District of New Jersey

CAMDEN, N.J. - A Burlington, New Jersey, woman admitted today to stealing more than $150,000 in Social Security benefits that were paid to an account in her deceased mother’s name, U.S. Attorney Paul J. Fishman announced.

Jean Marshall, 69, pleaded guilty before Senior U.S. District Judge Joseph E. Irenas in Camden federal court to an information charging her with one count of theft of government funds.

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

Marshall’s mother was entitled to Survivor’s Benefits from the Social Security Administration (SSA). Her mother’s benefits were paid by direct deposit into her bank account, which she held jointly with Marshall.

Marshall admitted that she failed to notify the SSA of her mother’s death in May 2003. As a result, SSA continued to make payments into their joint account. From May 2003 through May 2013, Marshall accessed her deceased mother’s bank account in order to make personal use of the Social Security funds. Altogether, Marshall obtained $151, 789 in benefits to which she was not entitled.

The charge to which Marshall pleaded guilty carries a maximum potential penalty of 10 years in prison and a $250,000 fine. Sentencing is scheduled for Sept. 9, 2015.

U.S. Attorney Fishman credited special agents of the Social Security Administration, Office of Inspector General, under the direction of Inspector General Patrick P. O’Carroll Jr., with the investigation leading to today’s guilty plea.

The government is represented by Assistant U.S. Attorney Justin C. Danilewitz of the U.S. Attorney’s Office in Camden.

Defense counsel:  Christopher O’Malley Esq., Assistant Federal Public Defender, Camden

NEWARK, N.J. – A lawyer who practiced in Jersey City, New Jersey, appeared in federal court today to face charges that he structured approximately $800,000 in cash to avoid reporting the income to the IRS, U.S. Attorney Paul J. Fishman announced.

Magdy Fouad Anise, a/k/a “Michael Anise,” 51, of Aberdeen, New Jersey, is charged in an indictment with one count of structuring cash transactions to avoid reporting requirements and one count of structuring more than $100,000. He appeared this morning before U.S. District Judge William H. Walls in Newark federal court.

According to the indictment:

Anise was an attorney at Anise & Anise, Attorneys at Law, located in Jersey City. From 2009 through 2011, Anise allegedly received cash kickbacks from doctors and others in exchange for personal-injury client referrals. In lieu of cash, Anise asked a doctor who gave him kickbacks to pay him with gold bars, give money to Anise’s church and pay Anise’s mortgage.

From 2009 through 2012, Anise accumulated approximately $800,000 in cash, including cash from the kickback scheme. During that time, Anise allegedly made cash deposits into five different bank accounts that he controlled in amounts less than $10,000, the amount that would have triggered the filing of a currency transaction report (CTR) with the IRS.

CTR forms require disclosure of the identity of the individual who conducted the transaction and the individual or organization for whom the transaction was completed. Many individuals involved in illegal activities are aware of these reporting requirements and take active steps to cause financial institutions not to file CTRs in order to avoid detection of the movement of large amounts of U.S. currency. These steps are referred to as “structuring” and involve making multiple cash deposits or withdrawals in amounts of $10,000 or less on the same day or consecutive days in order to avoid CTR filings.

The charge of structuring cash transactions to avoid reporting requirements carries a maximum potential penalty of five years in prison and a $250,000 fine. The charge of structuring more than $100,000 carries a maximum potential penalty of 10 years in prison and a $250,000 fine.

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, for the investigation leading to the charges.

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

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

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

The owner and operator of a stock trading operation and three of his associates were arrested today on charges arising from their alleged participation in a multi-year insider trading scheme that netted more than $3.2 million in illicit profits, announced today by U.S. Attorney Paul J. Fishman for the District of New Jersey.

Steven Fishoff, 58, of Westlake Village, California, Ronald Chernin, 66, of Oak Park, California, Steven Costantin aka Steven Constantin, 54, of Farmingdale, New Jersey, and Paul Petrello, 53, of Boca Raton, Florida, are each charged by complaint with one count of conspiracy to commit securities fraud.  Fishoff is charged with four substantive counts of securities fraud, Chernin and Petrello are each charged with two counts of securities fraud and Costantin is charged with one count of securities fraud.

The defendants were arrested by FBI agents this morning at their respective residences.  Costantin is scheduled to appear this afternoon before U.S. Magistrate Judge Joseph A. Dickson in Newark, New Jersey, federal court.  Fishoff is scheduled to appear before U.S. Magistrate Judge Kenly Kiya Kato in Riverside, California, federal court, Chernin is scheduled to appear before U.S. Magistrate Judge Carla Woehrle in Los Angeles, Californina, federal court, and Petrello is expected to appear before U.S. Magistrate Judge Dave Lee Brannon in West Palm Beach, Florida, federal court.

“The defendants and their associates were entrusted with confidential, nonpublic information about companies and time and time again, they allegedly violated that trust by illegally trading the companies’ stock for substantial profits,” said U.S. Attorney Fishman.  “They allegedly rigged the game so they would always win, and their profits came at the expense of legitimate investors, who were not privy to this inside information.”

“Insider trading is an investigative priority of the FBI,” said Special Agent in Charge Richard M. Frankel for the FBI in Newark, New Jersey.  “The FBI is committed to stopping insider trading and will hold those who perpetrate these schemes accountable because their illegal activities undermine the integrity of the U.S. financial markets and weaken investor confidence.”

“We allege an insider trading scheme based on a short-selling business model designed to systematically profit on confidential information obtained under false pretenses,” said Senior Associate Director Sanjay Wadhwa for Enforcement in the SEC’s Regional Office in New York.  “But the defendants’ short selling proved to be short-sighted as they overlooked the fact that their trading patterns would be detected and they would be caught by law enforcement.”

According to the complaint unsealed today, Fishoff, Chernin, Costantin, Petrello and others, acting individually and through their associated trading entities, engaged in an insider trading scheme in which they netted more than $3.2 million in illicit profits over three years by executing illegal trades through trading entities that they controlled. 

Fishoff is the president and sole owner of Featherwood Capital Inc. (Featherwood), a trading entity that he operates out of his home.  Featherwood maintained numerous stock trading accounts in its own name and in various additional names under which Featherwood did business (DBAs), including Gold Coast Total Return Inc. (Gold Coast), Seaside Capital Inc. (Seaside) and Data Complete Inc. (Data Complete).

Chernin, an attorney who was disbarred in California for misappropriation of client assets, is a friend and longtime business associate of Fishoff.  Corporate documents list Chernin as the president of Gold Coast and Fishoff as an officer.  Chernin is president of the trading entity Cedar Lane Enterprises Inc. (Cedar Lane) and an officer of Data Complete.

Costantin, a former pipefitter by trade, is Fishoff’s brother-in-law and a friend and business associate of Chernin.  Corporate documents list Costanstin as president of Seaside.  In brokerage account documents, Fishoff identifies himself as Seaside’s owner.  Costanstin is also the vice president and secretary of Cedar Lane.

Petrello is the president and owner of two trading entities, Brielle Properties Inc. and Oceanview Property Management LLC and a friend and longtime business associate of Fishoff.

On numerous occasions, the 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, Chernin, Costantin and a business associate referred to in the complaint as “Trader A” expressed interest in participating in at least 14 stock offerings by publicly traded companies.  Before providing these individuals with confidential information concerning the companies or the terms of the proposed sales, 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 which meant that they were required to keep the information disclosed to them confidential and could not buy or sell the stock based on the information.

Fishoff, Chernin, Costantin and Trader A agreed to these disclosure and trading restrictions and then flagrantly breached the agreements.  In instances where Fishoff was not personally wall-crossed in an offering, Chernin and Costantin tipped Fishoff telephonically 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 himself breached the agreement by trading on the confidential information and by providing the information to Petrello so that Petrello could engage in parallel trading.  There were also instances where Chernin and Costantin violated the terms of the confidentiality agreements by trading themselves before the offering.  The conspirators traded through the accounts of the trading entities or through related accounts that they controlled.  The conspirators shared the proceeds of the insider trading scheme, with Fishoff wiring money to Chernin and Costantin for their services and Fishoff receiving compensation from Petrello for the offering-related tips that Fishoff provided to him.

The conspiracy count with which each defendant is charged carries a maximum potential penalty of five years in prison and a $250,000 fine, or twice the aggregate loss to victims or gain to the defendants.   Each of the substantive securities fraud charges carry a maximum penalty of 20 years in prison and a $5 million fine. 

U.S. Attorney Fishman credited special agents of the FBI, under the direction of Special Agent in Charge Frankel, for the investigation leading to today’s arrests and complaint.  He also thanked the U.S. Securities and Exchange Commission’s New York Regional Office under the direction of Andrew Calamari.  He also thanked special agents of the FBI, Los Angeles (Ventura Resident Agency and Riverside Resident Agency) and FBI, Miami (West Palm Beach Resident Agency) for their assistance.  

The government is represented by Assistant U.S. Attorneys Shirley U. Emehelu of the Economic Crimes Unit of the U.S. Attorney’s Office in Newark, New Jersey and Acting Chief Barbara Ward for the of the Office’s Asset Forfeiture and Money Laundering Unit.

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

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

Illegally Traded on Inside Information in Violation of Confidentiality Agreements, Netting More Than $3.2 Million During Three-Year Scheme

NEWARK, N.J. - The owner and operator of a stock trading operation and three of his associates were arrested today on charges arising from their alleged participation in a multi-year insider trading scheme that netted more than $3.2 million in illicit profits, New Jersey U.S. Attorney Paul J. Fishman announced.

Steven Fishoff, 58, of Westlake Village, California; Ronald Chernin, 66, of Oak Park, California; Steven Costantin (a/k/a Steven Constantin), 54, of Farmingdale, New Jersey; and Paul Petrello, 53; of Boca Raton, Florida, are each charged by complaint with one count of conspiracy to commit securities fraud. Fishoff is charged with four substantive counts of securities fraud, Chernin and Petrello are each charged with two counts of securities fraud, and Costantin is charged with one count of securities fraud.

The defendants were arrested by FBI agents this morning at their respective residences.  Costantin is scheduled to appear this afternoon before U.S. Magistrate Judge Joseph A. Dickson in Newark federal court. Fishoff is scheduled to appear before U.S. Magistrate Judge Kenly Kiya Kato in Riverside, California, federal court; Chernin is scheduled to appear before U.S. Magistrate Judge Carla Woehrle in Los Angeles federal court, and Petrello is expected to appear before U.S. Magistrate Judge Dave Lee Brannon in West Palm Beach, Florida, federal court.

“The defendants and their associates were entrusted with confidential, nonpublic information about companies, and, time and time again, they allegedly violated that trust by illegally trading the companies’ stock for substantial profits,” U.S. Attorney Fishman said.  “They allegedly rigged the game so they would always win, and their profits came at the expense of legitimate investors, who were not privy to this inside information.”

FBI Special Agent in Charge, Newark, Richard M. Frankel stated: “Insider trading is an investigative priority of the FBI. The FBI is committed to stopping insider trading and will hold those who perpetrate these schemes accountable because their illegal activities undermine the integrity of the U.S. financial markets and weaken investor confidence.”

“We allege an insider trading scheme based on a short-selling business model designed to systematically profit on confidential information obtained under false pretenses,” said Sanjay Wadhwa, Senior Associate Director for Enforcement in the SEC’s New York Regional Office.  “But the defendants’ short selling proved to be short-sighted as they overlooked the fact that their trading patterns would be detected and they would be caught by law enforcement.”

According to the complaint unsealed today:

Fishoff, Chernin, Costantin, Petrello, and others, acting individually and through their associated trading entities, engaged in an insider trading scheme in which they netted more than $3.2 million in illicit profits over three years by executing illegal trades through trading entities that they controlled.

Fishoff is the president and sole owner of Featherwood Capital Inc. (Featherwood), a trading entity that he operates out of his home. Featherwood maintained numerous stock trading accounts in its own name and in various additional names under which Featherwood did business (DBAs), including Gold Coast Total Return Inc. (Gold Coast), Seaside Capital Inc. (Seaside), and Data Complete Inc. (Data Complete).

Chernin, an attorney who was disbarred in California for misappropriation of client assets, is a friend and longtime business associate of Fishoff. Corporate documents list Chernin as the president of Gold Coast and Fishoff as an officer. Chernin is president of the trading entity Cedar Lane Enterprises Inc. (Cedar Lane) and an officer of Data Complete.

Costantin, a former pipefitter by trade, is Fishoff’s brother-in-law and a friend and business associate of Chernin. Corporate documents list Costanstin as president of Seaside. In brokerage account documents, Fishoff identifies himself as Seaside’s owner. Costanstin is also the vice president and secretary of Cedar Lane.

Petrello is the president and owner of two trading entities: Brielle Properties Inc. and Oceanview Property Management LLC, and a friend and longtime business associate of Fishoff.

On numerous occasions, the 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, Chernin, Costantin, and a business associate referred to in the complaint as “Trader A” expressed interest in participating in at least 14 stock offerings by publicly traded companies. Before providing these individuals with confidential information concerning the companies or the terms of the proposed sales, 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 which meant that they were required to keep the information disclosed to them confidential and could not buy or sell the stock based on the information.

Fishoff, Chernin, Costantin, and Trader A agreed to these disclosure and trading restrictions and then flagrantly breached the agreements. In instances where Fishoff was not personally wall-crossed in an offering, Chernin and Costantin tipped Fishoff telephonically 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 himself breached the agreement by trading on the confidential information and by providing the information to Petrello so that Petrello could engage in parallel trading. There were also instances where Chernin and Costantin violated the terms of the confidentiality agreements by trading themselves before the offering. The conspirators traded through the accounts of the trading entities or through related accounts that they controlled. The conspirators shared the proceeds of the insider trading scheme, with Fishoff wiring money to Chernin and Costantin for their services, and Fishoff receiving compensation from Petrello for the offering-related tips that Fishoff provided to him.

The conspiracy count with which each defendant is charged carries a maximum potential penalty of five years in prison and a $250,000 fine, or twice the aggregate loss to victims or gain to the defendants.  Each of the substantive securities fraud charges carry a maximum penalty of 20 years in prison and a $5 million fine.

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 arrests and complaint.  He also thanked the U.S. Securities and Exchange Commission’s New York Regional Office under the direction of Andrew Calamari. He also thanked special agents of the FBI, Los Angeles (Ventura Resident Agency and Riverside Resident Agency) and FBI, Miami (West Palm Beach Resident Agency) for their assistance.

The government is represented by Assistant U.S. Attorneys Shirley U. Emehelu of the Economic Crimes Unit of the U.S. Attorney’s Office in Newark, Sarah Devlin of the Office’s Asset Forfeiture and Money Laundering Unit and Barbara Ward, Acting Chief of the of the Office’s Asset Forfeiture and Money Laundering Unit.

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

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.

 

NEWARK, N.J. – Two doctors with a practice in New York were each sentenced today to 20 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.

Richard Goldberg, 65, of Weston, Connecticut, and Gary Leeds, 61, of Greenwich, Connecticut, previously pleaded guilty before U.S. District Judge Stanley R. Chesler to one count of accepting bribes. Judge Chesler imposed both sentences today in Newark federal court.

Including Goldberg and Leeds, 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 million to date through forfeiture.

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

Goldberg and Leeds admitted to accepting thousands of dollars per month in cash between September 2010 and April 2013 in return for referring patient blood specimens to BLS. The pair acknowledged they each accepted more than $100,000 in cash from BLS in exchange for referring at least a combined $1.8 million in lab business from their joint practice, Family Medical Group of Manhattan.

In addition to the prison terms, Judge Chesler sentenced Goldberg to serve three years of supervised release and ordered him to pay a $5,000 fine. Leeds was also sentenced to one year of supervised release and ordered to pay a $15,000 fine. Goldberg and Leeds must each forfeit $108,000.

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 ongoing investigation.

The government is represented by Senior Litigation Counsel Andrew Leven; Assistant U.S. Attorney Joseph N. Minish; Jacob T. Elberg, Chief of the U.S. Attorney’s Office Health Care and Government Fraud Unit in Newark; and Assistant U.S. Attorney Barbara Ward, 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:       

Goldberg: Aidan P. O’Connor Esq., Hackensack, New Jersey.

Leeds: E. Scott Morvillo Esq., New York

CAMDEN, N.J. – A brother and sister and one other person were sentenced today for their respective roles in conspiring to defraud financial institutions as part of a $15 million mortgage fraud scam that used phony documents and “straw buyers” to make illegal profits on overbuilt condos, U.S. Attorney Paul J. Fishman announced.

Nancy Wolf-Fels, 58, of Toms River, New Jersey, was sentenced to 42 months in prison; Dwayne Onque, 47, of Belleville, New Jersey, was sentenced to 63 months in prison; and Mashon Onque, 44, of East Orange, New Jersey, as sentenced to 30 months in prison. All three had been convicted in a four-week trial in October 2014 before U.S. District Judge Jerome B. Simandle, who imposed the sentences today in Camden federal court.

The defendants were each convicted of one count of conspiracy to commit wire fraud. Dwayne Onque was also convicted of one count of conspiracy to commit money laundering.

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

The defendants and their conspirators schemed to defraud financial institutions by locating oceanfront condominiums overbuilt by financially distressed developers and negotiating a buyout price with the sellers. They then caused the sales prices for the properties – located in Wildwood Crest and North Wildwood, New Jersey, other locations in New Jersey and in Naples, Florida – to be much higher than the buyout price to ensure large proceeds. Other defendants helped conceal the true sales prices of certain properties through inflated sales contracts and finder’s fee agreements.

From 2007 through mid-2008, Wolf-Fels served as a loan officer at the Forked River Branch of the mortgage company, Mortgage Now. She and her conspirators originated six loan applications for unqualified buyers that contained false and fraudulent information. Working with her conspirators – including one who manufactured fake bank statements, retirement account statements and pay stubs to support the false loan applications – Wolf-Fels assembled the loan applications and sent them to victim financial institutions, which lent the unqualified buyers mortgage funds.

From late 2006 through mid-2007, Dwayne Onque served as a “straw buyer” of five properties in Middletown, New Jersey, and Wildwood, New Jersey. For each of the five properties, he signed false and fraudulent loan applications and closing documents that resulted in the release of more than $2 million of mortgage funds.

During 2006 and 2008, Mashon Onque served as a title agent at Tri-State Title Agency in Montclair, New Jersey. She acted as the closing agent for fraudulent mortgage loans orchestrated by her conspirators, including her brother, Dwayne Onque. The conspirators put together buyers and sellers in real estate transactions, and then filed false and fraudulent loan applications containing inflated income figures for the borrowers. After the mortgage lenders approved the loans, Mashon Onque prepared and signed fraudulent settlement statements that falsely claimed that the borrowers had made down payments to close the loans.

In addition to the prison terms, Judge Simandle sentenced each of the three defendants to three years of supervised release. Restitution will be determined at a hearing on July 9, 2015.

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, 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 convictions.

The government is represented by Assistant U.S. Attorneys Matthew T. Smith and Jacqueline M. Carle of the U.S. Attorney’s Office Criminal Division in Camden.

Defense counsel:

Wolf-Fels: Paul Urbania Esq., Shrewsbury, N.J.

Dwayne Onque: Peter Levin Esq., Philadelphia

Mashon Onque: Anne Singer Esq., Haddonfield, N.J.

CAMDEN, N.J. – A Camden woman today admitted buying five firearms in North Carolina so her cousin could sell them in New Jersey, U.S. Attorney Paul J. Fishman announced.

Johanna Betty Young, 25, pleaded guilty before U.S. District Judge Renée Marie Bumb in Camden federal court to an information charging her with one count of conspiring to deal firearms without a license.

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

In January 2012, Young’s cousin, Wendelle Ford, 41, also of Camden, gave Young money to apply for firearms purchase permits in North Carolina, where Young lived at the time.  Young admitted she knew that neither she nor Ford were federally licensed firearms dealers. She also knew that Ford had a prior felony conviction and therefore could not legally purchase or possess firearms.

Once Young obtained the purchase permits, Ford traveled to North Carolina and he and Young visited gun shops. After Ford told her which firearms to buy, Young lied on the purchase paperwork, stating that she was the actual buyer. Young bought five handguns and gave them to Ford knowing that he was going to bring them to New Jersey and sell them. Later, Ford gave Young $200 for each firearm.

The conspiracy charge to which Young pleaded guilty carries a maximum potential penalty of five years in prison and a $250,000 fine. Sentencing is scheduled for Sept. 7, 2015.

The case against Ford is still pending. The charges and allegations against him are merely accusations and he is considered innocent unless and until proven guilty.

U.S. Attorney Fishman credited special agents of the ATF, under the direction of Special Agent in Charge George P. Belsky in Newark, New Jersey, with the investigation leading to today’s guilty plea.

The government is represented by Assistant U.S. Attorney Howard Wiener of the U.S. Attorney’s Office in Camden.

Defense counsel: Jose Luis Ongay Esq., Camden

NEWARK, N.J. - The ringleader of a conspiracy that stole $2.6 million in income tax refund checks issued by the United States was sentenced today to 27 months in prison, U.S. Attorney Paul J. Fishman announced.

Raymundo Hernandez, 36, of Bronx, New York, previously pleaded guilty before U.S. District Judge Madeline C. Arleo to an information charging him with conspiracy to steal government funds. Judge Arleo imposed the sentence today in Newark federal court.

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

Stolen Identity Refund Fraud (SIRF) is a common type of fraud committed against the United States government that results in more than $2 billion in losses annually. SIRF schemes generally share a number of hallmarks. Perpetrators obtain personal identifying information, including Social Security numbers and dates of birth, from unwitting individuals, who often reside in the Commonwealth of Puerto Rico. They complete IRS-1040 tax return forms using the fraudulently obtained information and falsifying wages earned, taxes withheld and other data, always ensuring that fraudulent tax return generates a refund. The perpetrators then direct the U.S. Treasury Department to mail the refund checks to locations they control or can access. In some cases, they bribe mail carriers to remove the refund checks from their mail routes. With the fraudulently obtained refund checks in hand, the perpetrators generate cash proceeds by depositing the checks into bank accounts they control.

Hernandez admitted he knew the checks had been generated by conspirators filing false and fraudulent income tax returns with the IRS in order to obtain refunds to which he was not entitled. He admitted that from November 2010 through October 2012 he recruited and maintained a network of conspirators in the Newark and Bronx areas and distributed fraudulent treasury checks to that network in exchange for payment. Hernandez obtained at least 44 such checks from Luis Pena, 32, of Bronx, who pleaded guilty to his role in the conspiracy in March 2014. Pena had arranged for the fraudulent checks to be sent to a postal route and intercepted by the mail carriers on that route: Gloria Rivera 40, of Bronx, and Lourdes Ortiz, 42, of Bronx, Rivera and Ortiz also entered guilty pleas in March 2014 to their respective roles in the conspiracy.

Hernandez admitted that once he distributed the fraudulent checks, he and his conspirators deposited them into bank accounts, primarily in the names of businesses they controlled and then withdrew large amounts of the proceeds in cash. They used some of the money to purchase cars and gamble at Atlantic City casinos.

The fraudulently cashed checks totaled approximately $2,659,718. Of these deposits, $171,589 was deposited into three bank accounts under Hernandez’ direct control.

In addition to the prison term, Judge Arleo sentenced Hernandez to serve three years of supervised release. Hernandez must pay restitution of $2,659,717.82.

Pena was sentenced to 30 months in prison on Oct. 16, 2014. Rivera was sentenced to six months in prison on Jan. 7, 2015. Ortiz was sentenced to three years of probabtion on Jan. 7, 2015.

U.S. Attorney Fishman credited special agents of IRS-Criminal Investigation, under the direction of Special Agent in Charge Jonathan D. Larsen; 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. Secret Service, under the direction of Special Agent in Charge Carl Agnelli; and special agents of the U.S. Postal Service - Office of Inspector General, under the direction of Special Agent in Charge Rafael A. Medina, with the investigation leading to today’s sentencing.

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

Defense counsel: Roy Greenman Esq., Union, New Jersey

NEWARK, N.J. – A Boonton, New Jersey, man was sentenced today to 60 months in prison for using his home computer to download hundreds of images of child sexual abuse, U.S. Attorney Paul J. Fishman announced.

Lucas J. Reinmann, 36, previously pleaded guilty before U.S. District Judge Susan D. Wigenton to an information charging him with one count of knowingly receiving images of child pornography over the internet. Judge Wigenton imposed the sentence today in Newark federal court.

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

Reinmann admitted that he downloaded images and videos of child sexual abuse from the internet to his computer using a peer-to-peer file sharing network. He also admitted possessing more than 600 images of child sexual abuse on his computers and USB drives, which were seized from his residence in July 2013.

In addition to the prison term, Judge Wigenton sentenced Reinmann to serve 10 years of supervised release.

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; the Morris County Prosecutor’s Office, under the direction of Prosecutor Fredric M. Knapp; and the Boonton Township Police Department, under the direction of Chief Paul C. Fortunato with the investigation leading to today’s sentencing.

The government is represented by Assistant U.S. Attorney Sara F. Merin of the U.S. Attorney’s Office OCDETF Unit in Newark.

Defense counsel: Edward V. Sapone Esq., New York

NEWARK, N.J. – An associate of the DeCavalcante organized crime family of La Cosa Nostra today admitted his role in distributing more than 500 grams of cocaine, U.S. Attorney Paul J. Fishman announced.

Nicholas DeGidio, 37, of Union, New Jersey, pleaded guilty before U.S. District Judge William H. Walls, to an information charging him with one count of distribution of more than 500 grams of cocaine.

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

DeGidio was arrested and charged by complaint in March 2015, along with nine other members of the DeCavalcante crime family. Between December 2014 and March 2015, in conjunction with other family associates, DeGidio 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 DeGidio pleaded guilty carries a maximum potential penalty of 40 years in prison and a $5 million fine. Sentencing is scheduled for Sept. 29, 2015.

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 Executive Director Philip James Degnan; 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 Sr. and Assistant U.S. Attorney James Donnelly of the U.S. Attorney’s Office’s Organized Crime/Gangs Unit.

Defense counsel: Ted Romankow Esq., Springfield, New Jersey

NEWARK, N.J. – A Watchung, New Jersey, man was sentenced today to 408 months in prison for producing and transporting sexually explicit videos of children, U.S. Attorney Paul J. Fishman announced.

Patrick T. Deck, 54, previously pleaded guilty before U.S. District Judge Esther Salas to an information charging him with two counts of transportation of child pornography. Judge Salas imposed the sentence today in Newark federal court.

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

On Aug. 12, 2012, Deck was arrested at the Land of Make Believe amusement park in Hope, New Jersey, by the N.J. State Police for allegedly filming children, without their or their parents’ knowledge, in the men’s restroom. The following day, law enforcement officers executed a search warrant at Deck’s home in Watchung and discovered multiple videos and images containing child sexual abuse on Deck’s computers and other electronic devices.

Deck also admitted that between 1997 and 2010, he transported two minors, beginning when they were approximately 11 years old, to locations across the country, including New Jersey, New York, Pennsylvania, Colorado and Montana for the purpose of filming the minors in sexually explicit conduct. Deck produced the videos and images of child pornography and then transported those images back to his home in Watchung. In 1988, Deck was convicted in N.J. Superior Court, Burlington County, of two counts of endangering the welfare of a child. Those convictions arose out of prior incidents where Deck photographed or filmed minors engaged in prohibited sexual acts.

As part of his guilty plea, Deck agreed to forfeit the video cameras and other devices that he used to commit the offense. He will also be required to register as a sex offender.

In addition to the prison term, Judge Salas sentenced Deck to serve a lifetime of supervised release.

U.S. Attorney Fishman credited special agents of the Immigration and Customs Enforcement’s (ICE) Homeland Security Investigations (HSI), Newark Division, under the direction of Acting Special Agent in Charge Kevin Kelly; the N.J. State Police, under the direction of Col. Rick Fuentes; and the Warren County Prosecutor’s Office, under the direction of Prosecutor Richard T. Burke, with the investigation leading to today’s sentencing.

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

Defense counsel: James Wronko Esq., Somerville, New Jersey

NEWARK, N.J. – A Newark, New Jersey, man today admitted sexually abusing two girls and recording the conduct on his cellphone, U.S. Attorney Paul J. Fishman announced.

Justin Kinney, 26, pleaded guilty before U.S. District Judge Stanley R. Chesler in Newark federal court to an indictment charging him with two counts of producing child pornography. Kinney was previously arrested and charged by federal complaint on April 20, 2014, and is currently in state custody on related charges.

According to the papers 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.

On each count of the production of child pornography, Kinney faces a mandatory minimum penalty of 15 years in prison, a maximum potential penalty of 30 years in prison and a $250,000 fine. Kinney will be required to register as a sex offender. Sentencing is currently scheduled for Sept. 9, 2015.

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 plea.

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

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

TRENTON, N.J. – Two New Jersey men were convicted today for their roles in a drug-dealing business involving the sale of cocaine, marijuana, ecstasy and methylone, U.S. Attorney Paul J. Fishman announced.

Luke Atwell, 34, of Hamilton, New Jersey, and Christopher Castelluzzo, 30, of Bayonne, New Jersey, were convicted of conspiracy to distribute or possess with intent to distribute methylone, cocaine, MDMA, and marijuana following a two-week trial before U.S. District Judge Freda L. Wolfson. The jury deliberated for two hours before returning the guilty verdicts.

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

Atwell and Castelluzzo were partners in a drug dealing conspiracy that spanned 29 months. In March 2013, the Drug Enforcement Administration (DEA) conducted an investigation resulting in the seizure of more than six kilograms of methylone at a drug mill in East Orange, New Jersey, that was tied to Atwell and Castelluzzo. About a month later, in April 2013, agents of U.S. Immigration and Customs Enforcement (ICE) Homeland Security Investigations (HSI), seized 2.9 kilograms of methylone that Atwell intended to pick up at the Manville, New Jersey, Post Office. Agents replaced the package with a dummy package, which Atwell picked up and placed in the car he occupied with Castelluzzo. Following the arrest of both defendants outside the Manville Post Office, agents searched various electronic devices of the defendants and uncovered email communications establishing a drug distribution conspiracy dating back to 2010.

The drug charges on which Atwell and Castelluzzo were convicted carry a maximum potential penalty of 20 years in prison. Sentencing for both defendants is scheduled for Sept. 3, 2015.

U.S. Attorney Fishman credited special agents of HSI, under the direction of Acting Special Agent in Charge Kevin Kelly; and special agents of the DEA, under the direction of Special Agent in Charge Carl J. Kotowski, for the investigation leading to today’s verdict.

The government is represented by Assistant U.S. Attorneys Courtney A. Howard and Thomas S. Kearney of the Criminal Division in Newark.
 

Defense counsel: Castelluzzo: Dawn M. Florio Esq., New York
Atwell: Pasquale F. Giannetta Esq., Wayne

TRENTON, N.J. – Two Atlantic City, New Jersey, men and a Millville, New Jersey, woman today admitted their roles in a criminal street gang that used threats, intimidation and violence to maintain control of the illegal drug trade in Atlantic City, U.S. Attorney Paul J. Fishman announced.

Franklin Simms, a/k/a “Fat Boy,” 31, pleaded guilty to a superseding information charging him with one count of conspiring to distribute, and to possess with intent to distribute, 100 grams or more of heroin. Rayshell Strong, a/k/a “Big Truck,” 34, pleaded guilty to a superseding information charging him with one count of conspiring to distribute a detectable amount of heroin. Latasha Cherry, a/k/a “Tasha,” 31, pleaded guilty to a superseding information charging her with one count of conspiring to engage in money laundering. All three defendants entered their pleas today before U.S. District Judge Anne E. Thompson in Trenton federal court.

All three were members of a gang known as “Dirty Block,” a/k/a “Crime Fam,” “3.6.6.12,” or “3.6,” which operated in a geographic area of Atlantic City that includes the public housing apartment complexes of Stanley Holmes Village and Schoolhouse Apartments. To date, 23 of the 34 defendants charged in this matter have been convicted, either through guilty pleas or following trial.

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

Simms and Strong admitted distributing heroin on behalf of one of the gang’s alleged leaders, Tyrone Ellis, a/k/a “Rome,” 33, of Galloway, New Jersey, who was among the 34 defendants charged in May 2013. Simms and Strong admitted that from October 2012 through March 2013, they conspired to distribute between 400 and 700 grams of heroin. Cherry admitted she conspired with Ellis and others to launder the proceeds by transferring cash onto reloadable prepaid debit cards.

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

The drug conspiracy charge to which Simms pleaded guilty carries a maximum potential penalty of 40 years in prison and a $5 million fine. The drug distribution conspiracy charge to which Strong pleaded guilty carries a maximum potential penalty of 20 years in prison and a $1 million fine. The money laundering charge to which Cherry pleaded guilty carries a maximum potential penalty of 20 years in prison and a $500,000 fine. Sentencing for all three defendants is scheduled for Sept. 21, 2015.

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 sentencing.

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 Askin and Justin Danilewitz of the U.S. Attorney’s Office in Camden and Special Assistant U.S. Attorney Edmund Burgos of the Atlantic County Prosecutor’s Office.

Defense counsel:

Simms: Troy A. Archie Esq., Cinnaminson, New Jersey
Strong: J. Michael Farrell Esq., Philadelphia
Cherry: Richard Sparaco Esq., Cherry Hill, New Jersey

NEWARK, N.J. – Two Canadian men have admitted their roles in a stock market scheme that artificially inflated the stock price of two publicly traded companies through manipulative trading and other fraudulent means, U.S. Attorney Paul J. Fishman announced.

Michael Taxon, 52, of Toronto, Ontario, Canada, and Itamar Cohen, 52, of Thornhill, Ontario, Canada, each pleaded guilty before U.S. District Judge Jose Linares to separate informations charging them with conspiracy to commit securities fraud. Taxon entered his plea today and Cohen entered his plea on May 27, 2015.  

According to the documents filed in these cases and statements made in court:

From April 2007 through June 2008, Taxon, Cohen and others engaged in an extensive “pump-and-dump” stock manipulation scheme, fraudulently inflating the prices of shares of certain companies in order to later sell those shares at artificially higher prices. The scheme targeted two public companies: Raven Gold Corporation (RVNG) and Kentucky USA Energy Inc. (KYUS).  Taxon, Cohen and their conspirators first obtained control over large blocks of the free trading shares of the target companies. They then “pumped” the price of those shares by engaging in manipulative trading of the stocks and disseminating misleading promotional materials touting the stocks and encouraging others to purchase them. After pumping the stocks, Taxon, Cohen or their conspirators “dumped” them, selling large volumes of the stocks to victim-investors. The target companies’ stock price would then drop, resulting in losses to the victims.

In April 2007, Taxon, Cohen and a conspirator (CC2) received large blocks of unrestricted RVNG shares and then engaged in a pattern of manipulative trading designed to create the false appearance of liquidity and market depth for RVNG.  The manipulative trading included trades of RVNG stock in which CC2 or others acting in concert were on both the “buy” and “sell” side of the same trades. Throughout June 2007, CC2’s trading in various brokerage accounts that CC2, Taxon or Cohen controlled accounted for a substantial portion of RVNG’s daily trading volume.  In addition to the manipulative trading, Taxon, Cohen and their conspirators created and disseminated to potential investors an eight-page, glossy promotional mailer that touted RVNG’s stock. The promotional mailer was materially false in numerous ways. It was misleadingly titled, “Stock Trend Report,” and claimed to be a July 2007 “Special Edition For Premium Members.” Stock Trend Report was a fictional name that was created specifically for the scheme. The manipulative conduct had a substantial impact on RVNG’s stock price, which went from a low of $.61 per share in the early phase of the scheme to a high of $1.73 per share at its peak.         

Taxon and Cohen engaged in similar fraudulent conduct to artificially inflate the value of KYUS’s stock. In May 2008, Taxon assisted CC2 in manipulating KYUS’ stock by placing a number of manipulative trades using overseas trading accounts. Taxon placed and then canceled a series of successfully higher “buy” orders for KYUS stock at different brokers in order to maximize the false appearance of liquidity, depth and interest in the stock, and to “walk up” the price of KYUS stock.  Toward the end of the KYUS manipulation, after the stock had been manipulated from a low price of approximately $.60 per share to a high of $3.97 per share at the peak of the promotion, CC2 and other conspirators “dumped” their shares at the artificially inflated prices to unsuspected victim-investors.      

The stock manipulation scheme generated approximately $17.2 million in illegal proceeds, of which Taxon and Cohen received approximately $2.4 million.  

The conspiracy counts to which Taxon and Cohen pleaded guilty each carry a maximum potential penalty of five years in prison and a $250,000 fine, or twice the gain or loss from the offense. Sentencing for both Taxon and Cohen is scheduled for Sept. 2, 2015.

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 Taxon’s and Cohen’s guilty pleas.  He also thanked the U.S. Securities and Exchange Commission’s New York Regional Office, under the direction of Regional Director Andrew Calamari.

The government is represented by Gurbir S. Grewal, Chief of the U.S. Attorney’s Office Economic Crimes Unit, and Assistant U.S. Attorney Nicholas P. Grippo of the Economic Crimes Unit.

Defense counsel:

Taxon: Andrew Goodman Esq., New York

Cohen: Anne Hilton Esq., New York

Garden State Cardiovascular Specialists P.C. (Garden State), a cardiology practice which owns and operates several facilities in New Jersey under the name NJ MedCare/NJ Heart, has agreed to pay more than $3.6 million to resolve allegations that its facilities falsely billed federal health care programs for tests that were not medically necessary, announced today by U.S. Attorney Paul J. Fishman for the District of New Jersey.

The settlement announced today resolves allegations that Garden State and its principals, Jasjit Walia M.D. and Preet Randhawa M.D., submitted claims to Medicare for various cardiology diagnostic tests and procedures, including stress tests, cardiac catheterizations and external counterpulsation, which were not medically necessary. 

The allegations resolved by today’s settlement were raised in a lawsuit 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 whistleblower, Cheryl Mazurek, will receive more than $648,000 as part of today’s settlement.

The settlement is the culmination of an investigation conducted by special agents of the U.S. Department of Health and Human Services Office of Inspector General, under the direction of Special Agent in Charge Scott J. Lampert.

The government is represented by Assistant U.S. Attorneys Bernard J. Cooney and Kristin L. Vassallo of the U.S. Attorney’s Office for the District of New Jersey in Newark and Trial Attorney Arthur Di Dio of the Justice Department’s Civil Division.

U.S. Attorney Fishman reorganized the health care fraud practice at the U.S. Attorney’s Office in New Jersey 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.

The claims settled by this agreement are allegations only, and there has been no determination of liability. The qui tam case is captioned United States ex rel. Cheryl Mazurek v. Garden State Cardiovascular Specialists, P.C. et al., Civil Action No. 10-4734 (D.N.J.).

NEWARK, N.J. – Garden State Cardiovascular Specialists P.C. (Garden State), a cardiology practice which owns and operates several facilities in New Jersey under the name NJ MedCare/NJ Heart, has agreed to pay more than $3.6 million to resolve allegations that its facilities falsely billed federal health care programs for tests that were not medically necessary, U.S. Attorney Paul J. Fishman announced today.

The settlement announced today resolves allegations that Garden State and its principals, Jasjit Walia M.D. and Preet Randhawa M.D., submitted claims to Medicare for various cardiology diagnostic tests and procedures, including stress tests, cardiac catheterizations, and external counterpulsation, which were not medically necessary.

The allegations resolved by today’s settlement were raised in a lawsuit 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 whistleblower, Cheryl Mazurek, will receive more than $648,000 as part of today’s settlement.

The settlement is the culmination of an investigation conducted by special agents of the U.S. Department of Health and Human Services, Office of Inspector General, under the direction of Special Agent in Charge Scott J. Lampert.

The government is represented by Assistant U.S. Attorneys Bernard J. Cooney and Kristin L. Vassallo of the U.S. Attorney’s Office in Newark and Trial Attorney Arthur Di Dio of the Justice Department’s Civil Division, Commercial Litigation Branch.

U.S. Attorney 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.

The claims settled by this agreement are allegations only, and there has been no determination of liability. The qui tam case is captioned United States ex rel. Cheryl Mazurek v. Garden State Cardiovascular Specialists, P.C. et al., Civil Action No. 10-4734 (D.N.J.).

Defense counsel for Garden State and Doctors Walia and Randhawa:

Bruce A. Levy Esq., Newark

Counsel for Relator:

Ross Begelman Esq., Cherry Hill, New Jersey

NEWARK N.J. – A Jackson, New Jersey, man today admitted his role in a large-scale mortgage fraud scheme that used phony documents and straw buyers to acquire over $6 million in loans, U.S. Attorney Paul J. Fishman announced.

Joseph DiValli, 46, pleaded guilty before U.S. District Judge Susan D. Wigenton in Newark federal court to a superseding information charging him with one count of conspiracy to commit wire fraud, one count of wire fraud and one count of tax evasion.

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

From March 2011 through November 2012, DiValli and other conspirators agreed to fraudulently obtain mortgage loans for properties located in North Jersey. After recruiting “straw buyers” to purchase the properties, DiValli and others submitted false and fraudulent loan applications and supporting documents so the straw buyers could qualify for the loans. DiValli and others also used another conspirator, who worked at a bank, to create misleading certifications showing certain bank accounts held more money than they actually had. Divalli and other conspirators also submitted false appraisal reports, back-dated deeds and used unlicensed title agents to close transactions and disburse the mortgage proceeds.

As a loan officer for a North Jersey mortgage lender, DiValli facilitated some of these fraudulent transactions, including a $244,855.26 mortgage on a property located on Smith Street in Elizabeth, New Jersey. Overall, the scheme induced lenders to issue more than $6 million in loans, resulting in several defaults and exposing lenders and the Federal Housing Administration (FHA) to more than $2 million in potential losses.

DiValli also admitted using a separate scheme to modify the mortgage on his personal residence. From March 2011 through June 2012, Divalli used false payroll ledgers and earnings statements to deceive a loan officer into believing that his net earnings were lower than his actual income level.

DiValli also admitted receiving income of more than $450,000 in 2012. In order to avoid taxes of $79,000, DiValli failed to file taxes for 2012 and cashed his paychecks at a check-cashing facility to conceal his income.

The wire fraud and conspiracy counts to which DiValli pleaded guilty are each punishable by a maximum potential penalty of 30 years in prison and a $1,000,000 fine. The tax evasion count is punishable by a maximum potential penalty of five years in prison and a $250,000 fine. Sentencing is scheduled for Sept. 9, 2015.

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 Acting Prosecutor Gaetano Gregory, 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 in Newark, as well as Barbara Ward, Acting Chief of the office’s Asset Forfeiture and Money Laundering Unit.

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: Michael A. Koribanics Esq. Clifton, New Jersey

CAMDEN, N.J. - An Atlantic City, New Jersey, man was sentenced today to 120 months in prison for engaging in a conspiracy to distribute heroin on behalf of the “Dirty Block” criminal street gang that used threats, intimidation and violence to maintain control of the illegal drug trade in Atlantic City, U.S. Attorney Paul J Fishman announced.

Kamal Allen, a/k/a “Geez,” a/k/a “Maly Geez,” 27, previously pleaded guilty before U.S. District Judge Joseph E. Irenas to a superseding information charging him with one count of conspiracy to distribute and to possess with intent to distribute one kilogram or more of heroin and one count of possessing a firearm and ammunition while being a previously convicted felon. Judge Irenas imposed the sentence today in Camden federal court.

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

Allen acted as a distributor and enforcer on behalf of one of the gang’s leaders, Mykal Derry, 32, of Atlantic City. Allen helped Dirty Block distribute heroin in and around the public housing apartment complexes of Stanley Holmes, Carver Hall, Schoolhouse, Adams Court and Cedar Court, in Atlantic City. Allen was arrested on March 26, 2013. Allen said in court that he and others travelled with Derry to a shooting range in Lakewood, New Jersey, on Jan. 20, 2013, where Allen – a previously convicted felon – used, possessed, and discharged a firearm. Allen and other members of the group also participated in a violent altercation with rival drug traffickers at an Atlantic City casino in December 2012.

In addition to the prison term, Judge Irenas sentenced Allen to serve 10 years of supervised release.

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

U.S. Attorney Fishman credited special agents of the FBI’s Newark Division, Atlantic City Resident Agency, under the direction of Acting 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 sentencing.

The government is represented by Assistant U.S. Attorneys Patrick C. Askin and Justin C. Danilewitz, and Special Assistant U.S. Attorney Edmond Malqui-Burgos of the Atlantic County Prosecutor’s Office.

Defense counsel:  Jerome A. Ballarotto Esq., Trenton, New Jersey

NEWARK, N.J. – A Newark, New Jersey, man today admitted making counterfeit checks as part of a scheme that caused bank losses of approximately $80,000, U.S. Attorney Paul J. Fishman announced.

Laronn Moultrie, 30, pleaded guilty before U.S. District Judge William H. Walls to an information charging him with one count of conspiracy to commit bank fraud.

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

From October 2010 through May 2012, Moultrie used check-writing software to create hundreds of counterfeit checks, most of which were in amounts of less than $5,000. In furtherance of the scheme, Moultrie recruited numerous individuals to open new accounts at Bank of America, Sovereign Bank (now Banco Santander) and TD Bank by promising a share of the proceeds.

After obtaining the cooperation of an account holder, Moultrie or another conspirator would deposit one of the counterfeit checks into a new account. Before the bank realized that the deposited check was counterfeit, Moultrie would arrange to withdraw the funds within a day or two of the deposit. Moultrie also arranged for some account holders to cash counterfeit checks directly against their accounts. Moultrie admitted obtaining around $80,000 in cash through this scheme.

Moultrie faces a statutory maximum potential penalty of 30 years in prison and $1 million fine. Sentencing is scheduled for Sept. 23, 2015.

U.S. Attorney Fishman credited special agents of the U.S. Secret Service, under the direction of Special Agent in Charge Carl Agnelli; special agents of the FBI, under the direction of Special Agent in Charge Richard M. Frankel; investigators at the Union County Prosecutor’s Office, under the direction of Acting Prosecutor Grace H. Park; and investigators at the Morris County Prosecutor’s Office, under the direction of Prosecutor Fredric M. Knapp, for their roles in the investigation leading to today’s plea.

The government is represented by Assistant U.S. Attorney David W. Feder of the U.S. Attorney’s Office General Crimes Unit.

Defense counsel: Jean Barrett Esq., Montclair, New Jersey

NEWARK, N.J. – A Wayne, New Jersey, man was sentenced today to 78 months in prison for sharing images of child sexual abuse from his home computer, U.S. Attorney Paul J. Fishman announced.

Manuel Fernandez, 34, previously pleaded guilty before U.S. District Judge Jose L. Linares to one count of an indictment charging him with distributing images of child pornography over the Internet. Judge Linares imposed the sentence today in Newark federal court.

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

Fernandez admitted that between March 2011 and January 2012, he was a member of an online peer-to-peer file sharing network. Fernandez also admitted he made images and videos of child pornography available for other members to download from his “shared” folder. On March 24, 2011, an undercover law enforcement agent successfully downloaded multiple images and videos of child sexual abuse from Fernandez’s computer.

On Jan. 25, 2012, federal law enforcement agents executed a search warrant at Fernandez’s residence. The agents recovered a 1-terabyte hard drive and a 250-gigabyte computer tower, both of which contained numerous images and videos of minor children being sexually abused.

As part of his guilty plea, Fernandez agreed to forfeit the computers and computer accessories he used to commit the offense. He will also be required to register as a sex offender.

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

U.S. Attorney Fishman credited special agents of U.S. Immigration and Customs Enforcement’s (ICE) Homeland Security Investigations (HIS), 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 Rahul Agarwal of the U.S. Attorney’s Office Criminal Division in Newark.

Defense counsel: Chris Adams Esq. Holmdel, New Jersey

NEWARK, N.J. – A New York corporate and securities lawyer was sentenced today to 18 months in prison for orchestrating a stock market manipulation scheme designed to artificially inflate the stock price of two publicly traded companies through manipulative trading and other fraudulent means, U.S. Attorney Paul J. Fishman announced.

Adam S. Gottbetter, 46, of New York and Boca Raton, Florida, pleaded guilty on Sept. 3, 2014, before U.S. District Judge Jose L. Linares to conspiracy to commit securities and mail fraud.  Judge Linares imposed the sentence today in Newark federal court.

Two other men, Kenneth David Stevenson, 55, and Mitchell G. Adam, 47, both of Vancouver, Canada, have also been charged for their roles in the scheme. Stevenson pleaded guilty before Judge Linares on Dec. 9, 2013, to conspiracy to commit securities and mail fraud. He is scheduled to be sentenced on May 28, 2015 at 10 a.m. Adam was charged by criminal complaint on May 15, 2015, with conspiracy to commit securities, mail and wire fraud.  He was arrested on May 20, 2015, at the Houston George Bush Intercontinental Airport in Texas.

According to the documents filed in these cases and statements made in court:

Gottbetter was a licensed attorney and the managing partner of Gottbetter & Partners LLC, a New York-based securities and corporate law firm, which he founded. Gottbetter marketed himself as an expert in taking private companies public through a reverse merger process, which he referred to as an “Alternative Public Offering,” or his trademarked “Gottbetter Public Offering.” Gottbetter owned Gottbetter Capital Markets LLC, a registered broker-dealer, and Gottbetter Capital Group Inc., a firm which provided a variety of corporate transactional services to its clients.

Between June 2012 and November 2013, Gottbetter directed a scheme to manipulate the price and trading volume of Dynastar Holdings Inc. (DYNA), a social media company headquartered in Louisville, Kentucky, and HBP Energy Corp. (HBPE), a developmental stage company based in Houston, Texas, to create the false appearance of market interest in, and to artificially inflate the value of, both securities.  Gottbetter conspired with others to manipulate the price and volume of these securities to, among other things, make the companies more attractive to potential investors in various private offerings that Gottbetter would broker and which would generate substantial fees and other illicit gains to Gottbetter, his law firm and his broker-dealer, and to sell the stocks at the fraudulently inflated prices to the investing public for a profit.

Gottbetter and his conspirators obtained and concealed control of a significant portion of free-trading shares of DYNA and HBPE stock, agreed to fraudulently inflate the price and trading volume of the stocks through a variety of means – including disseminating false or misleading promotional materials to the investing public and engaging in manipulative trading of the stocks to create the appearance of market interest – and planned to sell the stocks at the fraudulently inflated prices or use the fraudulently inflated value of the companies to solicit private investments, thereby profiting at the expense of the investing public.

To assist in manipulating the stock of DNYA and HBPE, Gottbetter recruited a stock promoter and trader who owned a broker-dealer in New York and who claimed to have experience in various manipulative and fraudulent trading strategies. Unbeknownst to Gottbetter, however, this individual (“the CW”) was cooperating with law enforcement.  During the DYNA manipulation, Gottbetter instructed the CW to create “volume” in DYNA’s stock so that the stock would eventually trade “on its own.”  Gottbetter agreed that the CW would trade DYNA stock among various accounts that the CW controlled to “build a chart” for DYNA stock – in other words, to create the fake appearance of legitimate trading activity, which would be touted as “market” activity to unsuspecting investors in a later promotional mailer. Gottbetter reviewed a draft of a promotion that the CW created in connection with the DNYA scheme. The mailer contained numerous materially false and misleading statements and material omissions. During a meeting with the CW, Gottbetter was offered a copy of the mailer, but refused to keep it, stating that he “never saw it.”

Later in the scheme, the CW informed Gottbetter that the CW had developed an algorithmic trading system, or black box, for the purpose of manipulating the price of stocks.  The CW controlled 32 online brokerage accounts that were opened in the names of foreign nominees, and that a computer program that the CW created and controlled could trade between those accounts to create the appearance of massive volume in any stock. Gottbetter directed the CW to use the black box in connection with the DYNA scheme

In July 2013, before Gottbetter and the CW had launched the DYNA promotional campaign and completed the manipulative trading of DYNA’s stock, Gottbetter recruited the CW to participate with him, Stevenson and Adam in another, more profitable and elaborate market manipulation scheme involving HBPE.  Like DYNA, Gottbetter and others conspired to manipulate the price and volume of HBPE’s stock through a variety of fraudulent means, including manipulative trading through the CW’s black box. Gottbetter, Stevenson and Adam also planned an elaborate promotional campaign that would take place after HBPE’s stock was manipulated to a certain level, including international “call rooms,” listing HBPE’s stock on foreign exchanges, a “road show” and other activities. Law enforcement intervened before the HBPE promotion could take place.

Nonetheless, Gottbetter, Stevenson and Adam expected to realize significant profits by selling HBPE stock at fraudulently inflated prices. Gottbetter also anticipated generating substantial fees to his law firm and broker-dealer in connection with financing deals that he would close for HBPE after the stock price had been artificially inflated to certain levels. In one consensually recorded conversation with the CW, Gottbetter commented that the only other way to make as much money as he and his conspirators expected to make manipulating HBPE’s stock would be by “robbing a bank.”

In addition to the prison term, Judge Linares sentenced Gottbetter to one year of supervised release, fined him $60,000 and ordered him to forfeit $344,967.  Gottbetter also forfeited $4,595,333 to the U.S. Securities and Exchange Commission.

The conspiracy counts with which Adam and Stevenson are charged each carry a maximum potential penalty of five years in prison and a $250,000 fine, or twice the gain or loss from the offense.

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 sentence and the related charges against Stevenson and Adam.  He also thanked the U.S. Securities and Exchange Commission’s New York Regional Office under the direction of Andrew Calamari.

The government is represented by Gurbir S. Grewal, Chief of the U.S. Attorney’s Office Economic Crimes Unit and Assistant U.S. Attorney Nicholas P. Grippo of the Economic Crimes Unit.

The charges and allegations contained in the complaint against Adam are merely accusations, and he is presumed innocent unless and until proven guilty.

TRENTON, N.J. – The former in-house counsel of an Ocean County, New Jersey-based home health care company today admitted using his attorney trust account to steal over $2.6 million from his employer, U.S. Attorney Paul J. Fishman announced.

Matthew S. Neugeboren, 39, of Manalapan, New Jersey, pleaded guilty before U.S. District Judge Mary L. Cooper in Trenton federal court to an information charging him with one count of wire fraud and one count of subscribing to a false tax return.

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

From 2006 through 2013, Neugeboren was in-house counsel for Company A, a home health care company in Ocean County. As such, Neugeboren maintained an attorney trust account to pay for Company A’s expenses. To cover those expenses, Neugeboren requested checks and wire transfers be made from Company A’s bank accounts into his attorney trust account.

As part of the scheme, Neugeboren caused Company A to transfer more money into his attorney trust account than was necessary to cover company expenses. Neugeboren admitted that he used the additional money for his personal benefit, including gambling. Neugeboren admitted that from January 2008 through December 2012, he stole approximately $2,644,911.91 from Company A.

In addition to the wire fraud scheme, Neugeboren knowingly and willfully filed a false tax return that failed to include approximately $630,000 in gross income that he received in calendar year 2011 from his scheme to defraud Company A.

The wire fraud count to which Neugeboren pleaded guilty is punishable by a maximum penalty of 20 years in prison. The false tax return count is punishable by a maximum penalty of three years in prison. Both charges carry a maximum fine of $250,000. Neugeboren has already returned some of the money from the scheme. As part of his plea agreement, he must pay remaining restitution in the amount of $1,404,962.91. Sentencing is scheduled for Sept. 3, 2015.

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 IRS-Criminal Investigation, under the direction of Special Agent in Charge Jonathan D. Larsen, with the investigation leading to today’s guilty plea.

The government is represented by Assistant U.S. Attorney Fabiana Pierre-Louis of the U.S. Attorney’s Office Criminal Division in Trenton.

Defense counsel: Justin P. Walder Esq., Roseland, New Jersey

CAMDEN, N.J. – A previously convicted sex offender was sentenced today to 121 months in prison for uploading images of child sexual abuse to an online file-sharing network, U.S. Attorney Paul J. Fishman announced.

Layne Bracht, 32, of Highlands, New Jersey, previously pleaded guilty before U.S. District Judge Joseph E. Irenas to an information charging him with one count of possession of child pornography. Judge Irenas imposed the sentence today in Camden federal court.

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

Bracht, who pleaded guilty to possession of child pornography in 2006, admitted that on Oct. 28, 2013, he knowingly placed images and videos depicting child sexual abuse into shared folders that others could access via a peer-to-peer network. Special agents of the FBI executed a search warrant at his residence in Highlands on Jan. 15, 2014 and seized digital evidence that contained numerous videos and images depicting child sexual abuse, including material involving prepubescent minors and sadistic or masochistic conduct. The digital evidence seized included three files previously downloaded from Bracht by law enforcement agents working in an undercover capacity on the peer-to-peer network.

In addition to the prison term, Judge Irenas sentenced Bracht to serve 15 years of supervised release.

U.S. Attorney Fishman credited special agents of the FBI’s Child Exploitation Task Force, under the direction of Special Agent in Charge Richard M. Frankel in Newark, New Jersey, and the Monmouth County Prosecutor’s Office, under the direction of Acting Prosecutor Christopher Gramiccioni, with the investigation leading to today’s sentencing.

The government is represented by Assistant U.S. Attorney Fabiana Pierre-Louis of the U.S. Attorney’s Office Criminal Division in Trenton.

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

NEWARK, N.J. – A former postal worker who allegedly used stolen identities to assist in the filing of fraudulent tax returns to generate false U.S. Treasury checks was charged today for his involvement in the scam, U.S. Attorney Paul J. Fishman announced.         

Luis Martin, 24, of Trenton, New Jersey, was arrested this morning by special agents of IRS-Criminal Investigation, postal inspectors from the U.S. Postal Inspection Service, special agents of the U.S. Postal Service Office of Inspector General, and special agents of the U.S. Secret Service. He is charged by complaint with one count of stealing government funds. He is scheduled to make his initial appearance today before U.S. Magistrate Judge Steven C. Mannion in Newark federal court.

According to the complaint:

Background on Stolen Identify Refund Fraud

Stolen Identity Refund Fraud (SIRF) is a common type of fraud committed against the United States government that involves the use of stolen identities to commit tax refund fraud.  SIRF schemes generally share a number of hallmarks:

• SIRF perpetrators obtain personal identifying information, including Social Security numbers and dates of birth, from unwitting individuals, who often reside in the Commonwealth of Puerto Rico.
   
• SIRF perpetrators complete Form 1040 tax returns using the fraudulently obtained information and falsifying wages earned, taxes withheld, and other data, always ensuring that the fraudulent tax return generates a refund.
   
• They direct the U.S. Treasury Department to mail refund checks to locations that the perpetrators control or can access.
   
• With the fraudulently obtained refund checks in hand, SIRF perpetrators generate cash proceeds by depositing the checks into bank accounts that they control.

The Investigation

From June 2014 through February 2015, Martin allegedly caused to be filed 13 fraudulent Form 1040s, claiming $75,380 in fraudulent tax refund payments from the U.S. Treasury. He allegedly used his position as a postal worker in Monmouth County, New Jersey, to facilitate the scheme.

The count of theft of government funds with which Martin is charged is carries a maximum potential penalty of 10 years in prison and a fine of up to $250,000, or twice the gain or loss caused by the offense.        

U.S. Attorney Fishman credited special agents of the IRS-Criminal Investigation, under the direction of Special Agent in Charge Jonathan D. Larsen; 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. Postal Service Office of Inspector General, under the direction of Special Agent in Charge Monica S. Weyler; and special agents of the U.S. Secret Service, under the direction of Special Agent in Charge Carl Agnelli, with the investigation leading to today’s arrest and charge.

The government is represented by Assistant U.S. Attorneys Melissa Wangenheim and Elisa Wiygul of the General Crimes Unit in Newark.

The charges and allegations contained in the Complaint are merely accusations, and the Defendant is considered innocent unless and until proven guilty.

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

NEWARK, N.J. – Two people allegedly involved in an extensive scheme to obtain U.S. Government funds through fraudulently obtained refund checks issued by the U.S. Treasury were charged today for their involvement in the scam, U.S. Attorney Paul J. Fishman announced.

Jhan Luis Mejia Marcelino, 25, and Odanys Orlando Rojas, a/k/a “El Fuerte,” 37, both of Bronx, New York, were arrested this morning by special agents of IRS-Criminal Investigation, postal inspectors from the U.S. Postal Inspection Service, special agents of the U.S. Postal Service Office of Inspector General, and special agents of the U.S. Secret Service. They are charged by complaint with conspiracy to steal government funds.

Both defendants made their initial court appearances today before U.S. Magistrate Judge Steven C. Mannion in Newark federal court. Rojas was ordered detained and Marcelino was released on $250,000 unsecured bond.

According to the complaint:

Background on Stolen Identify Refund Fraud

Stolen Identity Refund Fraud (SIRF) is a common type of fraud committed against the United States government that involves the use of stolen identities to commit tax refund fraud.  SIRF schemes generally share a number of hallmarks:

• SIRF perpetrators obtain personal identifying information, including Social Security numbers and dates of birth, from unwitting individuals, who often reside in the Commonwealth of Puerto Rico.
   
• SIRF perpetrators complete Form 1040 tax returns using the fraudulently obtained information and falsifying wages earned, taxes withheld, and other data, always ensuring that the fraudulent tax return generates a refund.
   
• They direct the U.S. Treasury Department to mail refund checks to locations that the perpetrators control or can access.
   
• With the fraudulently obtained refund checks in hand, SIRF perpetrators generate cash proceeds by depositing the checks into bank accounts that they control.

The Investigation

Marcelino, Rojas and others allegedly have obtained stolen identities that they used to file, and to assist in the filing of Fraudulent Form 1040s to generate Fraudulent Treasury Checks.  From Jan. 31, 2014, through Nov. 22, 2014, the defendants caused to be filed 132 fraudulent Form 1040s, claiming $917,284 in false income tax returns, and causing $14,520 in fraudulent treasury checks to be issued directly from the U.S. Treasury.

Rojas was allegedly responsible for filing 73 Fraudulent Form 1040s, claiming total tax returns of $589,621, on April 22, 2014, alone.  From Jan. 31, 2014, through Nov. 22, 2014, the Preparer Tax Identification Number, or “PTIN,” associated with those filings was also used to file 16,037 fraudulent Form 1040s, which claimed $115,455,061 in tax refunds, and caused $2,943,329 in U.S. Treasury refund checks to be issued.

Marcelino was responsible for filing 59 fraudulent Form 1040s, claiming total tax returns of $327,663, on Sept. 2, 2014, alone.  From May 4, 2014, through Nov. 21, 2014, the PTIN associated with those filings was also used to file 1,356 fraudulent Form 1040s, claiming $8,416,206 in tax refunds, and causing $572,548 in U.S. Treasury refund checks to be issued.

The conspiracy charge is punishable by a maximum potential penalty of five years in prison.  The charge is also punishable by a fine of up to $250,000, or twice the gain or loss caused by the offense.      

U.S. Attorney Fishman credited special agents of the IRS-Criminal Investigation, under the direction of Special Agent in Charge Jonathan D. Larsen; 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. Postal Service Office of Inspector General, under the direction of Special Agent in Charge Monica S. Weyler; and special agents of the U.S. Secret Service, under the direction of Acting Special Agent in Charge Carl Agnelli; with the investigation leading to today’s arrests and charges.

The government is represented by Assistant U.S. Attorneys Melissa Wangenheim and Elisa Wiygul of the General Crimes Unit in Newark.

The charges and allegations contained in the complaint are merely accusations, and the Defendants are considered innocent unless and until proven guilty.

Defense counsel:

Marcelino: John Yauch Esq., Assistant Federal Public Defender, Newark
Rojas: Timothy R. Anderson Esq., Red Bank, N.J.

NEWARK, N.J. - A Morris County, New Jersey, man was sentenced today to 12 months in prison for his role in a scheme to bill for diagnostic testing services he did not render and to enable a cardiologist to evade the Medicare program’s pre-payment review of his claims, U.S. Attorney Paul J. Fishman announced.

Vijay Patel, 57, of Parsippany, New Jersey, previously pleaded guilty before U.S. District Judge Esther Salas to an information charging him with one count of health care fraud. Judge Salas imposed the sentence today in Newark federal court.

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

From 2009 to the present, Patel has been the owner of a diagnostic testing facility in Parsippany called Mobile Diagnostic Testing of NJ LLC (Mobile Diagnostic). He was also a participant in Medicare.

Patel had an associate identified as “S.A.,” who was a cardiologist and also a participant in the Medicare program. From around 2009 through 2012, S.A.’s Medicare contractor had placed him on so-called “pre-payment review,” which was initiated to ensure that S.A. was submitting claims within established rules and regulations and consistent with appropriate medical decision-making, and which required S.A. to submit medical and other documentation to support the services being billed to Medicare. Under pre-payment review, claims for reimbursement that did not have the documentation necessary to support the services being billed are rejected by the Medicare contractor.

From November 2009 through October 2012, Patel and S.A. engaged in a scheme to defraud Medicare whereby S.A. paid Patel substantial sums of money to enable S.A. to evade Medicare’s prepayment review. Patel admitted in court that he submitted claims to Medicare for diagnostic testing services that S.A. had performed as if Mobile Diagnostic had performed the services instead of S.A. Once Medicare paid Patel and Mobile Diagnostic for diagnostic testing services that S.A. had actually provided, Patel then transferred a portion of the payment to S.A. and kept a substantial portion for himself.                     

In addition to the prison term, Judge Salas sentenced Patel to two years of supervised release.

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 Tom O’Donnell, for the investigation leading today’s sentencing.

The government is represented by Assistant U.S. Attorney Scott B. McBride, Deputy Chief of the U.S. Attorney’s Office’s Economic Crimes Unit.

NEWARK, N.J. - A New York man involved in several CrossFit training businesses was arrested this morning by the FBI in connection with a scheme to defraud various potential investors, lenders and business partners out of over $2 million, U.S. Attorney Paul J. Fishman announced.

Joshua Bryce Newman, 35, is charged by criminal complaint with two counts of wire fraud. Newman is scheduled to make his initial appearance this afternoon before U.S. Magistrate Judge Steven C. Mannion in Newark federal court.

According to the complaint:

Newman was a self-styled entrepreneur who engaged in a variety of business ventures, including venture capital work, a film production company and businesses that offer CrossFit training, a popular strength and conditioning program typically run in facilities known as “boxes.” Newman found himself facing mounting legal and financial troubles largely as a result of judgments and liens filed against him and his film production company, Cyan Pictures, after its project about the New York Yankees failed. For example, a civil lawsuit filed against Newman alleges that he and others lied about the amount of money they raised for the project and that they had diverted funds meant for the film into their personal accounts.

The criminal complaint alleges that from 2012 through April 2015, Newman made material misrepresentations to solicit investments for CrossFit business enterprises and used the funds for personal expenses, including paying back others who invested in his prior projects. Using doctored or bogus documentation, Newman lulled his victims into believing that their investment money was safe or that he was in a position to repay their loans. The false documents included doctored operating agreements, false statements of ownership percentages held by various individuals and bogus Schedule K-1s purporting to show the amount of annual partnership gains or losses reported to the IRS. Newman also deceived his potential partners, purported investors and lenders into believing that one of his CrossFit ventures had raised millions of dollars in funding.

When investors and lenders raised concerns about Newman’s sincerity or threatened legal action to recoup their funds, he typically gave them false assurances or agreed to return the funds. In reality, he often had no funds to return and made various excuses, including blaming his lack of payment on wire transfers delays. He also stalled for time by giving his victims checks drawn on accounts with insufficient funds and even sent a picture of a purported wire transfer order for $165,000 that never existed.

The complaint alleges that even after his partners removed him from one of the CrossFit companies because of suspected fraudulent activity and willful misconduct, Newman continued to solicit investments on behalf of the company that he used for personal expenses.

The investigation to date has revealed that Newman defrauded numerous investors, creditors and potential partners out of more than $2 million.

Newman faces a maximum potential sentence of 20 years in prison on each count, a fine of $250,000 or twice the gain or loss from the offense and a mandatory restitution order in the full amount of the loss to the victims.

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 charges.

The charges in the complaint are merely accusations, and the defendant is considered innocent unless and until proven guilty.

The government is represented by Assistant U.S. Attorney Paul A. Murphy of the U.S. Attorney’s Office’s Economic Crimes Unit in Newark.

CAMDEN, N.J. – An Essex County, New Jersey, man was sentenced today to 84 months in prison for conspiring to defraud financial institutions and launder stolen funds as part of a $15 million mortgage fraud scam that used phony documents and “straw buyers” to make illegal profits on overbuilt condos, U.S. Attorney Paul J. Fishman announced.

Timothy Ricks, 47, of East Orange, New Jersey, previously pleaded guilty before Judge Jerome B. Simandle to a superseding indictment charging him with one count of conspiracy to commit wire fraud and one count of conspiracy to commit money laundering. Judge Simandle imposed the sentence today in Camden federal court.

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

Ricks was among 11 defendants charged in July 2012 with conspiracy to commit wire fraud and conspiracy to commit money laundering. Ricks and others located oceanfront condominiums overbuilt by financially distressed developers and negotiated a buyout price with the sellers. They then caused the sales prices for the properties – located in Wildwood Crest and North Wildwood, New Jersey, other locations in New Jersey and in Naples, Florida – to be much higher than the buyout price to ensure large proceeds. Other defendants helped conceal the true sales prices of certain properties through inflated sales contracts and sale and finder’s fee agreements.

Ricks and others recruited straw buyers to purchase certain properties at the inflated rates. The straw buyers had good credit scores but lacked the financial resources to qualify for mortgage loans. The conspirators created false documents, such as fake W-2 forms, pay stubs, bank statements and investment statements, to make the straw buyers appear more creditworthy than they actually were in order to induce the lenders to make the loans.

Ricks and others also caused fraudulent mortgage loan applications in the name of the straw buyers, including the supporting documents, to be submitted to mortgage brokers that the brokers knew were false. Once the loans were approved and the mortgage lenders sent the loan proceeds in connection with real estate closings, Ricks and others received a portion of the proceeds after conspirators had funds wired or checks deposited into various accounts they controlled.

In addition to the prison term, Judge Simandle sentenced Ricks to serve five years of supervised release. Restitution will be determined at a hearing scheduled for July 9, 2015.

U.S. Attorney Fishman credited special agents of the FBI, under the direction of Special Agent in Charge Richard M. Frankel in Newark; and IRS–Criminal Investigation, under the direction of Special Agent in Charge Jonathan D. Larsen, in Newark, for their roles in the investigation.

The government is represented by Assistant U.S. Attorneys Matthew T. Smith and Jacqueline M. Carle of the U.S. Attorney’s Office Criminal Division in Camden.

Defense counsel: Joshua Markowitz Esq., Princeton, New Jersey

NEWARK, N.J. – Two former employees of a Bergen County, New Jersey, watch manufacturer were charged today with orchestrating a scheme to defraud their employer out of hundreds of thousands of dollars of watches and watch parts using falsified documents and doctored corporate records, U.S. Attorney Paul J. Fishman announced.

Cynthia Espejo, 49, of Kissimmee, Florida, and Lissette Delarosa, 36, of Woodland Park, New Jersey, are each charged by criminal complaint with one count of conspiracy to commit mail fraud. Espejo is scheduled to appear this afternoon before U.S. Magistrate Judge Karla R. Spaulding in Orlando, Florida, federal court. Delarosa is scheduled to appear this afternoon in Newark federal court.

According to the criminal complaint:

From May 2003 through July 2010, Espejo and Delarosa abused their positions in the manufacturer’s Bergen County customer service department to fraudulently obtain company merchandise. Espejo and Delarosa created hundreds of fictitious invoices for watch parts in the manufacturer’s invoice system and directed those parts to be sent to addresses associated with Espejo, Delarosa, and others. The watch manufacturer received no payment related to these invoices and no legitimate basis existed for providing the parts free of charge.

Espejo and Delarosa also created dozens of fictitious customer complaints in the watch manufacturer’s invoice system, which resulted in “replacement” watches being shipped to addresses associated with Espejo and Delarosa.

The mail fraud conspiracy count carries a maximum potential penalty of 20 years in prison and a $250,000 fine, or twice the amount of loss caused by the offense.

U.S. Attorney Fishman credited postal inspectors with the U.S. Postal Inspection Service, under the direction of Inspector in Charge Maria L. Kelokates, with the investigation.

The government is represented by Special Assistant U.S. Attorney Andrew R. Tyler of the U.S. Attorney’s Office Criminal Division in Newark.

The charge and allegations contained in the complaint are merely accusations, and the defendants are considered innocent unless and until proven guilty.

Seventy-one people have been charged in connection with a long-running, coordinated federal, state and local investigation into the New Jersey set of the Grape Street Crips, a street gang allegedly responsible for violence and wide-spread drug trafficking in the northern New Jersey, announced U.S. Attorney Paul J. Fishman of the District of New Jersey.

Today’s charges and arrests culminate three waves of arrests that started May 6, 2015, and resulted in 14 federal complaints charging 50 members and associates of the Grape Street Crips in that two-week span.  These 50 defendants and their associates, along with another 21 defendants arrested previously and facing federal and state charges, actively controlled drug trafficking and other illegal activities in various neighborhoods and public-housing complexes in Newark, New Jersey.

The charges are the result of a long-running investigation led by the Drug Enforcement Administration (DEA) and the FBI, in conjunction with the Essex County Prosecutor’s Office, the Newark Police Department and Essex County Sheriff’s Office Bureau of Narcotics.  The defendants arrested today are scheduled to appear this afternoon before U.S. Magistrate Judges Steven C. Mannion, Mark Falk and James B. Clark III in federal court in Newark.

“As this investigation demonstrates, the New Jersey Grape Street Crips are allegedly one of the largest and most dangerous street gangs in Newark as well as a prolific narcotics trafficking organization that floods the streets New Jersey with heroin, cocaine and crack cocaine,” said U.S. Attorney Fishman.  “The narcotics activities that the gang and its associates allegedly engage in directly affect the quality of life of law-abiding citizens who reside in cities and suburbs of northern New Jersey.”

“This criminal gang used violence and intimidation to maintain their drug enterprise in Newark,” said Special Agent in Charge Carl J. Kotowski of the DEA’s New Jersey Division.  “The residents of Newark can be assured that the DEA will continue to pursue those people and organizations that cause them to live in fear.”

“Gangs are the mechanism by which drugs are transmitted to the ‘bad seeds’ in our cities, and are at the root of the violent crime problem,” said Assistant Special Agent in Charge Bradley W. Cohen of the FBI’s Newark Division.  “The FBI Newark Field Office is committed to making Newark and its surrounding communities, a safe place to be.  The most effective way to combat this epidemic of violence is through cooperation; the efforts of all law enforcement agencies with the support and understanding of the citizens to whom we protect and serve.” 

In addition to controlling drug trafficking across large swaths of Newark, the Grape Street Crips routinely engaged in acts of violence — including murder, shootings, aggravated assaults and witness intimidation.  A federal grand jury has returned a second superseding indictment charging two of the defendants – Kwasi Mack also known as Welchs, 26, of Belleville, New Jersey, and Corey Batts, also known as C-Murder and Cee, 30, of Newark, two leaders of the Grape Street Crips – with numerous violent crimes in aid of racketeering, including attempted murder and conspiracy to commit murder.  Batts and other gang members controlled drug trafficking and other criminal activities near the Oscar Miles public-housing complex located on Court Street.  Batts is charged by complaint with plotting to murder one of the FBI special agents investigating the gang.

According to documents filed in this case and statements made in court, the Grape Street Crips are a nationwide street gang, founded in Los Angeles and operating in New Jersey.  In addition to engaging in drug trafficking and other criminal activities to enrich themselves and fellow gang members, the rules governing the gang provide that members must retaliate against individuals who cooperate with law enforcement.  As a result, gang members routinely engage in acts of intimidation and violence against witnesses, individuals who are believed to be cooperating with law enforcement and law enforcement officers themselves.

In March 2015, during the lawful wiretap of a cell phone used by Ahmed Singleton, 25, also known as Gangsta-Mu and Mooshie, a member of the Grape Street Crips, the DEA intercepted Singleton detailing his efforts to intimidate a witness against him.  Singleton was facing trial for aggravated assault in connection with a shooting.  Singleton bragged about how he had “beat trial” by intimidating the main witness against him, saying he “had the goons in the back seat so, so he [the witness] recognized all the goons…lined up in the back, like, ‘Oh he got them goons in here, like,’ word up.”  As a result, Singleton explained, the witness “ain’t wanna look at nobody eyes, you heard son?”  Singleton also said that the attorney for the witness had told Singleton and Singleton’s attorney that the witness would “do the right thing,” meaning refuse to testify against Singleton, so that Singleton would not “take that [expletive] shit off when he come home for telling.”  Singleton went on to brag, “I walked out of court free, [expletive], who you know do that?...Who you know cause ruckus on these [expletive] streets, come home, do whatever the [expletive] they want, and still be out here son?”  As a result of Singleton’s witness intimidation, the state charges against Singleton had to be dismissed.

In late 2013, a senior member of the New Jersey Grape Street Crips used a social media account to identify an individual as having previously cooperated with a murder investigation conducted by the Essex County Prosecutor’s Office.  Several days after that social media post, several members of the Grape Street Crips repeatedly shot and nearly killed the individual who had been identified as having cooperated.

In late 2013, following the arrest of numerous gang members, law enforcement officials learned that members of the Grape Street Crips on the street had directed those members of the enterprise who were incarcerated at a county correctional facility to physically harm an individual who was believed to have cooperated with the law enforcement investigation.

On Oct. 2, 2014, a federal grand jury returned an 18-count second superseding indictment charging Mack and Batts with a variety of violent crimes in aid of racketeering, including attempted murder, conspiracy to commit murder, aggravated assault with a deadly weapon, conspiracy to commit aggravated assault with a deadly weapon — multiple counts of using firearms in furtherance of drug trafficking crimes and crimes of violence, conspiracy to distribute heroin and possessing firearms after previously having been convicted of felony offenses.

The attempted murder charges stem from a dispute between the leadership of the Grape Street Crips and a long-time rival of the enterprise.

Batts was charged by federal criminal complaint with plotting to kill an FBI special agent and with solicitation of a crime of violence against the special agent.  Batts was attempting to smuggle images of the special agent — obtained from the pretrial discovery turned over to Batts in connection with the above charges — to another gang member in order to kill the special agent.

To protect their gang and drug territory, the Grape Street Crips operating in the Sixth Avenue and North Fifth Street area of Newark used “community guns” that were easily accessible to gang members.  DEA special agents seized numerous firearms, including a .410 caliber assault rifle, a.45 caliber Thompson semi-automatic carbine, a 7.62 caliber assault rifle and numerous semi-automatic handguns.

U.S. Attorney Fishman credited special agents of the DEA, under the direction of Special Agent in Charge Kotowski, and special agents of the FBI, under the direction of Special Agent in Charge Richard M. Frankel, for the investigation leading to the charges.  U.S. Attorney Fishman also thanked prosecutors and detectives of the Essex County Prosecutor’s Office, under the direction of Acting Prosecutor Carolyn A. Murray, police officers and detectives of the Newark Police Department, under the direction of Director Eugene Venable and Chief Anthony Campos, and the Essex County Sheriff’s Office, under the direction of Armando B. Fontoura, for their work on the investigation.

The government is represented by Assistant U.S. Attorneys Osmar J. Benvenuto, Elizabeth M. Harris, Jose Almonte and Barry Kamar of the District of New Jersey’s Criminal Division in Newark.

The case against Batts for plotting to murder and soliciting a crime of violence against a special agent of the FBI is being handled by Assistant U.S. Attorney Dennis Carletta and Chief Zach Intrater of the Criminal Division’s General Crimes Unit.

This case was conducted under the auspices of the Organized Crime Drug Enforcement Task Force (OCDETF) and the FBI’s Safe Streets Task Force, 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 charges and allegations contained in the federal criminal complaints and indictment are merely accusations and the defendants are presumed innocent unless and until proven guilty.

Charges Include Plot to Kill FBI Agent, Attempted Murders, Shootings in Aid of Racketeering, Drug Trafficking, and Witness Intimidation

NEWARK, N.J. –Seventy-one people have been charged in connection with a long-running, coordinated federal, state, and local investigation into the New Jersey set of the Grape Street Crips, a street gang allegedly responsible for violence and wide-spread drug-trafficking in the northern New Jersey, U.S. Attorney Paul J. Fishman announced today.

Today’s charges and arrests culminate three waves of arrests that started May 6, 2015, and resulted in 14 federal complaints charging 50 members and associates of the Grape Street Crips in that two-week span. These 50 defendants and their associates, along with another 21 defendants arrested previously and facing federal and state charges, actively controlled drug-trafficking and other illegal activities in various neighborhoods and public-housing complexes in Newark.

The charges are the result of a long-running investigation led by the Drug Enforcement Administration and the FBI, in conjunction with the Essex County Prosecutor’s Office, the Newark Police Department and Essex County Sheriff’s Office Bureau of Narcotics. The defendants arrested today are scheduled to appear this afternoon before U.S. Magistrate Judges Steven C. Mannion, Mark Falk and James B. Clark III in Newark federal court.

“As this investigation demonstrates, the New Jersey Grape Street Crips are allegedly one of the largest and most dangerous street gangs in Newark as well as a prolific narcotics trafficking organization that floods the streets New Jersey with heroin, cocaine, and crack cocaine,” U.S. Attorney Fishman said. “The narcotics activities that the gang and its associates allegedly engage in directly affect the quality of life of law-abiding citizens who reside in cities and suburbs of northern New Jersey.”

“This criminal gang used violence and intimidation to maintain their drug enterprise in Newark,” Carl J. Kotowski, Special Agent in Charge for the Drug Enforcement Administration’s New Jersey Division said. “The residents of Newark can be assured that the DEA will continue to pursue those people and organizations that cause them to live in fear.”

“Gangs are the mechanism by which drugs are transmitted to the ‘bad seeds’ in our cities, and are at the root of the violent crime problem,” FBI Assistant Special Agent in Charge Bradley W. Cohen said. “The FBI Newark Field Office is committed to making Newark, and its surrounding communities, a safe place to be. The most effective way to combat this epidemic of violence is through cooperation; the efforts of all law enforcement agencies with the support and understanding of the citizens to whom we protect and serve.”

In addition to controlling drug-trafficking across large swaths of Newark, the Grape Street Crips routinely engaged in acts of violence — including murder, shootings, aggravated assaults, and witness intimidation. A federal grand jury has returned a second superseding indictment charging two of the defendants – Kwasi Mack, a/k/a “Welchs,” 26, of Belleville, New Jersey, and Corey Batts, a/k/a “C-Murder,” a/k/a “Cee,” 30, of Newark, two leaders of the Grape Street Crips – with numerous violent crimes in aid of racketeering, including attempted murder and conspiracy to commit murder. Batts and other gang members controlled drug-trafficking and other criminal activities near the Oscar Miles public-housing complex located on Court Street. Batts is charged by complaint with plotting to murder one of the special agents of the FBI investigating the gang.

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

The Grape Street Crips are a nationwide street gang, founded in Los Angeles, California, and operating in New Jersey. In addition to engaging in drug-trafficking and other criminal activities to enrich themselves and fellow gang-members, the rules governing the gang provide that members must retaliate against individuals who cooperate with law enforcement. As a result, gang members routinely engage in acts of intimidation and violence against witnesses, individuals who are believed to be cooperating with law enforcement, and law enforcement officers themselves.

In March 2015, during the lawful wiretap of a cell phone used by Ahmed Singleton, 25, a/k/a “Gangsta-Mu,” a/k/a “Mooshie,” a member of the Grape Street Crips, the DEA intercepted Singleton detailing his efforts to intimidate a witnesses against him. Singleton was facing trial for aggravated assault in connection with a shooting. Singleton bragged about how he had “beat trial” by intimidating the main witness against him, saying he “had the goons in the back seat so, so he [the witness] recognized all the goons … lined up in the back, like, ‘Oh he got them goons in here, like,’ word up.” As a result, Singleton explained, the witness “ain’t wanna look at nobody eyes, you heard son?” Singleton also said that the attorney for the witness had told Singleton and Singleton’s attorney that the witness would “do the right thing,” meaning refuse to testify against Singleton, so that Singleton would not “take that [expletive] shit off when he come home for telling.”  Singleton went on to brag:  “I walked out of court free, [expletive], who you know do that? . . . . Who you know cause ruckus on these [expletive] streets, come home, do whatever the [expletive] they want, and still be out here son?”  As a result of Singleton’s witness intimidation, the state charges against Singleton had to be dismissed.

In late 2013, a senior member of the New Jersey Grape Street Crips used a social media account to identify an individual as having previously cooperated with a murder investigation conducted by the Essex County Prosecutor’s Office. Several days after that social media post, several members of the Grape Street Crips repeatedly shot and nearly killed the individual who had been identified as having cooperated.

In late 2013, following the arrest of numerous gang members, law enforcement officials learned that members of the Grape Street Crips on the street had directed those members of the enterprise who were incarcerated at a county correctional facility to physically harm an individual who was believed to have cooperated with the law enforcement investigation.

On Oct. 2, 2014, a federal grand jury returned an 18-count second superseding indictment charging Mack and Batts with a variety of violent crimes in aid of racketeering, including attempted murder, conspiracy to commit murder, aggravated assault with a deadly weapon, conspiracy to commit aggravated assault with a deadly weapon — multiple counts of using firearms in furtherance of drug trafficking crimes and crimes of violence, conspiracy to distribute heroin, and possessing firearms after previously having been convicted of felony offenses.

The attempted murder charges stem from a dispute between the leadership of the Grape Street Crips and a long-time rival of the enterprise. (The attached table sets forth the charges and potential penalties.)

Batts was charged by federal criminal complaint with plotting to kill an FBI special agent and with solicitation of a crime of violence against the special agent. Batts was attempting to smuggle images of the special agent — obtained from the pretrial discovery turned over to Batts in connection with the above charges — to another gang-member in order to kill the special agent.

To protect their gang and drug territory, the Grape Street Crips operating in the 6th Avenue and North 5th Street area of Newark used “community guns” that were easily accessible to gang members. DEA special agents seized numerous firearms, including a .410 caliber assault rifle, a.45 caliber Thompson semi-automatic carbine, a 7.62 caliber assault rifle, and numerous semi-automatic handguns.

U.S. Attorney Fishman credited special agents of the DEA, under the direction of Special Agent in Charge Kotowski, and special agents of the FBI, under the direction of Special Agent in Charge Richard M. Frankel, for the investigation leading to the charges. Fishman also thanked prosecutors and detectives of the Essex County Prosecutor’s Office, under the direction of Acting Prosecutor Carolyn A. Murray; police officers and detectives of the Newark Police Department, under the direction of Director Eugene Venable and Chief Anthony Campos; and the Essex County Sheriff’s Office under the direction of Armando B. Fontoura, for their work on the investigation.

The government is represented by Assistant U.S. Attorneys Osmar J. Benvenuto, Elizabeth M. Harris, Jose Almonte, and Barry Kamar of the Criminal Division in Newark.

The case against Batts for plotting to murder, and soliciting a crime of violence against, a special agent of the FBI is being handled by Assistant U.S. Attorney Dennis Carletta and Chief of the General Crimes Unit Zach Intrater, both of the Criminal Division.

This case was conducted under the auspices of the Organized Crime Drug Enforcement Task Force (OCDETF) and the FBI’s Safe Streets Task Force, a partnership, 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 charges and allegations contained in the federal criminal complaints and indictment are merely accusations, and the defendants are presumed innocent unless and until proven guilty.

 

Name

Gang / Street Name(s)

Age

Residence

Date Charged

Charge(s)                                                                              (Potential Term of Imprisonment)

Federal Prosecutions

Kwasi Mack

Welchs

26

Belleville

10/2/2014

• Attempted murder (2 counts) (10 years each)
• Conspiracy to commit murder (10 years)
• Assault with a deadly weapon (3 counts)                    (20 years each)
• Heroin conspiracy (5 year man. min up to 40 years)
• Using firearm during a crime of violence and a drug trafficking crime (2 counts) (30 year man. min. up to life)
• Felon in possession of a firearm (10 year)

Corey Batts

C-Murder, Cee

30

Newark

10/2/2014

• Solicitation to murder FBI agent (20 years)
• Retaliation against a federal official (10 years)
• Attempted murder (2 counts) (10 years each)
• Conspiracy to commit murder (10 years)
• Assault with a dangerous weapon (2 counts)                          (20 years each)
• Heroin conspiracy (10 year man. min. up to life)
• Heroin distribution (3 counts) (30 years each)
• Using a firearm during a crime of violence and a drug trafficking crime (2 counts) (35 year man. min. up to life)
• Felon in possession of a firearm (10 year)

Hakeem Vanderhall

Keem

31

East Orange

5/5/2015

• Running a continuing criminal enterprise                                 (20 year man. min. up to life)
• Conspiracy to distribute 280 grams or more of crack cocaine (10 year man. min. up to life)

Eric Concepcion

E-Wax, Wax, Eddie Arroyo

28

Clifton

5/5/2015

• Running a continuing criminal enterprise                         (20 year man. min. up to life)
• Conspiracy to distribute 280 grams or more of crack cocaine (10 year man. min. up to life)
• Conspiracy to distribute 100 grams or more of heroin (5 year man. min. up to life)

Jamar Hamilton

Gunner

26

Tottowa

5/5/2015

• Running a continuing criminal enterprise                            (20 year man. min. up to life)
• Conspiracy to distribute 280 grams or more of crack cocaine (10 year man. min. up to life)
• Conspiracy to distribute 100 grams or more of heroin (5 year man. min. up to life)

Tyquan Clark

Tah

28

Newark

5/5/2015

• Running a continuing criminal enterprise                                   (20 year man. min. up to life)
• Conspiracy to distribute 280 grams or more of crack cocaine (10 year man. min. up to life)

Justin Carnegie

Dew Hi

27

East Orange

5/5/2015

• Conspiracy to distribute 1 kilogram or more of heroin (10 year man. min. up to life)

Ahmed Singleton

Gangsta-Moo

25

Newark

5/5/2015

• Conspiracy to distribute 1 kilogram or more of heroin (10 year man. min. up to life)

Hanee Cureton

City

30

Springfield

5/13/2015

• Conspiracy to distribute 1 kilogram or more of heroin (10 year man. min. up to life)

Khalil Stafford

Homicide, Stod

30

Newark

5/13/2015

• Distribution of heroin (up to 20 years)

Toma Williams

T-Dubs

38

Newark

10/4/2014

• Conspiracy to distribute 1 kilogram or more of heroin (10 year man. min. up to life)

Dennis Wright

Hersh

32

Newark

5/20/2015

• Conspiracy to distribute 100 grams or more of heroin    (5 year man. min. up to life)

Leonardo Arroyo

Leo

31

Newark

5/20/2015

• Conspiracy to distribute 280 grams or more of crack-cocaine (10 year man. min. up to life)
• Conspiracy to distribute 500 grams or more of cocaine (5 year man. min. up to 40 years)

Ahmad Mann

P.O., P-Easy

36

Newark

5/20/2015

• Conspiracy to distribute 100 grams or more of heroin   (5 year man. min. up to life)

James S. Gutierrez

Bad News, Stevie G

24

Newark

5/5/2015

• Conspiracy to distribute 280 grams or more of crack cocaine (10 year man. min. up to life)
• Conspiracy to distribute 100 grams or more of heroin       (5 year man. min. up to life)

Sharod Caraway

Hot Rod

29

Newark

5/20/2015

• Conspiracy to distribute 100 grams or more of heroin   (5 year man. min. up to 40 years)

Larry D. Coleman

LA

27

Newark

5/20/2015

• Conspiracy to distribute 100 grams or more of heroin    (5 year man. min. up to 40 years)

Hakim S. Thomas*

Dollar

34

Newark

5/20/2015

• Distribution of heroin (20 years)

Antonio Foye*

Steel

29

 Newark

5/20/2015

• Conspiracy to distribute 280 grams or more of crack cocaine (10 year man. min. up to life)

Darrell Johnson

Scrilla

26

 Newark

5/20/2015

• Conspiracy to distribute 280 grams or more of crack cocaine (10 year man. min. up to life)

Ernest Valentine

Bop

30

Newark

5/20/2015

• Conspiracy to distribute 280 grams or more of crack cocaine (10 year man. min. up to life)

Trae K. Roberts*

Trae Pound

22

Irvington

5/20/2015

• Conspiracy to distribute 280 grams or more of crack cocaine (10 year man. min. up to life)

Christopher Coelho

Brazil

27

Newark

5/5/2015

• Conspiracy to distribute 280 grams or more of crack cocaine (10 year man. min. up to life)

Tauheed Satchell*

Tah

26

Newark

5/20/2015

• Conspiracy to distribute 280 grams or more of crack cocaine (10 year man. min. up to life)

Willie T. Brooks

Animal

23

Newark

5/20/2015

• Conspiracy to distribute 280 grams or more of crack cocaine (10 year man. min. up to life)

Rakeem Hankerson

Rocco

24

Newark

5/20/2015

• Conspiracy to distribute 280 grams or more of crack cocaine (10 year man. min. up to life)

Max LaRue*

Max

25

East Orange

5/20/2015

• Conspiracy to distribute 280 grams or more of crack cocaine (10 year man. min. up to life)

Jarod Ravenell*

Roddy

27

Newark

5/20/2015

• Conspiracy to distribute 280 grams or more of crack cocaine (10 year man. min. up to life)

Louis Coston

Real Rell

25

Newark

5/7/2015

• Conspiracy to distribute 1 kilogram or more of heroin (10 year man. min. up to life)

Tamir White*

Trauma

19

Newark

5/20/2015

• Conspiracy to distribute 280 grams or more of crack cocaine (10 year man. min. up to life)

Milton Latham

Murder

40

 

5/20/2015

• Conspiracy to distribute 100 grams or more of heroin   (5 year man. min. up to life)

Gabriel Henderson*

Gabe

35

Newark

5/20/2015

• Conspiracy to distribute 100 grams or more of heroin   (5 year man. min. up to life)

Vincent Carter

Vince, Vin

NA

Newark

5/20/2015

• Conspiracy to distribute 100 grams or more of heroin   (5 year man. min. up to life)

Raheem Powell

Nutty

32

Newark

5/20/2015

• Distribution of heroin (20 years)

Brian Mitchell

Slash

25

Newark

5/20/2015

• Distribution of heroin (20 years)

Earl Bullock

Ish

30

Newark

5/20/2015

• Distribution of heroin (20 years)

Eugene Clemons*

 

65

Newark

5/20/2015

• Distribution of heroin (20 years)

Hyshawn Butler

S-Dot

40

Newark

5/20/2015

• Conspiracy to distribute 280 grams or more of crack cocaine (10 year man. min. up to life)

Fatimah Johnson*

Faddy

25

Newark

5/20/2015

• Conspiracy to distribute 280 grams or more of crack cocaine (10 year man. min. up to life)

Vincent Livingston*

Double O

49

Irvington

5/20/2015

• Conspiracy to distribute 280 grams or more of crack cocaine (10 year man. min. up to life)

Samuel Cureton

Sammy

24

Irvington

5/20/2015

• Conspiracy to distribute 280 grams or more of crack cocaine (10 year man. min. up to life)

Jafforn Rock

Two Times

34

Newark

5/20/2015

• Conspiracy to distribute 280 grams or more of crack cocaine (10 year man. min. up to life)

Anthony Mosely

Stretch

20

Newark

5/20/2015

• Conspiracy to distribute 280 grams or more of crack cocaine (10 year man. min. up to life)

Freddy Brown*

Freddy

35

Newark

5/20/2015

• Conspiracy to distribute 280 grams or more of crack cocaine (10 year man. min. up to life)

Tyrone Dunson*

Rudy

28

Orange

5/20/2015

• Conspiracy to distribute 280 grams or more of crack cocaine (10 year man. min. up to life)

Oneil Concepcion

Bori

33

Newark

5/20/2015

• Conspiracy to distribute 500 grams or more of cocaine (5 year man. min. up to 40 years)

Wilfred Mendez*

Will

47

Newark

5/20/2015

• Conspiracy to distribute 500 grams or more of cocaine (5 year man. min. up to 40 years)

Monesha Johnson*

Smoove

35

Newark

5/20/2015

• Conspiracy to distribute 280 grams or more of crack cocaine (10 year man. min. up to life)

Keith Bowens*

Weefy

42

Jersey City

5/13/2015

• Conspiracy to distribute 1 kilogram or more of heroin (10 year man. min. up to life)

Tarence Burks

Barack

42

Jersey City

5/13/2015

• Conspiracy to distribute 1 kilogram or more of heroin (10 year man. min. up to life)

Jerome Lewis*

Pete

37

Jersey City

5/13/2015

• Conspiracy to distribute 1 kilogram or more of heroin (10 year man. min. up to life)

Tequan Small

Tequan

29

Jersey City

5/13/2015

• Conspiracy to distribute 1 kilogram or more of heroin (10 year man. min. up to life)

George Bell*

Nino

37

Jersey City

5/13/2015

• Conspiracy to distribute 1 kilogram or more of heroin (10 year man. min. up to life)

Todd Carter

Oink

29

Newark

 

• Distribution of heroin (20 years)

Tedmond Ashe

Wild Boy

34

Newark

12/31/2013

• Felon in possession of a firearm (10 years)

Dwayne Harper

Buck

31

Newark

5/28/2014

• Smuggling contraband into federal prison (sentenced to 1 year and 1 month in federal prison)

Mookadeen Cheeseboro

 

28

Newark

2/20/2014

• Felon in possession of a firearm (sentenced to 5 years and 10 months in federal prison)

Bernard Anderson

BA

31

Newark

6/4/2014

• Distribution of heroin (20 years)

Jihad Coles

Half Dead

30

Newark

11/18/2014

• Conspiracy to distribute 280 grams or more of crack-cocaine (10 year man. min. up to life)

Marvin Eure

Man Man

21

Newark

2/11/2015

• Distribution of heroin (20 years);
• Felon-in-possession of a firearm (10 years)

Haneef Sanders

 

22

Newark

10/7/2014

• Felon in possession of a firearm (sentenced to 4 years and 2 months in federal prison)

Talib-Deen Kennedy

Tabills

21

Newark

6/20/2014

• Use of a firearm in furtherance of drug trafficking crime (sentenced to 5 years in federal prison)

Prosecution by Essex County Prosecutor’s Office

Ahmad Manley

Fresh, Moddi-G

29

Summit

3/18/2014

• Murder

Kevin Francis

Tweakset

21

Newark

5/20/2015

• Distribution of heroin

Rashan Washington

Shoota

25

Newark

4/6/2014

• Aggravated assault with deadly weapon

Timothy Wright

Tim Tim

49

Newark

5/20/2015

• Distribution of heroin

Terrence King

D-Bo

25

Newark

5/20/2015

• Distribution of heroin

Alfatier Ward

Bones

30

Newark

5/30/2014

• Distribution of heroin

Yasim Greene

Ya-Ya

23

Newark

05/20/2015

• Distribution of heroin

Olajuwon Tillery

Chance

26

Newark

05/20/2015

• Distribution of heroin

Devon Logan

Duncan

27

Newark

5/20/2015

• Distribution of heroin

*Denotes federal defendant at-large

CAMDEN, N.J. – A Pennsylvania construction company supervisor was sentenced today to 33 months in prison for extorting kickbacks from employees and giving the “go ahead” for the vehicular assault of a site manager critical of his company’s performance on a reconstruction project at the Ft. Dix military base in Burlington County, New Jersey, U.S. Attorney Paul J. Fishman announced today.

Richard Cottone, 40, of Windsor, Pennsylvania, previously pleaded guilty before U.S. District Judge Joseph H. Rodriguez to an information charging him with one count of conspiracy to obtain kickbacks from public works employees and one count of travel in interstate commerce to commit a crime of violence. Judge Rodriguez imposed the sentence today in Camden federal court.

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

Cottone is the son-in-law of Leonard Santos, 68, of Yardley, Pennsylvania, who owned Sands Mechanical Inc. of Bristol, Pennsylvania. Between November 2009 and September 2010, Sands Mechanical was a subcontractor on the restoration and rehabilitation of the Marine Corps Reserve Training Center at Joint Base-McGuire-Dix-Lakehurst in Burlington County. Sands Mechanical provided HVAC and plumbing services. The general contractor was a company headquartered in Marriotsville, Maryland.

In order to increase the profitability of the project, Santos, with the aid of Cottone and Michael Featherston, 45, of Bridgeton, New Jersey, demanded that certain employees kickback a percentage of their weekly paychecks or face termination. In February 2010, the U.S. Department of Labor’s Wage and Hour Division (WHD) was tipped off that the Sands Mechanical employees were being forced to kickback portions of their salary and were not being paid the prevailing wage for Burlington County. Santos conceded that Sands Mechanical failed to pay the proper prevailing wage to its employees and agreed to repay $80,000 to those deprived employees. Santos cut settlement checks to those employees who were owed back wages. However, Cottone and Featherston warned those employees not to cash their settlement checks. Instead, Cottone and Featherston took the employees to a nearby check cashing business, where they endorsed their checks over to Cottone, who cashed them and returned the funds to Santos.

The general contractor’s site manager was routinely critical of the work performance of Sands Mechanical’s employees, which, at times, necessitated that work be done over. Cottone was told to physically incapacitate the site manager so that he could no longer supervise the work site. Afterwards, Cottone recruited an assailant to physically attack the site manager. On June 10, 2010, the assailant opted instead to hit the site manager with his car and called Cottone for permission to carry out the deed. After Cottone gave the “go-ahead” the assailant and two friends ran down the site manager while he was riding his bike. The victim sustained multiple serious injuries.

In addition to the prison term, Judge Rodriguez sentenced Cottone to serve three years of supervised release.

Santos pleaded guilty on April 14, 2014 and awaits sentencing. Featherston pleaded guilty on Jan. 10, 2012 and was sentenced to one year in prison on Feb. 10, 2015.

U.S. Attorney Fishman credited special agents of the U.S. Department of Labor Office of Inspector General, Office of Labor Racketeering and Fraud Investigations, under the direction of Special Agent in Charge Cheryl Garcia; the Department of Labor-Wage and Hour Division, under the direction of Acting Regional Administrator Mark Watson Jr.; the Naval Criminal Investigative Service, under the direction of Special Agent in Charge Leo S. Lamont, Northeast field office; and the Air Force Office of Special Investigations, under the direction of Special Agent Seth Neville, detachment commander, Joint Base McGuire-Dix-Lakehurst.

The government is represented by Senior Litigation Counsel V. Grady O’Malley and Assistant U.S. Attorney Andrew Bruck of the U.S. Attorney’s Office Organized Crime-Gangs Unit in Newark.

Defense counsel: Richard Sparaco Esq., Cherry Hill, New Jersey

NEWARK, N.J. - A Nigerian man was sentenced today to 36 months in prison for his role in a computer hacking and identity theft scheme that defrauded vendors of nearly $1 million of office products after “phishing” e-mail login information from government employees, New Jersey U.S. Attorney Paul J. Fishman announced.

Abiodun Adejohn, a/k/a “James Williams,” a/k/a “Olawale Adeyemi,” a/k/a “Abiodun Ade John,” a/k/a “Abiodun Ade-John,” 31, of Nigeria, previously pleaded guilty before U.S. District Judge William H. Walls to an information charging him with one count of wire fraud conspiracy. Judge Walls imposed the sentence today in Newark federal court.

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

The scheme employed “phishing” attacks, which used fraudulent e-mails and websites that mimicked the legitimate e-mails and web pages of U.S. government agencies, such as the U.S.  Environmental Protection Agency (EPA). Employees of those agencies visited the fake web pages and provided their e-mail account usernames and passwords.

Adejohn and his conspirators used these stolen credentials to access the employees’ e-mail accounts in order to place fraudulent orders for office products, typically printer toner cartridges, in the employees’ names from vendors who were authorized to do business with U.S. government agencies. Adejohn and his conspirators directed the vendors to ship the fraudulent orders to individuals in New Jersey and elsewhere to be repackaged and ultimately shipped to overseas locations controlled by Adejohn and his conspirators. Once the orders were received in Nigeria, Adejohn and his conspirators sold the toner cartridges to another individual on the black market for profit.

Adejohn was arrested in Arizona on Sept. 24, 2013, and has been detained since his arrest. In addition to the prison term, Judge Walls sentenced Adejohn to three years of supervised release and ordered him to pay $630,806.48 in resitution.

U.S. Attorney Fishman credited special agents of the EPA Office of Inspector General (OIG), under the direction of Special Agent in Charge Thomas Muskett; General Services Administration OIG, under the direction of Special Agent in Charge Paul Walton; Department of Commerce OIG, under the direction of Todd J. Zinser; Department of Defense, Criminal Investigative Service, under the direction of Director James Burch; and 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.

The government is represented by Assistant U.S. Attorney Shana W. Chen, of the U.S. Attorney’s Office Economic Crimes Unit in Newark.

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

TRENTON, N.J. – A Newark, New Jersey, man was sentenced today to 148 months in prison for his role in an armed carjacking and subsequent involvement in a scheme to bribe a corrections officer to smuggle contraband, including marijuana and cell phones, into the Essex County Correctional Facility, a federal pretrial detention facility, U.S. Attorney Paul J. Fishman announced.

Quasim Nichols, 30, previously pleaded guilty before U.S. District Judge Mary L. Cooper to an information charging him with one count of committing an armed carjacking and one count of conspiring with others, including Essex County Corrections Officer Stephon Solomon, 27, of Irvington, New Jersey, to commit extortion under color of official right. Judge Cooper imposed the sentence today in Trenton federal court.

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

On May 28, 2012, Nichols and three men were traveling in a gray Dodge Magnum toward Elizabeth, New Jersey. Nichols was driving the vehicle. Upon arriving in Elizabeth, the three men exited the car and approached a 2005 BMW 645. The men pointed handguns in the direction of the BMW’s passengers and ordered them out of the car. Two of the men then entered the BMW and drove it away. The third man re-entered the Dodge Magnum driven by Nichols. The third man was carrying a black Taurus Millennium semi-automatic handgun and a cell phone that had been stolen from one of the occupants of the BMW. Nichols and the third man drove away and followed the stolen BMW.

While driving away from the scene, multiple police vehicles activated their overhead lights and turned on their sirens in an effort to stop Nichols. Nichols continued to drive the Dodge Magnum at a high rate of speed from Elizabeth into Newark, drove through a red light and struck a vehicle at the intersection of Martin Luther King Boulevard and Market Street. The driver of the other vehicle suffered serious injury. Nichols and the other man then attempted to flee the area on foot.

Subsequently, while detained at the Essex County Correctional Facility on the armed carjacking charge, Nichols conspired with others, including Solomon, Dwayne Harper, 31, of Newark, and Darsell Davis, 29, of Newark, to pay cash bribes to Solomon so that he would smuggle contraband – including cell phones, tobacco, and marijuana – into the Essex County Correctional Facility. After Davis and Harper collected the contraband, Davis delivered the items and cash bribes to Solomon, who then smuggled the contraband to Nichols. Nichols ultimately sold the marijuana and cell phones to other inmates. The inmates purchasing marijuana and cell phones had their friends and family pay for the items by sending Western Union money transfers to Nichols, who enlisted Davis and others to retrieve those payments. Davis obtained at least $4,300 in Western Union payments for Nichols.

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

Solomon pleaded guilty to conspiring to commit extortion under color of official right and was sentenced to 18 months in prison on March 25, 2015. Davis pleaded guilty to conspiring to commit extortion under color of official right and was sentenced to 15 months in prison on March 23, 2015. Harper pleaded guilty to conspiring to smuggle marijuana into the Essex County Correctional Facility and was sentenced to 12 months in prison on March 23, 2015.

U.S. Attorney Fishman credited special agents of the FBI, under the direction of Special Agent in Charge Richard M. Frankel in Newark; investigators with the Internal Affairs Division of Essex County Correctional Facility, under the leadership of Warden Roy Hendricks; the Port Authority of New York and New Jersey; the Newark Police Department, under the direction of Director Eugene Venable and Chief Anthony Campos; and the Elizabeth Police Department, under the direction of Director James Cosgrove, with the investigation leading to today’s sentencing.

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

Defense counsel: Michael J. Pappa Esq., Hazlet, New Jersey

CAMDEN, N.J. – An Atlantic City, New Jersey, man was sentenced today to 156 months in prison for distributing heroin on behalf of a criminal street gang that used threats, intimidation and violence to maintain control of the illegal drug trade in Atlantic City, U.S. Attorney Paul J. Fishman announced.

Saeed Zaffa, a/k/a “Seed,” 25, previously pleaded guilty before U.S. District Judge Joseph E. Irenas to a superseding information charging him with one count of conspiracy to distribute one kilogram or more of heroin and one count of possessing a firearm as a previously convicted felon. Judge Irenas imposed the sentence today in Camden federal court.

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

Zaffa was a member of a gang known as “Dirty Block,” a/k/a “Crime Fam,” “3.6.6.12,” or “3.6,” which operated in a geographic area of Atlantic City that includes the public housing apartment complexes of Stanley Holmes Village Public Housing Complex, Renaissance Plaza and Schoolhouse Apartments.

From October 2010 through February 2013, Zaffa received heroin from Mykal Derry, 34, of Atlantic City, one of the gang’s leaders, and distributed the drugs to other conspirators throughout Atlantic City. Zaffa, a previously convicted felon, was also found in possession of a .40 caliber handgun when he was stopped by Atlantic County police officers on March 11, 2013.

In addition to the prison term, Judge Irenas sentenced Zaffa to serve 10 years of supervised release.

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 sentencing.

He also thanked the N.J. State Police; the Atlantic County Sheriff’s Office; the Bureau of Alcohol, Tobacco, Firearms and Explosives; the Northfield Police Department; the Vineland Police Department; the Brigantine Police Department; the Millville Police Department; the Mullica Township Police Department; the South Jersey Transportation Authority; and the U.S. Secret Service for their contributions.

The government is represented by Assistant U.S. Attorneys Patrick Askin and Justin Danilewitz of the U.S. Attorney’s Office in Camden and Special Assistant U.S. Attorney Edmund Burgos of the Atlantic County Prosecutor’s Office.

Defense Counsel: Edward F. Borden Esq., Cherry Hill, New Jersey

NEWARK, N.J. - A Union City, New Jersey, man was sentenced today to 27 months in prison for operating a supposed charitable organization, or “gemach,” as an unchartered bank, accepting millions of dollars in deposits – including nearly $1 million of his own money – which he shielded from state or federal regulation, U.S. Attorney Paul J. Fishman announced.

Moshe Schwartz, 34, a/k/a “David Schwartz” or “Gedalya David Schwartz,” previously pleaded guilty before U.S. District Judge Jose L. Linares to two counts of an information: operating an unchartered bank and aiding and assisting in the filing of a false 2007 tax return. Judge Linares imposed the sentence today in Newark federal court.

According to the information and statements made in court:

Schwartz operated Gemach Shefa Chaim (GSC), purportedly to provide interest-free loans to needy members of the Sanz community in Union City. During his guilty plea proceeding, Schwartz admitted he operated GSC as a bank, with millions of dollars in deposits and more than 350 client accounts by July 2009. 

To operate a bank in the United States, a bank is required to obtain a charter from the United States or the state in which the bank operates. Chartered banks are subject to oversight, regulation, and periodic review by federal and state authorities. Neither Schwartz nor GSC had such a charter.

Schwartz admitted that, in operating GSC as a bank, he accepted deposits and credited clients’ accounts, wrote checks from GSC as directed by clients, made transfers between accounts, disbursed client funds upon request, negotiated GSC checks presented by persons other than the named payees, conducted wire transfers, provided clients with receipts of transactions, charged clients a fee for bounced checks and provided overdraft notices to clients. Schwartz also admitted that he opened and maintained various bank accounts at financial institutions in or around North Jersey in the name of GSC and used those institutions to deposit client funds, negotiate checks, provide clients with GSC checks and conduct wire transfers. Because client funds were deposited into and commingled within GSC’s bank accounts at financial institutions, the funds could only be traced back to GSC, thereby concealing the true ownership, nature and source of the funds. Many clients were thus able to use their GSC accounts to engage in suspicious and, at times, illegal activities, including evading federal taxes and money laundering.

Schwartz also admitted that he provided false and fraudulent information to his tax preparer in Union City concerning his income for tax year 2007, falsely representing that his income was $24,475 when it was approximately $208,845. Schwartz admitted that he used his own GSC account and a false identity to conceal his income and assets from the IRS, causing a $74,889 tax loss.

In addition to the prison term, Judge Linares sentenced Schwartz to serve two years supervised release and ordered him to pay restitution of $74,889 and a $60,000 fine.

GSC bank accounts were seized in July 2009 and approximately $500,000 was ultimately forfeited. The accounts had been used by Moshe Altman, 45, Itzak Friedlander, 47, and Shimon Haber, 39, to launder proceeds that cooperating witness Solomon Dwek, 42, had purported to be the proceeds of illegal activities. Altman pleaded guilty in December 2010, to, among other things, conspiring to launder monetary instruments and was sentenced in March 2011 to 41 months in prison. Friedlander pleaded guilty in April 2010 to conspiracy to launder monetary instruments and was sentenced in April 2011 to 24 months in prison. Haber pleaded guilty to the same charge in January 2010 and was sentenced in May 2010 to five months in prison.

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 sentencing; as well as the FBI, under the direction of Special Agent in Charge Richard M. Frankel; the Federal Deposit Insurance Corporation-Office of Inspector General, under the direction of Special Agent in Charge Francis L. Mace; and the Social Security Administration, Office of the Inspector General, under the direction of Special Agent in Charge Edward J. Ryan, for their assistance.

The government is represented by Assistant U.S. Attorneys Mark J. McCarren of the Special Prosecutions Division and Frances C. Bajada of the Criminal Division in Newark.

CAMDEN, N.J. – A Salem County, New Jersey, tax preparer today admitted her role in a conspiracy to prepare false and fraudulent income tax returns, U.S. Attorney Paul J. Fishman announced.

Grace Garrett, 63, of Pittsgrove, New Jersey, pleaded guilty before U.S. District Judge Noel L. Hillman in Camden federal court to an information charging her with conspiring to aid and assist others in the preparation of false and fraudulent tax returns for the tax years 2007 through 2011.

Garrett was a tax preparer at Pender Tax Services in Rosenhayn, New Jersey, through which she and others committed crimes resulting in tax losses of more than $340,000.

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

For the tax years 2007 through 2011, Garrett and a conspirator sought to generate increased referrals, enhance their business, and enrich themselves by preparing and filing income tax returns based on false information. They used a number of fraudulent practices, including falsely claiming a filer was a “head of household;” inventing and inflating deductions; creating fictitious dependents; and creating false credits for education and childcare.

Although taxpayers generally met with Garrett or the conspirator to provide information to prepare their tax returns, it was routinely the conspirator whose name appeared as preparer of the return. The bogus returns resulted in a tax loss to the government of more than $340,000.

The conspiracy charge to which Garrett pleaded guilty carries a maximum potential penalty of five years in prison and a $250,000 fine. Sentencing is scheduled for Sept. 11, 2015.

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 plea.

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

Defense counsel: Christopher O’Malley Esq., Camden

garrett_grace_information.pdf (304.81 KB)

 

NEWARK, N.J. – A former vice president at a South Plainfield, New Jersey, traffic safety equipment business was sentenced today to 33 months in prison for evading income taxes on more than $2 million in withdrawals he made from the business for his own use, U.S. Attorney Paul J. Fishman announced.

Anthony R. Pecoraro, 52, of Colts Neck, New Jersey, previously pleaded guilty before U.S. District Judge William H. Walls to an information charging him with one count of tax evasion. Judge Walls imposed the sentence today in Newark federal court.

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

Pecoraro worked in 2008 and 2009 at Traffic Safety Service LLC, which provided traffic safety equipment and other traffic related services to local and state municipalities and private businesses. In connection with his position as a vice president, he had access to the company’s business account.

During his guilty plea proceeding, Pecoraro admitted he wrote checks for unauthorized cash withdrawals for a total of approximately $2,126,200 between June 2008 and December 2009, which he took for personal use. Pecoraro acknowledged he failed to report this money as taxable income for calendar years 2008 and 2009 in the amounts of $563,800 and $1,562,400, respectively, and that if he had reported the additional cash on his income tax returns he would have owed the government approximately $733,970.

In addition to the prison term, Judge Walls sentenced Pecocaro to serve three years of supervised release and ordered him to pay $1,241,604.91in restitution to the IRS.

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 special agents with IRS-Criminal Investigation, under the direction of Special Agent in Charge Jonathan D. Larsen, with the investigation leading to today’s sentencing.

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

Defense counsel: John McDonald Esq., Somerville, New Jersey

TRENTON, N.J. – A Brick, New Jersey, member of a large-scale drug trafficking organization was sentenced today to 46 months in prison for distributing heroin in Ocean and Monmouth counties and elsewhere in New Jersey, U.S. Attorney Paul J. Fishman announced.

Richard Durham, 28, previously pleaded guilty before U.S. District Judge Peter G. Sheridan to an information charging him with one count of conspiring to distribute heroin. Judge Sheridan imposed the sentence today in Trenton federal court.  

In March 2014, 19 other alleged members of the drug trafficking organization of which Durham was a member were charged by criminal complaint with conspiring to distribute heroin. The complaint referred to the drug trafficking organization as the “Britt-Young DTO,” after its leaders, Robert Britt, a/k/a “True,” and Rufus Young, a/k/a “Equan,” a/k/a “E-Money,” a/k/a “Kintock.” Of those 19 individuals, 14 have pleaded guilty.

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

From November 2013 through March 2014, Durham conspired with Rufus Young and others to distribute heroin in Ocean and Monmouth counties as part of the Britt-Young DTO. At his plea hearing, Durham admitted he possessed and distributed between 60 and 80 grams of heroin.

In addition to the prison term, Judge Sheridan sentenced Durham to serve three years of supervised release.

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

The government is represented by Assistant U.S. Attorney Nicholas Grippo of the U.S. Attorney’s Office Criminal Division in Newark.

Defense Counsel: Scott Krasny Esq., West Trenton, New Jersey

NEWARK, N.J. – Upon the joint application of the government and defense counsel, U.S. District Judge Susan D. Wigenton today issued a continuance order in the case of U.S. v. William E. Baroni Jr. and Bridget Anne Kelly.

The order sets a new trial date of Nov. 16, 2015, and sets out a schedule for pretrial motions. The order is attached.

baroni_-_kelly_continuance_order.pdf (106.23 KB)

TRENTON, N.J. – Two Brooklyn, New York, men were convicted today of defrauding Home Depot out of more than $250,000 through an elaborate “double-dipping” scheme that they committed at various Home Depot locations throughout the United States, including New Jersey, U.S. Attorney Paul J. Fishman announced.

Renauld Medard, 74, and Wesly Dieudonne, 30, were convicted on all counts of an indictment charging each defendant with one count of conspiracy to commit wire fraud and four counts of wire fraud. They were convicted following a four-day trial before U.S. District Judge Anne E. Thompson in Trenton federal court. The jury deliberated for four hours before returning the verdict.

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

As part of the scheme, Medard and Dieudonne purchased various items from Home Depot locations in New Jersey, New York, Maryland, Connecticut and Pennsylvania using cash, credit cards or store credit. Medard and Dieudonne also went to Home Depot stores and compiled identical sets of goods as listed in receipts from previous purchases. Under the guise that they had forgotten to purchase an item, usually an inexpensive one, they used receipts from previous purchases to deceive cashiers into believing that the new sets of goods had already been bought.

Medard and Dieudonne also went to Home Depot to return items stolen in the scheme. In some instances, they presented a receipt in order to effectuate the return. In other instances, they obtained a refund for store credit without presenting a receipt. From July 2009 through November 2011, Medard and Dieudonne fraudulently obtained Home Depot store credit and refunds totaling over $250,000.

The counts of wire fraud conspiracy and wire fraud each carry a maximum potential penalty of 20 years in prison and a $250,000 fine. Sentencing for both defendants is scheduled for July 30, 2015.

U.S. Attorney Fishman credited special agents of the U.S. Secret Service, under the direction of Acting Special Agent in Charge Carl Agnelli, for the investigation leading to today’s verdict.

The government is represented by Assistant U.S. Attorneys David M. Eskew and Andrew D. Kogan of the U.S. Attorney’s Office Economic Crimes Unit in Newark.

CAMDEN, N.J. – Two Atlantic City, New Jersey, men were each sentenced to 240 months in prison today for their roles in a criminal street gang that used threats, intimidation and violence to maintain control of the illegal drug trade in Atlantic City, U.S. Attorney Paul J. Fishman announced.

Lamar Macon, 26, and Dominique Venable, 25, were previously convicted by a federal jury of conspiracy to distribute one kilogram or more of heroin, possession of firearms in furtherance of a drug trafficking crime, brandishing and discharging firearms in furtherance of the conspiracy and using a cellular telephone in furtherance of the conspiracy. Macon, Venable, Kareem Bailey, 21, and Terry Davis, 26, all of Atlantic City, were each convicted following a six-week trial before U.S. District Judge Joseph E. Irenas, who imposed the sentences for Macon and Venable today in Camden federal court.

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

The four men are members of a gang known as “Dirty Block,” a/k/a “Crime Fam,” “3.6.6.12,” or “3.6,” which operated in a geographic area of Atlantic City that includes the public housing apartment complexes of Stanley Holmes Village Public Housing Complex, Renaissance Plaza and Schoolhouse Apartments.

The defendants participated in a violent street-level drug trafficking organization that controlled heroin sales through the possession of dozens of firearms and the use of gun violence, including at least one homicide and several non-fatal, drug-related shootings.

In addition to the prison terms, Judge Irenas sentenced both Macon and Venable to serve 10 years of supervised release.

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 sentencing.

He also thanked the N.J. State Police; the Atlantic County Sheriff’s Office; the Bureau of Alcohol, Tobacco, Firearms and Explosives; the Northfield Police Department; the Vineland Police Department; the Brigantine Police Department; the Millville Police Department; the Mullica Township Police Department; the South Jersey Transportation Authority; and the U.S. Secret Service for their contributions.

The government is represented by Assistant U.S. Attorneys Patrick Askin and Justin Danilewitz of the U.S. Attorney’s Office in Camden and Special Assistant U.S. Attorney Edmund Burgos of the Atlantic County Prosecutor’s Office.

Defense Counsel:

Macon: William Spade Esq., Philadelphia

Venable: James Murphy Esq., Princeton, New Jersey

NEWARK, N.J. – A doctor with a medical practice in Montclair, New Jersey, was sentenced today to 14 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.

Franklin Dana Fortunato, 65, of Montville, New Jersey, previously pleaded guilty before U.S. District Judge Stanley R. Chesler to violating the Federal Travel Act, as well as filing a false tax return. Judge Chesler imposed the sentence today in Newark federal court.

Including Fortunato, 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 million to date through forfeiture.

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

Furtunato admitted he accepted bribes in return for referring patient blood specimens to BLS. Fortunato received more than $100,000 in bribe payments – often more than $5,000 per month – from BLS disguised through sham lease and sham service agreements between 2006 and 2009. BLS made more than $430,000 through testing on blood specimens referred by Fortunato.

Fortunato admitted that he failed to report those bribes as income. From 2004 to 2008, he also failed to disclose and report as income $540,000 in patient co-pays and other monies paid to him by other health care providers. Fortunato failed to pay more than $160,000 in taxes he owed as a result of that unreported income.

In addition to the prison term, Judge Chesler sentenced Fortunato to one year of supervised release and ordered him to pay a fine of $75,000. As part of the plea deal, he must forfeit more than $635,000.

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 ongoing investigation.

The government is represented by Senior Litigation Counsel Andrew Leven; Assistant U.S. Attorney Joseph N. Minish; Jacob T. Elberg, Chief of the U.S. Attorney’s Office Health Care and Government Fraud Unit in Newark; and Assistant U.S. Attorney Barbara Ward, 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: Ricardo Solano Esq., Newark

NEWARK, N.J. - A former real estate title agent was sentenced today to 66 months in prison for carrying out a mortgage fraud scheme in which she obtained seven loans, totaling more than $3.7 million, on two properties located in Wood-Ridge, New Jersey and Belvidere, New Jersey, U.S Attorney Paul J. Fishman announced.

Ania Nowak, 48, of Belvidere, previously pleaded guilty before U.S. District Judge Stanley R. Chesler to Count One of the superseding indictment charging her with conspiracy to commit wire fraud. Judge Chesler imposed the sentence today in Newark federal court.

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

Ania Nowak was the owner and operator of A.N. Title Agency LLC and was an agent for Stewart Title Guaranty Company. Nowak had a duty to review a property’s title to determine ownership and the existence of any prior liens and truthfully disclose them in the title insurance documents. She also had a duty to issue title insurance policies to lenders guaranteeing there were no other liens so that they would be first in line to have the property sold if the borrower stopped making mortgage payments. Nowak also acted as a settlement agent and was required to disburse loan money in accordance with lender instructions, pay off any existing liens and record loan documents in the appropriate county clerk’s office.

Nowak admitted her role in obtaining seven mortgage loans through fraudulent means, including: an April 2005 loan for her sham sale of the Wood-Ridge property to her husband, Zbigniew Cichy, 46, of Belvidere; a November 2005 refinancing loan for the Wood-Ridge property; a 2005 construction loan to build a house on the Belvidere property owned by Cichy; an August 2006 loan on the Belvidere property; May 2007 loans for a sham sale of the Belvidere property to another conspirator in the scheme, Kim Salvemini, 60, of Wallington, New Jersey ; Salvemini’s May 2007 refinancing loan on the Belvidere property; and Cichy’s November 2007 refinancing loan on the Belvidere property. Nowak admitted that, for each of the seven loans, she lied on loan documents, failed to pay off prior mortgages at closing, failed to record the mortgages and any deeds and that most of the loans went into default for non-payment.

In addition to the prison term, Judge Chesler sentenced Nowak to serve three years of supervised release and ordered her to pay restitution of $2,050,975.34.

Salvemini previously pleaded guilty to her role and was sentenced to one year of probation and ordered to pay restitution of $881,324.00 on May 6, 2015. Cichy also pleaded guilty to his role in the scheme and was sentenced to four months in prison and ordered to pay $2,050,975.34 in restitution on May 5, 2015.

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.

The government is represented by Assistant U.S. Attorney Shirley U. Emehelu and Senior Litigation Counsel Leslie F. Schwartz of the Economic Crimes Unit of the U.S. Attorney’s Office in Newark.

Today’s sentencing is 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: Peter R. Willis Esq., Jersey City, New Jersey 

NEWARK, N.J. – A Plainfield, New Jersey, man today admitted arranging sexual encounters involving a 15-year-old girl in return for payment, U.S. Attorney Paul J. Fishman announced.

Ronald Garris Jr., 30, pleaded guilty before U.S. District Judge Jose L. Linares in Newark federal court to an information charging him with one count of sex trafficking of a minor.

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

Garris admitted that on June 14, 2013, he met a 15-year-old girl at a Best Western Hotel in South Plainfield, New Jersey, and recruited her to work as a prostitute. On June 18, 2013, Garris posted an advertisement on backpage.com that contained explicit photographs of the girl, including her telephone number and the town in which she was located. Garris admitted arranging “dates” in which the girl was expected to perform sexual acts in exchange for payment. Garris also admitted that on June 21, 2013, the girl went to the Howard Johnson Express Inn in New Brunswick, New Jersey, for sexual encounters that he arranged.

The count of sex trafficking of a minor is punishable by a maximum potential penalty of life in prison and a mandatory minimum of 10 years in prison. It also carries a maximum fine of $250,000. Garris must register as a sex offender. Sentencing is scheduled for Aug. 18, 2015.

U.S. Attorney Fishman credited special agents of the FBI, under the direction of Special Agent in Charge Richard M. Frankel; the New Brunswick Police Department and the Middlesex County Prosecutor’s Office with the investigation leading to today’s plea.

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

Defense counsel: Assistant Federal Public Defender Linda Foster Esq., Newark

garris_ronald_information.pdf (72.37 KB)

NEWARK, N.J. –Two employees of SCM Data Inc. and MMC Systems Inc. were arrested today for their alleged roles in a scheme that fraudulently used the H1-B visa program to reduce skilled labor costs, U.S. Attorney Paul J. Fishman announced.   

Hiral Patel, 32, and Shikha Mohta, 31, both of Jersey City, New Jersey, were each charged by complaint with one count of conspiracy to bring in and harbor aliens and to obstruct justice. They are scheduled to make their initial court appearances this afternoon before U.S. Magistrate Judge Mark Falk in Newark federal court.

According to the complaint:

SCM Data and MMC Systems offered consultants to clients in need of IT support. Both companies recruited foreign nationals, often student visa holders or recent college graduates, and sponsored them for H-1B visas. The H1-B program allows businesses in the United States to temporarily employ foreign workers with specialized or technical expertise in a particular field, such as accounting, engineering or computer science. As part of the H-1B program, the Department of Homeland Security (DHS) and the Department of Labor (DOL) require employers to meet specific labor conditions to ensure that American workers are not adversely impacted, while the DOL’s Wage and Hour Division safeguards the treatment and compensation of H-1B workers. Congress sets a numerical cap for the admission of skilled workers into the United States.

Patel, Mohta and other conspirators recruited foreign workers with purported IT expertise who sought work in the United States. The conspirators then sponsored the foreign workers’ H1-B visas with the stated purpose of working for SCM Data and MMC Systems’ clients throughout the United States. When submitting the visa paperwork to the DHS, the conspirators falsely represented that the foreign workers had full-time positions and were paid an annual salary, as required to secure the H-1B visas. Contrary to these representations and in violation of the H-1B program, Patel, Mohta and others paid the foreign workers only when they were placed at a third-party client who entered into a contract with SCM Data or MMC Systems.

In some instances, Patel, Mohta and others generated false payroll records to create the appearance that the foreign workers were paid full-time wages. On multiple occasions the conspirators required workers to pay SCM Data or MMC Systems their gross wages in cash. In exchange, SCM Data or MMC Systems would subtract taxes and fees and issue payroll checks to the foreign workers in a smaller amount. The conspirators then encouraged the foreign workers to submit the bogus payroll checks to the DHS as proof that the workers were engaged in full-time work despite the fact that they were not working for SCM Data and MMC Systems.

This scheme provided Patel, Mohta and others with a labor pool of inexpensive, skilled foreign workers who could be used on an “as needed” basis. The scheme was profitable because it required minimal overhead, and SCM Data and MMC Systems could charge significant hourly rates for the foreign workers’ services. The conspirators earned a substantial profit margin when a foreign worker was assigned to a project and incurred few costs when a foreign worker was without billable work.

The conspiracy charge with which Patel and Mohta are charged carries a maximum potential penalty of five years in prison and a $250,000 fine.

U.S. Attorney Fishman praised special agents of the U.S. Immigration and Customs Enforcement’s (ICE) Homeland Security Investigations (HSI), under the direction of Acting Special Agent in Charge Kevin Kelly, and the Department of Labor, Office of Inspector General, Office of Labor Racketeering and Fraud Investigations, under the direction of Special Agent in Charge Cheryl Garcia, with the investigation leading to the charges.

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

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

patel_hiral_and_mohta_shikha_complaint.pdf (1.18 MB)

TRENTON, N.J. – A leader of a large-scale drug trafficking organization today admitted conspiring to distribute heroin in Ocean and Monmouth counties and elsewhere in New Jersey, U.S. Attorney Paul J. Fishman announced.

Rufus Young, a/k/a “Equan,” a/k/a “E-Money,” of Asbury Park, New Jersey, pleaded guilty before U.S. District Judge Peter G. Sheridan in Trenton federal court to an information charging him with conspiring to distribute 100 grams or more of heroin. 

In March 2014, 19 other alleged members of the drug trafficking organization of which Young was a leader were charged by criminal complaint with conspiring to distribute heroin.  The complaint referred to the drug trafficking organization as the “Britt-Young DTO,” after its leaders, Young and Robert Britt, a/k/a “True.”  Of those 19 individuals, 14 have pleaded guilty.

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

Between February 2013 and March 2014, Young conspired with others to distribute heroin in Ocean and Monmouth counties as part of the Britt-Young DTO. Young was a leader of the organization and was responsible for, among other things, supplying heroin to various sub-dealers who distributed the heroin to others. To carry out Britt-Young DTO’s drug trafficking business, Young maintained several stash house locations that he and his conspirators used to package, store and sell heroin, including a recording studio in Toms River and two apartments in Neptune, New Jersey. Young was responsible for distributing between one and three kilograms of heroin during the conspiracy.      

The narcotics conspiracy charge to which Young pleaded carries a maximum penalty of 40 years in prison and a $5 million fine. Sentencing is scheduled for Aug. 19, 2015.

U.S. Attorney Fishman credited special agents of the FBI, Red Bank Resident Office, under the direction of Special Agent in Charge Richard M. Frankel; officers of the Brick Township Police Department, under the direction of Chief Nils R. Bergquist: and officers of the Toms River Police Department, under the direction of Chief Mitchell Little, with the investigation. He additionally credited special agents of the Bureau of Alcohol Tobacco Firearms and Explosives, under the direction of Special Agent in Charge George P. Belsky; inspectors of the U.S. Postal Inspection Service, under the direction of Inspector in Charge Maria L. Kelokates; officers of the Monmouth County Prosecutor’s Office, under the direction of Acting Prosecutor Christopher J. Gramiccioni; and officers of the Ocean County Prosecutor’s Office, under the direction of Prosecutor Joseph D. Coronato. He also thanked the Monmouth County Sheriff’s Office and the Neptune Township, Asbury Park, Marlboro, Long Branch and Freehold police departments for their roles in the case.

The government is represented by Assistant U.S. Attorney Nicholas Grippo of the U.S. Attorney’s Office Criminal Division in Newark.

Defense counsel: Stacy A. Biancamano Esq., West Orange, New Jersey

young_rufus_information.pdf (712.75 KB)

NEWARK, N.J. – Five Essex County, New Jersey, men were arraigned today on charges they ran an illegal drug mill that distributed at least one kilogram of heroin, U.S. Attorney Paul Fishman announced.

On April 28, 2015, a federal grand jury in Newark indicted each of the following defendants with one count of distributing and possessing with intent to distribute, and one count of conspiring to distribute, one kilogram or more of a mixture and substance containing heroin:

    a.  Lateef Grimsley, 25, of Newark, previously arrested and charged by complaint on Nov. 13, 2013.

    b.  Daquwann Walker, 24, of Newark, previously arrested and charged by complaint on Nov. 15, 2013.

    c.  Rassol China, 33, of Newark, previously arrested and charged by complaint on Nov. 22, 2013.

    d.  Bryant Rudd, 26, of Newark, previously arrested and charged by complaint on Feb. 11, 2014.

    e.  Shakur Billinghurst, 21, of Newark, previously arrested and charged by complaint on April 6, 2015.

The defendants were arraigned today before U.S. District Judge Jose L. Linares in Newark federal court.        

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

During a drug trafficking investigation, special agents of the U.S. Drug Enforcement Administration (DEA) obtained information that the third-floor apartment of a building located in Newark was being used as a heroin mill. DEA special agents seized from the heroin mill more than one kilogram of heroin and a variety of drug paraphernalia and packaging materials.

Each of the two counts with which the defendants are charged carries a mandatory minimum term of 10 years in prison and a maximum term of life, and a $10 million fine.

U.S. Attorney Fishman credited special agents of DEA, under the direction of Special Agent in Charge Special Agent in Charge Carl Kotowski in Newark, with the investigation leading to the charges.

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

Defense counsel:

Grimsley: Angelo Servidio Esq., Nutley, N.J.

Walker: David A. Holman AFPD, Newark

China: Peter R. Willis Esq., Jersey City, N.J.

Rudd: Vincent J. Lapaglia Esq., Hoboken, N.J.

Billinghurst: Bruce S. Rosen Esq., Florham Park, N.J.

grimsley_lateef_et_al._indictment.pdf (195.55 KB)

NEWARK, N.J. – A Hazleton, Pennsylvania, man was sentenced today to 24 months in prison for his role in one of the nation’s largest and longest-running stolen identity refund fraud schemes ever prosecuted, U.S. Attorney Paul J. Fishman announced.

Porfirio Paredes, 47, previously pleaded guilty before U.S. District Judge Claire C. Cecchi to an information charging him with one count of conspiracy to commit theft of government funds, one count of theft of government funds and one count of aggravated identity theft. Judge Cecchi imposed the sentence today in Newark federal court.

The conspiracy caused more than 8,000 fraudulent U.S. income tax returns to be filed, which sought more than $65 million in tax refunds and resulted in losses to the United States of more than $12 million.

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

Stolen Identity Refund Fraud (SIRF) is a common type of fraud that results in over $2 billion in losses annually to the U.S. Treasury. SIRF schemes generally share a number of hallmarks:

• SIRF perpetrators obtain personal identifying information, including Social Security numbers and dates of birth, from unwitting individuals, who often reside in the Commonwealth of Puerto Rico;
• SIRF participants complete Individual Income Tax Return 1040 Forms using the fraudulently obtained information and falsifying wages earned, taxes withheld and other data. Perpetrators use data to make it appear that the “taxpayers” listed on the fraudulent 1040 form are entitled to tax refunds – when in fact, the various tax withholdings indicated have not been paid and no refunds are due;
• SIRF perpetrators direct the U.S. Treasury Department to issue the refunds through checks to locations they control or can access, in various ways;
• SIRF perpetrators generate cash proceeds. Some sell the checks at a discount to face value. The buyers then cash the checks at banks or check cashing businesses or deposit them into bank accounts.

Federal law enforcement agencies, recognizing that SIRF was a serious problem, created a multi-agency task force in New Jersey comprised of investigators from the IRS and the U.S. Postal Inspection Service, along with the U.S. Secret Service, and with assistance from the Drug Enforcement Administration (the “New Jersey Task Force”).

An investigation led by the New Jersey Task Force with assistance from U.S. Immigration and Customs Enforcement, Homeland Security Investigations has revealed that starting as early as 2007, dozens of individuals in the New Jersey and New York area have been engaged in a large-scale, long-running SIRF scheme.

Members of the conspiracy obtained personal identifiers, such as dates of birth and Social Security numbers, belonging to Puerto Rican citizens. They used those identifiers to create fake 1040 forms, which falsely reported wages purportedly earned by the “taxpayers” and taxes purportedly withheld, to create the appearance that the “taxpayers” were entitled to tax refunds. The returns were filed electronically. By tracing the specific IP addresses that submitted them, law enforcement officers learned just a handful of IP addresses created many of the fraudulent forms that led to the issuance of tax refund checks.

Paredes and the other members of the conspiracy then gained control of checks, sometimes bribing mail carriers to intercept checks and deliver them to other members of the conspiracy.  Paredes used conspirators in Michigan and North Carolina to negotiate the fraudulently obtained treasury checks that he bought and sold.

During the course of the investigation, members of the task force identified certain “hot spots” of activity and intercepted more than $22 million in fraudulently applied for refund checks before they were delivered to members of the conspiracy.

In addition to the prison term, Judge Cecchi sentenced Paredes to serve two years of supervised release and ordered him to pay restitution of $1,887,912.98.

U.S. Attorney Fishman praised special agents of IRS-Criminal Investigation, under the direction of Special Agent in Charge Jonathan D. Larsen; the U.S. Postal Inspection Service, under the direction of Inspector in Charge Maria L. Kelokates; the U.S. Secret Service, under the direction of Acting Special Agent in Charge Carl Agnelli; and the Drug Enforcement Administration, under the direction of Acting Special Agent in Charge Carl. J. Kotowski, for 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’s Health Care and Government Fraud Unit.

Defense counsel: Alex Jardines Esq., Union City, New Jersey