District of New Jersey

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

Robert Ketcham, 28, of Bayville, New Jersey, and Kenneth Greenhow, 41, of Asbury Park, New Jersey, pleaded guilty before U.S. District Judge Peter G. Sheridan in Trenton federal court to separate informations charging them each with one count of conspiring to distribute heroin.

In March 2014, 21 alleged members of the “Britt-Young DTO,” a drug trafficking organization named after its leaders, Robert Britt and Rufus Young, were charged by criminal complaint with conspiring to distribute heroin. Of those 21 individuals, 14 have pleaded guilty.

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

Between February 2013 and December 2013, Ketcham conspired with Young and others to distribute heroin in Ocean and Monmouth counties as part of the Britt-Young DTO. From October 2013 through March 2014, Greenhow also conspired with Young and others to distribute heroin on behalf of the Britt-Young DTO. Ketcham and Greenhow were collectively responsible for distributing between 60 and 100 grams of heroin.

The narcotics conspiracy charge to which Ketcham and Greenhow pleaded guilty carries a maximum potential penalty of 20 years in prison and $1 million fine. Sentencing for both defendants is scheduled for Aug. 18, 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, with the investigation leading to today’s guilty pleas.

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

Defense Counsel:

Ketcham: Michael A. Armstrong Esq., Willingboro, New Jersey

Greenhow: Mark G. Davis Esq., Hamilton, New Jersey

NEWARK, N.J. – A Union County, New Jersey, man who allegedly robbed one bank and attempted to rob another at gunpoint has been charged federally, U.S. Attorney Paul J. Fishman announced.

Marlon Peek, 39, of Plainfield, New Jersey, is charged by complaint with one count of bank robbery, one count of attempted bank robbery, and one count of using and brandishing a firearm during the commission of the attempted bank robbery. Peek was arrested by the Linden Police Department on May 6, 2015.  The U.S. Attorney’s Office is adopting the case for federal prosecution. Peek will have his initial court appearance in Newark federal court at a date to be determined.

According to the complaint:

On April 21, 2015, Peek allegedly robbed a PNC Bank in South Plainfield, New Jersey, of cash, including certain bills whose serial numbers had been recorded in advance (bait money).  Later that day, at an address associated with Peek, law enforcement observed a vehicle registered to Peek. The defendant exited his vehicle and fled on foot. Law enforcement later found some of the bait money from the PNC Bank robbery as well as Peek’s driver’s license, among other items, in the vehicle.

On May 6, 2015, Peek allegedly attempted to rob a Bank of America in Linden, New Jersey. He allegedly entered the Bank of America, pointed a gun directly at a teller, and demanded money. Due in part to the Bank of America branch having bullet-proof glass in front of the teller station, the teller refused to turn over money to Peek.

Peek fled the bank and allegedly attempted to carjack three cars, all at gunpoint, on or near Route 1 in Linden. After the three unsuccessful attempts to commandeer a car, Peek took a hostage and held a gun to the hostage’s head. Officers of the Linden Police Department, who had by then arrived on the scene, ordered Peek to drop his gun. Peek complied and was taken into custody. A loaded firearm was recovered.

The bank robbery and attempted bank robbery charges each carry a maximum potential penalty of 20 years in prison and a $250,000 fine.  The charge of brandishing a weapon during the attempted robbery of Bank of America carries a mandatory seven-year sentence to be served consecutively with any other sentence.

U.S. Attorney Fishman praised special agents of the FBI, under the direction of Special Agent in Charge Richard M. Frankel, for the investigation leading to the arrest and charges. He also thanked the Linden, Edison, South Plainfield, Middlesex, Dunellen, and Springfield Police Departments for their excellent work in this case.

The government is represented by Assistant U.S. Attorney Elisa T. Wiygul of the U.S. Attorney’s Office General Crimes Unit in Newark.

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

peek_marlon_complaint.pdf (341.28 KB)

NEWARK, N.J. – With summer approaching, parents are making arrangements to send their children to camps. To help ensure that children with disabilities receive the opportunity to attend summer camp, the U.S. Attorney’s Office announced today that it has sent the attached flyer to hundreds of summer camps located within the District of New Jersey, reminding them of their obligations under the Americans with Disabilities Act (ADA).

“A disability is no reason to deny a child a chance to enjoy the friendships and learning experiences available at summer camps,” U.S. Attorney Fishman said. “Reasonable accommodations are not an option; they are a requirement under the law.”

Under the ADA, summer camps, both private and those run by municipalities, must make reasonable modifications to enable campers with disabilities to participate fully in all camp programs and activities. This generally means that children with disabilities are entitled to attend any camp or activity that non-disabled children attend, that camps must evaluate each child on an individual basis, and that camps must train their staff in the requirements of the ADA. Camps are obligated to pay for the cost of any reasonable modifications necessary for disabled children to participate in camp activities, and parents should not be charged any additional fee beyond standard camp enrollment costs.

Additional information about the ADA is available at www.ada.gov and http://www.justice.gov/usao-nj/civil-rights-enforcement.

camp_ada_flyer.pdf (58.21 KB)

CAMDEN, N.J. – A member of a criminal street gang that used threats, intimidation and violence to maintain control of the illegal drug trade in Atlantic City, New Jersey, was sentenced today to 240 months in prison on drug conspiracy and weapons charges, U.S. Attorney Paul J. Fishman announced.

Terry Davis, 26, of Atlantic City – was convicted in January 2015 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 being a felon in possession of a weapon following a six-week trial before U.S. District Judge Joseph E. Irenas in Camden federal court. The jury deliberated approximately five hours before returning the verdicts.

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

Davis is 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. He 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 term, Judge Irenas sentenced Davis to 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 convictions.

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.

The charges and allegations against the other defendants arrested in this investigation are merely accusations and the defendants are considered innocent unless and until proven guilty.

Defense Counsel: Gina Capuano Esq., Philadelphia

Scheme Involved International Environmental Consulting Contracts, Including Reconstruction Contracts in Afghanistan and Iraq

TRENTON, N.J. – The former president, chief executive officer, and chairman of the board of a New Jersey-based international engineering consulting company was sentenced today to 12 months of home confinement and fined $4.5 million for conspiring to defraud the U.S. Agency for International Development (USAID) with respect to billions of dollars in contracts over a nearly 20-year period, U.S. Attorney Paul J. Fishman announced.

Derish Wolff, 79, of Bernardsville, New Jersey, previously pleaded guilty before U.S. District Judge Anne E. Thompson to a superseding information charging conspiracy to defraud the government with respect to claims. Judge Thompson imposed the sentence today in Trenton federal court.

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

Wolff, the former president and CEO of Morristown, New Jersey-based Louis Berger Group Inc. (LBG), and the former chairman of LBG’s parent company, Berger Group Holdings Inc. (BGH), led a conspiracy to defraud USAID by billing the agency on so-called “cost-reimbursable” contracts – including hundreds of millions of dollars of contracts for reconstructive work in Iraq and Afghanistan – for LBG’s overhead and other indirect costs at falsely inflated rates.

USAID, an independent federal government agency that advances U.S. foreign policy by supporting economic growth, agriculture, trade, global health, democracy, and humanitarian assistance in developing countries, including countries destabilized by violent conflict, awarded LBG hundreds of millions of dollars in reconstruction contracts in Iraq and Afghanistan as well as in other nations. LBG calculated certain overhead rates and charged USAID and other federal agencies these rates on cost-reimbursable contracts, which enabled LBG to pass on their overhead costs to the agency in general proportion to how much labor LBG devoted to the government contracts.

From at least 1990 through July 2009, LBG, through Wolff and other former executives, intentionally overbilled USAID in connection with these cost-reimbursable contracts. The scheme to defraud the government was carried out by numerous LBG employees at the direction of Wolff.

Wolff targeted a particular overhead rate, irrespective of what the actual rate was, and ordered his subordinates to achieve that target rate through a variety of fraudulent means. From at least as early as 1990 through 2000, Wolff ordered LBG’s assistant controller to instruct the accounting department to pad its time sheets with hours ostensibly devoted to federal government projects when it had not actually worked on such projects.     

At an LBG annual meeting in September 2001, Salvatore Pepe, who was then the controller and eventually became chief financial officer (CFO), presented a USAID overhead rate that was significantly below Wolff’s target. In response, Wolff denounced Pepe, called him an “assassin” of the overhead rate and ordered him to target a rate above 140 percent, meaning that for every dollar of labor devoted to a USAID contract, LBG would receive an additional $1.40 in overhead expenses supposedly incurred by LBG. 

In response, Pepe and former controller Precy Pellettieri, with Wolff’s supervision, hatched a fraudulent scheme from 2003 through 2007 to systematically reclassify the work hours of LBG’s corporate employees, including high-ranking executives and employees in the general accounting division, to make it appear as if those employees worked on federal projects when they did not. At his plea hearing on Dec. 12, 2014, Wolff admitted that Pepe and Pellettieri, at Wolff’s direction, reclassified these hours without the employees’ knowledge and without investigating whether the employees had correctly accounted for their time, and at times did so over an employee’s objection. 

In addition to padding employees’ work hours with fake hours supposedly devoted to USAID work, Wolff instructed his subordinates to charge all commonly shared overhead expenses, such as rent, at LBG’s Washington, D.C., office to an account created to capture USAID-related expenses, even though the D.C. office supported many projects unrelated to USAID or other federal government agencies.

On Nov. 5, 2010, Pepe and Pellettieri both pleaded guilty before then-U.S. Magistrate Judge Patty Shwartz to separate informations charging them with conspiring to defraud the government with respect to claims. Also on that date, LBG resolved criminal and civil fraud charges related to Wolff’s and others’ conduct. The components of the settlement included:

•           a Deferred Prosecution Agreement (DPA), pursuant to which the U.S. Attorney’s Office in New Jersey suspended prosecution of a criminal complaint charging LBG with a violation of the Major Fraud Statute; in exchange, LBG agreed, among other things, to pay $18.7 million in related criminal penalties; make full restitution to USAID; adopt effective standards of conduct, internal controls systems, and ethics training programs for employees; and employ an independent monitor who would evaluate and oversee the company’s compliance with the DPA for a two‑year period;

•           a civil settlement that required the company to pay the government $50.6 million to resolve allegations that LBG violated the False Claims Act by charging inflated overhead rates that were used for invoicing on government contracts; and

•           an administrative agreement between LBG and USAID, which was the primary victim of the fraudulent scheme.

In the settlement, the government took into consideration LBG’s cooperation with the investigation and the fact that those responsible for the wrongdoing were no longer associated with the company.

U.S. Attorney Fishman credited special agents of USAID-Office of Inspector General, under the direction of Special Agent in Charge Daniel Altman; the FBI, under the direction of Special Agent in Richard M. Frankel; the U.S. Department of Defense, Defense Criminal Investigative Service, under the direction of Special Agent in Charge Craig W. Rupert; and the former Office of the Special Inspector General for Iraq Reconstruction, under the direction of former Special Inspector General Stuart W. Bowen Jr., for the investigation leading to today’s sentencing. He also thanked the U.S. Attorney’s Office, District of Maryland, and the U.S. Department of Justice Civil Division for their roles in the case. 

The government is represented by Assistant U.S. Attorneys Scott B. McBride, Deputy Chief of the U.S. Attorney’s Office’s Economic Crimes Unit, and Joyce M. Malliet of the U.S. Attorney’s Office National Security Unit. 

Defense counsel: Herbert J. Stern Esq.; Mark W. Rufolo Esq.; Jeffrey Speiser Esq.; Florham Park, New Jersey

Alleges Violation of Employment Rights of Sergeant in Army National Guard

CAMDEN, N.J. – The U.S. Attorney’s Office announced today it has filed a civil complaint against a South Jersey company for failing to re-employ a former employee when she returned from a National Guard deployment, U.S. Attorney for New Jersey Paul J. Fishman announced.

The civil lawsuit, filed in Camden federal court, alleges that Healthcare Commons Inc., of Carneys Point, New Jersey, willfully violated the Uniformed Services Employment and Re-employment Rights Act of 1994 (USERRA). USERRA protects the rights of uniformed servicemembers to retain their civilian employment following absences due to military service obligations and provides that they shall not be discriminated against because of their military obligations.

“The men and women who serve in our armed forces here and abroad do so at great personal sacrifice,” U.S. Attorney Fishman said. “Because of that sacrifice, federal law guarantees that they have the opportunity to resume their careers when they’ve completed their service. When companies seek to skirt their obligations to re-employ our returning veterans, we will hold them accountable.”

“No person should lose their job for serving our country, but according to our complaint that’s exactly what happened to a National Guard member here,” Acting Associate General Stuart F. Delery said. “Today’s filing is one more example of the Department of Justice’s commitment to protecting the men and women who serve in our Armed Forces from discrimination and unlawful actions.”

“The filing of this case reinforces the commitment of the Department of Justice to the vigorously enforce the prohibition of employment discrimination based on military service,” Principal Deputy Assistant Attorney General Vanita Gupta of the Civil Rights Division, said.  “I want to thank the Department of Labor for referring this case to the Department of Justice.  I’m hopeful that through the department’s newly created Servicemembers and Veterans Initiative, we will continue to build on our strong ties with federal partners and continue using every tool at our disposal to protect the rights of the men and women who serve in our Armed Forces.”

According to the complaint:

Megan Toliver, 32, of New Castle, Delaware, is a former employee of Healthcare Commons. She joined the U.S. Army National Guard in September 2004 and, most recently, had served as a sergeant, with honorable service as a mental health specialist. When Toliver returned from her military deployment in May 2014, Healthcare Commons willfully violated USERRA by not re-employing her as a mental health screener or in another comparable position.

The case was referred by U.S. Department of Labor following an investigation by the department’s Veterans’ Employment and Training Service.

The plaintiff is represented by Assistant U.S. Attorney Michael E. Campion, U.S. Attorney’s Office, District of New Jersey, and Special Litigation Counsel Andrew Braniff, U.S. Department of Justice, Civil Rights Division, Employment Law Section.

In March 2015, the Attorney General created of the Service Members and Veterans Initiative, which is led by three dedicated career Justice Department attorneys with strong ties to the military community. They will further the Department’s existing efforts by coordinating and expanding enforcement, outreach, and training efforts on behalf of service members, veterans, and their families. The initiative will address the unique challenges that service members face while on active duty, that veterans face upon returning home, and that families face when a loved one is deployed.

Additional information about USERRA can be found on the U.S. Attorney’s Office website at www.justice.gov/usao-nj and the Justice Department’s websites at www.usdoj.gov/crt/emp and www.servicemembers.gov, as well as on the Labor Department’s website at www.dol.gov/vets/programs/userra/main.htm.

 

TRENTON, N.J. – A Perth Amboy, New Jersey, man was sentenced today to 60 months in prison for conspiring to distribute hundreds of grams of heroin throughout Monmouth and Ocean counties, U.S. Attorney Paul J. Fishman announced.

Rashawn Ramos, 38, previously pleaded guilty before U.S. District Judge Peter G. Sheridan to an information charging him with one count of conspiring to distribute 100 grams or more of heroin and 500 grams or more of cocaine. Judge Sheridan imposed the sentence today in Trenton federal court.

In March 2014, 21 alleged members of the “Britt-Young DTO,” a drug trafficking organization named after its leaders Robert Britt and Rufus Young, were charged by criminal complaint with conspiring to distribute heroin. Of those 21 individuals, 12 have pleaded guilty.

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

Ramos admitted that from November 2013 through March 2014, he received numerous packages of heroin and cocaine at his residence in Perth Amboy. The packages were sent from California via the U.S. Mail. Ramos later transferred the packages to another conspirator, who distributed the narcotics to others in New Jersey, including members of the Britt-Young DTO. Altogether, Ramos received at least 1,000 grams of heroin and 1,500 grams of cocaine.    

In addition to the prison term, Judge Sheridan sentenced Ramos to serve four 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:  Ramos: Anthony Simonetti Esq., Hightstown, New Jersey

CAMDEN, N.J. - A West Wildwood, New Jersey man today admitted possessing images and videos of child sexual abuse, U.S. Attorney Paul J. Fishman announced.

Jeffrey Spicer, 44, pleaded guilty today before U.S. District Judge Joseph E. Irenas in Camden federal court to an information charging him with one count of knowingly possessing child pornography.

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

Spicer admitted that he possessed images and videos of child sexual abuse on electronic and digital media that were seized from his residence pursuant to a search warrant executed on March 19, 2014. According to a forensic examination of these items, numerous images and videos of child sexual exploitation were discovered, including images on his cellular telephone, which he saved by taking screenshot photos with the telephone. The forensic examination further revealed that Spicer was using a password-protected “app” on his cell phone to store the child pornography.

As a previously convicted sex offender in New Jersey and Delaware, Spicer faces a mandatory minimum penalty of 10 years in prison, a maximum penalty of 20 years in prison, up to a lifetime of supervised release, and a $250,000 fine. Sentencing is scheduled for Aug. 11, 2015.

U.S. Attorney Fishman credited special agents of U.S. Immigration and Customs Enforcement’s (ICE) Homeland Security Investigations (HSI), under the direction of Acting Special Agent in Charge Kevin Kelly; the Cape May County Prosecutor’s Office, under the direction of Prosecutor Robert L. Taylor; the Lower Township Police Department, under the direction of Chief William Mastriana; and the West Wildwood Police Department, under the direction of Chief Jackie Ferentz, with the investigation leading to the guilty plea.

HSI encourages the public to report suspected child predators and any suspicious activity through its toll-free hotline at 1-866-347-2423 or by completing its online tip form. Both are staffed around the clock by investigators. For additional information about wanted suspected child predators, download HSI’s Operation Predator smartphone app or visit the online suspect alerts page.

The government is represented by Assistant U.S. Attorney Matthew J. Skahill of the U.S. Attorney’s Office Special Prosecutions Division in Camden.

Defense counsel: Lisa Evans Lewis Esq., Camden

CAMDEN, N.J. – A Ventress, Alabama, man was sentenced today to 210 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.

Kinard Henson, 43, previously pleaded guilty before U.S. District Judge Jerome B. Simandle to a second superseding indictment charging him with one count of conspiracy to commit wire fraud, one count of conspiracy to commit money laundering and one count of attempted murder of a witness in a federal case. Judge Simandle imposed the sentence today in Camden federal court.

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

Henson was among 11 defendants charged in July 2012 with conspiracy to commit wire fraud and conspiracy to commit money laundering. Henson’s conspirators 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.

Henson 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.

Henson’s conspirators 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, Henson received a portion of the proceeds after his conspirators had funds wired or checks deposited into various accounts they controlled.

Henson learned of a subpoena seeking documents in connection with a straw buyer’s purchases of real estate properties shortly after it was served by federal law enforcement agents on a mortgage brokerage firm. Henson, who had recruited the straw buyer, contacted another individual to kill the straw buyer. They then lured the straw buyer to a wooded area in Mobile, Alabama. At Henson’s direction and using Henson’s firearm, the other individual shot the straw buyer multiple times.

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

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

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: Stanley King Esq., Woodbury, New Jersey

NEWARK, N.J. – Two doctors were sentenced to prison today 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.

Eugene DeSimone, 60, of Eatontown, New Jersey, who practiced in Secaucus, and Franz Goyzueta, 67, of New York, who practiced in New York, were each sentenced to 37 months in prison. DeSimone and Goyzueta previously pleaded guilty before U.S. District Judge Stanley R. Chesler to separate informations charging them each with one count of accepting bribes. Judge Chesler imposed both sentences today in Newark federal court.

Including DeSimone and Goyzueta, 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 $10.5 million to date through forfeiture.

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

DeSimone accepted $1,500 in cash per month between August 2010 and March 2013 in return for referring patient blood specimens to BLS, for which BLS received $980,000. Goyzueta accepted as much as $3,000 per month from BLS between December 2013 and March 2013 in return for patient blood specimen referrals, for which BLS received approximately $713,249.

In addition to the prison terms, Judge Chesler sentenced both DeSimone and Goyzueta to serve one year of supervised release; he fined Goyzueta $75,000 and DeSimone $5,000. As part of their guilty pleas, DeSimone must forfeit $260,500 and Goyzueta must forfeit $72,000.

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 Assistant U.S. Attorney Joseph N. Minish, Senior Litigation Counsel Andrew Leven, and Jacob T. Elberg, Chief of the U.S. Attorney’s Office Health Care and Government Fraud Unit in Newark, as well as Assistant U.S. Attorney Barbara Ward 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.

                                                         

CAMDEN, N.J. - A former Richard Stockton College of New Jersey police officer was sentenced today to 31 months in prison for selling oxycodone-based pills to an undercover officer and a witness who was cooperating with law enforcement officers, U.S. Attorney Paul J. Fishman announced.

Marcus Taylor, 41, of Sicklerville, New Jersey, previously pleaded guilty before U.S. District Judge Renee Marie Bumb to an information charging him with distributing and possessing with intent to distribute oxycodone. Judge Bumb imposed the sentence today in Camden federal court.

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

Between November 2012 and January 2013, Taylor sold 537 oxycodone-based prescription pills to either an undercover Drug Enforcement Administration task force officer or the cooperating witness over five meetings, each of which occurred in Clementon, New Jersey. Taylor arranged the meetings with the undercover officer through a series of text messages. Taylor discussed the price of the pills and his hope of fostering a long-term drug distribution relationship. At the Nov. 28, 2012, meeting, Taylor told the undercover officer that the 30-milligram oxycodone pills he sold the officer were obtained through a prescription issued by a doctor, and “if you gonna be a good customer for me and buy these every 28 days for 15 bucks, I won’t give these to nobody.”

None of the transactions involved students or took place at the Stockton College campus, nor was Taylor ever in uniform when the drug sales were made. He resigned in April 2014.    

In addition to the prison term, Judge Bumb sentenced Taylor to serve three years of supervised release and ordered him to forfeit $8,775.

U.S. Attorney Fishman credited special agents and officers assigned to the Camden High Intensity Drug Trafficking Area team, under the direction of the DEA Special Agent in Charge Carl J. Kotowski, for the investigation. He also thanked U.S. Immigration and Customs Enforcement (ICE) Homeland Security Investigations (HSI); the Camden County Prosecutor’s Office; the Westampton Township, Camden, Burlington City and Richard Stockton College police departments; the Delaware River Port Authority; and the N.J. Division of Criminal Justice for their work on the case.   

The government is represented by Assistant U.S. Attorney Matthew J. Skahill of the Special Prosecutions Division in Camden.

 

CAMDEN, N.J. – An Atlantic City, New Jersey, man was sentenced today to 241 months in prison for his role 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.

Kareem Bailey, 21 was 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. Bailey, Terry Davis, 26, Lamar Macon, 26, and Dominique Venable, 25, all of Atlantic City, were each convicted following a six-week trial before U.S. District Judge Joseph E. Irenas, who imposed Bailey’s sentence today in Camden federal court.

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

The four men 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.

The defendants participated in a violent street-level drug trafficking organization that controlled heroin sales through the possession 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 term, Judge Irenas ordered Bailey to serve 10 years of supervised release. Davis, Macon, and Venable still await sentencing.

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 sentence.

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: John Holliday Esq., Hamilton, New Jersey

TRENTON, N.J. – The former mayor of Manalapan, New Jersey, was sentenced today to 60 months in prison for defrauding an investment client of $250,000 and submitting a falsified loan application in order to purchase farmland in Monmouth County, New Jersey, U.S. Attorney Paul J. Fishman announced.

Andrew Lucas, 37, was previously convicted by a federal jury on all 11 counts of an indictment charging him with wire fraud, an illegal monetary transaction, loan application fraud, false statements to the IRS, aggravated identity theft, obstruction of a grand jury investigation and falsification of records in a federal investigation. Lucas was convicted following a two-week trial before U.S. District Judge Freda L. Wolfson, who imposed the sentence today in Trenton federal court.

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

On Dec.15, 2009, Lucas submitted a loan application to a New Jersey bank requesting $525,000 to finance his purchase of the Burke Farm property in Manalapan. Lucas provided the bank with falsified versions of his 2007 and 2008 tax returns, as well as a falsified version of a 2007 tax return for a relative whose name was also on the loan application. Lucas also falsely reported that he had a total of $210,000 in cash.

Lucas owned and operated Lucas Capital Advisors LLC (Lucas Capital), through which he served as an investment advisor and manager to multiple individuals. To obtain the $250,000 down payment for the property, Lucas approached Bobby Janowski, who was a client of Lucas Capital, to pitch an investment in an entity called VLM Investments LLC (VLM). On Feb. 15, 2010, Lucas presented a written note to Janowski, which stated that the $250,000 investment was to be secured by “…interest in the equipment, fixtures, inventory and accounts receivable” of VLM. However, Lucas failed to inform Janowski that at the time the note was signed, VLM did not exist. Lucas also failed to disclose to Janowski that Lucas intended to make personal use of the funds. It was not until three days later, on Feb. 18, 2010, that Lucas created VLM by registering it with the State of New Jersey and the IRS, using the name and Social Security number of Lucas’ out-of-state relative, Thomas Littlefield, without his knowledge or permission.

On Feb. 22, 2010, Lucas authorized the wiring of $250,000 from Janowski’s Lucas Capital investment account to a VLM bank account that had Lucas as the only authorized signer. On March 1, 2010, Lucas withdrew this money in the form of a bank check, which he provided the next day to the closing attorney for the purchase of the Burke Farm property.

Lucas also filed tax returns for VLM for tax years 2011 and 2012, both times listing Littlefield’s name and Social Security number without Littlefield’s knowledge or permission.

Federal investigators served Lucas with subpoenas on Feb. 7, 2013, for the records of VLM and Lucas Capital Advisors. In response, Lucas provided federal authorities with a fabricated and back-dated letter purporting to be from Littlefield concerning a transaction for the purchase of the Burke Farm property.

In addition to the prison term, Judge Wolfson sentenced Lucas to serve three years of supervised release and forfeit Burke Farm.

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

The government is represented by Assistant U.S. Attorneys Matthew Skahill in Camden and Rahul Agarwal in Newark, both of the U.S. Attorney’s Special Prosecutions Division.

Defense counsel: Mario F. Gallucci Esq., and Michael DeSantis Esq., of Staten Island, New York

Allegedly Misused Government Property to Punish Fort Lee Mayor for Not Endorsing Gov. Christie’s Re-election

Second Former Port Authority Official Pleads Guilty in Connection with His Role in Scheme

NEWARK, N.J. – A former top official of the Port Authority of New York and New Jersey and a former member of Gov. Christopher J. Christie’s senior staff have been charged with a scheme to misuse Port Authority resources to facilitate and conceal the causing of traffic problems in Fort Lee, New Jersey, to punish the borough’s mayor for not endorsing the Governor’s re-election.

The charges were announced today by U.S. Attorney Paul J. Fishman, along with Inspector General Michael Nestor of the Port Authority, Office of Inspector General, and FBI Special Agent in Charge Richard M. Frankel, Newark Division.

William E. Baroni Jr., former deputy executive director of the Port Authority, and Bridget Anne Kelly, former deputy chief of staff to Gov. Christie, were each charged by a federal grand jury in a nine-count indictment unsealed today. David Wildstein, the former director of Interstate Capital Projects at the Port Authority, pleaded guilty today before U.S. District Judge Susan D. Wigenton in Newark federal court to a separate information charging him with two counts of conspiracy for his role in the scheme.

“Public officials must use government resources for proper government purposes,” U.S. Attorney Fishman said. “The indictment alleges, and Wildstein admitted, that the three defendants used Port Authority resources to exact political retribution against a public official who would not endorse the Governor for re-election, and concocted and promoted a bogus cover story to execute their plan and to cover their tracks.”

“William Baroni, Bridget Anne Kelly, and David Wildstein were held to a high standard of conduct due to the power they were entrusted with by the public,” Special Agent in Charge Frankel said. “These individuals breached that trust and as a consequence should be held accountable.”

“These high level government officials misused the Port Authority, its employees, and their public positions for political purposes with total disregard of the negative consequences it would have on the public and Port Authority,” Inspector General Nestor said. “This case should serve as a wake-up call and warning to those public servants who might consider abusing their official positions for their personal benefit, or the benefit of others.”

Baroni and Kelly are each charged with conspiring to misuse, and actually misusing, property of an organization receiving federal benefits; conspiring to commit, and actually committing, wire fraud; conspiring to injure and oppress certain individuals’ civil rights, and acting under color of law to deprive certain individuals of their civil rights. All of the charges relate to the defendants’ alleged scheme to manufacture traffic problems in Fort Lee by, without public warning, reducing from three to one the number of local access lanes, located in Fort Lee, to the upper level of the George Washington Bridge, and the toll booths servicing those lanes. It is alleged this was done to punish Mayor Sokolich for not endorsing Gov. Christie’s re-election bid. Wildstein pleaded guilty to conspiring to misuse the property of an organization receiving federal benefits and conspiring to injure and oppress certain individuals’ civil rights in connection with his role in causing traffic problems to punish Mayor Sokolich.

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

In August 2013, after Kelly confirmed that Mayor Sokolich would not be endorsing Gov. Christie for re-election in November 2013, Baroni, Kelly, and Wildstein decided to punish the mayor by deliberately causing significant traffic problems in Fort Lee under the false pretense of a traffic study.

From the morning of Sept. 9, 2013, to Sept. 13, 2013, the conspirators allegedly caused the local access lanes to be reduced so that only one toll booth, instead of the usual three, was accessible to the approach to the bridge for local traffic traveling through Fort Lee. To maximize the congestion and the punitive impact on Mayor Sokolich, the conspirators caused these lane and toll booth reductions to start on the first day of the school year without any advance notice to Mayor Sokolich, the Fort Lee chief of police or borough residents. The lane and toll booth reductions resulted in significant traffic in Fort Lee, for motorists intending to access the George Washington Bridge from local lanes and for residents, whose streets were choked with traffic.

The conspirators allegedly agreed to disregard any inquiries from Mayor Sokolich and other Fort Lee officials about the lane and toll booth reductions. They purposely ignored communications from Mayor Sokolich, including his pleas for help, requests for information, and repeated warnings about the increased risks to public safety. On Sept. 9, 2013, after Baroni received an email that Mayor Sokolich had called about an urgent matter of public safety, Wildstein sent an email to Baroni reiterating that Baroni should maintain “radio silence” toward the mayor. When Kelly was made aware of Mayor Sokolich’s communication regarding an urgent matter of public safety, she thanked Wildstein for confirming that Baroni had maintained “[r]adio silence” toward Mayor Sokolich. As alleged in the indictment, on Sept. 12, 2013, Baroni instructed a Port Authority employee through coded language that the employee should not contact Mayor Sokolich.

The conspirators concocted and promoted a sham story that the lane reductions were for a traffic study. They created and advanced this cover story so they could use Port Authority property, including the time and services of unwitting Port Authority personnel and other resources, to implement the lane and toll booth reductions and conceal their true punitive purpose.

On Nov. 25, 2013, with Kelly’s and Wildstein’s knowledge, Baroni provided false and misleading testimony about the lane and toll booth reductions to the N.J. Assembly Transportation, Public Works, and Independent Authorities Committee. Baroni knowingly and intentionally made misleading statements and false representations, including: (1) communications between members of the Port Authority Police Department and Wildstein triggered the lane and toll booth reductions; (2) the lane and toll booth reductions were part of a one-week traffic study; and (3) the failure to communicate with Fort Lee and the executive director of the Port Authority was simply the result of communication breakdowns at the Port Authority.

On the count of conspiracy to misuse property of an organization receiving federal benefits, the defendants and Wildstein each face a maximum potential penalty of five years in prison and a fine of $250,000. On the count of misusing property of an organization receiving federal benefits, the defendants each face a maximum potential penalty of 10 years in prison and a fine of $250,000. On each of the wire fraud conspiracy and wire fraud counts, the defendants face a maximum potential penalty of 20 years in prison and a fine of $250,000 per count. On the count of conspiring to injure and oppress certain individuals’ civil rights, the defendants and Wildstein each face a maximum potential penalty of 10 years in prison and a fine of $250,000. On the count of acting under color of law to deprive certain individuals of their civil rights, the defendants face a maximum potential penalty of one year in prison and a fine of $250,000.

U.S. Attorney Fishman credited criminal investigators of the Port Authority, Office of Inspector General, under the direction of Inspector General Nestor; special agents of the FBI, under the direction of Special Agent in Charge Frankel; and criminal investigators of the U.S. Attorney’s Office, for the investigation leading to today’s charges and guilty plea.

The government is represented by Assistant U.S. Attorneys Lee M. Cortes Jr., Vikas Khanna, and Senior Litigation Counsel J Fortier Imbert of the U.S. Attorney’s Office Special Prosecutions Division, and Assistant U.S. Attorneys Paul Murphy and David W. Feder of the Criminal Division.

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

Defense counsel:

William E. Baroni: Michael Baldassare Esq., Newark

Bridget Anne Kelly: Michael Critchley Sr. Esq., Roseland, New Jersey

David Wildstein: Alan L. Zegas Esq., Chatham, New Jersey

NEWARK, N.J. – A woman from Puerto Rico today admitted trying to smuggle 2.9 kilograms of cocaine through Newark Liberty International Airport, U.S. Attorney Paul J. Fishman announced.

Kenia Diaz, 24, pleaded guilty before U.S. District Judge Susan D. Wigenton in Newark federal court to an indictment charging her with one count of possessing cocaine with intent to distribute. 

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

On May 22, 2013, Diaz arrived at Newark Liberty International Airport on a flight from Puerto Rico. During a routine inspection, a canine detected a controlled substance inside Diaz’s suitcase. After searching the suitcase, agents recovered approximately 2.9 kilograms of cocaine.

The narcotics charge to which Diaz pleaded guilty carries a maximum potential penalty of 20 years in prison and a $1 million fine. Sentencing is scheduled for Aug. 11, 2015.

U.S. Attorney Fishman praised special agents of the DEA, Newark Division, under the direction of Special Agent in Charge Carl J. Kotowski with the investigation leading to today’s guilty plea.

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

Defense counsel: Kevin Carlucci Esq., Newark

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CAMDEN, N.J. – A Toms River, New Jersey, man today admitted his role in a conspiracy to smuggle more than $200,000 worth of firearms parts out of the United States, U.S. Attorney Paul J. Fishman announced.

Abelardo Delmundo, 53, pleaded guilty before U.S. District Judge Noel L. Hillman in Camden federal court to an information charging him with one count of conspiracy to violate the Arms Export Control Act and U.S. anti-smuggling laws.

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

Delmundo admitted that from 2008 through October 2013, he and other conspirators he met through an internet forum agreed to ship firearms and firearms parts from the United States to the Philippines. Kirby Santos, 38, of the Republic of the Philippines and others allegedly used credit cards and other forms of payment to purchase firearms parts from suppliers in the United States. Knowing that they would not ship to the Philippines, Santos and others arranged for the suppliers to send the firearms parts to Delmundo’s Toms River address in order to make it appear as if it were a domestic sale.

Delmundo also admitted that after receiving the firearms parts, he falsely labeled the contents of the package as food or other home goods and exported the firearms parts to the Philippines for ultimate delivery to the other conspirators. To disguise his role in the conspiracy, Delmundo used the alias “Teng Flores”when sending the packages containing prohibited items. Upon receiving the firearms parts, Delmundo was paid through cash payments and wire transfers to Delmundo’s relatives in the Philippines.

During the course of the nearly five-year long conspiracy, Delmundo and others purchased and directed the unlawful exportation of more than $200,000 worth of defense articles from the United States to the Philippines without the required export license.

Santos is charged by criminal complaint with one count of conspiracy to violate the Arms Export Control Act and U.S. anti-smuggling laws. He made his initial appearance in Camden federal court on April 22, 2015 and was detained. The charges and allegations against Santos are merely accusations, and the defendant is considered innocent unless and until proven guilty.

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

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

U.S. Attorney Fishman credited special agents of the U.S. Department of Homeland Security-Homeland Security Investigations (DHS-HSI), under the direction of Acting Special Agent in Charge Kevin Kelly, and special agents of the Bureau of Alcohol, Tobacco, Firearms, and Explosives (ATF), under the direction of Special Agent in Charge George P. Belsky Jr., with the investigation leading to today’s plea.

The government is represented by Assistant U.S. Attorney Matthew T. Smith of the U.S. Attorney’s Office Criminal Division in Camden and Trial Attorney Nathan M. F. Charles of the Counterespionage Section of the Justice Department’s National Security Division.

Defense counsel: David Schlendorf Esq., Toms River

NEWARK, N.J. – A Newark man was convicted today for his role in three gunpoint carjackings and an attempted carjacking within a 10-day period, U.S. Attorney Paul J. Fishman announced.

Jamie Manning, 29, was convicted on all nine counts of a superseding indictment: one count of conspiracy to commit theft of a motor vehicle by force, violence and intimidation; three counts of carjacking; one count of attempted carjacking; and four counts of using a firearm in furtherance of a crime of violence. Manning was convicted following a six-day trial before U.S. District Judge William H. Walls in Newark federal court. The jury deliberated for six hours before returning the verdict.

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

On Dec. 20, 2012, Manning and another conspirator approached the owner of 2004 Honda Accord. Manning pressed a firearm into the victim’s side and demanded that the victim give him keys to the car. Manning and the other conspirator took the victim’s keys and purse, demanded the PIN to the victim’s debit card and attempted to push the victim into the Accord’s trunk. Manning and the other conspirator got into the Accord and fled.

During the early morning hours of Dec. 26, 2012, Manning and Corey Thermitus, 22, of Newark, approached two individuals entering a parked, 2002, four-door Nissan Altima on a street in Newark. Manning pointed a firearm at one of the victims and both Manning and Thermitus ordered the victims to get out of the car. After robbing and threatening the victims, Manning and Thermitus fled the area in the carjacked vehicle.

On Dec. 28, 2012, Thermitus approached an individual sitting in a 2011, four-door Honda Accord that was parked in the driveway of a home in Newark. Thermitus pointed a firearm at the victim and ordered the victim out of the car. After threatening to shoot the victim, Thermitus, Manning and another man fled the area in the victim’s car.

Later that night, Thermitus, Manning and a third man drove in the carjacked Honda Accord to a residential area in Newark. Thermitus and Manning approached two individuals, one of whom was a young child, who were sitting in a parked, 2006, four-door Nissan Pathfinder in the driveway of a residence. Thermitus pointed a gun at the driver of the vehicle while Manning approached the rear passenger side of the vehicle, but the driver managed to escape in the car. As the assailants fled in the Honda Accord, Thermitus fired a gun in the direction of an individual who had come outside of a residence to investigate.

The conspiracy count carries a maximum potential penalty of five years in prison. The carjacking and attempted carjacking counts each carry a maximum potential penalty of 15 years in prison. The charge of using a firearm in furtherance of a crime of violence carries a maximum potential penalty of life in prison and a mandatory minimum sentence of seven years in prison, which must run consecutively to any other prison term. Each additional firearms charge carries a mandatory 25 years which must run consecutively to any other prison term. Each count also carries a maximum $250,000 fine. Sentencing is scheduled for Aug. 25, 2015.

Thermitus previously pleaded guilty to an information charging him with three counts of theft of a motor vehicle by force, violence and intimidation; one count of attempted theft of a motor vehicle by force, violence and intimidation; and one count of discharging a firearm in furtherance of a violent crime. His sentencing is scheduled for May 19, 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 Essex County Prosecutor’s Office, under the direction of Acting Prosecutor Carolyn A. Murray; and the Newark Police Department, under the direction of Director Eugene Venable, with the investigation leading to today’s verdict.

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

Defense counsel: Frank Arleo Esq., West Orange, New Jersey

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NEWARK, N.J. – An Essex County corrections officer today admitted accepting bribes in exchange for smuggling contraband, including cell phones and tobacco, into the Essex County Jail, a federal pretrial detention facility, U.S. Attorney Paul J. Fishman announced.

John Grosso, 41, of Belleville, New Jersey, pleaded guilty before U.S. District Judge Stanley R. Chesler to an information charging him with one count of conspiring to commit extortion under color of official right.

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

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

The conspiracy charge to which Grosso pleaded guilty carries a maximum potential penalty of 20 years in prison and a fine of $250,000. Grosso also must forfeit the $1,000 bribe he received in December 2013. Sentencing is scheduled for Aug. 19, 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 the Internal Affairs Division of Essex County Correctional Facility, under the leadership of Warden Roy Hendricks, with the investigation leading to today’s plea.

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

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

NEWARK, N.J. – A doctor with practices in Wall Township and Howell Township, New Jersey, was sentenced today to one year and one day in prison for accepting bribes in exchange for test referrals as part of a long-running scheme operated by Biodiagnostic Laboratory Services LLC (BLS), of Parsippany, New Jersey, its president and numerous associates, U.S. Attorney Paul J. Fishman announced.

Anthony DeLuca, 52, of Point Pleasant, New Jersey, previously pleaded guilty before U.S. District Judge Stanley R. Chesler to an information charging him with one count of accepting bribes. Judge Chesler imposed the sentence today in Newark federal court.          

Including DeLuca, 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 $10.5 million to date through forfeiture.

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

DeLuca admitted he accepted bribes in return for referring patient blood specimens to BLS and was paid approximately $1,500 per month, which he received from another person in his medical office engaged in the same activity.

In addition to the prison term, Judge Chesler sentenced DeLuca to serve one year of supervised release and ordered him to pay a $5,000 fine.

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 Assistant U.S. Attorney Joseph N. Minish, Senior Litigation Counsel Andrew Leven, and Jacob T. Elberg, Chief of the U.S. Attorney’s Office Health Care and Government Fraud Unit in Newark, as well as Assistant U.S. Attorney Barbara Ward 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: Patrick Egan Esq., Philadelphia, Pennsylvania

TRENTON, N.J. – A former international legal advisor and New York-licensed attorney today admitted his orchestration of a scheme to defraud a foreign nation of more than $3.5 million, U.S. Attorney Paul J. Fishman announced.

Bobby Boye, a/k/a “Bobby Ajiboye,” a/k/a “Bobby Aji-Boye,” 51, of Mahwah, New Jersey, pleaded guilty before U.S. District Judge Freda L. Wolfson in Trenton federal court to an information charging him with conspiracy to commit wire fraud.

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

As part of his employment as an international legal advisor for the victim nation, which is referred to in the information as “Country A,” Boye served on a committee responsible for reviewing and evaluating bids, solicited in February 2012, for a multimillion-dollar contract to provide legal and tax accounting advice to Country A.  In order to secure the lucrative contract for himself, Boye created a sham New York law and accounting firm called Opus & Best Law Services LLC (Opus & Best) that, unbeknownst to Country A, was secretly controlled by Boye.

In March 2012, Boye caused Opus & Best to submit by email a bid for the contract with Country A.  The bid documents contained multiple, material misrepresentations and omissions, including:  (1) a false claim that Opus & Best was founded in 1985 and was registered as a legal and accounting services provider in Europe, the Middle East and Africa; (2) a fraudulent listing of several purported employees of Opus & Best; and (3) a reference to prior consulting work purportedly performed by Opus & Best for another foreign country.  In reality, Boye created Opus & Best for the purpose of submitting the fraudulent bid documents.  Opus & Best employed no one other than Boye, let alone the professionals identified in the bid, and had never provided consulting services to the foreign country listed as a reference. The bid documents failed to disclose that Boye’s affiliation with Opus & Best created a conflict of interest and rendered him a third-party beneficiary of the proposed contract.

Unaware that Opus & Best was a sham firm secretly controlled by Boye, and relying on the recommendation of Boye, Country A awarded the contract to Opus & Best in June 2012.  Under the terms of the consulting contract, Boye was one of the two project coordinators acting on behalf of Country A and had authority to receive and approve invoices for payment.

Between June 2012 and December 2012, Country A wired more than $3.5 million to Opus & Best’s New York business checking account, which was controlled by Boye.  He used a substantial part of the money to purchase four properties in New Jersey for more than $1.5 million in cash, three luxury vehicles (a 2012 Bentley for $172,000, a 2012 Range Rover for $100,983, and a 2011 Rolls Royce for $215,000), and two designer watches for almost $20,000.

The conspiracy count to which Boye pleaded guilty carries a maximum potential penalty of 20 years in prison and a fine of up to $250,000, or twice the gain or loss from the offense. Sentencing is scheduled for August 13, 2015.

U.S. Attorney Fishman credited special agents of the FBI’s Garret Mountain Resident Office in Woodland Park, New Jersey, under the direction of Special Agent in Charge Richard M. Frankel in Newark, with the investigation leading to the guilty plea.

The government is represented by Assistant U.S. Attorney Shirley U. Emehelu of the U.S. Attorney’s Office’s Economic Crimes Unit in Newark and Assistant U.S. Attorney Barbara Ward of the U.S. Attorney’s 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:  K. Anthony Thomas, Assistant Federal Public Defender, Newark

TRENTON, N.J. – A Middlesex County, New Jersey, lawyer and certified public accountant was sentenced today to 27 months in prison for conspiring with a New Jersey mortgage broker to extort and defraud victims by falsely representing to them that they were the subjects of criminal investigations, U.S. Attorney Paul J. Fishman announced.

Thomas G. Frey, 55, of Edison, New Jersey, previously pleaded guilty before U.S. District Judge Joel A. Pisano to two counts of an indictment charging him with conspiracy to commit extortion under fear of economic harm and to commit wire fraud. The sentence was imposed by U.S. District Judge Anne E. Thompson in Trenton federal court.

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

Frey, Robert G. Cusic Jr., a Millstone, New Jersey, mortgage broker, and another conspirator (named “CC-1” in the indictment) schemed to defraud four victims, including two police officers, by falsely representing to them that they were the subjects of criminal investigations, principally by the IRS, in connection with investment properties that some of them owned. Frey and Cusic falsely represented that while Cusic was at a property formerly owned by one of the victims, Cusic encountered two IRS special agents (SA-1 and SA-2) who questioned him extensively about some of the victims.

Frey falsely told the victims he had ongoing communications with SA-1 about the purported investigation and had a special relationship with SA-1. Frey told the victims if they paid up to $20,000 each, he would call SA-1 and have the investigation converted from a criminal tax investigation to an IRS “desk audit,” a civil matter. Frey and CC-1 falsely stated that if the victims did not retain his services and pay the fee, the investigation would likely result in the arrest of certain of the victims.

In addition to the prison term, Judge Thompson sentenced Frey to 3 years of supervised release; 300 hours of community service and fined him $25,000.  The defendant was also ordered to repay the Criminal Justice Act funds expended on his behalf.

Frey was previously charged by complaint on April 8, 2011, along with Cusic, with one count of conspiracy to commit extortion and one count of wire fraud. Cusic pleaded guilty Nov. 28, 2011, to conspiring with Frey to extort the victims. He is awaiting sentencing.

U.S. Attorney Fishman credited special agents of the Treasury Inspector General for Tax Administration, under the direction of Special Agent in Charge Rodney Davis, Washington Field Division, for the investigation leading to today’s sentence.

The government is represented by Assistant U.S. Attorney Eric W. Moran of the U.S. Attorney’s Office Special Prosecutions Division in Trenton.

Defense counsel: Charles E. Waldron Esq., Lawrenceville, N.J.

NEWARK, N.J. – An Essex County, New Jersey, man was sentenced today to three years’ probation for defrauding Home Depot Inc. out of more than $470,000 through an elaborate “double-dipping” scheme he committed at various Home Depot locations, including in New Jersey, U.S. Attorney Paul J. Fishman announced.

Daniel Chalet, 29, of Bloomfield, previously pleaded guilty before U.S. Magistrate Judge James B. Clark III to an information charging him with one count of conspiracy to commit wire fraud. U.S. District Judge Jose L. Linares imposed the sentence today in Newark federal court.

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

From March 2009 through June 2012, Chalet and his conspirators routinely purchased various items from Home Depot locations in New Jersey, New York, Massachusetts, Delaware, Maryland, Connecticut and Pennsylvania. The conspirators would assemble two shopping carts containing identical items. They then purchased the items in one cart (Cart 1) and stashed the other cart in the store (Cart 2). They would typically purchase the items in Cart 1 using cash, fraudulently obtained Home Depot store credit, or some combination thereof. Chalet and his conspirators would then leave the store with the items in Cart 1, as well as the receipt for the purchase, leaving Cart 2 inside the store.

The conspirators would return to the store almost immediately with a receipt corresponding to the items in Cart 1 and retrieve Cart 2, which contained the identical set of items. Under the guise that they had forgotten to purchase an item, usually an inexpensive one, Chalet and his conspirators would return to the register with Cart 2, and purchase only the additional small item. They would present the receipt for the items from Cart 1 and deceive the cashier into believing that the items in Cart 2 had already been purchased.

Chalet and his conspirators would later go back to the same Home Depot store or travel to different Home Depot store locations to return the items. In some instances, they presented a receipt for the return, and in other instances, the defendants obtained a refund for store credit without presenting a receipt.

Chalet and his conspirators carried out the scheme hundreds of times at various Home Depot locations, fraudulently obtaining Home Depot store credit and refunds totaling at least $470,511.66.

In addition to probation, Judge Linares sentenced Chalet to pay restitution of $472,465.49.

U.S. Attorney Fishman credited special agents of the U.S. Secret Service, Newark Field Office, under the direction of Acting Special Agent in Charge Carl Agnelli, for 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: Richard Roberts Esq., Newark

CAMDEN, N.J. – A Lawnside, New Jersey, man was sentenced today to 70 months in prison for illegally possessing firearms and selling 22 guns without a license, U.S. Attorney Paul J. Fishman announced.

Anthony Gilmore, a/k/a “Tone,” 25, previously pleaded guilty before U.S. District Judge Renée Marie Bumb to an information charging him with one count of conspiring to deal firearms without a license and one count of possession of a firearm by a previously convicted felon. Judge Bumb imposed the sentence today in Camden federal court.

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

Between April 8, 2013, and July 8, 2014, Gilmore conspired with four others to sell 22 firearms on several occasions, for profit and without a license. The 22 firearms included handguns, shotguns and an assault rifle. Gilmore personally sold or participated in the sale of at least seven firearms, including handguns and shotguns, as well as a bullet-proof vest, to a witness cooperating with the Bureau of Alcohol, Tobacco, Firearms and Explosives (ATF). Gilmore’s conspirators obtained the firearms in South Carolina and brought them to New Jersey on a weekly basis, at times using Amtrak to transport the guns. On two occasions, Gilmore sold a firearm to the cooperating witness along with ammunition. All 22 weapons are now in the custody of law enforcement.

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

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

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

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

NEWARK, N.J. – A Mauritius man today admitted sexually abusing a sleeping woman aboard a cruise ship, U.S. Attorney Paul Fishman announced.

Karan Seechurn, 25, pleaded guilty before U.S. District Judge Esther Salas in Newark federal court to an information charging him with one count of abusive sexual contact.

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

Seechurn was employed by a cruise line and was responsible for restocking the minibars located in passengers’ rooms. In order to conduct this duty, he was provided with a key that gave him access to passengers’ rooms. Seechurn admitted that on Dec. 23, 2014, while he was off-duty, he entered a passenger’s room and encountered a sleeping woman. Seechurn admitted that he touched the passenger’s genitalia while she was asleep. 

The abusive sexual contact charge to which Seechurn pleaded guilty carries a maximum potential penalty of three years in prison. Sentencing is scheduled for August 3, 2015.

The federal government has special maritime jurisdiction over sexual abuse cases, such as those that occur on cruise ships.

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

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

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

seechurn_karan_information.pdf

NEWARK, N.J. – A Morris County, N.J., man was sentenced today to 44 months in prison for fraudulently obtaining $500,000 by promising investors favorable returns and that funds would be used to finance educational television programming for teenage audiences, U.S. Attorney Paul Fishman announced.

Peter Lareau, 78, of Mountain Lakes, N.J., previously pleaded guilty before U.S. District Judge Esther Salas to an information charging him with one count of wire fraud. Judge Salas imposed the sentencing in Newark federal court.

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

From June 2008 through January 2010, Lareau created numerous entities, including T4Teens LLC and Concordia Mediaworks LLC, for the purpose of soliciting investors. Lareau recruited investors through civic, religious and charitable organizations, as well as through alumni events at prestigious education institutions.

In addition to promising greater-than-market returns, Lareau falsely represented that investors’ funds would be used for educational television programming for teenage audiences.

He sent investors prospectuses and other information related to investment opportunities by email and then directed them to wire funds from brokerage accounts in New York to his business accounts in New Jersey.

Instead of using the funds for educational programming or other business-related purposes, Lareau used those funds for personal expenses, including groceries, tuition payments for his child, rent payments, and club memberships.

In addition to the prison term, Judge Salas sentenced Lareau to one year of supervised release and ordered him to pay restitution of $533,000.

U.S. Attorney Fishman credited special agents from 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 U.S. Attorney Lorraine S. Gerson of the Economic Crimes Unit in Newark.

Defense counsel: K. Anthony Thomas Esq., Assistant Federal Public Defender, Newark  

CAMDEN, N.J. – A Filipino national appeared in federal court today to face charges that he allegedly conspired to smuggle firearms parts out of the United States, U.S. Attorney Paul J. Fishman announced.

Kirby Santos, 38, of the Republic of the Philippines, is charged in a criminal complaint with one count of conspiracy to violate the Arms Export Control Act and U.S. anti-smuggling laws. Santos was arrested in Guam on March 31, 2015, by special agents of the U.S. Department of Homeland Security-Homeland Security Investigations (DHS-HSI) and the Bureau of Alcohol, Tobacco, Firearms, and Explosives (ATF). He appeared this morning before U.S. Magistrate Judge Joel Schneider in Camden federal court and was detained.

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

Beginning in 2008, Santos used an internet forum to meet others and discuss the sales and shipment of firearms and firearms parts from the United States to the Philippines. Santos met a Toms River, New Jersey, conspirator who agreed to help Santos ship firearms and firearms parts from the United States to the Philippines. Santos used his credit cards and other forms of payment to purchase firearms parts from suppliers in the United States. Knowing that they would not ship to the Philippines, Santos arranged for the suppliers – including J&T Distributing from Winchester, Kentucky, Rainier Arms from Auburn, Washington, and Midway Corporation from Columbia, Missouri, among others – to send the firearms parts to the conspirator’s Toms River address in order to make it appear as a domestic sale.

At the direction of Santos, the conspirator would then repackage the firearms parts, falsely label the contents of the package and export the firearms parts to the Philippines for ultimate delivery to Santos. To disguise his role in the conspiracy, the conspirator used an alias when sending the packages containing prohibited items. Upon receiving the firearms parts, Santos paid the conspirator through cash payments to the conspirator’s relatives in the Philippines.

During the course of the nearly five-year long conspiracy, Santos purchased and directed the unlawful exportation of more than $200,000 worth of defense articles from the United States to the Philippines without the required export license.

The conspiracy count with which Santos is charged is punishable by a maximum potential penalty of five years in prison and a $250,000 fine.

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

U.S. Attorney Fishman credited special agents of DHS-HSI, under the direction of Acting Special Agent in Charge Kevin Kelly, and special agents of the ATF, under the direction of Special Agent in Charge George P. Belsky Jr., with the investigation leading to the arrest.

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

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

Defense counsel: Timothy R. Anderson Esq., Red Bank, New Jersey

TRENTON, N.J. - Three Orthodox Jewish Rabbis were convicted at trial today for conspiring to kidnap Jewish men in an effort to force them to give their wives religious divorces, referred to as “gets,” U.S. Attorney Paul J. Fishman announced.

Rabbis Mendel Epstein, 69, of Lakewood, New Jersey; Jay Goldstein a/k/a “Yaakov,” 60, of Brooklyn, New York; and Binyamin Stimler, 39, of Brooklyn, New York, were each convicted on Count One of the indictment, conspiracy to commit kidnapping. Goldstein and Stimler were additionally convicted on Count Five of the indictment, attempted kidnapping. Epstein’s son, David Epstein a/k/a “Ari,” 40, of Lakewood, New Jersey, was acquitted on three counts. The jury deliberated three days following an eight-week trial before U.S. District Judge Freda L. Wolfson in Trenton federal court.

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

On Dec. 1, 2009, in Lakewood, an Orthodox Jewish man, Israel Markowitz, was assaulted, placed in a van, tied up, beaten and shocked with a stun-gun until he agreed to give his wife a get.

On Oct. 16, 2010, in Lakewood, another Orthodox Jewish man, Ysrael Bryskman, was assaulted, tied up and beaten until he agreed to give his wife a get.

On Aug. 22, 2011, in Brooklyn, New York, another Orthodox Jewish man, Usher Chaimowitz, and his roommate, Menachem Teitlebaum, were assaulted, tied up, and beaten until Chaimowitz agreed to give his wife a get.

Based upon these incidents, the FBI began an undercover operation in August 2013 in which two FBI agents posed as a wife who was seeking a get from her recalcitrant husband, and her brother, who was trying to help her obtain the get.  Over the next several weeks, the undercover agents had multiple recorded phone calls and in-person meetings with defendant Mendel Epstein. In those meetings, Mendel Epstein arranged to have his team kidnap the husband at a warehouse in exchange for $60,000.

On October 9, 2013, Goldstein, Stimler and six other individuals, traveled from New York to a warehouse in Middlesex County, New Jersey, to execute the planned kidnapping of the husband to force him to give the get.  They arrived at the warehouse in two dark minivans shortly after 8:00 p.m.  Some of the kidnap team members put on masks and entered the warehouse office with the undercover agent posing as the brother. The remaining kidnappers walked around the outside with flashlights. Over the next 15 minutes, members of the kidnap team went in and out of the warehouse office wearing disguises, including ski masks, Halloween masks and bandanas. They discussed their plan for kidnapping and assaulting the husband, how they planned to grab him, pull him down, tie him up, and take his phone.  Members of the kidnap team brought with them to the warehouse a 30-foot nylon rope, a blindfold, vodka, license plates they had switched out, and items used to ceremonially record the get.  At 8:23 p.m., law enforcement moved into the warehouse office and arrested the eight men, including Goldstein and Stimler.  Mendel Epstein was arrested at his Brooklyn home the same night.

The count of conspiracy to commit kidnapping carries a maximum potential penalty of life in prison and a $250,000 fine, or twice the gross gain or loss from the offense. The count of attempted to commit kidnapping carries a maximum potential penalty of 20 years in prison and a $250,000 fine, or twice the gross gain or loss from the offense. Sentencing is scheduled for July 15, 2015.  Nine other individuals previously entered guilty pleas in connection with this conspiracy.

U.S. Attorney Fishman credited special agents of the FBI, under the direction of Special Agent in Charge Richard M. Frankel in Newark, and the Lakewood Police for the investigation leading to today’s verdicts.

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

Defense counsel:

Mendel Epstein: Robert G. Stahl Esq. and Laura Gasiorowski Esq., Westfield, New Jersey

Jay Goldstein: Aiden O’Connor Esq., Hackensack, New Jersey

David Epstein: Henry Mazurek Esq., New York

Binyamin Stimler: Nathan Lewin Esq., Washington, D.C. and Gedalia Stern

epstein_mendel_et_al._amended_indictment.pdf

TRENTON, N.J. – A South Jersey woman who was a member of a large-scale drug trafficking organization today admitted distributing more than 100 grams of heroin, U.S. Attorney Paul J. Fishman announced.

Dawn Rosser, 34, of Lakewood, New Jersey, pleaded guilty before U.S. District Judge Peter G. Sheridan in Trenton federal court to an information charging her with one count of conspiring to distribute heroin.

In March 2014, 20 other alleged members of the drug trafficking organization of which Rosser 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 individuals, nine have pleaded guilty.

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

Between February 2013 and March 2014, Rosser conspired with others to distribute heroin in Ocean and Monmouth counties. Rosser admitted distributing between 100 and 400 grams of heroin.

The narcotics conspiracy charge to which Rosser pleaded guilty carries a maximum penalty of 20 years in prison and $1 million fine. Sentencing is scheduled for June 5, 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, with the investigation leading to today’s guilty plea.

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

Defense counsel: Joseph Accardi Esq., Elizabeth, New Jersey

rosser_dawn_information.pdf

TRENTON, N.J. – A Toms River, New Jersey, man today admitted distributing heroin and cocaine as part of a large-scale drug trafficking organization that operated in Monmouth, Ocean, and Middlesex counties, U.S. Attorney Paul J. Fishman announced.

Delovi R. Canales, a/k/a “Butter,” 48, pleaded guilty before U.S. District Judge Anne E. Thompson in Trenton federal court to an information charging him with one count of conspiring to distribute heroin.

In October 2014, 20 other alleged members of the drug trafficking organization of which Canales was a member were charged by criminal complaint with conspiring to distribute heroin. The complaint referred to the drug trafficking organization as the “Cadet DTO,” after one of its leaders, Herve Cadet, a/k/a “Gotti,” a/k/a “Bro,” 29, of Neptune and Sayreville, New Jersey.

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

From November 2013 through October 2014, Cadet, Eric Smith, a/k/a “EV,” a/k/a “E,” 42, of Manchester, New Jersey, and the other members of Cadet DTO, including Canales, conspired to sell illegal drugs – chiefly heroin – in Monmouth, Ocean and Middlesex counties. Through the use of confidential informants, authorized interception of cell phone calls and other means, law enforcement learned Cadet and Smith were responsible for identifying sources of heroin supply and oversaw distributors and other conspirators who sold, packaged and stored the drugs. Members used stash houses, spoke in code and used Haitian Creole to avoid detection by law enforcement.

The narcotics conspiracy charge to which Canales pleaded guilty carries a maximum penalty of 20 years in prison and $1 million fine. Sentencing is scheduled for June 27, 2015.

U.S. Attorney Fishman credited special agents of the DEA, Newark Division, under the direction of Special Agent in Charge Carl J. Kotowski and officers of the Monmouth County Prosecutor’s Office, under the direction of Acting Prosecutor Christopher J. Gramiccioni 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:  David R. Oakley Esq., Princeton, New Jersey

NEWARK, N.J. – A Union County, New Jersey, tax preparer with an office in Essex County, New Jersey, was arrested today on charges of aiding and abetting in the filing of two dozen false tax returns, U.S. Attorney Paul J. Fishman announced.

Darlene Covington, 31, of Hillside, New Jersey, was indicted by a federal grand jury on April 10, 2015, and charged with 24 counts of aiding and abetting in the filing of false tax returns. She made her initial appearance today before U.S. Judge Joseph A. Dickson in Newark federal court and was released on $75,000 unsecured bond.

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

Covington worked as a tax preparer for KCJ Financial Corp., a tax preparation business in Irvington, New Jersey. During 2009 and 2010, Covington filed 24 false tax returns for tax years 2008 and 2009, using false information and personal identification information without the knowledge, consent or permission of the individuals named in the tax returns. Covington then applied for refund acceleration loans from financial institutions for each of the fraudulent refunds and earned a portion of each loan she secured. The refunds were given to a third party.

The false filing charges with which Covington is charged each carry a maximum potential penalty of three years in prison and a $250,000 fine.

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

The government is represented by Assistant U.S. Attorney Sharon Ashe.

The charges in the indictment are mere accusations and the defendant is presumed innocent unless and until proven guilty.

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

NEWARK, N.J. – A native of Romania who was arrested in Spain will make his initial court appearance today following his extradition to face charges that he participated in a large-scale lucrative ATM skimming scheme targeting New Jersey bank customers, U.S. Attorney Paul J. Fishman announced.

Robert Mate, a/k/a “Chioru,” a/k/a “Marcel Varga,” 29, will appear this afternoon before U.S. Magistrate Judge Joseph A. Dickson on a six-count indictment charging him with conspiracy to commit bank fraud, aggravated identity theft, conspiracy to possess 15 or more counterfeit access devices, and conspiracy to possess access device-making equipment. The other two individuals charged on the indictment, Alin Dumitru Carabus and Ionut Vasile Ciurba-Stana, have been apprehended in Spain and requests for extradition are pending.      

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

Mate participated as a high-level member of an extensive scheme to steal bank customer account information, commonly referred to as “ATM skimming,” by installing secret card-reading devices on ATMs throughout New Jersey, New York, Connecticut, Florida, and elsewhere. The scheme was organized by Marius Vintila, 31, who previously pleaded guilty to bank fraud conspiracy and aggravated identity theft charges. The scheme defrauded Citibank, TD Bank, Wells Fargo, and multiple other financial institutions out of at least $5 million, and affected thousands of bank customers. Vintila and Bogdan Radu designed and constructed sophisticated card-reader devices and pinhole camera panels capable of reading and storing customers’ bank account information and personal identification numbers. Mate and others then secretly installed the card-reader devices and the pinhole cameras panels onto bank ATMs, and removed them a few days later after they had recorded customer bank account information as customers performed routine bank transactions at ATMs. After the account information was stolen, it was used to create thousands of false and fraudulent ATM cards, which Mate and others used to withdraw millions of dollars from customers’ bank accounts.   

The ATM skimming operation in which Mate participated is one of the largest ever uncovered by law enforcement. To date, 16 individuals have been charged in connection with this scheme, 12 have pleaded guilty, and one individual, Dinu Horvat, was recently convicted after a week-long trial. Marius Vintila, the ringleader of the scheme, pleaded guilty

Marius Vintila, 31, previously pleaded guilty in February 2015 to bank fraud conspiracy and aggravated identity theft charges. Bogdan Radu, 30, pleaded guilty to bank fraud conspiracy and aggravated identity theft charges in February 2014. Dinu Horvat, 28, Enes Causevic, 24, Marius Cotiga, 35, Constantin Ginga, 53, Dezso Gyapias, 29, Ioan Leusca, 30, Constantin Pendus, 30, and Emil Revesz, 30, participated in the scheme by installing or removing the devices, and by subsequently using the fraudulent ATM cards to withdraw cash from compromised bank accounts.  Florin Apetrei, 18, Luis Franco, 23, and Mirel Hadzalic, 24, participated in the scheme by using the fraudulent ATM cards to withdraw cash. Causevic, Cotiga, Ginga, Gyapias, Leusca, and Revesz all pleaded guilty to bank fraud conspiracy and aggravated identity theft charges. Apetrei, Cotiga, Pendus, Franco, and Hadzalic pleaded guilty to bank fraud conspiracy. And Horvat was convicted at trial of bank fraud conspiracy, aggravated identity theft, conspiracy to possess 15 or more access devices, and conspiracy to possess access device-making equipment.

For their roles in the scheme, Judge Martini sentenced Ginga, Gyapias, and Leusca each to 57 months in prison and Franco and Pendus each to 33 months in prison. Hadzalic received a sentence of 34 months in prison, Apetrei received a sentence of 24 months in prison, and Cotiga received a sentence of 26 months in prison. Vintila, Causevic, Radu, Revesz, and Horvat are pending sentencing.           

Mate is charged with four counts, as described below, which carry the following maximum penalties and fines:

Count

Offense

Maximum Penalty

Maximum Fine

1

Conspiracy to Commit Bank Fraud

Thirty years in prison

$1 million

4

Aggravated Identity Theft

Mandatory, consecutive penalty of two years in prison

$250,000, or twice the gross pecuniary gain or loss from the offense

5

Conspiracy to Possess Fifteen or More Counterfeit Access Devices

Five years in prison

$250,000, or twice the gross pecuniary gain or loss from the offense

6

Conspiracy to Possess Access Device-Making Equipment

Seven and one-half years in prison

$250,000, or twice the gross pecuniary gain or loss from the offense

                    

U.S. Attorney Fishman praised special agents of the U.S. Secret Service, Newark Field Office, under the direction of Acting Special Agent in Charge Carl Agnelli, along with special agents of Immigration and Customs Enforcement, Homeland Security Investigations (HSI) in Newark, under the direction of Acting Special Agent in Charge Kevin Kelly, with the investigation leading to the charges.

The government is represented by Assistant U.S. Attorneys Rahul Agarwal of the Special Prosecutions Division and David M. Eskew of the Criminal Division, Economic Crimes Unit, in Newark.

Defense counsel: Angelo Servidio Esq., Nutley, New Jersey                      

NEWARK, N.J. – The owner of a home health agency today admitted her role in a $7 million scheme to defraud Medicaid and engage in bribery, money laundering, and tax evasion, U.S. Attorney Paul J. Fishman announced.

Irina Krutoyarsky, 61, Springfield, New Jersey, pleaded guilty before U.S. District Judge Katharine S. Hayden in Newark federal court to an information that charged her with conspiracy to commit health care fraud, bribery, conspiracy to commit money laundering, and tax evasion.

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

Krutoyarsky owned HHCH Health Care Inc., of Linden, New Jersey, which provided home health aides and health care services to New Jersey residents. Home health aides visit patients at their homes and provide a variety of health care services, such as assistance with eating, dressing, and grooming. These home health aide services were subsidized under the N.J. Medical Assistance Program (Medicaid).

Krutoyarsky and her conspirators defrauded Medicaid by submitting false documents to the N.J. Board of Nursing, the state agency responsible for issuing home health aide certifications. Krutoyarsky falsely represented that prospective home health aides had attended and satisfactorily completed required training and testing. In truth, Krutoyarsky charged prospective home health aides hundreds of dollars for fraudulently obtaining their certifications.

Krutoyarsky also fraudulently billed Medicaid for services not actually rendered to patients. Numerous HHCH home health aides routinely falsified records that claimed they had visited patients and provided them health care services. In truth, these home health aides had other jobs, were on vacations overseas, or were in other parts of the state during the times they claimed they were with patients. Home health aides sometimes gave cash kickbacks to patients who were also participating in the scheme. Federal agents introduced a cooperating witness (CW), posing as a prospective home health aide to Krutoyarsky. During one meeting in January 2012, Krutoyarsky and another conspirator meet with the CW to discuss having him join the scheme to defraud Medicaid. In explaining the scheme, Krutoyarsky explained that they would fraudulently bill Medicaid to obtain “free money [from the] Government.”

Krutoyarsky hired individuals with no home health certifications and no status in the country and then sent them to patients’ homes. Krutoyarsky and her conspirators then billed Medicaid, fraudulently claiming that the services had been provided by duly certified home health aides.

Krutoyarsky defrauded Medicaid out of $7 million. She directed certain home health aides to establish checking accounts at a bank near HHCH’s office and then took control of their checkbooks.  After Medicaid paid the claims and transferred the funds into HHCH accounts, Krutoyarsky then transferred portions of the money into the aides’ accounts and used the money to purchase, maintain, and pay for real property in New Jersey, New York, Florida; purchase personal property for her own use and benefit; and pay for personal expenses for her own use and benefit and the use and benefit of her family.

Krutoyarsky also bribed an employee of the N.J. Department of Labor (NJDOL), who was working in an undercover capacity with federal agents. In mid-2010, the NJDOL received a complaint that Krutoyarsky was not paying overtime wages to her employees and commenced an investigation. The department demanded Krutoyarsky produce certain HHCH records. Realizing that providing these records would reveal the Medicaid fraud scheme, Krutoyarsky paid approximately $10,000 in a cash bribe to the employee for the purpose of obstructing and unlawfully influencing the NJDOL investigation. The employee, however, was wearing a recording device and recorded Krutoyarsky making the bribe payment on video.

In May 2011, Krutoyarsky paid a second cash bribe of approximately $15,000 to the employee for the purpose of obstructing and unlawfully influencing a second NJDOL investigation related to one of Krutoyarsky’s conspirator’s companies. This bribe payment was also captured on video.

Between 2007 and 2011, Krutoyarsky cheated the IRS out of $907,150 in taxes due and owing to the United States. She sent home health aides to the homes of patients who were not eligible for Medicaid. These patients wrote checks payable to HHCH. A conspirator cashed these checks at check-cashing businesses in New Jersey and equally divided the cash with Krutoyarsky. Krutoyarsky also issued HHCH checks to “no show” employees, who then wrote personal checks back to Krutoyarsky. On her corporate tax returns, she falsely characterized these payments as legitimate business deductions, thus reducing her business’ corporate taxes.

The counts of conspiracy to commit health care fraud, bribery and money laundering each carry a maximum potential sentence of 10 years in prison, and the count of tax evasion carries a maximum potential sentence of five years in prison. All counts are also punishable by a fine of $250,000. As part of the plea agreement, Krutoyarsky will be ordered to pay a $7 million forfeiture money judgment to the United States and will forfeit several homes and properties in New Jersey, New York, and Florida, as well as hundreds of thousands of dollars seized from her bank accounts or bank accounts that she controlled. Krutoyarsky’s sentencing is scheduled for Sept. 14, 2015.

As other defendants, the charges and allegations contained in the complaint are merely accusations, and those defendants are presumed innocent unless and until proven guilty.

U.S. Attorney Fishman credited special agents of the FBI, under the direction of Special Agent in Charge Richard M. Frankel, in Newark; IRS-Criminal Investigation, under the direction of Special Agent in Charge Jonathan D. Larsen; U.S. Citizenship and Immigration Services; Acting N.J Attorney General John J. Hoffman; N.J. State Comptroller Marc Larkins; Division Director Mark Anderson, Office of the State Comptroller, Medicaid Fraud Division; New Jersey Division of Consumer Affairs, under the direction of Acting Director Steve C. Lee; the N.J. Board of Nursing; the N.J. Department of Labor, under the direction of Commissioner Hal Wirth; U.S. Department of State-Bureau of Diplomatic Security; and the Marlboro Police Department, under the direction of Chief Bruce Hall, for the investigation leading to today’s guilty plea.

The government is represented by Assistant U.S. Attorneys V. Grady O’Malley, Peter Gaeta, and Anthony Moscato of the U.S. Attorney’s Office Criminal Division in Newark.

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

TRENTON, N.J. – A Newark, New Jersey, man was sentenced to 156 months in prison for robbing a Target Store in Union, New Jersey, on “Black Friday” in November 2012, U.S. Attorney Paul J. Fishman announced today.

DaQuaan Vaughn, 36, previously pleaded guilty before U.S. District Judge Anne E. Thompson to a superseding information charging him with one count of Hobbs Act robbery and one count of using a firearm in furtherance of a crime of violence. Vaughn also pleaded guilty to an unrelated count of firearms trafficking in connection with his unlawful sale of firearms between April and June 2012. Judge Thompson imposed the sentence today in Trenton federal court.  

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

On Nov. 23, 2012, Vaughn, Lavell Jones, 29, of East Orange, New Jersey, Darrell A. Carter, 25, or Irvington, New Jersey, and Maryland Liggins III, 30, of Newark, robbed a Target store located on Springfield Avenue in Union on Black Friday – the day after Thanksgiving – which is considered to be one of the busiest shopping days of the year. Jones posed as a shopper and served as a lookout inside the store. He alerted the others when the store was closing and money was being transferred from the store’s registers to the cash room. Liggins served as the getaway driver.

Before closing, Carter and Vaughn waited in the bathroom. When an employee entered the bathroom, Carter and Vaughn restrained the employee and threatened him with a firearm. After the store closed, Carter and Vaughn entered the cash room, restrained other Target employees with zip ties and robbed them at gunpoint, stealing more than $50,000 from a cash cart and safe. Then they fled the store and ran out to a vehicle – driven by Liggins – that was parked on the shoulder of nearby Route 78.

In addition to the prison term, Judge Thompson sentenced Vaughn to five years of supervised release and ordered him to pay $54,000 in restitution to Target. All of the defendants have the same restitution obligation until the full $54,000 is satisfied. Liggins also pleaded guilty to his role in the robbery and await sentencing.

U.S. Attorney Fishman credited special agents of the FBI, under the direction of Special Agent in Charge Richard M. Frankel, with the investigation leading to today’s sentencing. He also thanked the Union Police Department for its role in the investigation and Target corporate security for its cooperation.

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

Defense Counsel: Timothy Donohue Esq., West Orange, New Jersey

NEWARK, N.J. – The Elizabeth Public School District has agreed to credit its School Lunch Program $272,810 and pay $49,500 to the U.S. Department of Justice to settle allegations that it improperly used federal and state funds to provide meals and catering services for school board meetings and other special functions.

The announcement was made today by U.S. Attorney Paul J. Fishman and Special Agent-in-Charge William G. Squires of U.S. Department of Agriculture (USDA), Office of Inspector General.

The school district participates in the USDA’s National School Lunch Program, which provides reimbursement payments to ensure low-cost or free meals (breakfast, lunch and snacks) for certain qualifying students. The USDA administers the program, while oversight, compliance and general administration is done by the N.J. Department of Education, Office of Fiscal Accountability and Compliance (OFAC) and the state Department of Agriculture (NJDA), Division of Food and Nutrition.

The district receives federal and state funds designated specifically for the lunch program. Those funds must be kept separate and independent from other funds and used solely for approved lunch program purposes. The district may generate revenue for its lunch program by selling snacks and meals and providing catering services, but all money used for and earned from these services must be used solely for the lunch program.                   

According to the settlement agreement:

Between July 1, 2008, and June 30, 2014, the district failed to collect, reimburse, or apply $182,243 to its lunch program for catering services provided to its Board of Directors and $90,567 for catering services provided to various schools, principals, and administrators within the district for other special functions. The United States contends the district’s lunch program was deprived of the use of $272,810. 

In addition to repaying the lunch program and paying penalties, the district will participate in training and be subject to three years of monitoring by OFAC and NJDA.

The civil settlement agreement is between the United States – acting through the U.S. Attorney’s Office for the District of New Jersey and on behalf of the USDA, OFAC, NJDA – and the Elizabeth Public School District.

U.S. Attorney Fishman credited OFAC, NJDA, and the USDA, Office of the Inspector General, with the investigation leading to the settlement.

The government is represented by Assistant U.S. Attorney Valorie D. Smith of the U.S. Attorney’s Office Civil Division in Newark.

The claims settled by this agreement are allegations only; there have been no admissions of liability.

Defense counsel: Bruce S. Rosen Esq., Florham Park, New Jersey

 

CAMDEN, N.J. – A bookkeeper at an Atlantic City, New Jersey, rolling chair company  today admitted lying to federal agents during an investigation into unreported cash taken from the business, U.S. Attorney Paul J. Fishman announced.

Abdus Mian, 66, of Atlantic City, pleaded guilty before U.S. District Judge Joseph H. Rodriguez to an information charging him with one count of making materially false statements to federal agents.

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

Mian was the bookkeeper for Royal Rolling Chairs LLC, an Atlantic City business that provided rolling chair transportation services to patrons on the Atlantic City boardwalk. Mian admitted that he maintained a second set of books that tracked the cash that William Boland, 58, of Ventnor City, New Jersey, and two other owners were removing from the business and not reporting to the IRS.

Mian admitted that he was interviewed by IRS and FBI special agents on June 9, 2011, at which time he was asked questions about his role as bookkeeper. Mian falsely stated that he only maintained one set of books, never prepared a second set of books and was unaware of the owners taking cash out of the business.

The false statements charge carries a maximum potential penalty of five years in prison and a $250,000 fine, or twice the gain or loss from the offense. Sentencing is currently scheduled for July 29, 2015.

On Oct. 30, 2014, Boland admitted conspiring with his two partners at Royal Rolling Chairs to defraud the IRS of $119,880 in income taxes over the course of three years. Boland is scheduled to be sentenced by Judge Rodriguez on July 14, 2015.

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

The government is represented by Assistant U.S. Attorney Matthew J. Skahill of the U.S. Attorney=s Office Special Prosecutions Division in Camden and Trial Attorney Tino Lisella of the Tax Division of the U.S. Department of Justice.

Defense counsel: Steven I. Kaplan Esq., Northfield, New Jersey

NEWARK, N.J. – A Kenilworth, New Jersey, man was sentenced today to 41 months in prison for his role in the affairs of the Genovese organized crime family of La Cosa Nostra (the “Genovese family”), including engaging in a pattern of racketeering activity by extorting Christmastime tribute payments from members of the International Longshoremen’s Association (ILA), New Jersey U.S. Attorney Paul J. Fishman and Eastern District of New York U.S. Attorney Loretta E. Lynch announced.

Stephen Depiro, 59, a Genovese family soldier, previously pleaded guilty before U.S. District Judge Claire C. Cecchi to Count One of the second superseding indictment charging him with racketeering conspiracy. Depiro admitted to predicate acts involving conspiracy to commit extortion and bookmaking. Judge Cecchi imposed the sentence today in Newark federal court.

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

Since at least 2005, Depiro has managed the Genovese family’s control over the New Jersey waterfront – including the nearly three-decades-long extortion of port workers in ILA Local 1, ILA Local 1235 and ILA Local 1478. Members of the Genovese family, including Depiro, are charged with conspiring to collect tribute payments from New Jersey port workers at Christmastime each year through their corrupt influence over union officials, including the last three presidents of Local 1235 and vice president of ILA Local 1478.

During their guilty plea proceedings, Depiro and two other Genovese family associates – Albert Cernadas, 79, of Union, New Jersey, former president of ILA Local 1235 and former ILA executive vice president; and Nunzio LaGrasso, 64, of Florham Park, New Jersey, former vice president of ILA Local 1478 and ILA representative – admitted their involvement in the Genovese family, including conspiring to compel tribute payments from ILA union members, who made the payments based on actual and threatened force, violence and fear. Cernadas and LaGrasso admitted to carrying out multiple extortions of dockworkers. The timing of the extortions typically coincided with the receipt by certain ILA members of “Container Royalty Fund” checks, a form of year-end compensation. Depiro also admitted to managing an illegal sports betting business.

In addition to the prison term, Judge Cecchi sentenced Depiro to serve three years of supervised release. Cernadas was previously sentenced to probation and LaGrasso was sentenced to 28 months in prison.

U.S. Attorneys Fishman and Lynch credited the FBI in New Jersey, under the direction of Special Agent in Charge Richard M. Frankel, and in New York, under the direction of Assistant Director in Charge George Venizelos, as well as 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, with the investigation leading to today’s sentencing. They also thanked the Waterfront Commission of New York Harbor for its cooperation and assistance in the investigation.

The government is represented by Assistant U.S. Attorney Jacquelyn M. Kasulis of the U.S. Attorney’s Office, Eastern District of New York, and Assistant U.S. Attorney Anthony Mahajan, of the U.S. Attorney’s Office, District of New Jersey.

Defense counsel: Alyssa Cimino Esq., Fairfield, New Jersey

NEWARK, N.J. – A jury today convicted Joseph A. Ferriero, the former chairman of the Bergen County Democratic Organization (BCDO), in connection with a racketeering scheme involving fraud and soliciting and accepting bribes as a party official, U.S. Attorney Paul J. Fishman announced.

Ferriero, 57, was found guilty following an eight-week trial before U.S. District Judge Esther B. Salas in Newark federal court. The jury deliberated four days before finding Ferriero guilty of conducting the BCDO’s affairs through a pattern of racketeering activity (Count One), using the mail and facilities in interstate commerce to promote bribery and distribute bribe proceeds (Count Three) and wire fraud (Count Five).

“Joseph Ferriero was convicted today of running a local political organization as a criminal enterprise, using his power and position to line his pockets,” U.S. Attorney Fishman said. “The evidence we presented at trial described a racketeering operation that ran on influence peddling, bribes and kickbacks. Rooting out and prosecuting this kind of political corruption is a constant priority for this office. The people of New Jersey are entitled to honest public service.”

“Today’s conviction of Joseph A. Ferriero reaffirms the FBI’s commitment to combat public corruption in New Jersey and serves as a reminder that those individuals who violate the public’s trust will be held accountable,” Richard M. Frankel, the FBI’s Special Agent in Charge, Newark, said.

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

Ferriero served as the chairman of the BCDO from 1998 until January 2009 and was the sole member of SJC Consulting LLC.  The jury found Ferriero accepted bribes in his capacity as BCDO chairman in the course of a scheme involving SJC. Ferriero agreed with John Carrino, a Nutley, New Jersey-based attorney and software developer that Ferriero would recommend and provide a favorable opinion of the software developer and his companies to various public officials in Bergen County with whom Ferriero had influence. The software developer agreed to pay Ferriero one-quarter to one-third of the gross receipts from any contract obtained as a result of Ferriero’s efforts. Ferriero’s financial interest in the software developer’s public contracts was completely hidden using two shell companies, one of which was created and incorporated in Nevada for the sole purpose of contracting with and accepting payments from another shell company controlled by the software developer.

The racketeering charge carries a maximum potential penalty of 20 years in prison; the Travel Act charge carries a maximum penalty of five years in prison; and the wire fraud charge carries a maximum potential penalty of 20 years in prison. Each count of the indictment also carries a maximum $250,000 fine. Sentencing is scheduled for July 27, 2015.

U.S. Attorney Fishman credited special agents of the FBI, under the direction of Special Agent in Charge Frankel, and investigators from the U.S. Attorney’s Office, under the direction of Supervisory Criminal Investigator Thomas Mahoney, with the investigation leading to today’s conviction.

The government is represented by Counsel to the U.S. Attorney Rachael A. Honig and Assistant U.S. Attorney Barbara Llanes of the Special Prosecutions Division in Newark.

Defense counsel: Michael Baldassare, Jennifer Mara and Dillon Malar Esqs., Newark       

TRENTON, N.J. –Two Essex County, New Jersey, men were each sentenced to 130 months in prison for robbing a Target Store in Union, New Jersey, on “Black Friday” in November 2012, U.S. Attorney Paul J. Fishman announced today.

Lavell Jones, 29, of East Orange, New Jersey, previously pleaded guilty before U.S. District Judge Anne E. Thompson to an indictment charging him with one count of Hobbs Act robbery. Darrell A. Carter, 25, or Irvington, New Jersey, previously pleaded guilty before Judge Thompson to an information charging him with one count of Hobbs Act robbery and one count of using a firearm in furtherance of a crime of violence. Judge Thompson imposed both sentences in Trenton federal court. 

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

On Nov. 23, 2012, Jones, Carter, DaQuaan Vaughn, 36, of Newark, New Jersey, and Maryland Liggins III, 30, of Newark, robbed a Target store located on Springfield Avenue in Union on Black Friday – the day after Thanksgiving – which is considered to be one of the busiest shopping days of the year. Jones posed as a shopper and served as a lookout inside the store. He alerted the others when the store was closing and money was being transferred from the store’s registers to the cash room. Liggins served as the getaway driver.

Before closing, Carter and Vaughn waited in the bathroom. When an employee entered the bathroom, Carter and Vaughn restrained the employee and threatened him with a firearm. After the store closed, Carter and Vaughn entered the cash room, restrained other Target employees with zip ties and robbed them at gunpoint, stealing more than $50,000 from a cash cart and safe. Then they fled the store and ran out to a vehicle – driven by Liggins – that was parked on the shoulder of nearby Route 78.

In addition to the prison term, Judge Thompson sentenced Jones to three years of supervised release and Carter to five years of supervised release; both were ordered to pay $54,000 in restitution to Target. All of the defendants have the same restitution obligation until the full $54,000 is satisfied.

Vaughn and Liggins have also pleaded guilty to their roles in the robbery and await sentencing.

U.S. Attorney Fishman credited special agents of the FBI, under the direction of Special Agent in Charge Richard M. Frankel, with the investigation leading to the guilty pleas. He also thanked the Union Police Department for its role in the investigation and Target corporate security for its cooperation.

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

Defense Counsel:      

Carter: Peter Carter Esq., Newark                                                                

Jones: Richie Roberts Esq., Newark

CAMDEN, N.J. – A South Jersey man and a woman from South Carolina have admitted their roles in a conspiracy to sell 25 guns without a license, U.S. Attorney Paul J. Fishman announced today.

Shawn Tribbett, 32, of Camden, pleaded guilty to an information charging him with one count of conspiring to deal firearms without a license, two counts of possession of a firearm by a previously convicted felon and one count of distribution and possession with intent to distribute cocaine. Katelynn Schippnick, 25, of Greeley, South Carolina, pleaded guilty to a separate information charging her with one count of conspiring to deal firearms without a license. Both defendants entered their pleas before U.S. District Judge Renée Marie Bumb in Camden federal court.

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

Between April 8, 2013, and July 2014, both Tribbett and Schippnick conspired with others to illegally sell firearms without a license, including handguns, shotguns and an assault rifle. They obtained the firearms from pawn shops, gun stores and other sources in South Carolina and brought them to New Jersey, at times using Amtrak trains to transport the guns.  Tribbett personally sold or participated in the sale of at least six firearms, including handguns, shotguns and an assault-style rifle, to a witness cooperating with the Bureau of Alcohol, Tobacco, Firearms and Explosives (ATF). Schippnick assisted in the sale of at least five firearms, including handguns and a shotgun, also to an ATF cooperating witness. On at least one occasion, Tribbett and sold ammunition with the firearms.

In addition to the firearms conspiracy, Tribbett admitted that on several occasions he sold cocaine and oxycodone pills to a witness cooperating with the ATF.

The conspiracy charge to which Tribbett and Schippnick pleaded guilty carries a maximum potential penalty of five years in prison and a $250,000 fine. The unlawful possession of a firearm as a convicted felon charges to which Tribbett pleaded guilty each carry a maximum potential penalty of 10 years in prison and a $250,000 fine. The distribution of cocaine charge carries a maximum potential penalty of 20 years in prison and a $1 million fine. Sentencing for both defendants is scheduled for July 23, 2015.

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

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

Defense counsel:     

Tribbett: Brian O’Malley Esq., Haddon Heights, New Jersey

Schippnick: Martin Isenberg Esq., Gibbsboro, New Jersey

CAMDEN, N.J. – A Pennsylvania man was sentenced today to 60 months in prison for his role in an assault, U.S. Attorney Paul J. Fishman announced.

Garrett Wiseman, 25, previously pleaded guilty before U.S. District Judge Joseph H. Rodriguez to an information charging him in connection with his role in traveling from Pennsylvania to New Jersey to commit an aggravated assault in furtherance of an extortion scheme. Judge Rodriguez imposed the sentence today in Camden federal court.

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

On June 09, 2010, Wiseman and two co-defendants were in a car that was used to run down a construction site manager who had been critical of the work being done by a company called Sands Mechanical Inc., a subcontractor on the restoration and rehabilitation of the Marine Corps Reserve Training Center at Joint Base-McGuire-Dix-Lakehurst in Burlington County, New Jersey. Wiseman was driving the vehicle at the time of the assault. The victim suffered serious injuries.

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

U.S. Attorney Fishman credited special agents of 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; Naval Criminal Investigative Service – Northeast Field Office, under the direction of Special Agent in Charge Leo S. Lamont; and the Air Force Office of Special Investigations Detachment 307, under the direction of Special Agent Seth Neville, detachment commander, Joint Base McGuire-Dix-Lakehurst. He also thanked the U.S. Attorney’s Office for the Eastern District of Pennsylvania.

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

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

NEWARK N.J. – The owner of a Morris County, New Jersey, freight shipping company today admitted billing a medical devices and pharmaceutical company more than $3 million for services that were never provided, U.S. Attorney Paul J. Fishman announced.

Courtney P. Shorter, 48, of Roselle, New Jersey, and Memphis, Tennessee, pleaded guilty today before U.S. District Judge William H. Walls in Newark federal court to an information charging him with one count of mail fraud.

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

Shorter owned Sam Shorter & Son Delivery Service LLC, a freight shipping and trucking company in Long Valley, New Jersey. Company B manufactured and supplied insulated containers to Company A, a medical devices, pharmaceutical and consumer packaged goods manufacturer headquartered in New Brunswick, New Jersey. Company C was a freight invoice processing company headquartered in Fort Myers, Florida, that Company A used to pay trucking companies.

From 2008 through April 2010, Shorter charged Company A for transporting shipments from Company B to Company A when, in fact, those shipments were never made. Shorter admitted that he and others sent Company C more than 1,725 fraudulent invoices for work that was never actually performed. As a result of the invoices, Shorter received $3,039,840 from Company C, which he later deposited into bank accounts he controlled and used for personal expenses, including more than $120,000 in jewelry.

The mail fraud charge to which Shorter pleaded guilty carries a maximum potential penalty of 20 years in prison and a $250,000 fine. Sentencing is scheduled for July 28, 2015.

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

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: Randy P. Davenport Esq. and Steven Brister Esq., Union, New Jersey

NEWARK, N.J. – A North Jersey man was sentenced today to 28 months in prison for his role in the affairs of the Genovese organized crime family of La Cosa Nostra (the “Genovese family”), including engaging in a pattern of racketeering activity by extorting Christmastime tribute payments from members of the International Longshoremen’s Association (ILA), New Jersey U.S. Attorney Paul J. Fishman and Eastern District of New York U.S. Attorney Loretta E. Lynch announced.

Nunzio LaGrasso, 64, of Florham Park, New Jersey, former vice president of ILA Local 1478 and ILA representative – previously pleaded guilty before U.S. District Judge Claire C. Cecchi in Newark federal court to Count One of the second superseding indictment, charging him with racketeering conspiracy. LaGrasso admitted to predicate acts involving conspiracy to commit extortion and multiple extortions.

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

Since at least 2005, co-defendant Stephen Depiro, 59, of Kenilworth, New Jersey, has managed the Genovese family’s control over the New Jersey waterfront – including the nearly three-decades-long extortion of port workers in ILA Local 1, ILA Local 1235 and ILA Local 1478. Members of the Genovese family, including Depiro, are charged with conspiring to collect tribute payments from New Jersey port workers at Christmastime each year through their corrupt influence over union officials, including the last three presidents of Local 1235 and vice president of ILA Local 1478.

During their guilty plea proceedings, LaGrasso, Depiro and co-defendant Albert Cernadas, 79, of Union, New Jersey, former president of ILA Local 1235 and former ILA executive vice president, admitted their involvement in the Genovese family, including conspiring to compel tribute payments from ILA union members, who made the payments based on actual and threatened force, violence and fear. LaGrasso and Cernadas admitted to carrying out multiple extortions of dockworkers. The timing of the extortions typically coincided with the receipt by certain ILA members of “Container Royalty Fund” checks, a form of year-end compensation.

In addition to the prison term, Judge Cecchi sentenced LaGrasso to two years of supervised release and fined $25,000. Cernadas was previously sentenced to probation and DePiro is scheduled to be sentenced April 17, 2015.

U.S. Attorneys Fishman and Lynch credited the FBI in New Jersey, under the direction of Special Agent in Charge Richard M. Frankel, and in New York, under the direction of Assistant Director in Charge George Venizelos, as well as 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, with the investigation leading to today’s guilty pleas. They also thanked the Waterfront Commission of New York Harbor for its cooperation and assistance in the investigation.

The government is represented by Assistant U.S. Attorney Jacquelyn M. Kasulis of the U.S. Attorney’s Office, Eastern District of New York, and Assistant U.S. Attorney Anthony Mahajan, of the U.S. Attorney’s Office, District of New Jersey.

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Defense counsel: Michael Critchley Sr., Esq., Roseland

TRENTON, N.J. - A former New Jersey resident who previously worked for the U.S. subsidiary of a foreign investment bank admitted today that he orchestrated a scheme to defraud his former employer out of more than $1.5 million, U.S. Attorney Paul J. Fishman announced.

Michael Lieberman, 43, formerly of New Jersey and currently a resident of Huntersville, North Carolina, 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 for executing a scheme over the course of two years through which he fraudulently transferred more than $1.5 million from accounts of his former employer to bank accounts he controlled.

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

Lieberman was employed by “Company A,” a United States-based subsidiary of an international investment bank, in its International Settlements Group in Iselin, New Jersey. Company A engaged in and settled cross-border securities transactions and acted as a settlement agent for similar securities transactions entered into by its broker-dealer clients.  Company A’s International Settlements Group was responsible for, among other things, wiring funds to settle various securities transactions.

From June 2012 through May 2014, Lieberman devised a scheme to use his position in the International Settlements Group to initiate more than 50 separate fraudulent wire transfers of Company A’s money, directing the proceeds to bank accounts he either owned or controlled. Lieberman then spent Company A’s money for his own purposes, including purchasing a home in North Carolina, making tens of thousands of dollars in credit card payments and spending hundreds of thousands of dollars on hotels, airplane tickets, home furnishings, restaurant tabs and other expenditures.

Lieberman took various steps to conceal his fraudulent activities, including making fictitious entries in Company A’s bookkeeping system and supplying phony documents to others in order to cause them to make false entries in the company’s books and records reflecting fake profits on non-existent transactions.

The wire fraud count to which Lieberman pleaded guilty carries a maximum potential penalty of 20 years in prison and a fine of up to the greatest of $250,000, twice the gain or twice the loss from the offense. As part of the guilty plea, Lieberman must make restitution and forfeit the proceeds of his scheme, including the home in North Carolina he purchased with money from the fraud.  Sentencing is scheduled for July 22, 2015.

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

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

This arrest 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: Linda Pellegrino Esq., Newton, New Jersey

lieberman_michael_information.pdf

 

Defendant Managed ‘Cash Out’ Crews for Organization that Allegedly Capitalized on Information Hacked From Customers of More Than a Dozen Global Financial Institutions

TRENTON, N.J. – A member of an international cybercrime, identity theft and credit card fraud conspiracy was sentenced today to 92 months in prison for using information hacked from customer accounts held at more than a dozen banks, brokerage firms, payroll processing companies and government agencies in an attempt to steal at least $15 million from American customers, U.S. Attorney Paul J. Fishman announced.

Oleg Pidtergerya, 50, of Brooklyn, New York, previously pleaded guilty before U.S. District Judge Peter G. Sheridan to an information charging him with one count of wire fraud conspiracy and one count of conspiracy to commit access device fraud and identity theft. Judge Sheridan imposed the sentence today in Trenton federal court.

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

Pidtergerya was asked by leaders of the conspiracy to participate in a scheme to “cash out” bank accounts and pre-paid debit cards opened in the names of others. Oleksiy Sharapka, 34, of Kiev, Ukraine, allegedly directed the conspiracy with the help of Leonid Yanovitsky, 40, also of Kiev. Pidtergerya managed a cash out crew in New York for Sharapka and Yanovitsky.

Conspiring hackers first gained unauthorized access to the bank accounts of customers of more than a dozen global financial institutions and businesses, including: Aon Hewitt; Automatic Data Processing Inc.; Citibank N.A.; E-Trade; Electronic Payments Inc.; Fundtech Holdings LLC, iPayment Inc.; JP Morgan Chase Bank N.A.; Nordstrom Bank; PayPal; TD Ameritrade; U.S. Department of Defense, Defense Finance and Accounting Service; TIAA-CREF; USAA; and Veracity Payment Solutions Inc.

After obtaining unauthorized access to the bank accounts, Sharapka and Yanovitsky diverted money from them to bank accounts and pre-paid debit cards they controlled. They then employed crews of individuals known as “cashers” to withdraw the stolen funds from the fraudulent accounts, among other ways, by making ATM withdrawals and fraudulent purchases in New York, Massachusetts, Georgia and elsewhere. Both Sharapka and Yanovitsky are under indictment in the United States and remain at large.

Pidtergerya admitted he was aware fraudulent accounts and cards were created without the consent of the individuals in whose names they were opened. He admitted coordinating ATM and bank withdrawals of the stolen funds. He also admitted to sending proceeds of the fraud to Sharapka and Yanovitsky in Ukraine.

The government’s ongoing investigation into the organization has so far identified attempts to defraud the victim companies and their customers of more than $15 million.

In addition to the prison term, Judge Sheridan sentenced Pidtergerya to three years of supervised release, ordered him to pay restitution of $1,758,127, and entered a forfeiture judgment of $250,000.

U.S. Attorney Fishman credited the U.S. Secret Service, under the direction of Acting Special Agent in Charge Carl Agnelli; U.S Immigration and Customs Enforcement, Homeland Security Investigations, under the direction of Acting Special Agent in Charge Kevin Kelly;  Department of Defense, Defense Criminal Investigative Service, under the direction of Special Agent in Charge Jeffery D. Thorpe, Cyber Field Office; and IRS-Criminal Investigation, under the direction of Special Agent in Charge Jonathan D. Larsen, with the ongoing investigation leading to today’s sentencing. He also thanked the Department of Homeland Security’s Customs and Border Protection for assistance with the Yarmolitsky arrest.

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

The charges and allegations concerning alleged conspirators are merely allegations 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.  

Defense counsel: Mitchell Elman Esq., Port Washington, New York

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

Chad Weber, 22, of Colt’s Neck, New Jersey, pleaded guilty today before U.S. District Judge Anne E. Thompson in Trenton federal court to an information charging him with one count of possessing images of child pornography.

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

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

As part of his guilty plea, Weber must forfeit the computer and cell phone he used to commit the offense. He will also be required to register as a sex offender.

The possession of child pornography count to which Weber pleaded guilty carries a statutory maximum penalty of 10 years in prison and a $250,000 fine. Sentencing is scheduled for June 22, 2015.

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

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

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

NEWARK, N.J. – A Newark, New Jersey, man who was identified by the “find my iPhone” feature on a cell phone he stole during an armed carjacking was sentenced today to 135 months in prison, U.S. Attorney Paul J. Fishman announced.

Lee Caraballo, 28, was previously convicted of both counts in the indictment against him: theft of a motor vehicle by force, violence and intimidation and use of a firearm in furtherance of a crime of violence. Caraballo was convicted following a three-day trial before U.S. District Esther Salas, who imposed the sentence today in Newark federal court.

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

On Nov. 30, 2012, Caraballo carjacked a Rutgers law student at gunpoint in the driveway of the student’s home. After stealing the victim’s wallet and cell phone, Caraballo fled in the victim’s Toyota Corolla. A Roselle Park police officer stopped Caraballo, who was driving his own car, later that day. In that car, law enforcement found the victim’s cell phone and car keys as well as various items of clothing the victim later identified. While Caraballo was in police custody, the carjacking victim located his phone remotely using the “find my iPhone” feature and called the police station. He later identified the defendant.

In addition to the prison term, Judge Salas sentenced Caraballo to five years of supervised release.

U.S. Attorney Fishman credited detectives of the Essex County Prosecutor’s Office, under the direction of Acting Prosecutor Carolyn A. Murray; the N.J. State Police, Newark Police Department and Roselle Park Police Department, as well as criminal investigators from the U.S. Attorney’s Office in Newark with the investigation leading to today’s sentencing.

The government is represented Assistant U.S. Attorneys Barry A. Kamar and Adam N. Subervi of the U.S. Attorney’s Office Criminal Division in Newark.

Defense counsel: Gary Leo Cutler Esq., Newark

TRENTON, N.J. – The former owner of a New Jersey defense contracting business today admitted supplying the U.S. Department of Defense (DoD) with foreign-made replacement parts on contracts that only allow products manufactured in the United States, U.S. Attorney Paul J. Fishman announced.

Mehmet Karatokus, 39, of Ankara, Turkey, pleaded guilty before U.S. District Judge Mary L. Cooper to an information charging him with one count of mail fraud.

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

Karatokus, a Turkish citizen who became a United States resident in 2013, was the founder and owner of Diamond Parts, a company that supplied the DoD with replacement parts for aircraft and other defense items. When he registered the company with the DoD, Karatokus provided a location in Red Bank, New Jersey, even though Diamond Parts did not have manufacturing capabilities in the United States. The investigation revealed that Diamond Parts was actually a shell company created for the purpose of obtaining DoD contracts that Turkish-based manufacturers were not permitted to receive.

From January 2012 to September 2013, Karatokus submitted fraudulent bids stating that Diamond would provide parts manufactured in the United States, when in fact, the items were manufactured in Turkey. Karatokus admitted that in March 2012, he submitted a false bid to provide the DoD with replacement parts for the Hercules C-130 aircraft. Based on Karatokus’ false bid, Diamond Parts was awarded the contract, which was valued at $10,350. Shipping records showed that the parts were sent from Turkey on Sept. 25, 2012, to a packaging and shipping company in Clifton, New Jersey. The parts were subsequently provided to the DoD on Oct. 10, 2012. DoD testing later revealed that the parts had dimensional nonconformities, exhibited poor workmanship and lacked critical markings which could result in a safety issue. As a result, the parts were suspended from use.

The mail fraud count to which Karatokus pleaded guilty is punishable by a maximum penalty of 20 years in prison and a $250,000 fine. As part of the plea, Karatokus must pay restitution of $641,454, representing the funds paid to him pursuant to the fraudulent contracts. Sentencing is scheduled for July 15, 2015. 

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

NEWARK, N.J. – A deportation officer with Immigration and Customs Enforcement (ICE) surrendered this morning to special agents of ICE’s Office of Professional Responsibility on charges of harboring his girlfriend, an illegal alien, and making false statements about his ownership of a hair salon, U.S. Attorney Paul J. Fishman announced.

Arnaldo Echevarria, 37, of Somerset, New Jersey, is charged by criminal complaint with one count of harboring an illegal alien and one count of making false statements. Echevarria is scheduled for an initial appearance and bail hearing this afternoon before U.S. Magistrate Judge Steven C. Mannion.

According to the criminal complaint unsealed today:

Echevarria was a deportation officer with ICE, a division of the U.S. Department of Homeland Security. In December 2012, Echevarria received permission from his superiors at ICE to open a hair salon in West Orange, New Jersey. Echevarria certified to ICE that the hair salon would not conflict with ICE matters and would not involve illegal aliens. However, Echevarria employed his girlfriend at the time, an illegal alien, to manage the salon. Echevarria’s girlfriend had entered the United States illegally, using the name and identification of an individual in Puerto Rico to obtain a Pennsylvania identification card.

Echevarria allegedly knew his girlfriend and another salon employee resided in the United States illegally. Prior to opening the hair salon, Echevarria queried the name and date of birth of his girlfriend’s alias in various law enforcement databases. After opening the salon, Echevarria allegedly ensured that his girlfriend’s illegal status remained a secret by signing the lease for her apartment and by placing her cable and electric bills in his name. In addition to driving his girlfriend and other salon employees to and from the salon each day, Echevarria also paid the employees in cash and never asked them to fill out employment eligibility paperwork.

The charges of harboring an illegal alien and making false statements are each punishable by a maximum potential penalty of five years in prison and a fine of $250,000 or twice the gain or loss from the offense.

U.S. Attorney Fishman credited special agents of ICE, Office of Professional Responsibility, under the direction of Special Agent in Charge Terence S. Opiola, with the investigation leading to today’s arrest.

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

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

Defense counsel: Michael Koribanics Esq., Clifton, New Jersey

echevarria_arnaldo_complaint.pdf

NEWARK, N.J. – A Jersey City fire inspector was sentenced today to one year and one day in prison for accepting bribes in return for his assistance in providing prostitution businesses with certificates of occupancy and advance notice of inspections or law enforcement activity, U.S. Attorney Paul J. Fishman announced.

Phillip Procaccino, 56, of Belleville, New Jersey, previously pleaded guilty before U.S. District Judge Katharine S. Hayden to an information charging him with one count of attempting to obstruct, delay and affect interstate commerce by extortion under color of official right. Judge Hayden imposed the sentence today in Newark federal court.

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

Procaccino admitted that on Oct. 23, 2013, he accepted $2,500 in exchange for his official assistance in obtaining a certificate of occupancy for a massage parlor, which also operated as a prostitution business. Procaccino also offered to provide notice of impending inspections from Jersey City authorities so the owner and employees could preemptively hide evidence of prostitution.

In addition, Procaccino agreed to take 10 percent of future profits from a separate prostitution business in exchange for a certificate of occupancy and one day’s advance notice of any police activity targeting the business. Both prostitution businesses were located in Jersey City.      

In addition to the prison term, Judge Hayden sentenced Procaccino to serve one year of supervised release.

U.S. Attorney Fishman praised special agents of the FBI’s Newark Field Office, under the direction of Special Agent in Charge Richard M. Frankel, and criminal investigators from the U.S. Attorney’s Office in Newark for their work leading to today’s sentence.

The government is represented by Assistant U.S. Attorneys Vikas Khanna and Amy Luria of the U.S. Attorney’s Office Special Prosecutions Division in Newark.

Defense counsel: Paul B. Brickfield Esq., River Edge, New Jersey

NEWARK, N.J. – A convicted felon from Jersey City, New Jersey, today admitted selling 33 firearms to a confidential informant, U.S. Attorney Paul J. Fishman announced.

Bernardo Guzman, 27, pleaded guilty before U.S. District Judge Madeline Cox Arleo in Newark federal court to an information charging him with one count of possessing firearms while being a previously convicted felon.

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

Guzman admitted that on Nov. 14, 2013, he met with an individual in the parking lot of a grocery store in Fort Lee, New Jersey, to illegally sell three handguns. Guzman also admitted that from June 2013 through February 2014, He sold approximately 33 firearms and hundreds of rounds of ammunition to a confidential informant. The firearms sold by Guzman consisted of semiautomatic weapons, sawed-off shotguns, assault-style rifles and firearms with high-capacity magazines. Some of the firearms had obliterated serial numbers. All of the weapons and ammunition are now in the custody of law enforcement.

The charge of possessing a firearm while being a convicted felon carries a maximum potential penalty of 10 years in prison and a $250,000 fine. Sentencing is scheduled for July 11, 2015.

The government is represented by Assistant U.S. Attorney Elizabeth M. Harris of the Organized Crime/Gangs Unit of the Criminal Division in Newark.

U.S. Attorney Fishman credited special agents of the Bureau of Alcohol, Tobacco, Firearms, and Explosives, under the direction of Special Agent in Charge George P. Belsky; 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 Jersey City Police Department with the investigation leading to today’s plea.

Defense counsel: Julian Wilsey Esq., Livingston, New Jersey

guzman_bernardo_information.pdf