had authority over the selection of contractors seeking to provide materials for the project site.

From August 2010 through November 2011, Pica, Castaldo and others schemed to obtain payments from certain contractors in exchange for Pica and Employee 1’s assistance in getting approval for certain companies to provide materials for the LPW project.

Pica admitted that he arranged to obtain corrupt payments from “Individual 3,” the owner of a recycling business in Bayonne, New Jersey. Pica admitted using his authority at the HCIA to ensure that Individual 3 and Individual 3’s company received approval to provide Class B materials, including crushed stone, for the LPW project. As part of the agreement, Individual 3 would pay Castaldo a fee – $2 per cubic yard of fill and soil material delivered to the site – for the benefit of Pica, Castaldo and Employee 1. Pica admitted receiving approximately $6,600 in December 2010 as a partial payment of his share. In addition, Pica admitted to creating a fraudulent invoice from a separate company which he owned for monies purportedly owed to him by Renda Enterprises. Pica admitted that he accepted a check for $6,000 from Renda Enterprises in April 2011, knowing that this amount was further payment of his share which he extorted from Individual 3.  

Castaldo admitted that in early 2011, he met with Pica and a person referred to in the indictment as “Individual 1,” who was the owner of a full service environmental consulting firm seeking authorization to dump soil and fill material at the LPW site. Castaldo admitted that he, Pica and Individual 1 agreed upon the amount per cubic yard that Individual 1 would have to pay in return for Pica’s  assistance in ensuring Individual 1 would receive authorization to dump the material at the LPW site. Castaldo acknowledged that in July 2011, Renda Enterprises received two payments totaling more than $8,600 as corrupt payments for allowing Individual 1 to dump more than 2,600 cubic yards of fill materials at the LPW site.

The counts to which Pica and Castaldo pleaded guilty both carry a maximum potential penalty of 20 years in prison and a $250,000 fine, or twice the gross gain or loss from the offense. Pica and Castaldo are also jointly responsible for forfeiture of $53,861. Sentencing for both defendants is scheduled for Feb. 23, 2016.

U.S. Attorney Fishman credited special agents from the FBI, under direction of Special Agent in Charge Richard M. Frankel in Newark and special agents with the N.J. State Commission of Investigation, under the direction of Acting Executive Director Lee C. Seglem, for the investigation.

The government is represented by Assistant U.S. Attorneys David L. Foster and Mark McCarren of the U.S. Attorney’s Office Special Prosecutions Division in Newark.

Defense counsel:

Pica: Edward Plaza, Esq., Newark

Castaldo: Matthew J. Heagen, Toms River

NEWARK, N.J. – A Newark, New Jersey, man was convicted today by a federal jury of possessing a firearm as a previously convicted felon, U.S. Attorney Paul J. Fishman announced.

Caliph Barr, 25, was convicted of possessing a firearm despite his previous conviction in Essex County Superior Court. Barr was convicted today following a three-day trial before U.S. District Judge Kevin McNulty in Newark federal court. The jury deliberated for two hours before returning the verdict.

According to documents filed in this case and the evidence at trial, on June 2, 2014, Barr was found in possession of a Russian Nagant .32 caliber revolver along with six rounds of ammunition.

The charge of which Barr was convicted carries a maximum potential penalty of 10 years in prison and a $250,000 fine. Sentencing is not yet scheduled.

U.S. Attorney Fishman credited special agents of the Bureau of Alcohol, Tobacco, Firearms and Explosives (ATF), under the direction of Special Agent in Charge George P. Belsky, with the investigation leading to today’s guilty verdict.

The government is represented by Assistant U.S. Attorneys Courtney A. Howard and David Feder of the U.S. Attorney’s Office Criminal Division in Newark.

Defense counsel: Assistant Federal Public Defenders K. Anthony Thomas Esq. & Carol Gillen Esq., Newark

NEWARK, N.J. – A Union County, New Jersey man was charged today with distributing images of child sexual abuse online, U.S. Attorney Paul J. Fishman announced.

Lenin Eugenio Basantes, 30, of Elizabeth, New Jersey, is charged by complaint with one count of distribution of child pornography. He had his initial court appearance before U.S. Magistrate Judge James B. Clark III in Newark federal court and was detained without bail.

According to the complaint:

On June 19, 2013, Basantes distributed 18 video files and approximately 70 image files of child sexual abuse via a peer-to-peer file sharing network on the Internet, to which others had access in shared directories. During an undercover operation, a special agent of the FBI communicated with Basantes via the peer-to-peer network. Basantes provided this agent with a password to a file containing the images and video files. The undercover agent was able to access and download these images. On Nov. 4, 2015, FBI agents interviewed Basantes, who admitted that that he shared pornographic images of children with other people via the peer-to-peer network.

The charge of distribution of child pornography carries a mandatory minimum penalty of five years in prison, a maximum potential penalty of 20 years in prison, and a $250,000 fine.

U.S. Attorney Fishman credited special agents of the FBI, under the direction of Special Agent in Charge Richard M. Frankel in Newark, with the investigation leading to the charges.

The government is represented by Assistant U.S. Attorney Meredith Williams of the U.S. Attorney’s Office General Crimes Unit in Newark.

Defense counsel: Chester Keller Esq., First Assistant Federal Public Defender, Newark

NEWARK, N.J. - A Newark federal grand jury today indicted an Englewood Cliffs, New Jersey, woman for tax evasion and using bogus litigation support companies to obtain millions from two law firms where she was a partner, U.S. Attorney Paul Fishman announced.

Keila Ravelo, 50, is charged by indictment with one count of conspiracy to commit wire fraud, four counts of wire fraud and four counts of tax evasion. Ravelo and her husband, Melvin Feliz, 49, also of Englewood Cliffs, were originally arrested and charged by complaint on Dec. 22, 2014 with conspiracy to commit wire fraud.

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

Ravelo worked as a partner for a company identified in the indictment as “Law Firm 1” from July 1, 2005 through October 2010. She then became partner for another company identified as “Law Firm 2” and worked there from October 2010 through November 2014.

From 2008 through July 2014, Ravelo and Feliz allegedly formed two limited liability companies, “Vendor 1” and “Vendor 2,” which purported to provide litigation support for both firms, but in fact provided no actual services. Ravelo and Feliz controlled Vendor 1 and Vendor 2 bank accounts and submitted invoices to Law Firm 1, Law Firm 2 and a client of both firms for work that was never performed. Ravelo, in her capacity as a partner at the law firms, allegedly approved payments to Vendor 1 and Vendor 2, which Ravelo and Feliz later used for personal expenses.     

Over the course of the conspiracy, the law firms paid Vendor 1 and Vendor 2 a combined total of approximately $7.8 million. The indictment further alleges that Ravelo willfully failed to report the fraudulent earnings on her tax returns.

The conspiracy charge and each count of wire fraud are punishable by a maximum potential penalty of 20 years in prison and a $250,000 fine, or twice the gross gain or loss from the offense. The tax evasion charges are each punishable by a maximum potential penalty of five years in prison and a $100,000 fine.

The charges and allegations in the indictment are merely accusations, and Ravelo is considered innocent unless and until proven guilty.

On Aug. 25, 2015, Feliz pleaded guilty before U.S. District Judge Kevin McNulty in Newark federal court to an information charging him with one count of conspiracy to commit wire fraud and one count of tax evasion. His sentencing is currently scheduled for Dec. 14, 2015.

U.S. Attorney Fishman credited law enforcement officers of the Drug Enforcement Administration, Newark Division, under the direction of Special Agent in Charge Carl Kotowski, and law enforcement officers of IRS-Criminal Investigation, under the direction of Special Agent in Charge Jonathan D. Larsen, with the investigation.

The government is represented by Assistant U.S. Attorneys Ronnell Wilson, Andrew Kogan, and Brian Urbano of the U.S. Attorney’s Office Criminal Division, Barbara Ward, Acting Chief of the office’s Asset Forfeiture and Money Laundering Unit, and Assistant U.S. Attorney David Foster of the U.S. Attorney’s Office Special Prosecution’s Division in Newark.

Defense counsel: Lawrence S. Lustberg Esq., Newark, and Steven H. Sadow Esq., Atlanta, Georgia

NEWARK, N.J. – A regional manager for a prime contractor working at Picatinny Arsenal today admitted taking more than $20,000 in kickbacks in return for favorable treatment on construction projects at the installation, U.S. Attorney Paul J. Fishman announced.

Shawn A. Fuller, 45, of East Stroudsburg, Pennsylvania, pleaded guilty before U.S. District Judge Susan D. Wigenton in Newark federal court to an information charging him with one count of accepting unlawful kickbacks.

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

Fuller, a project manager for a prime contractor working at Picatinny Arsenal, admitted taking kickbacks from subcontractors in return for favorable treatment on related construction projects. On June 27, 2010, Fuller solicited and accepted a Yamaha Wave Runner, valued at $4,250, from a subcontractor who owned a Warren County, New Jersey, construction company. Fuller also admitted that, between 2009 and June 2013, he accepted approximately $20,000 in cash payments from other subcontractors involved in Picatinny Arsenal construction projects.

The charge to which Fuller pleaded guilty carries a maximum potential penalty of 10 years in prison and a $250,000 fine, or twice the gross gain or loss from the offense. Sentencing is scheduled for Feb. 16, 2016.

U.S. Attorney Fishman credited special agents with the FBI, under the direction of Special Agent in Charge Richard M. Frankel; the U.S. Department of Defense, Defense Criminal Investigative Service, under the direction of Special Agent in Charge Craig Rupert; and the U.S. Army Major Procurement Fraud Unit, Criminal Investigation Command, under the direction of Special Agent in Charge Larry Scott Moreland, with the investigation leading to today’s plea. 

The government is represented by Assistant U.S. Attorney Barbara R. Llanes and Senior Litigation Counsel Leslie Faye Schwartz of the U.S. Attorney’s Office Special Prosecutions Division in Newark.   

Defense counsel:  Assistant Federal Public Defender Candace Hom Esq., Newark

CAMDEN, N.J. – The owner of a compounding pharmacy in Lakewood, New Jersey, was sentenced today to 20 months in prison for paying tens of thousands of dollars in cash bribes to physicians for referring pain cream prescriptions, defrauding health care benefit programs out of hundreds of thousands of dollars, U.S. Attorney Paul J. Fishman announced.

The president and pharmacist-in-charge of Prescriptions R US – Vladimir Kleyman, 44, of Lakewood, New Jersey – previously pleaded guilty before U.S. District Judge Joseph H. Rodriguez to an information charging him with conspiracy to pay kickbacks and to commit health care fraud. Judge Rodriguez imposed the sentence today in Camden federal court.

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

From January 2013 through January 2014, Kleyman provided another individual with tens of thousands of dollars in cash and checks to provide bribes to physicians for referring prescriptions for a compounded pain cream to Prescriptions R US. Compounding pharmacies prepare medication, using different types and dosages of drugs, in order to provide more personalized medications for patients. The compounded pain cream prepared by Prescriptions R US in this case contains several components, including ketamine (a Schedule III non-narcotic), lidocaine and diclofenac.

Kleyman admitted that in a series of meetings in November and December 2013 alone, he arranged for the middleman to receive more than $50,000 in cash or checks with the understanding it would be used to pay bribes for the referral of pain cream prescriptions.

Kleyman also admitted he knew certain health insurance carriers, including federal health care benefit programs, did not cover compounded pain cream, but he nevertheless dispensed the pain cream to these patients and obtained payment from their insurance carriers by falsely representing the pain cream to be other covered items. Kleyman also acknowledged he defrauded health insurance carriers by making false and misleading representations about the quantity of the pain cream that he dispensed and the frequency with which he dispensed it. As a result, private insurance companies paid the pharmacy hundreds of thousands of dollars.

In addition to the prison term, Judge Rodriguez sentenced Kleyman to serve three years of supervised release, ordered him to pay $1,036,658 in criminal restitution and forfeiture and civil penalties. As part of his plea agreement, Kleyman also must pay $2 million in federal income taxes, interest, and penalties for the 2013 tax year.

In a separate civil settlement with the Justice Department and the Office of Inspector General of the Department of Health and Human Services, Kleyman paid $160,000 to resolve allegations of receiving Medicare funds through referrals and orders by physicians he paid.

U.S. Attorney Fishman credited special agents of the FBI, under the direction of Special Agent in Charge Richard M. Frankel; the U.S. Department of Health and Human Services, Office of Inspector General, under the direction of Special Agent in Charge Scott J. Lampert, and IRS–Criminal Investigation, under the direction of Acting Special Agent in Charge Jonathan D. Larsen, with the investigation leading to today’s sentencing.

The government is represented in the criminal case by Assistant U.S. Attorney Jane H. Yoon and Senior Litigation Counsel Andrew Leven, and in the civil settlement, by Assistant U.S. Attorney Bernard J. Cooney, all of the U.S. Attorney’s Office Health Care and Government Fraud Unit in Newark.

U.S. Attorney Paul J. Fishman reorganized the health care fraud practice at the New Jersey U.S. Attorney’s Office shortly after taking office, including creating a stand-alone Health Care and Government Fraud Unit to handle both criminal and civil investigations and prosecutions of health care fraud offenses. Since 2010, the office has recovered more than $635 million in health care fraud and government fraud settlements, judgments, fines, restitution and forfeiture under the False Claims Act, the Food, Drug and Cosmetic Act and other statutes.

Defense counsel: Alain Jeff Ifrah Esq., Washington, D.C.              

Fakeplastic.net Responsible for More than $30 Million in Fraud

NEWARK, N.J. – The creator and administrator of fakeplastic.net, a one-stop online shop selling counterfeit credit and debit cards, or “payment” cards, and holographic overlays used by criminals to create fake driver’s licenses, was sentenced today to 78 months in prison, U.S. Attorney Paul J. Fishman announced.

Sean Roberson, 40, of Palm Bay, Florida, previously pleaded guilty before U.S. Magistrate Judge James B. Clark III to an information charging him with one count of conspiracy to commit wire fraud and one count of conspiracy to commit fraud and related activity in connection with authentication features. U.S. District Judge Jose L. Linares imposed the sentence today in Newark federal court.

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

The fakeplastic.net website was a one-stop online shop operated by Roberson and used by criminals across the country to purchase customized counterfeit credit and debit cards used for unauthorized transactions with stolen payment card data, and holographic overlays used to make fake driver’s licenses.

During his guilty plea proceeding, Roberson admitted he began selling counterfeit cards and related items as early as April 2011 and launched the fakeplastic website in June 2012. Roberson owned and operated the website with the assistance of Vinicio Gonzalez and Hugo Rebaza. Roberson admitted that he and his conspirators fulfilled orders for approximately 69,000 counterfeit payment cards, more than 35,000 holographic stickers used to make counterfeit cards appear more legitimate and more than 30,000 state identification card holographic overlays. The orders – more than 3,600 parcels – were shipped through the U.S. mail.

Law enforcement estimates the losses associated with just the counterfeit payment cards trafficked by Roberson and his conspirators at more than $30 million. During his guilty plea, Roberson admitted he personally made more than $1.7 million from the scheme.

The fakeplastic website was used by various groups of criminals across the country often referred to as “carding” or “cash out” crews. These crews bought stolen payment card numbers and related information – referred to as “track data” or “dumps” – which typically appear on the magnetic stripe on the back of legitimate payment cards. Illegal vendors of that information usually get it through hacking or skimming operations involving the installation of specialized equipment at ATM locations or point-of-sale terminals. The stolen data was ultimately put on a counterfeit payment cards, purchased from Roberson, and used to make unauthorized transactions.

In addition to the prison term, Judge Linares ordered Roberson to serve five years of supervised release and pay restitution of $3,578,996.52. As part of his plea agreement, Roberson forfeited his Bitcoin, a house in Palm Bay, a 2013 Yamaha motorboat and trailer, and a 2008 Hummer.

Gonzalez and Rebaza have both pleaded guilty to related charges in the Western District of North Carolina and were sentenced to 36 and 12 months in prison, respectively.

U.S. Attorney Fishman credited special agents of the FBI, under the direction of Special Agent in Charge Richard M. Frankel in Newark; and inspectors of the U.S. Postal Inspection Service, under the direction of Inspector in Charge Maria L. Kelokates, for the investigation leading to today’s sentencing.

The Computer Crimes and Intellectual Property Section (CCIPS) of the Justice Department’s Criminal Division and the U.S. Attorney’s Office for the Western District of North Carolina have been partners in the prosecution.

The government is represented by Assistant U.S. Attorney Andrew S. Pak of the Computer Hacking and Intellectual Property Section and Barbara Ward of the office’s Asset Forfeiture and money laundering unit.

Defense counsel: Assistant Federal Public Defender Patrick McMahon Esq., Newark

NEWARK, N.J. – Tuesday, Nov. 3, 2015, is New Jersey’s general election, and U.S. Attorney Paul J. Fishman is reminding voters to use the Election Day Hotline if they suspect voter fraud. The U.S. Attorney’s Office will receive and respond to reports of election irregularities, voter intimidation or any other activities that would interfere with a citizen’s right to vote. The Election Day Hotline – (888) 636-6596 – is active now through Nov. 4, 2015, and will be staffed live on Election Day in English and in Spanish.

The Department of Justice and federal law enforcement partners will work with county boards of election and the New Jersey Attorney General’s Office to respond to complaints and direct them to the appropriate authority.

The Justice Department seeks to ensure that all qualified voters have the opportunity to cast their ballots and have their votes counted, without discrimination, intimidation or fraud.

Established in 2010, this yearly initiative is intended to foster public confidence in the integrity of the election process by providing local points of contact within the Justice Department for the public to report possible election fraud and voting rights violations while the polls are open on Election Day.

The Justice Department and federal investigative agencies, led by the FBI, work cooperatively with the state Attorney General’s Office, under the direction of Acting Attorney General John J. Hoffman, to enforce voters’ rights at the polls.

The Department of Justice Civil Rights Division staff in Washington also will be available by phone to receive complaints related to voting rights (1-800-253-3931 toll free or 202-307-2767) or by TTY (202-514-0716).  In addition, individuals may also report complaints, problems, or concerns related to voting by fax to 202-307-3961, by email to voting.section@usdoj.gov, and, by complaint forms that may be submitted through a link on the Department’s website, at http://www.justice.gov/crt/complaint/votintake/index.php.

NEWARK, N.J. – A North Jersey man and a Brooklyn, New York, man were convicted today on multiple counts in connection with a multimillion-dollar, multi-state burglary spree, U.S. Attorney Paul J. Fishman announced.

Daniel “Tokyo” Gatson, 43, of North Bergen, New Jersey, and Anthony Hanks, 36, of Brooklyn, were each convicted of one count of conspiracy to transport stolen property in interstate commerce; Gatson was convicted of 11 counts, and Hanks three counts, of interstate transportation of stolen property. The two men were convicted following a three-week trial before U.S. District Judge William J. Martini in Newark federal court. The jury deliberated a day and a half before returning the verdicts.

According to documents filed in this case and the evidence at trial:

Gatson, Hanks and four conspirators – who previously pleaded guilty and testified against Gatson and Hanks – took part in 27 burglaries and attempted burglaries in six states, stealing $3.4 million in cash and valuables.

The conspiracy count on which the defendants were found guilty carries a maximum potential penalty of five years in prison. The substantive counts of interstate transportation of stolen property each carry a maximum potential penalty of 10 years in prison. Sentencing is scheduled for Feb. 11, 2016.

U.S. Attorney Fishman credited special agents of the FBI, under the direction of Special Agent in Charge Richard M. Frankel in Newark; and the Bergen County Prosecutor’s Office, under the direction of Prosecutor John L. Molinelli, with the investigation leading to today’s guilty verdicts.

The government is represented by Assistant U.S. Attorney Joshua Hafetz of the Criminal Division in Newark and Special Assistant U.S. Attorney Thomas S. Kearney, on loan from the Bergen County Prosecutor’s Office.

Defense counsel:

Gatson: Michael Pedicini Esq., Chatham, New Jersey

Hanks: Peter S. Gordon Esq., Forest Hills, New York

NEWARK, N.J. – A Mahwah, New Jersey, woman was sentenced today to 36 months in prison for pretending to be an employee of the United States in order to defraud investors out of $4 million, U.S. Attorney Paul J. Fishman announced.

Sara Rong Liu, 54, previously pleaded guilty before U.S. District Judge Susan D. Wigenton to an information charging her with one count of falsely assuming or pretending to be an employee of the United States and obtaining money as a result of her impersonation. Judge Wigenton imposed the sentence today in Newark federal court.

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

Liu was the president of Westone Inc., a company purportedly involved in the wholesale distribution of textiles as well as interior design. Liu falsely represented to prospective victim investors, among other things, that Westone had been awarded a lucrative $156.6 million contract by the New York City Department of Design and Construction Fund (NYC DDC).

The NYC DDC never awarded the defendant or her company any such contract.

Liu falsely represented to the victim investors that there was a problem with the fictitious contract that required Westone to pay certain fees before the NYC DDC would release contract payments to the defendant and her company.

To support her false claims, Liu created, or caused to be created, a number of fictitious documents, including documents purportedly from, among others: the NYC DDC, which stated she had been awarded the contract to provide ADesign, Construction, and Construction Support Services for the Design, Manufacture, and Supply of Good Quality Home & Office Interior Textile Products and Finishing” in and around the New York metropolitan area; the Federal Reserve Bank of New York; the U.S. Department of Treasury; the FBI; and the U.S. Attorney=s Office for the Southern District of New York, among others. Liu emailed a number of these documents to the victim investors from whom she solicited funds. She characterized the funds as short-term loans, which would be repaid immediately upon the release of the first contract payment of $52.2 million from the NYC DDC.

In all, the defendant obtained more than approximately $4 million in illegitimate proceeds from victim investors.

In addition to the prison term, Judge Wigenton sentenced Liu to serve one year of supervised release and pay $4,220,185 in restitution.

U.S. Attorney Fishman credited special agents of the FBI, under the direction of Special Agent in Charge Richard M. Frankel in Newark, and the U.S. Treasury Department, Office of the Treasury Inspector General for Tax Administration, under the direction of Special Agent in Charge Rodney Davis, Washington Field Division, with the investigation leading to today’s sentencing.

The government is represented by Chief Gurbir Grewal and Assistant U.S. Attorney Lakshmi Srinivasan Herman of the U.S. Attorney’s Office Economic Crimes Unit in Newark.

This case was brought in coordination with President Barack Obama’s Financial Fraud Enforcement Task Force. The task force was established to wage an aggressive, coordinated and proactive effort to investigate and prosecute financial crimes. With more than 20 federal agencies, 94 U.S. Attorneys’ offices and state and local partners, it’s the broadest coalition of law enforcement, investigatory and regulatory agencies ever assembled to combat fraud. Since its formation, the task force has made great strides in facilitating increased investigation and prosecution of financial crimes; enhancing coordination and cooperation among federal, state and local authorities; addressing discrimination in the lending and financial markets and conducting outreach to the public, victims, financial institutions and other organizations. Over the past three fiscal years, the Justice Department has filed nearly 10,000 financial fraud cases against nearly 15,000 defendants including more than 2,900 mortgage fraud defendants. For more information on the task force, please visit www.stopfraud.gov.

Defense counsel: Assistant Federal Public Defender Lisa Mack Esq., Newark

CAMDEN, N.J. – A Camden man was sentenced today to 180 months in prison for his role in a conspiracy to sell 22 guns without a license, U.S. Attorney Paul J. Fishman announced.

Joseph Rutling, 24, previously pleaded guilty before U.S. District Judge Renée Marie Bumb to an information charging him with one count of conspiring to deal firearms without a license and one count of possession of a firearm by a previously convicted felon. Judge Bumb imposed the sentence today in Camden federal court.

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

Between April 8, 2013, and July 28, 2014, Joseph Rutling and his brother, Marcus Rutling, a/k/a “Fresh,” 33, of Camden, and Saluda, South Carolina, conspired with others to illegally sell firearms without a license, including handguns, shotguns and an assault rifle. They obtained the firearms from pawn shops, gun stores and other sources in South Carolina and brought them to New Jersey, at times using Amtrak trains to transport the guns. Marcus Rutling personally sold or participated in the sale of at least seven firearms, including handguns and shotguns, to a witness cooperating with the Bureau of Alcohol, Tobacco, Firearms and Explosives (ATF). Joseph Rutling personally sold or participated in the sale of at least 15 firearms, including handguns, shotguns and an assault rifle, also to an ATF cooperating witness. On at least five occasions, Joseph Rutling sold ammunition with the firearms.

In addition to the prison term, Judge Bumb sentenced Joseph Rutling to three years of supervised release. Marcus Rutling also pleaded guilty to his role in the conspiracy and was sentenced to 14 years in prison on Oct. 8, 2015.

U.S. Attorney Fishman credited special agents of the ATF, under the direction of Special Agent in Charge George P. Belsky, with the investigation leading to today’s sentencing. He also thanked special agents from the Drug Enforcement Administration, under the direction of Special Agent in Charge Carl J. Kotowski, as well as officers from the Winslow Township and Clementon, New Jersey, police departments, for their work in the case.

The government is represented by Assistant U.S. Attorney Matthew T. Smith of the U.S. Attorney’s Office in Camden.

Defense counsel: Mark W. Catanzaro Esq., Mount Holly

NEWARK, N.J. – A Neshanic Station, New Jersey, man today admitted his role in a scheme that used straw buyers and phony loan documents to fraudulently obtain a $400,500 loan on a property in Irvington, New Jersey, U.S. Attorney Paul J. Fishman announced.

Antonio Pimenta, 47, pleaded guilty before U.S. District Judge Esther Salas in Newark federal court to Count Two of an indictment charging him with bank fraud.

According to documents filed and statements made in court:

Pimenta owned and managed Kelmar Construction Co. (“Kelmar”). Kelmar built multiple properties in Irvington, New Jersey. These properties were sold to straw buyers utilizing fraudulent mortgage loans brokered by loan officer, Klary Arcentales, 47, of Lyndhurst, New Jersey, and closed by settlement agent Linda Cohen, 57, of Orange, New Jersey, who used fraudulent settlement statements (HUD-1s) to hide the true sources and destinations of the mortgage funds. The straw buyers had no means of paying the mortgages, and many of the properties entered into foreclosure proceedings.

One such transaction took place in September 2007 on a property located at 97 22nd Street in Irvington, New Jersey, which was built by Kelmar. The mortgage loan application contained false and fraudulent information concerning the straw buyer’s income, employment and rental history. The application also falsely represented that the straw buyer intended to reside in the property as his primary residence. The straw buyer also represented to JP Morgan Chase that he would make a down payment of $44,500. Based on the bogus information, JP Morgan Chase agreed to fund a mortgage loan of approximately $400,500.

Pimenta admitted that despite the fact that he never received a down payment, he knowingly signed a settlement statement that falsely indicated that the payment was made. Afterwards, Pimenta and Kelmar received approximately $381,000 from the fraudulent transaction. No payments were ever made to JP Morgan Chase for this mortgage loan.

The charge to which Pimenta pleaded guilty carries a maximum potential penalty of 30 years in prison and a $1 million fine. Sentencing is scheduled for Feb. 16, 2016.

Arcentales and Cohen have both pleaded guilty to related charges and await sentencing.

U.S. Attorney Fishman credited special agents of the FBI, under the direction of Special Agent in Charge Richard M. Frankel; special agents of IRS-Criminal Investigation, under the direction of Special Agent in Charge Jonathan D. Larsen; and special agents of the Federal Housing Finance Agency, Office of the Inspector General, under the direction of Special Agent in Charge Steven Perez, for the investigation leading to today’s plea. Fishman also thanked the Social Security Administration, Office of the Inspector General, under the direction of Special Agent in Charge Edward J. Ryan, for its role in the investigation.

The government is represented by Special Assistant U.S. Attorney Sean M. Farrell and Assistant U.S. Attorneys Zach Intrater and Rahul Agarwal of the U.S. Attorney’s Office Criminal Division in Newark.

This case was brought in coordination with President Barack Obama’s Financial Fraud Enforcement Task Force. The task force was established to wage an aggressive, coordinated and proactive effort to investigate and prosecute financial crimes. With more than 20 federal agencies, 94 U.S. Attorneys’ offices and state and local partners, it’s the broadest coalition of law enforcement, investigatory and regulatory agencies ever assembled to combat fraud. Since its formation, the task force has made great strides in facilitating increased investigation and prosecution of financial crimes; enhancing coordination and cooperation among federal, state and local authorities; addressing discrimination in the lending and financial markets and conducting outreach to the public, victims, financial institutions and other organizations. Over the past three fiscal years, the Justice Department has filed nearly 10,000 financial fraud cases against nearly 15,000 defendants including more than 2,900 mortgage fraud defendants. For more information on the task force, please visit www.stopfraud.gov.

Defense counsel: Alain Leibman Esq., Princeton, New Jersey

NEWARK, N.J. – A compliance officer with the Union City Community Development Agency (UCCDA) was indicted today for allegedly manipulating the contractor selection process for federally-funded residential rehabilitation and sidewalk replacement projects, causing losses of at least $250,000, U.S. Attorney Paul J. Fishman announced.

Washington Borgono, 64, of North Bergen, New Jersey, was charged with one count of obtaining by fraud, converting and misapplying government funds provided by the UCCDA and one count of conspiring with others to do the same. The indictment was returned today by a federal grand jury sitting in Newark.

According to the indictment:

From April 2007 through February 2013, Borgono was a compliance officer at the UCCDA, a local government agency that receives grant funds from the U.S. Department of Housing and Urban Development (HUD) for home improvement projects, sidewalk replacement and other projects.

From 2007 through 2013, Borgono conspired with Johnny Garces, 52, of Union City, New Jersey, a UCCDA inspector, and contractors Joseph Lado, 67, of Fort Lee, New Jersey, Leovaldo Fundora, 54, of Guttenberg, New Jersey, and others to use false and misleading bids to rig the selection process for HUD-funded projects. In addition to instructing Lado, Fundora and other contractors to submit phony higher bids from competitors or their own companies, Borgono and Garces used fabricated higher bids or threw out lower bids in order to secure certain UCCDA projects for Lado, Fundora and others.

The charge of obtaining by fraud, converting and misapplying government funds carries a maximum potential penalty of 10 years in prison and a $250,000 fine, or twice the gross gain or loss from the offense. The conspiracy charge carries a maximum potential penalty of five years in prison and a $250,000 fine, or twice the gross gain or loss from the offense.

The charges and allegations contained in the indictment are merely accusations, and Borgono is presumed innocent unless and until proven guilty.

Garces, Lado and Fundora previously pleaded guilty to their roles in the scheme and await sentencing.

U.S. Attorney Fishman credited special agents of the FBI, under the direction of Special Agent in Charge Richard M. Frankel, and special agents of the U.S. Department of Housing and Urban Development, Office of Inspector General, under the direction of Special Agent in Charge Christina Scaringi, for their work in the investigation. 

The government is represented by Assistant U.S. Attorney Barbara R. Llanes of the U.S. Attorney’s Office Special Prosecutions Division in Newark.   

Defense counsel: Louis A. Zayas Esq., North Bergen, New Jersey

A West New York, New Jersey, man today admitted that he conspired to provide material support to the Islamic State of Iraq and the Levant (ISIL), a designated foreign terrorist organization.  The announcement was made by Assistant Attorney General for National Security John P. Carlin, U.S. Attorney Paul J. Fishman of the District of New Jersey and Special Agent in Charge Richard M. Frankel of the FBI’s Newark, New Jersey, Division.

Alaa Saadeh, 24, pleaded guilty before U.S. District Judge Susan D. Wigenton of the District of New Jersey to an information charging him with one count of conspiring with others to provide material support to ISIL.  He remains detained without bail.

“Saadeh conspired with his brother and others to travel overseas to join ISIL,” said Assistant Attorney General Carlin.  “The National Security Division’s highest priority is counterterrorism and we will continue to pursue justice against those who seek to provide material support to designated foreign terrorist organizations.”

“Alaa Saadeh is the second defendant in this case who has admitted trying to provide material support to a known terrorist organization,” said U.S. Attorney Fishman.  “That organization, and others who share its goals, are intent on recruiting people in this country and around the world to join their campaign against our security.  The fight against these kinds of groups is going on around the world, but is also being waged here at home.  They are intent on threatening the safety of Americans here and abroad, and we and our law enforcement partners are intent on stopping them.”

“Today in the U.S. District Court of New Jersey Alaa Saadeh admitted he planned to travel to Syria to join ISIL along with others,” said Special Agent in Charge Frankel.  “Now, thanks to the efforts of Newark FBI’s Joint Terrorism Task Force, Saadeh will go to prison rather than take up arms overseas.”

According to documents filed in this and related cases and statements made in court:

Saadeh admitted that prior to his arrest on June 29, 2015, he planned to travel overseas to join ISIL along with others.  Saadeh discussed the plans to join ISIL with his brother, Nader Saadeh, Samuel Rahamin Topaz and Munther Omar Saleh, and told the judge today that each of them indicated that they wanted to join ISIL at various times.  Saadeh also admitted that he watched ISIL-related videos with Nader Saadeh and Topaz, some of which depicted the execution of individuals – both Muslim and non-Muslim – regarded by ISIL as enemies.

On May 5, 2015, Nader Saadeh, departed the United States with plans to travel overseas to join ISIL as part of the conspiracy, according to Saadeh’s statements in court today.  Saadeh further admitted assisting Nader Saadeh with these plans by letting him purchase airline tickets using Saadeh’s credit card, removing the SIM card from Nader’s smartphone and resetting the smartphone in an effort to avoid detection.  Saadeh admitted that Saleh assisted Nader Saadeh by giving him a contact that would facilitate Nader’s travel from Turkey to ISIL in Syria.  Saadeh further admitted that after his brother left the United States, Saleh and Topaz intended to travel overseas to join ISIL.  After becoming aware that the FBI was investigating this matter, Saadeh instructed an individual who knew of Nader Saadeh’s support for ISIL to lie if questioned by the FBI on the subject.  Saadeh further admitted telling this individual to “just play stupid,” “pretend it never happened” and “keep it honest up to a point.”

Saadeh admitted to knowing that ISIL was a designated terrorist organization and was taking over territory overseas, expelling non-Muslims from their homes and executing individuals who did not obey ISIL’s commands. 

The count of conspiracy to provide material support to a designated foreign terrorist organization carries a maximum potential penalty of 15 years in prison and a fine of $250,000.  Sentencing is scheduled for Feb. 16, 2016.

Saadeh’s alleged co-conspirators are being prosecuted and are currently in federal custody.  On Sept. 9, 2015, Topaz pleaded guilty before Judge Wigenton to conspiring to provide material support to ISIL.  Nader Saadeh has been charged in a criminal complaint with conspiring to provide material support to ISIL, among other charges.  Saleh has been indicted on terrorism-related charges in the Eastern District of New York.  The charges and allegations against Nader Saadeh and Saleh are merely accusations, and they are presumed innocent unless and until proven guilty.

Assistant Attorney General Carlin and U.S. Attorney Fishman credited special agents of the FBI’s Newark Division, under the direction of Special Agent in Charge Frankel, and the Joint Terrorism Task Force with the investigation leading to today’s guilty plea. 

The case is being prosecuted by Assistant U.S. Attorneys L. Judson Welle, Dennis C. Carletta and Francisco J. Navarro of the District of New Jersey, with assistance from Trial Attorney Robert Sander of the National Security Division’s Counterterrorism Section.

Alaa Saadeh Information

Alaa Saadeh Plea Agreement

NEWARK, N.J. – A Hudson County, New Jersey, man today admitted that he conspired to provide material support to the Islamic State of Iraq and the Levant (ISIL), a designated foreign terrorist organization, U.S. Attorney Paul J. Fishman, Assistant Attorney General for National Security John P. Carlin, and Special Agent in Charge Richard M. Frankel of the FBI’s Newark Division announced.

Alaa Saadeh, 24, of West New York, New Jersey, pleaded guilty before U.S. District Judge Susan D. Wigenton in Newark federal court to an information charging him with one count of conspiring with others to provide material support to ISIL. He remains detained without bail.

“Alaa Saadeh is the second defendant in this case who has admitted trying to provide material support to a known terrorist organization,” U.S. Attorney Fishman said. “That organization, and others who share its goals, are intent on recruiting people in this country and around the world to join their campaign against our security. The fight against these kinds of groups is going on around the world, but is also being waged here at home. They are intent on threatening the safety of Americans here and abroad, and we and our law enforcement partners are intent on stopping them.”

“Saadeh conspired with his brother and others to travel overseas to join ISIL,” Assistant Attorney General Carlin said.  “The National Security Division’s highest priority is counterterrorism and we will continue to pursue justice against those who seek to provide material support to designated foreign terrorist organizations.”

“Today in the U.S. District Court of New Jersey Alaa Saadeh admitted he planned to travel to Syria to join ISIL along with others,”  FBI Newark Special Agent in Charge Richard M. Frankel said.  “Now, thanks to the efforts of Newark FBI’s Joint Terrorism Task Force, Saadeh will go to prison rather than take up arms overseas.”

According to documents filed in this and related cases and statements made in court:

Saadeh admitted that prior to his arrest June 29, 2015, by the FBI Joint Terrorism Task Force (JTTF), he planned to travel overseas to join ISIL along with others. Saadeh discussed the plans to join ISIL with his brother, Nader Saadeh, Samuel Rahamin Topaz, and Munther Omar Saleh, and admitted that at various times each of them indicated that they wanted to join ISIL. Saadeh also admitted he watched ISIL-related videos with Nader Saadeh and Topaz, some of which depicted the execution of individuals – both Muslim and non-Muslim – regarded by ISIL as enemies.

On May 5, 2015, Saadeh’s brother, Nader Saadeh, departed the United States with plans to travel overseas to join ISIL as part of the conspiracy, according to Alaa Saadeh’s statements in court today.  Saadeh admitted assisting his brother with these plans by letting him purchase airline tickets using Saadeh’s credit card and by removing the SIM card from Nader’s smartphone and resetting the smartphone in an effort to avoid detection.  Saadeh admitted that Saleh assisted Nader Saadeh by giving him a contact who would facilitate Nader’s travel from Turkey to ISIL in Syria.

Saadeh admitted that after Nader Saadeh left the United States, Saleh and Topaz intended to travel overseas to join ISIL. After becoming aware the FBI was investigating this matter, Saadeh instructed an individual who knew of Nader Saadeh’s support for ISIL to lie to the FBI if the individual was interviewed.  Saadeh told this individual to “just play stupid,” “pretend it never happened,” and “keep it honest up to a point.”

Saadeh admitted knowing that ISIL was a designated terrorist organization and was taking over territory overseas, expelling non-Muslims from their homes, and executing individuals who did not obey ISIL’s commands.

The count of conspiracy to provide material support to a designated foreign terrorist organization carries a maximum potential penalty of 15 years in prison and a fine of $250,000.  Sentencing is scheduled for Feb. 16, 2016.

Saadeh’s alleged conspirators are being prosecuted and are currently in federal custody.  On Sept. 9, 2015, Topaz pleaded guilty before Judge Wigenton to conspiring to provide material support to ISIL. Nader Saadeh has been charged in a criminal complaint with conspiring to provide material support to ISIL, among other charges. Saleh has been indicted on terrorism-related charges brought by the U.S. Attorney’s Office for the Eastern District of New York.

The charges and allegations against Nader Saadeh and Saleh are merely accusations, and they are presumed innocent unless and until proven guilty.

U.S. Attorney Fishman and Assistant Attorney General Carlin credited special agents of the FBI, under the direction of Special Agent in Charge Frankel in Newark, and the JTTF, with the investigation leading to today’s guilty plea.

The government is represented by Assistant U.S. Attorneys L. Judson Welle, Dennis C. Carletta, and Francisco J. Navarro of the U.S. Attorney’s Office National Security Unit in Newark, with assistance from Trial Attorney Robert Sander of the National Security Division’s Counterterrorism Section.

Defense counsel for Alaa Saadeh: Maria Noto Esq., Matawan, New Jersey