District of New Jersey

NEWARK, N.J. - Television personality Michael “The Situation” Sorrentino and his brother Marc Sorrentino are expected to appear in federal court this afternoon to face an indictment alleging they did not properly pay taxes on $8.9 million in income Michael Sorrentino received from promotional activities, U.S. Attorney Paul J. Fishman announced.

Michael Sorrentino and his brother Marc Sorrentino are charged with one count of conspiracy to defraud the United States. Marc and Michael Sorrentino also are charged with three and two counts, respectively, of filing false tax returns for 2010 through 2012. Michael Sorrentino faces an additional count for allegedly failing to file a tax return for 2011. The defendants are expected to surrender to special agents of IRS-Criminal Investigation and United States Marshals prior to their court appearance before U.S. Magistrate Judge Steven C. Mannionin Newark federal court.

“According to the indictment, Michael and Marc Sorrentino filed false tax returns that incorrectly reported millions made from promotions and appearances,” said U.S. Attorney Paul J. Fishman. “The brothers allegedly also claimed costly clothes and cars as business expenses and funneled company money into personal accounts. The law is absolutely clear: telling the truth to the IRS is not optional.”
“Most individuals file truthful tax returns and pay their fair share of taxes. However, as alleged in today's indictment, rather than living in reality and reporting their true income, Michael Sorrentino and his brother Marc created the illusion that they earned less income by filing false and fraudulent tax returns,” stated Jonathan D. Larsen, Acting Special Agent in Charge, IRS-Criminal Investigation, Newark Field Office.  “No matter what your occupation or status in life, if you attempt to cheat on your taxes for personal financial gain, you face real consequences including criminal prosecution and a possible prison sentence.”

Both Michael and Mark Sorrentino are expected to be arraigned on the indictment before U.S. District Judge Susan D. Wigenton in Newark federal court on Oct. 6, 2014.

According to the indictment returned today: Michael Sorrentino is a reality television personality who first gained fame on “The Jersey Shore,” which appeared on the MTV network. Marc Sorrentino is Michael’s brother and manager. The pair conspired to fail to pay all federal income tax owed on approximately $8.9 million earned by Michael Sorrentino between 2010 and 2012. This income was largely received by two companies controlled by the brothers: MPS Entertainment, LLC and Situation Nation, Inc.

As part of the conspiracy, the brothers submitted or caused to be submitted to the IRS false documents which understated the gross receipts received by the brothers and the two companies. The brothers also submitted false personal tax returns which failed to report all of the income they received, and Michael failed to file a personal tax return in 2011, despite earning $1,995,757 that year. 

As part of the conspiracy, the brothers also fraudulently claimed millions of dollars in personal expenses as business expenses, including payments for high-end vehicles and clothing, personal grooming expenses, and distributions – or direct payments – from the businesses to personal bank accounts. 
  
The conspiracy count carries a maximum potential penalty of five years in prison and a $250,000 fine; the filing false tax return counts each carry a maximum potential penalty of three years in prison and a $250,000 fine. The count charging Michael Sorrentino with failing to file a tax return carries a maximum potential penalty of one year in prison and a $100,000 fine.

U.S. Attorney Fishman credited special agents of IRS-Criminal Investigation, under the direction of Acting Special Agent in Charge Larsen, with the investigation.

The government is represented by Assistant U.S. Attorneys Evan S. Weitz and Jonathan W. Romankow of the U.S. Attorney's Office Criminal Division in Newark, as well as Trial Attorney Tino Lisella of the Tax Division of the United States Department of Justice.

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

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Defense counsel:

Michael Sorrentino: Richard Sapinski Esq., Newark, N.J.
Marc Sorrentino: Chris Adams Esq., Colts Neck, N.J. 

Sorrentino, Michael and Marc Indictment

NEWARK, N.J. - A woman today admitted committing three bank robberies over a three week span in Newark and Harrison, New Jersey – including one on Valentine’s Day, U.S. Attorney Paul J. Fishman announced.

Valeria Parziale, 35, of Harrison, N.J., pleaded guilty before U.S. Magistrate Judge Michael A. Hammer in Newark federal court to an information charging her with robbing a Wells Fargo Bank in Newark on Feb. 14, 2014. Parziale also admitted committing two other robberies.

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

Parziale robbed a Valley National Bank in Harrison on Jan. 30, 2014, a Wells Fargo bank in Newark on Feb. 14, 2014, and a Popular Community Bank in Newark on Feb. 20, 2014. At each robbery, Parziale handed the teller a note demanding cash and threatening the use of a gun. On one occasion, she wore a wig to disguise her identity. 

On Feb. 24, 2014, Parziale was located in Newark and was in possession of a wig and a note similar to the one used in the prior bank robberies. She has been in custody since that time.

The bank robbery charge carries a maximum potential penalty of 20 years in prison and a $250,000 fine. Sentencing is scheduled for Dec. 23, 2014.

U.S. Attorney Fishman praised special agents of the FBI, under the direction of Special Agent in Charge Aaron T. Ford, with the investigation leading to the arrest and charges. He also thanked the Newark, Kearny, and Harrison Police Department for their excellent work in this case.

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.

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

Parziale, Valeria Information

NEWARK, N.J. – A New Jersey Transit employee admitted today to obtaining money from New Jersey Transit vendors to use his official authority and influence to help them get work with New Jersey Transit, U.S. Attorney Paul J. Fishman announced.

William Talerico, 55, of Beachwood, New Jersey, pleaded guilty to an information charging one count of affecting commerce by extortion under color of official right. Talerico entered his guilty plea before U.S. District Judge William H. Walls in Newark federal court.

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

From at least around January 2006 to April 2012, Talerico served as a supervisor of stations responsible for overseeing the maintenance and custodial functions for certain New Jersey Transit facilities, including stations on New Jersey Transit’s North Jersey Coast Line and Northeast Corridor.

During this time period, Talerico agreed to accept and accepted corrupt payments in cash from numerous New Jersey Transit vendors. In exchange, Talerico agreed to, and did, exercise official authority and influence to assist the New Jersey Transit vendors with securing work from New Jersey Transit. In addition, Talerico acted as an intermediary through which corrupt payments were given to a New Jersey Transit supervisor. Talerico received more than $70,000, for himself and the supervisor, in corrupt payments of cash and other items of value from these New Jersey Transit vendors.

The extortion charge to which Talerico pleaded guilty carries a maximum potential penalty of 20 years in prison and a $250,000 fine. Talerico is scheduled to be sentenced on Jan. 6, 2015.

U.S. Attorney Fishman thanked the New Jersey Attorney General’s Office, under the direction of Acting Attorney General John Hoffman and Elie Honig, Director of the New Jersey Division of Criminal Justice, for their work in this investigation.

U.S. Attorney Fishman credited special agents of the Federal Bureau of Investigation, under the direction of Special Agent in Charge Aaron T. Ford; and the New Jersey State Police, under the direction of Colonel Joseph R. Fuentes, Superintendent of the New Jersey State Police, for their work in the investigation leading to today’s guilty plea.

The government is represented by Assistant U.S. Attorneys Amy Luria and Maureen Nakly of the U.S. Attorney’s Office Special Prosecutions Division in Newark, and Special Assistant U.S. Attorney Michael A. Monahan, the Chief of the Financial and Computer Crimes Bureau, Division of Criminal Justice, in the New Jersey Attorney General’s Office. 

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Defense counsel: Peter R. Willis Esq., Jersey City, New Jersey

Talerico, William Information

NEWARK, N.J. - A former assistant vice president at a Fort Lee, New Jersey bank surrendered to the FBI today for her alleged involvement in a scheme to embezzle over $1 million from her employer, U.S. Attorney Paul J. Fishman announced.

Miye Chon, a/k/a/ “Karen Chon,” 34, of Englewood Cliffs, New Jersey, is scheduled to make her initial appearance today before U.S. Magistrate Judge Steven C. Mannion in Newark federal court. She is charged by complaint with theft, embezzlement or misapplication of funds by a bank officer or employee.

According to the complaint unsealed today:

Chon was employed by BankAsiana, a federally insured financial institution, until the bank was acquired in October 2013. Chon was an operations officer and later an assistant vice president at the Fort Lee branch. As a result, she had access to customer accounts, as well as the bank’s internal account records, computer system and vault.

Over the course of several years, Chon allegedly stole over $1 million from BankAsiana’s customer accounts by regularly making unauthorized transfers from customer certificate of deposit (CD) accounts into BankAsiana’s vault cash account, and then physically removing cash from the bank’s vault.

BankAsiana’s successor bank began an internal investigation after a customer found problems with tax forms and account records. The successor bank discovered that Chon, using her unique credentials, accessed BankAsiana’s computer systems on multiple occasions to make unauthorized transfers from customer CDs to the bank’s vault account before removing the cash. Chon had avoided detection by making false entries in the bank’s records and ensuring that funds she removed from CDs were transferred back into those accounts before they were set to reach maturity.

Chon allegedly embezzled funds on dozens of occasions, typically taking tens of thousands of dollars at a time, and one time converting as much as $100,000 from a customer’s CD account. Bank records show that during one week between September 27, 2013 and October 4, 2013, Chon’s last day working at the bank, she made multiple unauthorized transfers from customer accounts totaling approximately $1.2 million to cover losses in other customer accounts that she had previously looted. According to the successor bank’s investigation, the scheme resulted in an approximate $1.4 million loss to the bank.

Chon faces a maximum sentence of 30 years in prison, a maximum fine of the greater of $1 million or twice the gross gain or loss from the offense, and a mandatory restitution order in the full amount of BankAsiana’s loss.

U.S. Attorney Fishman praised special agents of the FBI’s Newark Field Office, under the direction of Special Agent in Charge Aaron T. Ford, for their work on this case.

The charge in the complaint against Chon is merely an accusation, and the defendant is considered innocent unless and until proven guilty.

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

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Defense counsel:  Matthew Jeon Esq., Fort Lee

Chon, Miye Complaint

CAMDEN, N.J. - An Atlantic City, New Jersey, man admitted today to engaging in a conspiracy to distribute heroin with Mykal Derry, a leader of the “Dirty Block” criminal street gang that allegedly used threats, intimidation and violence to maintain control of the illegal drug trade in Atlantic City, U.S. Attorney Paul J. Fishman announced.

Aree Toulson, a/k/a “Beyah,” a/k/a “Beyeazz,” 25, of Atlantic City, pleaded guilty before U.S. District Judge Joseph E. Irenas in Camden federal court to a superseding information charging him with one count of conspiracy to distribute and to possess with intent to distribute, and to distribute and to possess with intent to distribute within 1,000 feet of public housing, 100 grams or more of heroin.  

During the period of the conspiracy Toulson acted as a distributor on behalf of Mykal Derry, 34, of Atlantic City, helping Dirty Block to distribute heroin in and around the public housing apartment complexes of Stanley Holmes, Carver Hall, Schoolhouse, Adams Court and Cedar Court in Atlantic City.

Toulson was arrested on March 26, 2013.  According to Toulson’s statements in court, he and others travelled with Mykal Derry to a shooting range in Lakewood, New Jersey, on Oct. 18, 2012, where Toulson – a previously convicted felon – used, possessed, and discharged a firearm.  According to filed documents, members of the group also participated in a violent altercation with rival drug traffickers at an Atlantic City casino in December 2012.

The drug conspiracy charge carries a minimum penalty of five years in prison, a maximum penalty of 80 years in prison, and maximum potential fine of up to $10 million.  Sentencing is scheduled for January 16, 2015.

U.S. Attorney Fishman credited special agents of the FBI’s Newark Division, Atlantic City Resident Agency, under the direction of Special Agent in Charge Aaron T. Ford; the Atlantic County Prosecutor’s Office, under the direction of Prosecutor James P. McClain; the Atlantic City Police Department, under the direction of Police Chief Henry White; and the South Jersey Safe Streets Violent Incident and Gang Task Force, with the investigation.

The government is represented by Assistant U.S. Attorneys Patrick C. Askin and Justin C. Danilewitz of the U.S. Attorney’s Office Criminal Division in Camden.

The charges and allegations against Derry are merely accusations, and the defendant is presumed innocent unless and until proven guilty.

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Defense counsel:  Paul George Esq., Philadelphia

Toulson, Aree Superseding Information

NEWARK, N.J. - Two Taiwan nationals today admitted their roles in an international scheme to import narcotics and attempting  to export sensitive United States’ military technology, U.S. Attorney Paul J. Fishman announced.

Hui Sheng Shen, 47, and Huan Ling Chang, 43, each pleaded guilty before U.S. District Judge Esther Salas in Newark federal court to one count of conspiracy to import illegal drugs and one count of conspiracy to violate the Arms Export Control Act.

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

From June 2010 through February 2012, Shen and Chang engaged in a wide-ranging pattern of global criminal activity that touched on the United States, the People’s Republic of China (PRC), the Philippines, Taiwan, Hong Kong, and elsewhere.

In September 2011, Shen and Chang asked undercover agents from the FBI (UCs) whether they could obtain and pass along highly sensitive American military technology, including defense articles restricted from export, for the benefit of individuals and organizations operating on behalf of the PRC. In December 2011, the UCs told Shen and Chang that the UCs could obtain certain drone technology, including a small drone known as the “RQ-11B,” and a manual for the RQ-4 “Global Hawk” drone, and asked Shen and Chang to find out if their clients were interested in these items. Shen and Chang later e-mailed the UCs that their clients were interested in the RQ-11B (as well as the RQ-4 and related manuals), and asked how much each would cost.

In February 2012, Shen and Chang arrived in New York and told a UC that they purchased cameras to take pictures of military technology. They explained they intended to delete them from the memory cards and use one of their contacts in the PRC to retrieve the deleted photos from the cameras’ memory, avoiding detection by law enforcement.

At another meeting, Shen and Chang examined the RQ-11B, as well as manuals relating to the RQ-4.  A UC explained that it was illegal to export any of the items being discussed, and pointed out the warnings to that effect affixed to each of the items. Shen then told the UCs how he and Chang planned to remove the RQ-11B from the United States, and stated that he could use techniques that he had learned from narcotics trafficking, such as using scuba divers to swim out to a ship docked offshore with parts from the RQ-11B, or loading the parts onto a remote controlled semi-submersible vehicle to rendezvous with a ship.

Shen and Chang were then shown manuals for the RQ-4 and the RQ-11B, and Shen and Chang took photographs of both manuals. The pair were arrested before they could delete the photographs.

In February 2011 a conspirator introduced Shen and Chang to the UCs at a meeting in Manila. The conspirator and Shen arranged for the delivery of a sample of crystal methamphetamine to the UCs, who then negotiated the purchase of one kilogram of crystal meth for $70,000. In July 2011, the drug was shipped to the United States hidden in a shipping container, which was discovered by law enforcement agents in the exact location described by Shen and Chang.

The drug charge to which Shen and Chang pleaded guilty carries a maximum potential penalty of 20 years in prison and a $1 million fine. The arms export control act violation carries a maximum potential penalty of five years in prison and a $250,000 fine.  Sentencings are scheduled for January 5, 2015.

U.S. Attorney Fishman credited special agents of the FBI, under the direction of Special Agent in Charge Aaron T. Ford in Newark, with the investigation leading to today’s guilty pleas. He also thanked officers of the U.S. Customs and Border Protection, under the direction of Robert E. Perez, Director, Field Operations; FBI special agents in Manila, Beijing, Hong Kong and Taiwan; the Philippine authorities; and the Department of Justice’s Organized Crime and Gangs Section, Office of Enforcement Operation and Office of International Affairs, for their roles in the case.

The government is represented by Assistant U.S. Attorneys Andrew Pak and Zach Intrater of the Computer Hacking and Intellectual Property section of the Economic Crimes Unit of the U.S. Attorney’s Office in Newark.

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Defense counsel: Shen: Kenneth Kayser Esq., West Orange, N.J.
Chang: Maria Noto, Esq., Matawan, N.J.

Shen, Hui Sheng Information
Chang, Huan Ling Information

TRENTON, N.J. - A Middlesex County, New Jersey, woman today admitted her role in defrauding the United States Department of the Treasury of more than $900,000 in income tax return checks, U.S. Attorney Paul Fishman announced today.       
         
Rosanna Rodriguez, 29, of Middlesex, New Jersey, pleaded guilty today before U.S. District Judge Anne E. Thompson in federal court in Trenton, to an information charging her with one count of conspiracy to defraud the United States.

According to documents filed in the case and statements made in court: Rodriguez was the head teller at a bank located in Perth Amboy, New Jersey, and received Treasury checks from her conspirators. Rodriguez’ role in the scheme was to negotiate Treasury checks against unknowing third-party bank accounts at the bank. She admitted the total loss from the conspiracy was more than $900,000, and that she used a portion of that money for her own personal expenses, knowing the money had been fraudulently obtained from the U.S. Treasury.

The count of conspiracy to defraud the United States is punishable by a maximum penalty of five years in prison and a $250,000 fine, or twice the gain or loss from the offense.  Sentencing is scheduled for January 12, 2015.

U.S. Attorney Fishman credited special agents of the IRS-Criminal Investigation, under the direction of Acting Special Agent in Charge Jonathan D. Larsen; special agents of the U.S. Secret Service, under the direction of Special Agent in Charge James Mottola; and special agents of Homeland Security Investigations, Immigration and Customs Enforcement, under the direction of Special Agent in Charge Andrew M. McLees, with the investigation leading to today’s plea.

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

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

Rodriguez, Rosanna Information

NEWARK, N.J. – The owner of a New Jersey-based insurance adjusting company today admitted his role in a scheme to defraud the New Jersey Turnpike Authority (NJTA) and various insurance companies of at least $900,000, U.S. Attorney Paul J. Fishman announced.

Robert Napolitano, 54, of Clifton, New Jersey, owner of Dawn to Dusk LLC, pleaded guilty today before U.S. District Judge Kevin McNulty to an information charging him with using the mails to facilitate a scheme to defraud the NJTA and insurance companies through false and fraudulent pretenses, representations and promises.

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

In October 2011, Napolitano reached an agreement with Gerardo Blasi, 56, of Clifton, New Jersey, who was employed as claims manager for the NJTA. It was Blasi’s job to negotiate and recover the costs of repairs from insurance companies of motorists who caused damage to property belonging to the NJTA. As part of the agreement, it was Napolitano’s responsibility to evaluate the damage caused by the insured motorist, create an estimate of the cost to repair the damage, and negotiate with the particular insurance company to arrive at the repair amount. Napolitano would request that the checks issued by the insurance companies for the costs of repairing the damage be made payable to Dawn to Dusk and mailed to Napolitano’s business.

 Once Napolitano received these checks he would keep a portion of the proceeds for himself, provide Blasi with a share of the proceeds, and sometimes send the remaining amount to the NJTA as payment for the damages caused by the insured motorist. However, on several occasions, he and Blasi simply kept all of the proceeds. As a result of this scheme, Napolitano and others defrauded the NJTA and various insurance companies of approximately $900,000.

The charge to which Napolitano pleaded guilty carries a maximum potential penalty of 20 years in prison and a $250,000 fine. Sentencing is scheduled for January 8, 2015.

U.S. Attorney Fishman credited special agents from the FBI, under the direction of Special Agent in Charge Aaron T. Ford in Newark, with the investigation leading to today’s plea. He also thanked the N.J. Turnpike Authority, under the direction of Veronique Hakim, for its cooperation during the investigation.

Blasi pleaded guilty on December 11, 2013, and is due to be sentenced on Nov. 12, 2014.

The government is represented by Assistant U.S. Attorney David L. Foster of the U.S. Attorney’s Office, Special Prosecution’s Division.

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

Napolitano, Robert Information

CAMDEN, N.J. – A Pennsylvania accountant was sentenced today to 40 months in prison for conspiring to defraud FirstPlus Financial Group Inc. (FirstPlus), a Texas-based financial services company, which had been targeted for extortionate takeover and looting by a group led by Lucchese organized crime family member Nicodemo S. Scarfo.

New Jersey U.S. Attorney Paul J. Fishman and Assistant Attorney General Leslie R. Caldwell of the Justice Department’s Criminal Division made the announcement.

Howard Drossner, 53, of Ambler, Pennsylvania, previously pleaded guilty before U.S. District Judge Robert B. Kugler to a superseding information charging him with conspiracy to commit wire fraud. Judge Kugler imposed the sentence today in Camden federal court.

According to court documents and evidence introduced at a related trial:

Scarfo is a made member of the Lucchese La Cosa Nostra (LCN) organized crime family.  In April 2007, Scarfo, Salvatore Pelullo, and others devised a scheme to take over FirstPlus.  Scarfo and Pelullo used threats of economic harm to intimidate and remove the prior management and board of directors and replaced those officers with individuals beholden to Scarfo and Pelullo.

Drossner, a certified public accountant, joined the conspiracy in February 2008 when he helped Scarfo and Scarfo’s then-fiancée secure a $500,000 mortgage to purchase a house for $715,000 in Egg Harbor Township, New Jersey.  At the direction of Pelullo, Drossner created false tax returns to help Scarfo’s fiancée qualify for a mortgage.  Scarfo used money looted from FirstPlus for the $215,000 down payment on the house.  The false tax returns, which exaggerated Scarfo’s fiancée’s income so that she could qualify for the mortgage without naming Scarfo, were used to secure the mortgage.    

After the First Plus scheme was shut down by federal law enforcement in May 2008, Scarfo was unable to pay the mortgage and the house ultimately went into foreclosure.  It was sold by the bank in 2010.

In addition to the prison term, Judge Kugler sentenced Drossner to three years of supervised release and fined him $125,000.  Under the terms of his plea agreement, Drossner was required to notify the Pennsylvania State Board of Accountancy of his guilty plea and consent to the voluntary suspension of his CPA license.

Four other members of the conspiracy – Scarfo; Pelullo, an associate of the Lucchese and Philadelphia LCN families; William Maxwell, a Texas lawyer; and John Maxwell, who acted as the nominal CEO of FirstPlus after the takeover – were convicted of several offenses, including racketeering conspiracy, in July 2014 after a six-month trial. The indictment in which they were charged also named Nicodemo S. Scarfo’s father, Nicodemo D. Scarfo – the former boss of the Philadelphia LCN family – and Vittorio Amuso – the boss of the Lucchese family – as unindicted co-conspirators. Both are serving lengthy prison sentences.

Three other defendants charged in the indictment – John Parisi, manager of Scarfo’s shell company; Lisa Murray-Scarfo, Scarfo’s then-fiancée and a participant in the mortgage fraud conspiracy; and Cory Leshner, a participant in the looting of FirstPlus – have pleaded guilty and are awaiting sentencing.  Todd Stark, also charged in the indictment, previously pleaded guilty and was sentenced for providing ammunition to Scarfo and Pelullo despite knowing that they were convicted felons.

U.S. Attorney Fishman and Assistant Attorney General Caldwell credited special agents of the FBI under the direction of Special Agent in Charge Aaron T. Ford in Newark; 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, New York Region; and the ATF, under the direction of Special Agent in Charge George P. Belsky in Newark, for the investigation leading to today’s sentencing. They also thanked the FBI under the direction of Special Agent in Charge Edward J. Hanko in Philadelphia for its assistance.

The government is represented by Assistant U.S. Attorneys Steven D’Aguanno and Howard Wiener of the New Jersey U.S. Attorney’s Office’s Camden Office and Trial Attorney Adam L. Small of the Organized Crime and Gang Section in the Department of Justice’s Criminal Division in Washington.

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Defense counsel: Christopher D. Adams Esq., Roseland, N.J.

TRENTON, N.J. - A New York man was sentenced today to 24 months in prison for a scheme to distribute kilogram amounts of a controlled substance commonly known as “bath salts,” U.S. Attorney Paul J. Fishman said today.

Conor Healion, 22, of West Hempstead, New York, previously pleaded guilty before U.S. District Judge Joel A. Pisano to conspiracy to distribute methylone. Judge Pisano imposed the sentence today in Trenton federal court. 

According to documents filed in the case and statements made in court: Healion and Benjamin Caturano, 22, of New Brunswick, New Jersey, were arrested on March 15, 2013. Kyle Jobes, 23, of East Brunswick, New Jersey, Charles Knierim, 24, of Old Bridge, N.J., were arrested on March 14, 2013. All were charged in connection with their respective roles in a conspiracy to distribute methylone in New Jersey and New York. “Bath salts” is the street name for a family of designer drugs that have effects similar to amphetamine and cocaine. Their white and yellow crystals often resemble legal bath salts, like Epsom salts, but are chemically different.

The current investigation involved a package containing approximately two kilograms of methylone that was intercepted by law enforcement. The package originated in the People’s Republic of China and was supposed to be shipped to an address in Old Bridge. Law enforcement removed the methylone and replaced it with sham drugs that resembled bath salts. On March 14, 2013, law enforcement delivered the package and watched over the next two days as Knierim, Jobes, Caturano, and Healion transferred the package among themselves. After their arrests, a number of the defendants admitted that they had distributed multiple kilograms of bath salts over the past year and that some of the drugs were sold at local college campuses, including Rutgers University and Monmouth University. As part of the investigation, agents of Immigration and Customs Enforcement-Homeland Security Investigations seized more than $90,000 in cash and two luxury automobiles obtained with proceeds from the drug conspiracy.

Healion was the first to be sentenced before Judge Pisano, who also sentenced him to three years of supervised release. Caturano, Jobes and Knierim will each be sentenced by Judge Pisano on Sept. 22, 2014, Oct. 9, 2014, and Oct. 15, 2014, respectively. 

U.S. Attorney Fishman credited special agents of the ICE-HSI, under the direction of Special Agent in Charge Andrew M. McLees; inspectors of the U.S. Postal Inspection Service, under the direction of Acting Inspector in Charge Maria L. Kelokates; and U.S. Customs and Border Protection, under the direction of Robert E. Perez, Director of CBP's New York Field Operations, with the investigation leading to today’s sentencing.

The government is represented by Assistant U.S. Attorney Danielle M. Corcione of the U.S. Attorney’s Health Care & Government Fraud Unit in Newark, N.J.

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Defense counsel: Michael Chazen Esq., Freehold, N.J.

TRENTON, N.J. - The middleman in a five-year insider trading scheme admitted today to receiving numerous trading tips from a law firm source and passing the tips on to his broker-dealer to trade, yielding net profits of more than $5.6 million, U.S. Attorney Paul J. Fishman announced.

Frank Tamayo, 41, of Brooklyn, New York, surrendered this morning to the FBI and pleaded guilty before U.S. District Judge Michael A. Shipp in Trenton federal court to an information charging him with one count of conspiracy to commit securities and tender offer fraud, one count of securities fraud, and one count of tender offer fraud.

According to documents filed in this case and statements made in court: Tamayo, a mortgage broker, admitted that from 2009 to 2013, he obtained material nonpublic information from his friend and former law school classmate, Steven Metro, 40, of Katonah, New York. Metro was then the managing clerk of the New York office of Simpson Thacher & Bartlett LLP, a law firm specializing in mergers and acquisitions. The inside information divulged by Metro to Tamayo concerned mergers, acquisitions, or tender offers in which the firm represented a party or financial advisor. As the firm’s managing clerk, Metro did not personally work on most these transactions. Instead, Metro stole the information by scouring the firm’s computer system for client names and the keywords “merger agreement,” “bid letter,” “engagement letter,” and “due diligence.”

After stealing material information, Metro would personally meet Tamayo at bars, coffee shops, or other locations near their Manhattan workplaces. Tamayo admitted that during these meetings, Metro gave him the names and ticker symbols of the companies whose securities should be purchased, the general timing of the planned deals, and information related to how the deals would affect the issuers’ stock price once public. Tamayo would write the security’s ticker symbol on a small piece of paper or napkin and then commit the information to memory.

Tamayo would then meet with his broker-trader Vladimir Eydelman, 42, of Colts Neck, New Jersey, who was employed first at Oppenheimer & Co. and later at Morgan Stanley. Tamayo and Eydelman met at locations near Eydelman’s workplace, including the large clock in New York City’s Grand Central Terminal. Tamayo admitted that during these meetings, he would show Eydelman the paper or napkin with the ticker symbol of the company whose securities should be purchased. After Eydelman memorized the ticker symbol, Tamayo put the paper or napkin into his mouth and chewed it until it was destroyed.

Using the stolen information, Eydelman purchased securities for himself, family members, friends, and clients, including Tamayo. Eydelman quickly sold the shares and covered any options positions once the relevant deal was publicly announced and the stock price rose.

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

By exploiting the material information that Metro stole from the firm, Tamayo, Metro and Eydelman netted more than $5.6 million in illicit profits over the course of the five-year insider trading scheme.

Tamayo faces a maximum potential penalty of five years in prison and a fine of $250,000 on the conspiracy count; and a maximum potential penalty of 20 years in prison and a fine of $5 million on the securities and tender offer fraud counts. Tamayo agreed to pay a forfeiture money judgment of more than $1 million and to forfeit certain property, including the contents of two brokerage accounts and a 2008 Audi Q7 automobile. He is scheduled to be sentenced on Dec. 23, 2014.

Metro and Eydelman have been charged by complaint for their own involvement in the insider trading scheme. The charges and allegations contained in the complaint are merely accusations, and defendants Metro and Eydelman 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 Aaron T. Ford in Newark, for the investigation leading to today’s guilty plea. He also thanked the U.S. Securities and Exchange Commission’s Market Abuse Unit, under the direction of Daniel Hawke. The SEC today filed a civil complaint against Tamayo. U.S. Attorney Fishman also thanked the Financial Industry Regulatory Authority for their assistance.

The government is represented by Assistant U.S. Attorneys Shirley U. Emehelu of the Economic Crimes Unit of the U.S. Attorney’s Office in Newark, and Joseph R. Gribko of the U.S. Attorney’s Office in Trenton, as well as Unit Chief Marion Percell and Assistant U.S. Attorney Barbara Ward of the Office’s Asset Forfeiture and Money Laundering Unit.

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

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Defense counsel: A. Ross Pearlson Esq. and Matthew E. Beck Esq., West Orange, New Jersey

Insider Trades

APPROX. DATE(S) OF PURCHASES

ANNOUNCEMENT DATE

SECURITY

APPROX. ILLICIT PROFIT

2/17/2009

Sirius XM Radio

$212,814

12/29/2009-1/15/2010

1/18/2010

Brinks Home Security

$773,154

7/8/2010-7/15/2010

7/15/2010

Smithtown Bancorp

$29,010

10/20/2010-10/29/2010

11/1/2010

CNA Surety Corporation

$241,141

4/11/2011-4/12/2011

4/13/2011

Graham Packing Company Inc.

$105,964

1/31/2011-4/19/2011

4/26/2011

SMART Modular Technologies

$1,575,382

4/4/2011-4/21/2011

4/27/2011

Vital Images, Inc.

$39,233

4/29/2011

5/2/2011

International Coal Group, Inc.

$231,276

6/21/2011-8/22/2011

8/23/2011

PharMerica Corp.

$1,517,092

4/16/2012-4/20/2012

5/1/2012

Collective Brands, Inc.

$360,775

5/14/2012-10/1/2012

N/A

“Company A”

N/A

9/20/2012-9/25/2012

9/27/2012

Sealy Corporation

$14,509

1/31/2013-2/15/2013

2/20/2013

Officemax Inc.

$573,332

APPROX. TOTAL ILLICIT PROFITS

$5,673,682

Tamayo, Frank Information

NEWARK, N.J. - A New Brunswick, New Jersey, couple was arrested today and charged with harboring undocumented aliens to serve as prostitutes in a string of at least eight brothels scattered across the state, U.S. Attorney Paul J. Fishman announced.

Juan Fredy Hernandez-Zozaya, 36, and his wife, Elizabeth Rojas Rojas, 33, are charged by complaint with one count of harboring aliens for the purpose of prostitution, one count of harboring aliens for the purpose of financial gain and conspiracy to commit those offenses. The defendants are scheduled to make their initial court appearances this afternoon before U.S. Magistrate Judge Mark Falk in Newark federal Court.

According to the documents filed in this case and statements made in court: Since at least 2012, law enforcement has been investigating Hernandez-Zozaya and Rojas in connection with a chain of brothels in towns including New Brunswick, Trenton, Orange, Lakewood, Asbury Park and Bridgeton, New Jersey. The brothels were typically located in private residences, and undocumented aliens were employed as prostitutes. 

Hernandez-Zozaya and Rojas were allegedly the leaders of the organization. Hernandez-Zozaya hired, fired and oversaw individuals who managed the daily activities at the brothels.  Rojas organized, directed and scheduled prostitutes. The couple also employed and relied on a string of conspirators to help manage the brothels. The investigation revealed that the prostitutes sometimes traveled across state lines to work and that Hernandez-Zozaya and Rojas both collected the proceeds from the prostitution activities.

Both of the harboring counts with which the defendants are charged carry a maximum penalty of 10 years in prison. The conspiracy count carries a maximum penalty of five years in prison.

U.S. Attorney Fishman credited special agents of Immigration and Customs Enforcement, Homeland Security Investigations, under the direction of Special Agent in Charge Andrew M. McLees, with the investigation leading to the charges.

The government is represented by Assistant U.S. Attorney Sharon Ashe of the office’s Narcotics Unit in Newark.

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

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Hernandez-Zozaya, Juan Fredy and Rojas, Elizabeth Rojas Complaint

Defrauded Investment Client of $250,000 and Submitted Falsified Loan Application in Order to Purchase Farm in Manalapan

TRENTON, N.J. – The former mayor of Manalapan, New Jersey, was convicted at trial today on charges related to his acquisition of farmland in Monmouth County, New Jersey, U.S. Attorney Paul J. Fishman announced.

Andrew Lucas, 37, was found guilty today 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. The jury deliberated three hours before returning its verdict following a two-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.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.

The counts of wire fraud and falsification of records in a federal investigation are each punishable by a maximum potential penalty of 20 years in prison and a $250,000 fine. Loan application fraud is punishable by a maximum potential penalty of 30 years in prison and a $1 million fine. The counts of conduction an illegal monetary transaction and obstruction of a grand jury investigation are each punishable by a maximum potential penalty of 10 years. Each of the charges of false statements to the IRS is punishable by a maximum potential penalty of five years in prison. Aggravated identity theft is punishable by a mandatory prison term of two years, to be run consecutive to any other sentence. Sentencing is scheduled for Jan. 20, 2015.

U.S. Attorney Fishman credited special agents of the FBI Red Bank Office, under the direction of Special Agent in Charge Aaron T. Ford; special agents of IRS-Criminal Investigation, under the direction of Acting Special Agent in Charge Jonathan D. Larsen; and investigators with the U.S. Attorney’s Office, for the investigation leading to today’s arrest.

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.

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Defense counsel: Mario F. Gallucci Esq., and Michael DeSantis Esq., of Staten Island, N.Y.

Lucas, Andrew Indictment

TRENTON, N.J. –Two Newark men admitted this week to 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, pleaded guilty today before U.S. District Judge Anne E. Thompson in Trenton federal court to an indictment charging him with one count of Hobbs Act robbery. DaQuaan Vaughn, 36, pleaded guilty before Judge Thompson on Sept. 16, 2014, 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. 

Vaughn, Jones, and two other men – Darrell A. Carter, 24, of Irvington and Maryland Liggins, 29, of Newark – were arrested on June 19, 2013, and charged by criminal complaint in connection with the Target robbery. Carter and Liggins each pleaded guilty before Judge Thompson in May 2014 to informations charging them with Hobbs Act robbery. Carter also pleaded guilty to one count of using a firearm in furtherance of a crime of violence. Sentencing dates for both Carter and Liggins are pending.    

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

On Nov. 23, 2012, Vaughn, Carter, Jones and Liggins 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. 

The charge of Hobbs Act robbery carries a maximum potential penalty of 20 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, which must run consecutively to any other prison term. The firearms trafficking charge against Vaughn carries a maximum potential penalty of five years in prison. Each of these counts also carries a maximum fine of $250,000. Sentencing for Vaughn is scheduled for Jan. 6, 2015, and sentencing for Jones is scheduled for Jan. 7, 2015.

U.S. Attorney Fishman credited special agents of the FBI, under the direction of Special Agent in Charge Aaron T. Ford, 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.

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Defense Counsel:     

Carter: Peter Carter Esq., Newark                                                                 
Liggins: Joseph Rotella Esq., Newark           
Vaughn: Timothy Donohue Esq., West Orange, New Jersey
Jones: Richie Roberts Esq., Newark

Jones, Lavell Indictment
Vaughn, DaQuaan Information

TRENTON, N.J. – A Jersey City man was sentenced today to 114 months in prison for committing an armed robbery of a jewelry store in Hudson County, New Jersey, U.S. Attorney Paul J. Fishman announced. 

Mouhamadou Lamine Amar, 21, previously pleaded guilty before U.S. District Judge Mary L. Cooper in Trenton federal court to an indictment charging him with committing a Hobbs Act robbery and with brandishing a firearm during the robbery. Judge Cooper imposed the sentence – which includes 30 months on the robbery count and 84 months, served consecutively, on the weapons count – today in Trenton federal court.

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

On June 28, 2013, Amar entered a jewelry store in Jersey City and held a gun to a store employee’s head. He grabbed and pushed the employee when the employee tried to flee. He tied up the employee and threatened to shoot the employee if the employee tried to escape. Amar was arrested inside the store while still in possession of the firearm.

In addition to the prison term, Judge Cooper sentenced Amar to three years of supervised release. 

U.S. Attorney Fishman credited special agents of the FBI, under the direction of Special Agent in Charge Aaron T. Ford in Newark, with the investigation leading to today’s guilty plea. He also thanked the Jersey City Police Department and the Hudson County Prosecutor’s Office for their work on this case.

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

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Defense counsel: Jeffrey B. Steinfeld Esq., Newark

NEWARK, N.J. - A former contract employee for U.S. Citizenship and Immigration Services (USCIS) was sentenced today to 26 months in prison for stealing hundreds of immigration forms from the warehouse where he worked and selling them for ultimate use as part of a criminal enterprise, U.S. Attorney Paul J. Fishman announced.

Martin Trejo, 47, of Rialto, California, was previously convicted of one count of conspiracy to steal government property and transport it in interstate commerce and one count of transportation of stolen goods in interstate commerce. Trejo was convicted following a one-week trial before U.S. District Judge Faith S. Hochberg, who imposed the sentence today in Newark federal court.

According to documents filed in this case and the evidence at trial: While working as a contract employee for USCIS, Trejo stole hundreds of immigration forms from the warehouse where he worked and sold them to a conspirator, who sold the forms to a criminal enterprise that used them to obtain hundreds of driver’s licenses for individuals living in New Jersey and other states illegally.

In addition to the prison term, Judge Hochberg sentenced Trejo to serve two years of supervised release and fined him $4,000.

U.S. Attorney Fishman credited special agents of the FBI, under the direction of Special Agent in Charge Aaron T. Ford in Newark; and agents of the Department of Homeland Security, Office of Inspector General, under the direction of Acting Special Agent in Charge Edward Nasiatka of the New York field office, with the investigation leading to today’s sentencing.

The government is represented by Assistant U.S. Attorneys Anthony Moscato and David M. Eskew of the U.S. Attorney’s Office Criminal Division in Newark.

14-329                                                    

Defense counsel: John P McGovern Esq., Newark

31 Defendants – including 20 Doctors – Have Pleaded Guilty to Roles in Massive Scheme

NEWARK, N.J. – Two doctors with practices in Secaucus and Hawthorne, New Jersey, today admitted 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 Douglas Bienstock, 48, of Wayne, New Jersey, who practiced in Hawthorne, each pleaded guilty before U.S. District Judge Stanley R. Chesler in Newark federal court to one count of accepting bribes.

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

DeSimone admitted accepting $1,500 in cash per month between August 2010 and March 2013 in return for referring patient blood specimens to BLS. Bienstock admitted that in return for patient blood specimens referrals to BLS he was paid more than $2,500 per month under a sham service contract. BLS also paid Bienstock $100 in cash for each of a certain type of blood test that he ordered. The two doctors acknowledged generating a total of at least $1.6 million in lab business for BLS from their respective practices.

As part of their guilty pleas, DeSimone and Bienstock agreed to forfeit a combined total of $339,000.

On April 9, 2013, federal agents arrested David Nicoll, 40, of Mountain Lakes, New Jersey, Scott Nicoll, 33, of Wayne, New Jersey, a senior BLS employee and David Nicoll’s brother, and Craig Nordman, 35, of Whippany, New Jersey, a BLS employee and the CEO of Advantech Sales LLC – one of several entities used by BLS to make illegal payments. They were charged by federal complaint with the bribery conspiracy, along with the BLS company and Frank Santangelo, 44, of Boonton, New Jersey. In June 2013, David and Scott Nicoll, Nordman and four other associates of BLS pleaded guilty to charges related to their involvement. Santangelo, a doctor, pleaded guilty in August 2013 to charges relating to his role in the scheme.

The bribery counts to which DeSimone and Bienstock pleaded guilty carry a maximum potential penalty of five years in prison and a $250,000 fine. Sentencing for both defendants is scheduled for Dec. 16, 2014.

Including DeSimone and Bienstock, 31 people have now 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. So far, 11 employees or associates of BLS, and 20 doctors have pleaded guilty to their roles in the bribery scheme. The investigation has recovered more than $10.2 million to date through forfeiture.

U.S. Attorney Fishman credited special agents of the FBI, under the direction of Special Agent in Charge Aaron T. Ford; U.S. Department of Health and Human Services, Office of Inspector General, under the direction of Special Agent in Charge Thomas O’Donnell; IRS–Criminal Investigation, under the direction of Acting 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 leading to today’s guilty pleas.

The government is represented by Assistant U.S. Attorney Joseph 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 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 $540 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.      

13-326                                      

Defense counsel:         Eugene DeSimone: Alain Leibman Esq., Lawrenceville, N.J.

Douglas Bienstock: Alan Zegas Esq., Chatham, N.J.

Desimone, Eugene Information
Bienstock, Douglas Information

NEWARK, N.J. – A Watchung, New Jersey, man today admitted producing and transporting sexually explicit videos of children, U.S. Attorney Paul J. Fishman announced.

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

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

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

Deck also admitted that between 1997 and 2010, he transported two minors, beginning when they were approximately 11 years old, to locations across the country, including New Jersey, New York, Pennsylvania, Colorado and Montana for the purpose of filming the minors in sexually explicit conduct. Deck produced the videos and images of child pornography and then transported those images back to his home in Watchung.

In 1988, Deck was convicted in N.J. Superior Court, Burlington County, of two counts of endangering the welfare of a child. Those convictions arose out of prior incidents where Deck photographed or filmed minors engaged in prohibited sexual acts. As a result of Deck’s prior convictions, each count of transportation of child pornography to which Deck pleaded guilty carries a mandatory minimum penalty of 15 years in prison, a maximum potential penalty of 40 years in prison and a $250,000 fine. Sentencing is currently scheduled for Jan. 12, 2015.

U.S. Attorney Fishman credited special agents of the U.S. Immigration and Customs Enforcement’s Homeland Security Investigations, under the direction of Special Agent in Charge Andrew M. McLees in Newark, the N.J. State Police, under the direction of Col. Rick Fuentes, and the Warren County Prosecutor’s Office, under the direction of Prosecutor Richard T. Burke, with the investigation leading to today’s guilty plea.

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

14-325                                            

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

Deck, Patrick Information

TRENTON, N.J. – The former owner of two New Jersey defense contracting businesses was charged with mail fraud and violating the Arms Export Control Act, U.S. Attorney Paul J. Fishman announced today.

Alper Calik, 38, of Ankara, Turkey, was arrested upon his entry into the United States on Sept. 13, 2014 and charged by complaint with two counts of mail fraud, in connection with allegedly fraudulent contracts entered into with the U.S. Department of Defense (DoD), and one count of violating the Arms Export Control Act, in connection with his download of thousands of military technical drawings while outside the United States without prior approval from the U.S. Department of State. He is scheduled to make his initial court appearance later today before U.S. Magistrate Judge Tonianne J. Bongiovanni in Trenton federal court. 

According to the complaint:

Starting in November 2009, Calik was the co-owner of Clifmax LLC in Clifton, New Jersey. The company contracted with DoD to supply defense hardware items and spare parts. Starting in May 2011, Calik started a second defense-contracting company, Tunamann LLC, based at the same address in Clifton. Both Clifmax and Tunamann were allegedly “shell” companies for manufacturing facilities in Turkey, created to obtain DoD contracts that the manufacturers were not permitted to receive. Calik, on numerous occasions, falsely claimed to the DoD that Clifmax and Tunamann were U.S.-based manufacturers, when, in fact, neither company ever had any manufacturing capabilities in the United States.

From November 2009 to March 2011, Calik allegedly defrauded the DoD by electronically submitting fraudulent bids for DoD contracts stating that he would provide parts manufactured in the United States when the items were, in fact, manufactured in Turkey. On Feb. 17, 2010, Calik submitted a false bid to the DoD for a contract to provide 121 parts known as “gear, spur,” an item used in the “steer section and brake” of the Amphibious Assault Vehicle. Calik claimed that Clifmax was a manufacturer and that the parts would be manufactured in the United States. Only U.S.-based contractors were eligible to obtain that contract. Based on Calik’s false bid, Clifmax was awarded the contract, valued at $50,215. Shipping records showed that the parts were shipped from Turkey to Clifmax’s address on July 20, 2014. The parts were subsequently provided to the DoD on July 25, 2014. The DoD paid Clifmax $49,913.71 for the foreign manufactured parts. Subsequent testing by the DoD revealed that the parts had dimensional non-conformances and were unusable.

Calik is also charged with violating the Arms Export Control Act. For both Clifmax and Tunamann, Calik submitted Military Critical Technical Data Agreements in which he claimed his companies were U.S.-based manufacturers. Calik also acknowledged that he understood export control laws and agreed not to disseminate export-controlled data and technical drawings in a manner that would violate export control laws. Based on his false representations, Calik was granted electronic access to drawings and technical data subject to U.S. export control regulations. Beginning in 2009, Calik downloaded approximately one hundred thousand drawings, some of which were subject to U.S. export control regulations. Calik was not in the United States when the majority of the drawings were downloaded and he did not obtain export licenses from the U.S. Department of State.

On May 23, 2013, Calik, who at that time was operating Tunamann, downloaded from a DoD database the technical drawings for parts that go into the NSSN Class Submarine. Those drawings contained warnings stating that the export of the drawings to places outside the United States is restricted by the Arms Export Control Act. Calik was not in the United States when those drawings were downloaded and he did not obtain an export license from the U.S. Department of State for the export of those drawings.
Counts One and Two of the complaint, charging mail fraud, each carry a maximum penalty of 20 years in prison and a fine of $250,000. Count Three carries a maximum penalty of 20 years in prison and a $1 million fine.

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

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

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

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

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Calik, Alper Complaint

NEWARK, N.J. – A Washington, New Jersey, man is charged with stalking a female minor and soliciting another to produce images of herself engaging in sexually explicit conduct, U.S. Attorney Paul J. Fishman announced today.

Brandon McIntyre, 22, is charged by complaint with one count of stalking and one count of sexual exploitation of a child. He is scheduled to appear today before U.S. Magistrate Judge Steven C. Mannion in Newark federal court.

According to the complaint:

McIntyre allegedly met various female minors through Facebook, sometimes pretending to be a teenage girl. Disguised under the Facebook alias of “Katie Thompson,” McIntyre urged one female minor to go on trips with him. When she refused, McIntyre, still using the alias, threatened to hurt her boyfriend and kill her family.

During his interaction with another female minor, McIntyre allegedly sent images of his genitals and asked her to send nude images of herself. When the victim refused, McIntyre claimed he was a police officer and would make her life a “living hell.” McIntyre threatened the victim with fines, school expulsion, and jail time until she sent him pictures of her engaging in sexually explicit conduct.

The charge of sexual exploitation of a child carries a mandatory minimum penalty of 15 years in prison, a maximum potential penalty of 30 years in prison and a $250,000 fine. The charge of stalking carries maximum penalty of five years in prison and a $250,000 fine.

U.S. Attorney Fishman credited special agents of the FBI’s Child Exploitation Task Force, under the direction of Special Agent in Charge Aaron T. Ford in Newark; and Hunterdon County Prosecutor’s Office for the investigation leading to the arrest. He also thanked special agents from FBI in Anchorage, Alaska, and Albany, New York, for their assistance.

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

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

14-323                                            

McIntyre, Brandon Complaint

WASHINGTON—The Department of Justice announced today that it filed a motion to show cause why Bayer Corporation should not be held in civil contempt for violating a court order in the U.S. District Court for the District of New Jersey.  The court order, entered in 2007 in United States v. Bayer Corporation, prohibits Bayer from making unsubstantiated claims for any dietary supplement it promotes or sells.  The government alleges in today’s motion that Bayer promotes one of its products, Phillips’ Colon Health, using claims about the product’s purported benefits without having evidence to substantiate those claims.

The court order prohibits Bayer from making any claim about the performance or efficacy of any dietary supplement, multivitamin or weight-control product unless, at the time Bayer makes the claim, the company possesses “competent and reliable scientific evidence” to support the claim.  In its motion, the United States alleges that Bayer expressly claims Phillips’ Colon Health can “defend against” occasional constipation, diarrhea, and gas and bloating, and impliedly claims that Phillips’ Colon Health prevents, treats and cures constipation, diarrhea, and gas and bloating, even though the company lacks competent and reliable scientific evidence for those claims.

“Bayer is required to abide by a longstanding court order to back up claims it makes about the products it sells,” said Assistant Attorney General Stuart F. Delery for the department’s Civil Division.  “The Department of Justice will not tolerate companies that seek to gain an unfair advantage over their competitors by promoting to consumers unsubstantiated claims about the health benefits of their products.”

In its motion, the United States describes Bayer’s multimillion dollar nationwide marketing campaign for Phillips’ Colon Health, which includes print advertisements and television commercials featuring “The Colon Lady,” in addition to claims on the product’s packaging.  The motion further alleges that consumers have paid hundreds of millions of dollars for Phillips’ Colon Health, even though Bayer lacks the evidence to support the claims of the purported benefits of this product.

The Consumer Protection Branch of the Civil Division and the U.S. Attorney’s Office for the District of New Jersey filed the motion for contempt with the assistance of the Federal Trade Commission (FTC).  The matter is filed as United States v. Bayer Corporation, No. 07-0001, in the District of New Jersey.

In 2007, the United States filed a civil complaint against Bayer alleging that Bayer marketed its One-A-Day WeightSmart multivitamin and dietary supplement with unsubstantiated claims that, among other things, One-A-Day WeightSmart helped prevent some of the weight gain associated with a decline in metabolism in users over the age of 30.  The complaint alleged that those unsubstantiated claims violated an order issued in 1991 by the FTC against Bayer’s predecessor, Miles Inc., that required all claims about the benefits of One-A-Day brand vitamins to be substantiated by competent and reliable scientific evidence.

In order to resolve the complaint’s allegations, in 2007, Bayer agreed to pay a $3.2 million civil penalty and agreed that it would not make unsubstantiated representations regarding the benefits, performance, efficacy, safety or side effects of any dietary supplement, multivitamin or weight-control product.  In 2007, the U.S. District Court for the District of New Jersey entered an order resolving the complaint’s allegations and prohibiting Bayer from making unsubstantiated claims about its products.

Assistant Attorney General Delery commended the efforts of the FTC to investigate Bayer’s compliance with the 2007 court order and for referring this latest matter for enforcement.  This case is being handled by the Civil Division’s Consumer Protection Branch.

This motion contains a set of allegations.  If this motion is litigated, the government would need to prove the allegations by clear and convincing evidence.

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Motion in Bayer 9-12-14

TRENTON, N.J. – Two employees of related Parsippany, New Jersey,-based construction companies today admitted underreporting significant amounts of cash income on their tax returns, U.S. Attorney Paul J. Fishman announced.

Joseph Carsillo, 46, of East Hanover, New Jersey, pleaded guilty to an information charging him with one count of subscribing to a false personal federal income tax return for calendar year 2010, and one count of bankruptcy fraud. Carl J. Corso, 59, of Hamilton Township, New Jersey, pleaded guilty to an information charging him with one count of subscribing to a false personal federal income tax return in calendar year 2010, and one count of engaging in a mail fraud scheme to defraud the state of New Jersey with respect to unemployment compensation benefits.       

The defendants were previously charged in separate complaints in November 2013. Both of the pleas were entered today before U.S. District Judge Michael A. Shipp in Trenton federal court. Charges against a third defendant, Frank Chimento, III, 46, of Verona, New Jersey, remain pending.

According to the documents filed in this case and statements in court: Chimento Construction, Chimento Construction Services, and FAC Construction, were   commingled companies specializing in commercial masonry and concrete work (the “Chimento Companies”). From 2008 through 2011, the Chimento Companies’ primary construction job was the Palmer Square project in Princeton, New Jersey. Chimento Companies operated a cash payroll for a significant portion of the wages paid to employees during the period 2006 through 2011. 

Carsillo started working for the Chimento Companies in 2007 and was the project superintendent at Palmer Square. He admitted that he received cash wages from the Chimento Companies of $66,865 in 2010, which he failed to include on his tax return. He also admitted in court that he failed to include cash wages of $58,161 on his 2009 return and $42,440 on his 2011 return.

Carsillo also admitted that he made false statements at a bankruptcy hearing on April 28, 2011, regarding his combined current monthly income and his monthly gross wages for the prior six-month period.

Corso started working for the Chimento Companies on Aug. 12, 2009 and worked through 2011. In addition to payroll checks, Corso requested and received cash wages from the Chimento Companies. He disclosed to his return preparer only the wages he received by payroll check and deliberately omitted the cash payments and certain supplemental paychecks from his personal tax returns despite knowing that these payments should have been included on these returns.

Corso received unreported cash income of $52,780 in 2010, as well as unreported income of $10,074 in 2009, and $34,492 in 2011.   

Corso further admitted that on Nov. 1, 2009, he falsely advised the N.J. Department of Labor and Workforce Development that he was no longer working and reactivated an earlier application for unemployment benefits. He collected $19,988 in unemployment benefit checks through the U.S. mail.  
As part of their guilty pleas, the two defendants agreed to make full restitution to the IRS for all losses resulting from the filing of false tax returns. Corso agreed to make restitution to the NJDOL-WD with regard to his fraudulent unemployment compensation claim.

The charge of subscribing to a false tax return is punishable by a maximum potential penalty of three years in prison; the charge of mail fraud is punishable by a maximum potential penalty of twenty years in prison; and the charge of bankruptcy fraud is punishable by a maximum potential penalty of five years in prison.  All charges are punishable by a maximum $250,000 fine. Sentencing for both defendants is scheduled for Dec. 18, 2014.

U.S. Attorney Fishman praised the special agents of the U.S. Department of Labor, Office of Inspector General, under the direction of Special Agent in Charge Cheryl Garcia New York Regional Office; and special agents of IRS-Criminal Investigation, under the leadership of Acting Special Agent in Charge Jonathan D. Larsen; for investigation leading to today’s guilty pleas. He also thanked the N.J. Department of Labor and Workforce Development, under the leadership of Commissioner Harold J. Wirths, for its assistance in the investigation.

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

The charges and allegations in the complaint against Chimento are merely accusations, and he remains innocent unless and until proven guilty.

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Defense counsel: Carsillo: Lorraine S. Gauli-Rufo Esq., Assistant Federal Public Defender, Newark
Corso: Lisa Mack Esq., Assistant Federal Public Defender, Newark

Carsillo, Joseph Information
Corso, Carl Information

TRENTON, N.J. – The former owner of two New Jersey defense contracting businesses was indicted by a federal grand jury today for allegedly submitting fraudulent bids to the U.S Department of Defense (DoD) and disseminating military technical drawings to India without a license, U.S. Attorney Paul J. Fishman announced.

Hannah Robert, 49, of North Brunswick, New Jersey, was charged in a superseding indictment with one count of violating the Arms Export Control Act, one count of conspiracy to violate the act and four counts of wire fraud and one count of conspiracy to commit wire fraud. 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. Robert is currently under home detention pending trial.

According to the superseding indictment:

Robert was the founder, owner, and president of One Source USA LLC, a company located at her residence in Mount Laurel Township, New Jersey, and contracted with DoD to supply defense hardware items and spare parts pursuant to government contracts. Starting in September 2012, Robert opened a second defense-contracting company, Caldwell Components Inc., based at the same address in Mount Laurel Township.

Along with a resident of India identified only as “P.R.”, Robert owned and operated another company (One Source India) located in India that manufactured at its own facility defense hardware items and spare parts. From June 2010 to December 2012, Robert and P.R. allegedly conspired to defraud the DoD by electronically submitting fraudulent bids for DoD contracts, stating that they would provide parts manufactured in the United States, when in fact, the items were manufactured in India. One Source USA also subcontracted to other U.S. defense contractors, including those in Sussex County, New Jersey, and Boca Raton, Florida. Robert provided export-controlled items made in India to these defense contractors in such a way as to appear to the DoD that the items were manufactured in this country.

From June 2010 to December 2012, Robert also allegedly conspired to export defense blueprints to India without obtaining the necessary licenses from the U.S. Department of State. The exported technical drawings include parts used in the torpedo systems for nuclear submarines, military attack helicopters, and F-15 fighter aircraft.

In addition to United States’ sales, Robert and P.R. sold defense hardware items to foreign customers. Robert transmitted export-controlled technical data to P.R. in India so that Robert and P.R. could submit bids to foreigners, including those in the United Arab Emirates (UAE), to supply them or their foreign customers with defense hardware items and spare parts. Neither Robert nor P.R. obtained approval from the U.S. Department of State for this conduct.

On August 23, 2012, P.R. e-mailed Robert from India requesting the technical drawing for a particular military item. P.R.’s e-mail forwarded Robert an e-mail from an individual purporting to be “an official contractor of the UAE Ministry of Defence,” and who listed a business address in Abu Dhabi, UAE. The UAE e-mail requested quotations for a bid for the “blanket assembly” for the CH-47F Chinook military helicopter and listed the “End User” for the hardware item as the UAE Armed Forces. Later that same day, Robert replied to P.R.’s e-mail, attaching, among other things, the electronic file for an export-controlled technical drawing titled “Installation and Assy Acoustic Blankets, STA 120 CH-47F,” to be used in the Chinook attack helicopter.

Starting in October 2010, Robert transmitted the military drawings for parts to India by posting the technical data to the password-protected website of a Camden County, N.J., church where she was a volunteer web administrator. This was done without the knowledge of the church staff. Robert e-mailed P.R. the username and password to the church website so that P.R. could download the files from India. Through the course of the scheme, Robert uploaded thousands of technical drawings to the church website for P.R. to download in India.

On June 25, 2012, P.R. e-mailed Robert from India, stating: “Please send me the church web site username and password.” The e-mail was in reference to both an invoice to, and a quote for, an individual known to Robert as a broker of defense hardware items for an end-user in Pakistan. This individual (the “Pakistan trans-shipper”) employed a UAE address for shipping purposes. Later than day, Robert replied to this e-mail, providing a new username and password for the church website so that P.R. could download the particular defense drawings.

There were quality issues with the parts that Robert provided to the DoD. After the DoD in October 2012 disclosed the failure of certain parts used in the wings of the F-15 fighter aircraft, supplied by one of One Source USA’s American customers, Robert and P.R. provided the principal of that company with false and misleading material certifications and inspection reports for the parts. These documents, to be transmitted to the DoD, listed only One Source USA’s New Jersey address and not the address of the actual manufacturer in India, One Source India. As a result of the failed wing pins, the DoD grounded approximately 47 F-15 fighter aircraft for inspection and repair, at a cost estimated to exceed $150,000.

Robert was, until November 2012, an employee of a separate defense contractor in Burlington County, New Jersey, where she worked as a system analyst and had access to thousands of drawings marked with export-control warnings and to information on this defense contractor’s bids on DoD contracts. Robert misrepresented to her employer the nature and extent of her involvement with One Source USA.

Count One of the superseding indictment, charging conspiracy to commit wire fraud, carries a maximum penalty of 20 years in prison and a fine of $250,000. Counts Two through Five, charging substantive wire fraud, each carry a maximum penalty of 20 years and a fine of $250,000. Count Six, charging conspiracy to violate the Arms Export Control Act, is punishable by a maximum penalty of five years in prison and a $250,000 fine. Count Seven, charging a substantive violation of the Arms Export Control Act, is punishable by a maximum penalty of 20 years in prison and a $1 million fine. The superseding indictment also seeks forfeiture of Robert’s proceeds from the alleged criminal scheme.

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 Andrew M. McLees, with the investigation leading to the superseding indictment.

The government is represented by Assistant U.S. Attorney Fabiana Pierre-Louis of the U.S. Attorney’s Office Criminal Division in Trenton, and L. Judson Welle of the U.S. Attorney’s Office National Security Unit.

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

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

Robert, Hannah, Superseding Indictment

NEWARK, N.J. – Three New Jersey men were arrested today on charges they allegedly ran an online shop selling fake driver’s licenses, U.S. Attorney Paul J. Fishman announced today.

Ricardo Rosario, 32, and Abraham Corcino, 33, both of Jersey City, and Alexis Scott Carthens, 37, of Newark, are charged by complaint with conspiracy to commit fraud and related activity in connection with authentication features. All three men are expected to make their initial court appearances later today before U.S. Magistrate Steven C. Mannion in Newark federal court.

According to the complaint:

From October 2012 through August 2014, Rosario, Corcino and Carthens allegedly sold fake driver’s licenses over the Internet. The three men ran a website that was available at “fakeidstore.co” and “fakedlstore.com.” A number of the fake driver’s licenses allegedly sold by the defendants were used in connection with “cash out” schemes, where stolen credit card information, usually obtained through hacking or ATM skimming operations, was encoded on to counterfeit credit cards and then used to steal cash from victims’ accounts.

The website sold fake driver’s licenses for the states of New Jersey, Florida, Illinois, Pennsylvania, Rhode Island, and Wisconsin, and boasted that the licenses had “scannable barcodes” and “real” holographic overlays. The price for each fake driver’s license was approximately $150, but the website offered bulk pricing for orders of 10 or more cards. The website allowed its users to pay by bitcoin, a cryptographic-based digital currency, or MoneyPak, a type of prepaid payment card that could be purchased at retail stores. The “FAQ” section of the website indicated that orders would be received one to two days after payment was received and described the website’s policy with respect to returns: “No Refunds. No snitching.”

Rosario allegedly created and ran the Website. Corcino and Carthens allegedly assisted Rosario by creating and mailing the fake driver’s licenses. Corcino also maintained an Instagram website, which was used to promote the website.

Rosario and his conspirators sold 1,514 fake driver’s licenses for $232,660 between or Dec. 30, 2013, and June 23, 2014.

The count of conspiracy to commit fraud and related activity in connection with authentication features carries a maximum potential penalty of 15 years in prison and a fine of twice the gross gain or loss derived from the offense.

U.S. Attorney Fishman credited special agents of the FBI, under the direction of Special Agent in Charge Aaron T. Ford in Newark; and inspectors of the U.S. Postal Inspection Service, under the direction of Inspector in Charge Maria L. Kelokates in Newark, with the investigation leading to today’s charges.

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

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

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Rosario, Ricardo et al. Complaint

CAMDEN, N.J. – A certified Occupational Safety and Health Administration (OSHA) instructor today admitted selling more than 100 false safety certifications to New Jersey carpenters who never completed the required training, U.S. Attorney Paul J. Fishman announced.

Frederick Prinz, 38, of Marmora, New Jersey, pleaded guilty before U.S. District Judge Joseph H. Rodriguez in Camden federal court to an information charging him with making and selling fraudulent construction industry certification forms, known as “OSHA 30” cards.

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

The “OSHA 30” training program provides construction workers with foundational knowledge and skills in occupational safety. Prinz was certified by OSHA’s Outreach Training Program (OTP) at the Rocky Mountain Education Center, in Red Rocks, Colorado, to issue workers “OSHA 30” cards after they passed a 30-hour OTP training course. For a fee of $150 to $250 per card, Prinz sold false “OSHA 30” certifications to carpenters who never completed the required training.

The violation charged carries a maximum potential penalty of five years in prison and a $250,000 fine. Sentencing is scheduled for Dec. 10, 2014.

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, with the investigation leading to today’s guilty plea.

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

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Defense counsel: William J. Hughes Esq., Atlantic City, New Jersey

Prinz, Frederick Information

NEWARK, N.J. - A Louisiana man today admitted sexually touching a sleeping woman who did not know him aboard a flight from Houston to Newark Liberty International Airport, U.S. Attorney Paul J. Fishman announced.

Devender Singh, 62, an Indian national who lives in Baton Rouge, Louisiana, pleaded guilty before U.S. District Judge Stanley R. Chesler in Newark federal court to an information charging him with abusive sexual contact.

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

Singh was seated next to a woman who occupied a window seat on a United Airlines flight from Houston to Newark. While the plane was in the air, the woman fell asleep. She awoke to find Singh kissing her face with his hand inside her shirt.

After pushing Singh off of her and telling him to get away, the woman went to the back of the plane and told a flight crew member what had happened, asking that the police be present when the plane landed.

The federal government has exclusive jurisdiction over all sexual abuse cases that occur on aircraft in flight in the United States.

The charge to which Singh pleaded guilty carries a maximum potential penalty of two years in prison and a $250,000 fine. Sentencing is scheduled for Oct. 23, 2014.

U.S. Attorney Fishman credited special agents of the FBI, under the direction of Special Agent in Charge Aaron T. Ford, and the Port Authority Police Department, under the direction of Superintendent Michael A. Fedorko, with the investigation leading to today’s plea.

The government is represented by J. Jamari Buxton of the U.S. Attorney’s Office Criminal Division in Newark.
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Defense counsel: Assistant Federal Public Defender Candace Hom Esq., Newark

Singh, Devender Information

WASHINGTON – Public Affairs Officer Rebekah E. Carmichael of the U.S. Attorney’s Office in the District of New Jersey was one of 243 members of the Department of Justice recognized by Attorney General Eric Holder and Executive Office for U.S. Attorneys (EOUSA) Director Monty Wilkinson at the 30th annual Director’s Awards Ceremony today in Washington, D.C.

The District of New Jersey was one of 44 districts represented at the ceremony which was held in the Great Hall at the Robert F. Kennedy Department of Justice Building.

In his prepared remarks, Attorney General Holder told the awardees said, “Locally, nationally, and internationally, you represent the very best that this Department has to offer. Your work embodies our ongoing commitment – not merely to win cases, but to do justice; to protect our fellow citizens from crime, violence, and terrorism; to empower the most vulnerable among us; and to uphold the rule of law.”

EOUSA Director Monty Wilkinson echoed those sentiments, saying to the recipients, “You have persevered, and remained focused and motivated – achieving remarkable results in work that makes a difference in the lives of citizens across our great country. The vast scope of your collective accomplishments is nothing short of exceptional.”

Since her arrival in the District of New Jersey in the spring of 2010, Ms. Carmichael has enhanced the professionalism of the Public Affairs Office and worked with the media to keep the public well-informed about the important work of the office. Her thoughtful recommendations to the U.S. Attorney on opportunities to speak or write publicly on issues of concern in New Jersey and nationwide have raised awareness of the office’s work, as well as promoted its outreach efforts to the state’s diverse communities. 

“Rebekah has worked tirelessly to improve our communication with the public we serve about the office’s critically important law enforcement mission,” U.S. Attorney Fishman said. “Her professionalism, messaging ability, excellent writing and editing skills, work ethic and devotion to her job ensure that the public is fully informed about the scope of our office’s mission and the extraordinary success of the dedicated lawyers and support staff who carry it out.”

Ms. Carmichael’s reputation for excellence in the DOJ public affairs community resulted in her appointment to a six–month detail (September 2012-March 2013) as the senior public affairs specialist and on-record spokesperson for the Criminal Division in Washington. She was responsible for fielding and responding to media inquiries, developing communications plans, enhancing relationships with news media and other stakeholders, and succinctly explaining and advocating official positions.

Ms. Carmichael is routinely called upon by public affairs officers in other districts for guidance on media-related matters, and played a significant role in developing the public affairs officer training course at the National Advocacy Center in South Carolina, where she regularly serves as an instructor. In 2013, she led the District of New Jersey’s entry into social media, starting its first Twitter feed, which now has more than 1,100 followers.

Ms. Carmichael and Christina DiIorio Sterling, of the District of Massachusetts, are the first-ever recipients of the award for Superior Performance in Public Affairs.

EOUSA provides oversight, general executive assistance, and direction to the 94 United States Attorneys’ offices around the country. For more information on EOUSA and its mission, visit http://www.justice.gov/usao.

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Office of Justice Programs Funds U.S. Attorney-led Violence Reduction Effort in Jersey City

NEWARK, N.J. - The U.S. Department of Justice today awarded a $500,000 grant to New Jersey for a Project Safe Neighborhoods (PSN) program designed to reduce crime in Jersey City by focusing law enforcement efforts on gang and gun violence, U.S. Attorney Paul J. Fishman announced.

The New Jersey U.S. Attorney’s Office worked with partners in Jersey City and the N.J. Department of Law and Public Safety’s Division of Criminal Justice to develop the application that successfully competed against others from across the country.

“The goal of this project is to reduce violent crime in one of New Jersey’s largest and most densely populated cities,” U.S. Attorney Fishman said. “To do that, this grant will fund state-of-the-art methods to analyze criminal activity, improve information sharing among law enforcement agencies and collaboration with the community, and do a better job of getting services to where they are most needed.”

U.S. Attorney Fishman said Jersey City has made substantial progress in addressing gun crime and gang violence, particularly through its participation in the Violent Enterprise Source Targeting (VEST) Program, which was developed to dismantle criminal organizations through multi-agency collaboration to share intelligence, target the most violent offenders, and conduct sustained enforcement operations and coordinated prosecutions.

Jersey City plans to use the $500,000 PSN grant to expand and amplify the federal, state and local partnerships created by VEST. Project Safe Neighborhoods is a nationwide effort to reduce gang and gun violence by networking existing local programs and providing them with additional tools.

The New Jersey U.S. Attorney’s Office is responsible for establishing a collaborative PSN task force of federal, state, and local law enforcement and other community members to implement gang violence and gun crime enforcement, intervention and prevention initiatives within the district. The PSN Task Force will be expanded to include community partners, Rutgers University, as well as law enforcement. The law enforcement arm includes the Drug Enforcement Administration, the N.J. State Police, the N.J., Department of Corrections, Hudson County Prosecutor’s Office, Hudson County Sheriff’s Office and Jersey City Police Department. On the community level, collaborators will include the City of Jersey City, Rutgers University, Jersey City Employment and Training Program, which operates Jersey City’s reentry program led by former New Jersey Gov. Jim McGreevey, Jersey City Public Schools, Jersey City Department of Recreation, Urban Concerns, Boys & Girls Club of Hudson County, Jersey City Housing Authority, Interdenominational Ministerial Alliance of Jersey City, Jersey City Medical Center, Hudson County Chamber of Commerce, Urban League of Hudson County, and a network of additional non-profit and faith-based partners.

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NEWARK, N.J. - A Somers Point, New Jersey man admitted today to killing, or attempting to kill, four different species of hawks protected by federal law, U.S. Attorney Paul J. Fishman announced.

Robert Losasso, 69, pleaded guilty today to six counts of violating the Migratory Bird Treaty act for shooting the birds from his home. He entered his guilty plea before U.S. Magistrate Judge Steven C. Mannion in Newark federal court.

Losasso admitted that he fatally shot or attempted to shoot red-tailed, sharp-shinned, red-shouldered and Cooper’s hawks on several occasions. These species are among the tens of thousands of birds of prey that migrate every year from Canada along the Atlantic Flyway through New Jersey. 

Losasso also admitted that he didn’t have any permit to shoot the birds.

The Migratory Bird Treaty Act is a statute that was enacted in 1918 and implements in the United States protections afforded migratory birds under several international conventions to which the United States is a party.  Breeding populations of red-shouldered hawks are listed as endangered on the State of New Jersey’s Endangered and Threatened Wildlife list. Sharp-shinned hawks and populations of Cooper’s hawks also have special protections under New Jersey state law.

The charges to which Losasso pleaded guilty each carry a maximum potential penalty of six months in prison and a maximum fine equal to the greatest of $15,000 or twice the gross gain or loss resulting from the offenses. Sentencing is currently scheduled for Dec. 15, 2014.

In his plea agreement, Losasso also agreed to pay more than $4,000 in restitution to the wildlife rehabilitation centers that incurred losses treating or euthanizing hawks injured as a result of his conduct.

U.S. Attorney Fishman credited special agents of U.S. Fish and Wildlife Service, Office of Law Enforcement, under the direction of Resident Agent in Charge Carmine Sabia, with the investigation leading to the charges. He also thanked the New Jersey Division of Fish and Wildlife, Bureau of Law Enforcement, and the Somers Point Police Department for their roles in the case.

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

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

Losasso, Robert Information

NEWARK, N.J. - A Pennsylvania man today admitted lying to customs authorities in order to avoid $7 million in anti-dumping duties on children’s bedroom furniture imported from China, U.S. Attorney Paul J. Fishman announced.

John Sandiford, 66, of East Earl, Pennsylvania, pleaded guilty before U.S. District Judge William J. Martini in Newark federal court to an information charging him with one count of importing merchandise from China by means of false statements.

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

Sandiford was the managing director of a Cranbury, New Jersey, company that imported children’s wooden bedroom furniture from China. Importers must pay “anti-dumping” duties of 216 percent on some types of wooden bedroom furniture made in certain Chinese factories because those factories sell the furniture at less than fair value and materially injure U.S. industry. However, importers pay an anti-dumping duty of only 7.24 percent on the same types of furniture if it is made in Chinese factories that are not state-owned or controlled.

Between 2008 and 2011, Sandiford and others at his company imported furniture from factories with the 216 percent anti-dumping duty rate, but filed false customs documents and bills of lading stating that the furniture was made at factories with the 7.24 percent anti-dumping duty rate. These fraudulent documents enabled Sandiford’s company to avoid paying $7 million in anti-dumping duties.

The count with which Sandiford is charged carries a maximum penalty of two years in prison and a fine of $250,000 or twice the gain or loss caused by the offense. Sentencing is currently scheduled for Jan. 14, 2015.

U.S. Attorney Fishman credited special agents of U.S. Department of Immigration and Customs Enforcement, Homeland Security Investigations (ICE HSI), under the direction of Special Agent in Charge Andrew M. McLees, for the investigation leading to today’s plea.

The government is represented by Assistant U.S. Attorneys R. David Walk Jr. and Melissa L. Jampol of the U.S. Attorney’s Office’s Health Care and Government Fraud Unit.

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Defense counsel:  Barry Gross Esq., Philadelphia

Sandiford, John Information

NEWARK, N.J. – An electronics engineer for the U.S. Army pleaded guilty today to making false statements in an attempt to obtain a government military contract to manufacture a portable power supply for U.S. Army use, U.S. Attorney Paul J. Fishman announced.

Modesto Torres, 49, of Dover, New Jersey, surrendered today to federal law enforcement and pleaded guilty to an information charging him with making false statements to the U.S. Department of Defense. He entered his guilty plea before U.S. District Court Judge William J. Martini in Newark federal court and was released on $25,000 unsecured bond.

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

In June 2012, Torres, an electronics engineer for the U.S. Army at Picatinny Arsenal, sought to bid – through a company referred to in court documents as “Company A” – on a contract with the U.S. Army. The winner of the contract would manufacture the Artillery Portable Universal Battery Supply, or “APUBS,” a battery that powered the guidance system on the 105 mm Howitzer, a type of artillery weapon used by the U.S. military.

Torres prepared the majority of the content of the proposal submitted to a U.S. Army bidding officer. During his guilty plea, Torres admitted that he included fabricated biographies of personnel not employed by the company, as well as false representations regarding the company’s supplier relationships with manufacturers based in Puerto Rico and China when no such relationships existed. 

The charge of false statements carries a maximum penalty of five years in prison and a $250,000 fine.  Sentencing is currently scheduled for Jan. 14, 2015.

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

The government is represented by Assistant U.S. Attorney Joyce M. Malliet of the U.S. Attorney’s Office National Security Unit in Newark.  

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Defense counsel: Joel M. Bacher Esq., Wayne, N.J.

Torres, Modesto Information

TRENTON, N.J. – An Ocean County, New Jersey, attorney today admitted his role in a scheme that defrauded investors in connection with a Facebook IPO and several real estate deals, U.S. Attorney Paul J. Fishman announced.
 
Fred Todd, 61, of Lakewood, New Jersey, pleaded guilty before U.S. District Judge Joel A. Pisano in Trenton federal court to an information charging him with one count of conspiracy to commit wire fraud and one count of transacting in criminal proceeds.

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

Todd is an attorney with offices in Seaside Heights, New Jersey, and Los Angeles, California. His two co-defendants, Eliyahu Weinstein, 39, of Lakewood, and Aaron Glucksman, 41, of Brooklyn, New York, have already pleaded guilty to charges related to their roles in the scheme.

Weinstein, already convicted and sentenced to 22 years in prison in a separate Ponzi scheme, pleaded guilty on Sept. 3, 2014, to three counts of an indictment pending against him: one count of conspiracy to commit wire fraud, one count of committing wire fraud while on pretrial release, and one count of money laundering. He is scheduled to be sentenced on those charges on Dec. 15, 2014.

Glucksman has also pleaded guilty and was sentenced by Judge Pisano on May 5, 2014, to 52 months in prison, three years of supervised release, and ordered him to forfeit $1.2 million. Judge Pisano ordered Glucksman’s sentence to run partially concurrently with a 36-month sentence recently imposed by U.S. District Judge Raymond J. Dearie of the Eastern District of New York in an unrelated case.

In February 2012, Todd and his conspirators offered a pair of investors (referred to in the information as the “Facebook victims”) the opportunity to purchase large blocks of Facebook shares prior to the company’s initial public offering, or IPO, in May 2012. The offer was particularly attractive because large blocks of the shares were extremely difficult to get and were expected to increase in value at the time of the IPO. Weinstein and his conspirators did not actually have access to the shares.

Based on misrepresentations by the conspirators, the Facebook victims wired millions of dollars between February and March of 2012 to an account Weinstein and a conspirator controlled. Weinstein and another conspirator provided investors with false documents showing companies owned by various conspirators held assets, which would secure the Facebook victims’ investment.

The conspirators did not use any of the Facebook victims’ money to purchase Facebook shares, instead misappropriating it for their own use.

Around the same time, Todd and his conspirators also persuaded victims to invest in the purported purchase of an apartment complex in Florida. They told the victims that Weinstein had the opportunity to purchase the notes on the condominiums at a discounted price and immediately flip it at a substantial profit. The victims wired money to complete the purchase, but Todd and his conspirators instead used the money for their own purposes.

The conspiracy count to which Todd pleaded guilty carries a maximum potential penalty of 20 years in prison; the transacting in criminal proceeds count carries a maximum potential penalty of 10 years in prison. Both are also punishable by a potential fine of $250,000 or twice the gross loss or gain from the scheme, whichever is greater.

U.S. Attorney Fishman credited special agents of the FBI, under the direction of Special Agent in Charge Aaron T. Ford in Newark, for the investigation leading to today’s guilty plea. He also thanked agents of IRS–Criminal Investigation, under the direction of Acting Special Agent in Charge Jonathan D. Larsen, for their role in the investigation.

The government is represented by Counsel to the U.S. Attorney Rachael A. Honig; Gurbir S. Grewal, Chief of the U.S. Attorney’s Office Economic Crimes Unit; Assistant U.S. Attorneys Zach Intrater of the Economic Crimes Unit; and Evan S. Weitz of the Asset Forfeiture and Money Laundering Unit.

This case was brought in coordination with President Barack 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.

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Defense counsel: James Filan Esq., Westport, Conn.

Todd, Fred Information

TRENTON, N.J. – A Monmouth County, New Jersey, doctor today admitted he structured transactions in order to avoid reporting requirements and filed false tax returns, U.S. Attorney Paul J. Fishman announced.

Dr. Paul DiLorenzo, 60, of Ocean Township, New Jersey, pleaded guilty before U.S. District Judge Freda L. Wolfson in Trenton federal court to Counts Two and 12 of a second superseding indictment charging him with structuring financial transactions and helping to file false tax returns. 

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

Between 2009 and June 27, 2012, DiLorenzo received more than $2 million in cash payments from his patients. On at least 35 occasions, the office received payments exceeding $10,000 in a single day. Between May 28, 2009, and Nov. 2, 2011, DiLorenzo deposited approximately $1 million in cash into banks accounts in his name and in the name of his business. The deposits included 150 separate transactions, all but one of which were for amounts of less than $10,000. Transactions of $10,000 or more trigger Currency Transaction Report requirements. DiLorenzo admitted he made the deposits for less than $10,000 to evade the reporting requirement.

On March 29, 2011, DiLorenzo helped his accountant file a U.S. Individual Income Tax Return, Form 1040, for the 2010 tax year, reporting gross receipts of $444,331, knowing his gross receipts were approximately $1 million. In May 2012, DiLorenzo helped his accountant prepare a tax return for the 2011 tax year in which he reported gross receipts of $537, 236. In fact, his gross receipts were in excess of $800,000.

U.S. Attorney Fishman credited special agents of the FBI, under the direction of Special Agent in Charge Aaron T. Ford in Newark; special agents of IRS-Criminal Investigations, under the direction of Acting Special Agent in Charge Jonathan D. Larsen; and special agents and task force officers from the Tactical Diversion Squad of the Drug Enforcement Administration, under the direction of Special Agent in Charge Carl Kotowski, with the investigation leading to today’s guilty plea.

The structuring charge carries a maximum potential penalty of 10 years in prison and a fine of $500,000; the tax charge carries a maximum potential penalty of three years in prison and a fine of up to $250,000. Sentencing is scheduled for Dec. 18, 2014.

The government is represented by Assistant U.S. Attorney R. Joseph Gribko of the U.S. Attorney’s Office in Trenton and Yael Epstein, Trial Attorney with the U.S. Department of Justice, Tax Division.

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Defense counsel: Robert J. DeGroot Esq., Newark

DiLorenzo, Paul SSuperseding Indictment

NEWARK, N.J. - A Hoboken, New Jersey, financial consultant today admitted evading payment of taxes on approximately $273,000 in commission payments received from an insurance broker, U.S. Attorney Paul J. Fishman announced.

John Twomey Booth, 66, pleaded guilty before U.S. District Judge Esther Salas in Newark federal court to Count Three of an information charging him with willfully attempting to evade the payment of federal personal income tax for calendar year 2008.

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

Booth was a financial consultant who operated in Hoboken and elsewhere. Beginning in March 2006 and continuing through December 2009, Booth accepted hundreds of thousands of dollars in payments from an insurance broker based in Towson, Maryland, whose companies provided insurance brokerage services for New Jersey municipal entities—including the Weehawken Board of Education and the Union City Board of Education. Booth directed the insurance broker and others to make payments to four entities controlled by Booth.

Booth used the funds to pay for his personal expenses and withdraw cash. Despite receiving approximately $719,000 in income during the calendar years 2006, 2007, 2008, and 2009, including approximately $273,000 from the insurance broker, Booth failed to report any of this income to the IRS, causing a loss to the government of $119,731.

The tax evasion count to which Booth pleaded guilty carries a maximum potential penalty of five years in prison and a $250,000 fine. Sentencing is scheduled for Dec. 15, 2014.

U.S. Attorney Fishman credited special agents of IRS—Criminal Investigation, under the direction of Acting Special Agent in Charge Jonathan D. Larsen, and the FBI, under the direction of Special Agent in Charge Aaron T. Ford, for the investigation leading to today’s plea.

The government is represented by Assistant U.S. Attorney Lee M. Cortes Jr., of the U.S. Attorney’s Office Special Prosecutions Division in Newark.

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Defense counsel: Richard Lawler Esq., New York

Booth, John Twomey Information

CAMDEN, N.J. – A pastor of the now-defunct ReBirth International Church in Elizabeth, New Jersey, admitted today to defrauding financial institutions as part of a $15 million mortgage fraud scam that used phony documents and “straw buyers” to make illegal profits on overbuilt condos, U.S. Attorney Paul J. Fishman announced.

Sean A. Souels, 44, of Linden, New Jersey, pleaded guilty before U.S. District Judge Jerome B. Simandle in Camden federal court to a second superseding indictment charging him with one count of conspiracy to commit wire fraud.

Souels was among 11 defendants charged in July 2012 with conspiracy to commit wire fraud and conspiracy to commit money laundering. Two additional defendants, Nicholas Tarsia, 65, of Totowa, N.J., and Mashon Onque, 43, of East Orange, N.J., were charged in November 2013 with conspiracy to commit wire fraud. Tarsia was also charged with one count of conspiracy to commit money laundering.

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

Souel’s conspirators, including Darryl Henry, 48, of Somerset, New Jersey, and Jerry Smith, 48, of Rahway, New Jersey – who both pleaded guilty before Judge Simandle; Henry in March of 2009 and Smith in December, 2011 – 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, Fla. – to be much higher than the buyout price to ensure large proceeds. Other defendants helped conceal the true sales prices of certain properties through inflated sales contracts and finder’s fee agreements.

In 2007, Souels agreed with Henry and Smith to recruit a church member to purchase a Wildwood Crest property at an inflated rate. In order for the “straw purchaser” to appear more creditworthy, Souels submitted documents fraudulently claiming that the church member was employed as the president of operations at ReBirth International Church. Once the loan was approved and the mortgage lender sent the loan proceeds in connection with real estate closing, Souels received $30,000 from his conspirators.

The wire fraud conspiracy charge is punishable by a maximum potential penalty of 30 years in prison and a $1 million fine. Souels is scheduled to be sentenced on Jan. 20, 2015.

U.S. Attorney Fishman credited special agents of the FBI, under the direction of Special Agent in Charge Aaron T. Ford in Newark, and special agents of IRS-Criminal Investigation, under the direction of Acting Special Agent in Charge Jonathan D. Larsen, with the investigation leading to today’s guilty plea.

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.

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Defense counsel: Jose Ongay Esq., Haddon Heights, N.J.

Ricks, Timothy, et al., Superseding Indictment

Company owner sentenced to 30 months in prison

NEWARK, N.J. – The owner of a Maine seafood company was sentenced to 30 months in prison today for his role in concealing 79,666 pounds of Atlantic sea scallops harvested off the coast of New Jersey and Cape Cod, Massachusetts, New Jersey U.S. Attorney Paul J. Fishman announced.

 The owner of D.C. Air & Seafood, Christopher Byers, 42, of Winter Harbor, Maine, previously pleaded guilty before U.S. District Judge William H. Walls to an information charging him with conspiring with his company and six fishing boat operators to prepare false reports to conceal the overharvesting. Judge Walls imposed the sentence today in Newark federal court. The six boat operators previously pleaded guilty before Judge Walls and await sentencing.

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

D.C. Air & Seafood, a seafood wholesaler, purchased Atlantic sea scallops harvested by federally permitted vessels in the Elephant Trunk Access Area – a large sea scallop fishing ground off the mid-Atlantic coast. That area and others managed by the National Oceanic and Atmospheric Administration (NOAA) had been closed to fishing as part of an area rotation management program to rebuild the scallop population, but were open to limited scallop fishing by federally permitted vessels for two-week periods in March 2007, July 2007 and March 2008.

During those periods, individual vessels were restricted to harvesting no more than 400 pounds of scallops per vessel per trip. Vessels operated by the conspiring boat operators failed to report 79,666 pounds of scallops harvested off the coast of New Jersey and Cape Cod for purchase by D.C. Air & Seafood during the permit periods. Some of the scallops were off-loaded from the vessels in Atlantic City, New Jersey, to trucks used by Byers and D.C. Air & Seafood.

Byers admitted during his guilty plea that he, D.C. Air & Seafood and the six boat operators conspired to conceal the overharvesting of scallops by preparing fishing vessel trip reports – required to be submitted to NOAA – which falsely represented the amount of scallops harvested on certain vessel trips was 400 pounds or less.

As part of its plea agreement, D.C. Air & Seafood agreed to pay $520,371 in restitution to the United States – representing the value of the sea scallops – and to be placed on probation for five years. During the probationary period, the company will be subject to the terms of an environmental compliance plan to ensure all purchases and sales of fish comply with federal law. The company agreed not to participate in the scallop industry during that time.

In addition to the prison term, Judge Walls sentenced Byers to three years of supervised release and ordered him to pay restitution in the amount of $520,371.

U.S. Attorney Fishman credited special agents of the National Oceanic and Atmospheric Administration, under the direction of Special Agent in Charge Logan Gregory, with the investigation.

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

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Defense counsel: William J. Hughes Esq., Atlantic City, N.J.

NEWARK, N.J. – A former delivery driver from Totowa, New Jersey, was sentenced today to 120 months in prison for possessing images of child sexual abuse, U.S. Attorney Paul J. Fishman announced.

Anthony Chiampi, 49, previously pleaded guilty before U.S. Magistrate Judge Michael A. Hammer to an information charging him with one count of possession of child pornography. U.S. District Judge Faith S. Hochberg imposed the sentence today in Newark federal court.

According to documents filed in this case and statements made in court: Chiampi is registered sex offender, having been previously convicted for endangering the welfare of a child. As a result, he is subject to community supervision for life.

On March 14, 2013, as part of his community supervision, officers of the N.J. Division of Parole visited Chiampi’s residence in Totowa. The officers discovered 63 disks that contained images and videos depicting child sexual abuse, including material that involved prepubescent minors.

In addition to the prison term, Judge Hochberg sentenced Chiampi to 10 years of supervised release.

U.S. Attorney Fishman credited the N.J. State Parole Board, under the direction of Chairman James T. Plousis, and special agents of the FBI’s Child Exploitation Task Force, under the direction of Special Agent in Charge Aaron T. Ford in Newark, with the investigation leading to today’s sentencing.

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

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Defense counsel: David A. Holman Esq., Assistant Federal Public Defender, Newark

TRENTON, N.J. – A Brooklyn, New York, man admitted today to participating in six armed electronic store robberies, including robberies in Linden, New Jersey and Paramus, New Jersey, U.S. Attorney Paul J. Fishman announced.

Carl Williams, 30, pleaded guilty before U.S. District Judge Joel A. Pisano in Trenton federal court to a superseding indictment charging him with conspiracy to commit Hobbs Act robberies and brandishing a firearm in furtherance of a crime of violence. Williams has been in custody since his arrest on Feb. 14, 2013.

According to documents filed in this case and statements made in court: Between June 11, 2012, and Jan. 16, 2013, Williams conspired with others to commit a series of armed electronics store robberies in New Jersey and New York. During each robbery, Williams and other conspirators would assign “look-outs” to remain outside while the rest of the group, armed with a gun, entered the store, locked the front doors, and tied-up employees and customers with zip ties before stealing the merchandise.

The charge of conspiracy to commit Hobbs Act robberies carries a maximum potential penalty of 20 years in prison. The charge of brandishing a firearm in furtherance of a crime of violence carries a mandatory minimum of seven years in prison, which must run consecutive to any other prison sentence imposed, and a maximum of life in prison. Each count carries a maximum fine of $250,000. Sentencing is scheduled for Jan. 21, 2015.

U.S. Attorney Fishman credited special agents of the FBI, under the direction of Special Agent in Charge Aaron T. Ford, with the investigation leading to today’s guilty plea. He also thanked the Linden and Woodbridge police departments in New Jersey, as well as the New York City and Nassau County police departments and the Kings County District Attorney’s Office in New York for their work in this case.

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

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Defense counsel: Mark A. Berman Esq., River Edge, N.J.

Williams, Carl Superseding Indictment

NEWARK, N.J. – A New Jersey man pleaded guilty today to orchestrating an eight-year scheme to falsify employment certifications to facilitate the illegal entry of Indian immigrants into the United States and to filing a false tax return.

U.S. Attorney Paul J. Fishman of the District of New Jersey, Assistant Attorney General Leslie R. Caldwell of the Justice Department’s Criminal Division, Chief Richard Weber of Internal Revenue Service – Criminal Investigation (IRS-CI) and Director Bill A. Miller of the State Department’s Diplomatic Security Service (DSS) made the announcement.

Sandipkumar Patel, 41, of Edison, New Jersey, pleaded guilty before U.S. District Judge William H. Walls in Newark federal court to conspiring to defraud the United States and to filing a false federal income tax return. Sentencing is scheduled for Jan. 6, 2015.

According to court documents filed with the plea agreement, from 2001 until 2009, Patel sponsored the visa applications of Indian nationals by falsely claiming to provide employment for them in the United States. Patel falsely certified on the visa applications that he would employ the immigrants in various technical fields at several New Jersey companies, thereby facilitating their illegal entry into the United States. Over the course of the scheme, immigrants paid Patel thousands of dollars for the false certifications to fraudulently secure the visas. To disguise the scheme, Patel issued payroll checks and other payroll forms. Patel required the immigrants to return the money from the checks and also to reimburse him for his payroll tax expenses. Patel used the fraudulent pay stubs and payroll checks to support false applications to extend the visas, and Patel charged the immigrants fees for the visa extensions.

As a result of falsely carrying the immigrant employees on his payrolls, Patel overstated his payroll expenses on his federal income tax returns by more than $1.4 million over four years, under-reporting his tax obligation by over $400,000 for those years.

This case was investigated by IRS-CI and DSS. The case is being prosecuted by Senior Trial Attorneys Hope S. Olds and William H. Kenety of the Criminal Division’s Human Rights and Special Prosecutions Section and Assistant U.S. Attorney Danielle M. Corcione of the District of New Jersey, with assistance from the Criminal Division’s Asset Forfeiture and Money Laundering Section.

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Patel, Sandipkumar Information

NEWARK N.J. – The former senior vice president of marketing at A&P, a U.S. supermarket and liquor store chain, was sentenced today to 36 months in prison for his role in a scheme to defraud A&P by selling for personal gain event tickets that were intended for A&P’s use, U.S. Attorney Paul J. Fishman announced.

John R. Moritz, 45, of Mason, Ohio, previously pleaded guilty before U.S. District Judge Kevin McNulty to an information charging him with one count of wire fraud.

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

From December 2010 through December 2011, Moritz worked at A&P, a U.S. supermarket and liquor store chain headquartered in Montvale, New Jersey. He arranged for A&P to purchase thousands of tickets to sporting events, concerts and other shows that were to be used to reward high-performing A&P employees and for other legitimate business purposes. However, Moritz resold more than 7,000 tickets to third parties over the internet, without A&P’s knowledge or consent. Some of these tickets were for the 2011 Super Bowl, the 2011 New York Yankees playoff games and Bon Jovi, Lady Gaga and U2 concerts. He admitted that as a result of his conduct he fraudulently obtained $1,218,192.  

In addition to the prison term, Judge McNulty sentenced Moritz to three years of supervised release and ordered to pay restitution of $3.2 million.

U.S. Attorney Fishman credited special agents of the FBI in Newark, under the direction of Special Agent in Charge Aaron T. Ford, for the investigation leading to today’s guilty plea.

The government is represented by Assistant U.S. Attorneys Lakshmi Srinivasan Herman of the U.S. Attorney’s Office Economic Crimes Unit in Newark and Evan Weitz of the Asset Forfeiture and Money Laundering Unit.

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Defense Counsel: Lawrence S. Feld Esq. and Paul Silverman Esq. New York

NEWARK N.J. – The former senior vice president of marketing at A&P, a U.S. supermarket and liquor store chain, was sentenced today to 36 months in prison for his role in a scheme to defraud A&P by selling for personal gain event tickets that were intended for A&P’s use, U.S. Attorney Paul J. Fishman announced.

John R. Moritz, 45, of Mason, Ohio, previously pleaded guilty before U.S. District Judge Kevin McNulty to an information charging him with one count of wire fraud.

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

From December 2010 through December 2011, Moritz worked at A&P, a U.S. supermarket and liquor store chain headquartered in Montvale, New Jersey. He arranged for A&P to purchase thousands of tickets to sporting events, concerts and other shows that were to be used to reward high-performing A&P employees and for other legitimate business purposes. However, Moritz resold more than 7,000 tickets to third parties over the internet, without A&P’s knowledge or consent. Some of these tickets were for the 2011 Super Bowl, the 2011 New York Yankees playoff games and Bon Jovi, Lady Gaga and U2 concerts. He admitted that as a result of his conduct he fraudulently obtained $1,218,192.   

In addition to the prison term, Judge McNulty sentenced Moritz to three years of supervised release and ordered to pay restitution of $3.2 million.

U.S. Attorney Fishman credited special agents of the FBI in Newark, under the direction of Special Agent in Charge Aaron T. Ford, for the investigation leading to today’s guilty plea.

The government is represented by Assistant U.S. Attorneys Lakshmi Srinivasan Herman of the U.S. Attorney’s Office Economic Crimes Unit in Newark and Evan Weitz of the Asset Forfeiture and Money Laundering Unit.

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Defense Counsel: Lawrence S. Feld Esq. and Paul Silverman Esq. New York

TRENTON, N.J. - A former FBI special agent and his wife today admitted colluding to hide her income as part-owner of a retail pharmacy in Piscataway, New Jersey, from the Internal Revenue Service – instead using the cash to pay for home renovations and other personal expenses, U.S. Attorney Paul J. Fishman announced.

Pritesh Desai, 47, and his wife, Darshna Desai, 45, both of Watchung, New Jersey, surrendered to federal authorities this morning. Each pleaded guilty to one count of conspiring to defraud the IRS. The pair entered their guilty pleas to an information before U.S. District Judge Michael A. Shipp in Trenton federal court.

According to documents filed in this case and statements made in court:  At the time of the conspiracy, Pritesh Desai was employed as a special agent with the FBI’s New York Field Office until his resignation in July 2013, and Darshna Desai was a part-owner in DVS Pharma Inc., known as Heights Pharmacy. From June 2004 to June 2012, the couple conspired with each other and with Darshna Desai’s partner to conceal cash income from the pharmacy.
 
Darshna Desai admitted that she or her partner would separate the cash earned by Heights Pharmacy from other income received, pay a portion to Darshna Desai as cash salary, and then split the remainder.

Pritesh and Darshna Desai admitted they took certain actions to conceal her share of the cash, depositing it into various financial institutions and multiple accounts. They also acknowledged they used cash to pay personal living expenses, including renovating their residence, and gave cash to others in exchange for checks the Desais deposited in their personal bank accounts. Pritesh Desai also admitted providing false information to his employer, the FBI, when submitting financial disclosure forms for years 2007 through 2011. He falsely claimed the cash held by his family was gifts from other family members.

For tax years 2004 through 2011, Darshna Desai and her partner filed false corporate income tax returns for the pharmacy. For those same tax years, Darshna Desai and Pritesh Desai filed false joint personal income tax return which also failed to disclose the cash. The total tax loss from the fraud was between $200,000 and $400,000.

The offense to which the Desais pleaded guilty carries a maximum potential penalty of five years in prison and a $250,000 fine. Sentencing for both defendants is scheduled for Dec. 11, 2014.

U.S. Attorney Fishman credited special agents of the Department of Justice, Office of the Inspector General, under the direction of Special Agent in Charge Ronald G. Gardella, and IRS – Criminal Investigation, under the direction of Acting Special Agent in Charge Jonathan D. Larsen, with the investigation leading to today’s guilty plea.

The government is represented by Assistant U.S. Attorneys Maureen Nakly and Jacques Pierre of the U.S. Attorney’s Special Prosecutions Division in Newark.
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Defense counsel:

Pritesh Desai: Michael Critchley and John Vazquez Esqs., Roseland, N.J.
Darshna Desai: Lawrence Horn and Richard Sapinski Esqs., Newark

Desai, Pritesh, Information
Desai, Darshna Information

Defrauded Investors in Facebook IPO and Real Estate Deals

TRENTON, N.J. –  Convicted Ponzi schemer Eliyahu Weinstein, 39, of Lakewood, N.J., who was previously sentenced to 22 years in prison for running a real estate investment fraud scheme that caused $200 million in losses, today admitted that he also defrauded investors in connection with the Facebook IPO and several additional real estate deals and then laundered the proceeds of the scheme, U.S. Attorney Paul J. Fishman announced.

Weinstein pleaded guilty before U.S. District Judge Joel A. Pisano in Trenton federal court to three counts of an indictment pending against him: one count of conspiracy to commit wire fraud, one count of committing wire fraud while on pretrial release, and one count of money laundering.

Two co-defendants, Alex Schleider, 48, of Lakewood, and Aaron Glucksman, 41, of Brooklyn, New York, have already pleaded guilty to charges related to their roles in the scheme.  Judge Pisano sentenced Glucksman on May 5, 2014, to 52 months in prison, three years of supervised release, and ordered him to forfeit $1.2 million. Judge Pisano ordered Glucksman’s sentence to run partially concurrently with a 36-month sentence recently imposed by U.S. District Judge Raymond J. Dearie of the Eastern District of New York in an unrelated case. Glucksman remains on release pending his designation to a federal institution by the U.S. Department of Justice, Bureau of Prisons. Schleider is scheduled to be sentenced Sept. 18, 2014.

“Even while facing federal charges that eventually netted him decades in prison, Weinstein couldn’t resist the buzz around the Facebook IPO and the opportunity to fleece unsuspecting investors,” U.S. Attorney Fishman said. “Shamelessly, he even used the money he stole to pay the legal fees he accumulated from the previous scam.”

“Eliyahu Weinstein spent the greater part of a decade creating and executing a series of elaborate fraudulent investment schemes, ultimately defrauding victims of over $200 million by taking advantage of trusted relationships and innocent investors,” Aaron T. Ford, FBI Special Agent in Charge, Newark, said. “This long-term, complex investigation required much in terms of investigative resources. The FBI, through its vast experience investigating investment schemes, was able to provide such resources, resulting in the arrest and today’s guilty plea of Eliyahu Weinstein.”

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

In February 2012, Weinstein and his fellow conspirators offered a pair of investors (referred to in the indictment as the “Facebook victims”) the opportunity to purchase large blocks of Facebook shares prior to the company’s initial public offering, or IPO, in May 2012. The offer was particularly attractive because large blocks of the shares were extremely difficult to get and were expected to increase in value at the time of the IPO. Weinstein and his conspirators did not actually have access to the shares.

Based on misrepresentations by Weinstein and his conspirators, the Facebook victims wired millions of dollars between February and March of 2012 to an account Weinstein and a conspirator controlled. Weinstein and another conspirator provided investors with false documents showing companies owned by various conspirators held assets, which would secure the Facebook victims’ investment.

The conspirators did not use any of the Facebook victims’ money to purchase Facebook shares, instead misappropriating it for their own use. Weinstein used some of the money to pay lawyers and experts representing him in his earlier – and at that time, still pending – criminal case and in related civil matters. Weinstein and his conspirators also used the Facebook victims’ money to make investments in businesses unrelated to Facebook and to make loans for their own benefit.

Around the same time, Weinstein and his conspirators also persuaded the Facebook victims to invest in the purported purchase of an apartment complex, “Belle Glade Gardens,” in Florida. They told the Facebook victims that Weinstein had the opportunity to purchase Belle Glade Gardens at a discounted price and immediately flip it at a substantial profit. Weinstein and his conspirators further told the Facebook victims that Weinstein had already placed $2.5 million in the trust account of a Miami law firm for the transaction; that if the Facebook victims contributed another $2.5 million toward the transaction, those funds would remain in escrow at the Miami law firm until the deal closed; and that the Facebook victims would be repaid within 60 days. The Facebook victims wired $2.83 million to the Miami law firm in order to complete the Belle Glades Gardens transaction. Weinstein and his conspirators did not use the money to purchase Belle Glades Gardens. Instead, they redirected the money from the law firm to accounts that they controlled, returned $1.8 million to the Facebook victims as a purported return on their Facebook investment, and used the remaining money for their own purposes.

In July 2012, Weinstein approached another group of investor victims (referred to in the indictment as the “Florida condominium victims”) and told them he had the opportunity to purchase the notes on seven condominiums in Florida at a discounted price of $3 million. Weinstein and his conspirators falsely represented that they had already paid $1.5 million toward the deal, and that they needed only $1.5 million to complete the transaction. They claimed that the properties had an annual rental income of approximately $780,000 and provided to the Florida condominium victims fraudulent documentation purporting to verify this fact. The victims transferred $1.5 million to Weinstein and his conspirators between August 2012 and December 2012. Weinstein did not use this money to purchase the notes on the Florida condominiums – many of which he himself had previously owned and lost to foreclosure. Instead, Weinstein and his conspirators converted the money to their own use.

Throughout the scheme, Weinstein was already under indictment and on pretrial release, and was prohibited from engaging in any monetary transaction for more than $1,000 without the approval of court-appointed special counsel. Weinstein pleaded guilty on Jan. 3, 2013, before Judge Pisano to two counts of that indictment, admitting he ran a Ponzi-style real estate investment fraud scheme that caused $200 million in losses and then laundered the proceeds of the scheme. Judge Pisano sentenced Weinstein on Feb. 25, 2014, to 264 months in prison and ordered him to pay more than $200 million in restitution and forfeiture to the victims of his scheme.

The counts to which Weinstein pleaded guilty today carry the following maximum potential penalties: 20 years in prison on the conspiracy count; 30 years in prison on the wire fraud while on pretrial release count  (20 years on the wire fraud plus 10 years for commission while on pretrial release); and 10 years on the money laundering count. All the counts are also punishable by a maximum fine of the greater of $250,000 or twice the amount of Weinstein’s gain from the scheme. Sentencing is scheduled for Dec. 15, 2014.

Charges against a third conspirator, Aaron Muschel, 64, of Brooklyn, NY, who was charged in the criminal complaint filed against Weinstein and Schleider in May 2013, remain pending. The charges against him are merely accusations and he is presumed innocent until proven guilty.

U.S. Attorney Fishman credited special agents of the FBI, under the direction of Acting Special Agent in Aaron T. Ford in Newark, for the investigation leading to today’s guilty plea. He also thanked agents of IRS–Criminal Investigation, under the direction of Acting Special Agent in Charge Jonathan D. Larsen, for their role in the investigation.

The government is represented by Counsel to the U.S. Attorney Rachael A. Honig; Gurbir S. Grewal, Chief of the U.S. Attorney’s Office Economic Crimes Unit; Assistant U.S. Attorneys Zach Intrater of the Economic Crimes Unit; and Evan S. Weitz of the Asset Forfeiture and Money Laundering Unit.

This case was brought in coordination with President Barack 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.

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Defense counsel:  Eric Creizman Esq., New York

Weinstein, Eliyahu Indictment

NEWARK, N.J. – An Orange, New Jersey, man was taken into federal custody today and is expected to make his initial court appearance this afternoon for allegedly committing six armed robberies of New Jersey hotels, U.S. Attorney Paul J. Fishman announced.

Tremone Burnett, 42, is charged by complaint with six counts of committing a Hobbs Act robbery and one count of using a firearm during a crime of violence. He was previously charged with related offenses by the Essex County Prosecutor’s Office and has been in state custody. Burnett is expected to appear this afternoon before U.S. Magistrate Judge Cathy L. Waldor in Newark federal court.

According to the complaint unsealed today:

From May 9, 2014, through June 19, 2014, Burnett robbed at least six New Jersey hotels at gunpoint: in Carteret, Lebanon, Newark, Rockaway, and Secaucus. In each of the robberies, Burnett pointed a handgun at a hotel employee and, in some instances, tied the victim’s hands and feet. During the course of the robberies, Burnett also variously stole uncashed employee checks, safe deposit boxes, an ATM, and a personal credit card in addition to cash.    

The Hobbs Act charges each carry a maximum penalty of 20 years in prison. The charge of brandishing a firearm during a crime of violence carries a maximum 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 count also carries a maximum fine of $250,000, or twice the gross gain or loss from the offense.

U.S. Attorney Fishman credited special agents of the FBI, under the direction of Special Agent in Charge Aaron T. Ford in Newark, with the investigation leading to today’s charges, along with the Essex County Prosecutor’s Office and Newark Police Department. He also credited the Carteret, Edison, Lebanon, Rockaway, Parsippany, Weehawken and Woodbridge Township police departments in New Jersey; and the Clarkstown and Ramapo police departments in New York – along with the New Jersey State Police and the Bergen County, Hunterdon County, Middlesex County, and Morris County Prosecutors’ Offices for their work on this case.

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

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

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

Burnett, Tremone Complaint

CAMDEN, N.J. – An Essex County, New Jersey, man today admitted conspiring to defraud financial institutions as part of a $15 million mortgage fraud scheme that used phony documents and “straw buyers” to make illegal profits on overbuilt condos, U.S. Attorney Paul J. Fishman announced.

Larry Fullenwider, 63, of Belleville, New Jersey, pleaded guilty before U.S. District Judge Jerome B. Simandle in Camden federal court to a second superseding indictment charging him with one count of conspiracy to commit wire fraud. Using the alias “Stanley Hyde," Fullenwider admitted purchasing four condominiums in North Wildwood, New Jersey, after presenting a false identification and using fake documents to support fraudulent loan applications.

According to the documents filed in this case and statements made in court: Fullenwider was among 11 defendants charged in July 2012 with conspiracy to commit wire fraud and conspiracy to commit money laundering. Two additional defendants, Nicholas Tarsia, 65, of Totowa, New Jersey, and Mashon Onque, 43, of East Orange, New Jersey, were charged in November 2013 with conspiracy to commit wire fraud. Tarsia was also charged with one count of conspiracy to commit money laundering.

Fullenwider’s conspirators, including Timothy Ricks, 46, of East Orange, and Kinard Henson of Ventres, Alabama, who both pleaded guilty before Judge Simandle – Ricks in February 2013 and Henson in February 2014 – 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.
Fullenwider served as a “straw buyer” and purchased four North Wildwood properties at the inflated rates in late January and early February of 2007. Fullenwider used the alias “Stanley Hyde” and a false Social Security number to purchase the properties. In order to qualify for mortgage loans, Fullenwider and his conspirators created false documents, such as fake W-2 forms, pay stubs, bank statements and investment statements, to make him (and other straw buyers) appear more creditworthy.

Fullenwider and his conspirators caused fraudulent mortgage loan applications in his name, 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, Fullenwider received a portion of the proceeds from his conspirators after they had funds wired or checks deposited into various accounts they controlled. Fullenwider’s conspirators also distributed a portion of the proceeds to other members of the conspiracy for their respective roles.

The wire fraud conspiracy charge is punishable by a maximum potential penalty of 30 years in prison and a $1 million fine. Sentencing is scheduled for Jan. 20, 2015.

U.S. Attorney Fishman credited special agents of the FBI, under the direction of Special Agent in Charge Aaron T. Ford in Newark; and IRS–Criminal Investigation, under the direction of Acting Special Agent in Charge Jonathan D. Larsen in Newark, for the investigation leading to today’s guilty plea.

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.

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Defense counsel: Brian O’Malley Esq., Haddon Heights, N.J.

Fullenwider, Larry Superseding Indictment

NEWARK, N.J. - An East Brunswick, New Jersey, man admitted today to sharing images of child sexual abuse from his home computer, U.S. Attorney Paul J. Fishman announced.

Armia Alber, 28, entered his guilty plea today before U.S. District Judge Stanley R. Chesler in Newark federal court to an indictment charging him with distributing images of child pornography over the Internet. Alber was initially arrested in July 2013.

According to documents filed in the case and statements made during Alber’s guilty plea proceeding: Alber admitted that between March and July 2013, he was a member of an online peer-to-peer file sharing network and had more than 600 images or videos of children being sexually abused. Alber also admitted he made images and videos of child pornography available for other members to download from his “shared” folder. During this period, a law enforcement agent successfully downloaded multiple images and videos of child sexual abuse from Alber’s computer.

On July 25, 2013, federal law enforcement agents executed a search warrant at Alber’s residence. The agents recovered two computer hard drives, both of which contained numerous images and videos of child pornography.

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

The distribution of child pornography count to which Alber pleaded guilty carries a mandatory minimum penalty of five years in prison and a maximum statutory penalty of 20 years in prison and a $250,000 fine. Sentencing is currently scheduled for Dec. 16, 2014.

U.S. Attorney Fishman credited special agents of U.S. Immigration and Customs Enforcement’s Homeland Security Investigations, Newark Field Office, under the direction of Special Agent in Charge Andrew M. McLees, with the investigation leading to today’s guilty plea. He also thanked the Middlesex County Prosecutor’s Office and the East Brunswick Police Department for their roles in the search and arrest.
The government is represented by Assistant U.S. Attorney Josh Hafetz of the U.S. Attorney’s Office General Crimes Unit in Newark.

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Defense counsel: Assistant Federal Public Defender Carol Gillen Esq., Newark

Alber, Armia Information

TRENTON, N.J. – An East Orange, New Jersey, man today admitted his involvement in a scheme to smuggle marijuana and tobacco into the Essex County Correctional Facility, U.S. Attorney Paul J. Fishman announced.

Vladimir Sauzereseteo, 40, pleaded guilty before U.S. District Judge Mary L. Cooper in Trenton federal court to an information charging him with one count of conspiring to smuggle contraband into a federal detention facility. 

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

From September 2013 to January 2014, Sauzereseteo, an associate of Muhammad Subpunallah, 32, a federal detainee at the Essex County Correctional Facility, delivered marijuana and tobacco to Brian Kapalin, 67, of Maplewood, New Jersey, a lawyer who smuggled the contraband into the jail in exchange for a cash fee.

On one occasion in January 2014 Kapalin spoke with Subpunallah over a recorded jail phone. Subpunallah asked Kapalin to deliver contraband to an inmate at the Essex County Correctional Facility. After receiving $1,650 via Western Union money transfers, Sauzereseteo used the money to purchase marijuana and delivered the drugs to Kapalin, along with a cash payment for Kapalin’s service. A few days later, Kapalin met an inmate in the attorney conference room at the Essex County Correctional Facility and gave him the marijuana.

The conspiracy charge to which to Sauzereseteo pleaded guilty carries a maximum potential penalty of five years in prison and a maximum fine of $250,000. Sentencing is scheduled for Dec. 4, 2014. Charges against Kapalin and Subpunallah are still pending, and they are considered innocent unless and until proven guilty.

U.S. Attorney Fishman credited special agents of the FBI, under the direction of Special Agent in Charge Aaron T. Ford in Newark, and investigators with the Internal Affairs Division of Essex County Jail, under the direction of Warden Roy Hendricks, with the investigation leading to today’s guilty plea.

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

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Defense counsel: Lorraine Gauli-Rufo Esq., Verona, New Jersey

Sauzereseteo, Vladimir Information

NEWARK, N.J. – A Newark man was indicted by a federal grand jury today on three additional counts of producing images of child sexual abuse for allegedly abusing a prepubescent girl repeatedly and filming the abuse, U.S. Attorney Paul J. Fishman announced.

Pedro Rios, 58, was charged in a superseding indictment with a total of five counts of production of child pornography and one count each of possession and distribution of child pornography. The case has been assigned to U.S. District Judge Stanley R. Chesler. An arraignment will be scheduled.

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

Law enforcement officers executed a search warrant at Rios’s home in Newark on Feb. 5, 2013. A forensic review of the computer equipment seized revealed several video files of child pornography which appear to be self-produced and allegedly depict Rios on camera engaging in sexually explicit conduct with a prepubescent female in the rear of a cab of a tractor trailer truck.

Law enforcement officers identified and interviewed the female, who allegedly said Rios would periodically drive her to his tractor trailer truck in Union County, N.J., where he would undress her and have sexual contact and sexual relations with her and record the encounters. Rios allegedly threatened to hurt the victim’s family if she told anyone.

Each charge of sexual exploitation of a child carries a mandatory minimum penalty of 15 years in prison, a maximum potential penalty of 30 years in prison and a $250,000 fine. Rios remains detained.

U.S. Attorney Fishman credited special agents of the FBI Newark Division’s Child Exploitation Task Force, under the direction of Special Agent in Charge Aaron T. Ford in Newark, the Essex County Prosecutor’s Office, under the direction of Acting Prosecutor Carolyn A. Murray, and the N.J. Regional Computer Forensics Laboratory with the investigation leading to these charges.

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

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

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Defense counsel: Brian J. Neary Esq., Hackensack, N.J.

Rios, Pedro Superseding Indictment

NEWARK, N.J. – Two men were indicted by a federal grand jury today for allegedly using a real estate investment scheme to defraud 15 victims of more than $3 million, U.S. Attorney Paul J. Fishman announced.

Paul Mancuso, 46, of Glen Rock, New Jersey, is charged by indictment with one count of conspiracy to commit wire fraud and five counts of wire fraud. Pasquale Stiso, 52, of West Harrison, New York, is charged by indictment with one count of conspiracy to commit wire fraud and one count of wire fraud.

According to documents filed in this case: Since 2009, Mancuso posed as a real estate investor, broker and developer, as well as a “hard money” lender for other investments. Stiso, a disbarred attorney, held himself out as an individual working with Mancuso on various investment projects.

Mancuso and Stiso fraudulently obtained financing for projects that did not exist or in which they had no actual involvement. Some of the purported projects touted by Mancuso, Stiso, and other conspirators included investments in a phony ticket scam, the development of a pizzeria at a resort in the Bahamas, the development of a casino in Atlantic City, the development of a commercial shopping center, and the “flipping” of a piece of real estate in Matawan.

Victims lost all of their investments or life savings in Mancuso’s schemes. Instead of funding the purported projects, Mancuso and Stiso used the money for personal expenses and financing their involvement in illegal gambling pursuits.

The charge of wire fraud conspiracy and each substantive count of wire fraud carry a maximum potential penalty of 20 years in prison and a maximum fine of $250,000 or twice the gross gain or loss associated with the offense, whichever is greater. The indictment also includes a notice of forfeiture of $3,425,750, representing the fraudulent payments Mancuso and Stiso received from the scheme.

U.S. Attorney Fishman credited criminal investigators of the U.S. Attorney’s Office; special agents of the FBI, under the direction of Special Agent in Charge Aaron T. Ford; and special agents of IRS-Criminal Investigation, under the direction of Acting Special Agent in Charge Jonathan D. Larsen, for the investigation leading to today’s indictment.

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

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

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Defense counsel: Mancuso: Mary Frances Palisano Esq., Newark
Stiso: Henry E. Klingeman Esq., Newark

Mancuso, Paul, and Stiso, Pasquale Indictment

NEWARK, N.J.  – A Bronx, N.Y., man is scheduled to appear in federal court today to face charges stemming from a violent crime spree spanning three states, in which he attacked, kidnapped, and raped a woman, assaulted a National Park Service employee and set fire to a used car dealership office before crashing on the George Washington Bridge, U.S. Attorney Paul J. Fishman announced.

Luis Figueroa, 33, is charged in a six-count complaint with kidnapping, brandishing a firearm during a crime of violence, possession of a firearm by a convicted felon, aggravated sexual abuse, assaulting an employee of the United States, and arson. He is scheduled to make his initial court appearance before U.S. Magistrate Judge Cathy L. Waldor in Newark federal court this afternoon.

According to the complaint:

On the morning of June 6, 2014, Figueroa allegedly entered a multi-family residence in Luzerne County, Pa., where a woman (Victim One) with whom he had a previous relationship and several other people lived in an apartment. He waited outside the apartment armed with a loaded shotgun.

When Victim One opened the door to leave shortly after 8:00 a.m., Figueroa struck her in the head with the shotgun. Figueroa allegedly stated, “I told you, bitch.  I told you I was going to kill you.”  He then entered the apartment and punched Victim One multiple times. Figueroa also struck Victim Two, a relative of Victim One, with the shotgun, then chased her and kicked her as she tried to escape, causing her to fall down a flight of stairs, and slammed her head against the front entrance. After a brief struggle with Victim One, which enabled Victim Two to escape, Figueroa collected the shotgun from the apartment and exited the building. Figueroa then forced Victim One into the back seat of a red SUV and drove away. Victim Two was eventually treated for her injuries.

Figueroa headed east in the red SUV on Interstate 80 towards New Jersey. At one point, Figueroa told Victim One that he was going to kill her, then kill himself. As he was driving, Figueroa allegedly forced Victim One to perform a sex act. After crossing the New Jersey state border, Figueroa exited the freeway and pulled the red SUV into a rest stop area at the Kittatinny Point Visitor’s Center.

After parking the red SUV, Figueroa allegedly climbed into the back seat with Victim One and forcibly raped her. Figueroa removed the ammunition from the shotgun and disposed of the rounds in a nearby wooded area. He then returned to the vehicle and retrieved the shotgun, then left again to dispose of the firearm. Once Figueroa left the red SUV with the shotgun, Victim One got in the driver’s seat of the vehicle and sped away. Victim One was subsequently transported to a hospital to receive treatment for her injuries.  

After Victim One escaped in the red SUV, Figueroa allegedly approached U.S. National Park Service employee (Victim Three) near the parking lot area, attacked him and forced him into a nearby storage room, where he rammed Victim Three’s head into a door. Figueroa told Victim Three, “If you want to live, you better give me your car keys right now.” Victim Three handed over the keys and Figueroa drove away in Victim Three’s red minivan, heading east on Interstate 80.  Victim Three was also treated for injuries.

Figueroa eventually stopped in Paterson, New Jersey, where he left Victim Three’s red minivan at a used car dealership he sub-let on West Broadway Street. Several days prior to June 6, 2014, Figueroa was given an eviction notice to vacate the property. At 11:30 a.m., Figueroa went to a separate used car dealership (the Victim Car Dealership) in Paterson, which was several blocks away. The Victim Car Dealership is operated by the individual who leased the West Broadway Street property to Figueroa. Figueroa asked an employee to borrow a portable gas container, then drove to a nearby gas station in a white SUV and filled the container with gasoline. Figueroa returned to the Victim Car Dealership and doused a small office area near the corner of the property with gasoline. The employee managed to get the gas container out of Figueroa’s hands, but Figueroa lit a match and ignited the structure. He then fled the scene in the white SUV.

Figueroa’s alleged crime spree ended when law enforcement officers traveling in marked police vehicles spotted him on the George Washington Bridge in the white SUV. Figueroa ignored the officers’ commands to stop and led them on a high-speed chase across the bridge, during which he struck two police vehicles before crashing into a wall. Figueroa then attempted to flee from the officers on foot but they tackled him and took him into custody.

Law enforcement subsequently searched the Kittatinny Point Visitor’s Center area and recovered the shotgun Figueroa used in the attacks.

The charge of kidnapping carries a maximum penalty of life in prison and a $250,000 fine. The charge of brandishing a firearm during a crime of violence carries a mandatory minimum term of seven years in prison and a maximum penalty of life in prison and a $250,000 fine. The charge of possession of a firearm by a convicted felon carries a maximum penalty of ten years in prison and a $250,000 fine. The charge of aggravated sexual abuse carries a maximum penalty of life in prison and a $250,000 fine. The charge of assaulting an employee of the United States carries a maximum penalty of twenty years in prison and a $250,000 fine. The charge of arson carries a mandatory minimum term of five years in prison and a maximum penalty of twenty in prison and a $250,000 fine.

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 Belsky in Woodland Park, for the investigation leading to the charges. He also thanked the Hazelton City Police Department (Pennsylvania), the Luzerne County District Attorney’s Office (Pennsylvania), the N.J. State Police, the Warren County Prosecutor’s Office, the Passaic County Prosecutor’s Office, the Bergen County Prosecutor’s Office, the Port Authority of New York and New Jersey Police Department, and the Manhattan District Attorney’s Office.

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

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Figueroa, Luis Complaint