District of New Jersey

NEWARK, N.J. – An Essex County, New Jersey man who previously admitted his role in an armed carjacking in Little Falls, New Jersey, was convicted today for brandishing a shotgun while committing that crime, U.S. Attorney Paul J. Fishman announced.

Ivan Lee, 26, of Newark, was found guilty of brandishing a firearm in furtherance of a crime of violence following a one-week trial before U.S. District Judge Susan D. Wigenton in Newark federal court. The jury deliberated three hours before returning its verdict.

According to documents in this case and the evidence at trial: Oct. 30, 2011, Lee and Hanza Darby, 25, of Newark, were in the Little Falls area when they spotted a parked 2008 BMW 335 with passengers inside. Darby and Lee  – who brandished a shotgun – approached the car and ordered the occupants out of the vehicle at gunpoint. Darby and Lee then took the car and fled the area. Law enforcement officers recovered the car in Newark on Nov. 7, 2011. Darby was standing next to it at the time. Lee previously pleaded guilty to the carjacking count and Darby has previously pleaded guilty carjacking and brandishing a weapon in furtherance of a crime of violence. Darby is awaiting sentencing.

The carjacking charge carries a maximum potential penalty of 15 years in prison. The firearm charge carries a maximum potential penalty of life in prison and a mandatory minimum sentence of seven years in prison, which must run consecutively to any other prison term. Each of the two counts also carries a maximum $250,000 fine. Sentencing for Lee is scheduled for Oct. 21, 2014.

U.S. Attorney Fishman credited special agents with the FBI, under the direction of Special Agent in Charge Aaron T. Ford in Newark, officers of the Little Falls Police Department, under the direction of Chief John Dmuchowski; the N.J. State Police, under the direction of Col. Rick Fuentes; and the Passaic County Prosecutor’s Office, under the direction of Prosecutor Camelia M. Valdes, with the investigation leading to today’s conviction.

The government is represented by Assistant U.S. Attorney Cari Fais and Special Assistant U.S. Attorney Thomas S. Kearney of the U.S. Attorney’s Office Criminal Division in Newark.

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Defense counsel: Mark Berman Esq., of River Edge, New Jersey

NEWARK, N.J. – A Suffolk County, New York, man who worked at a facility in Elizabeth, New Jersey, that manufactured oxycodone was sentenced today to 42 months in prison for stealing more than 70,000 pills from the facility, U.S. Attorney Paul J. Fishman announced.

Edwin Hernandez, 49, of North Babylon, New York, previously pleaded guilty before U.S. District Judge Dennis M. Cavanaugh to distribution and possession with intent to distribute oxycodone. Judge McNulty imposed the sentence today in Newark federal court.

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

Hernandez was previously employed at one of the largest manufacturers of oxycodone in the United States at the company’s Elizabeth facility. On Nov. 21, 2012, he was seen by another employee scooping 30 mg oxycodone pills into a quart-sized plastic bag. A subsequent search of Hernandez’ locker by security revealed a backpack containing 8,591 30 mg oxycodone pills. Law enforcement eventually recovered an additional 61,535 pills from Hernandez’ residence. The street value of the stolen pills is $1.4 million to $2.1 million.

Oxycodone, also known as “oxy,” is a narcotic analgesic or painkiller and is classified as a Schedule II controlled substance. Demand for oxycodone-based prescription pain medication has grown to epidemic proportions in the United States and dealers profit by selling such medication on the street. Oxycodone-based Schedule II drugs have a high potential for abuse, and users will often crush and snort the pills or dissolve and inject them to get an immediate high. This abuse can lead to addiction, overdose and sometimes death.

In addition to the prison term, Judge McNulty sentenced Hernandez to three years of supervised release and ordered forfeiture of $47,000.

U.S. Attorney Fishman credited the Drug Enforcement Administration’s New Jersey Division, under the direction of Special Agent in Charge Carl J. Kotowski, for the investigation leading to today’s sentencing.

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

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Defense counsel: Howard Leader Esq., New York

NEWARK, N.J. – The former pharmacist in charge of West Orange Pharmacy was sentenced today to 37 months in prison for illegally distributing hundreds of tablets of oxycontin in exchange for thousands of dollars in cash, U.S. Attorney Paul J. Fishman announced.

Leonard “Lenny” Stefanelli, 49, of East Hanover, New Jersey, previously pleaded guilty to an information charging him with illegally dispensing oxycodone. Stefanelli also admitted to conspiring with brothers Robert and William Carlucci, both 70, of Florham Park, New Jersey, to submit fraudulent bills to health care benefit providers, including Medicare and Medicaid. U.S. District Judge Faith S. Hochberg imposed the sentence today in Newark federal court.

Stefanelli also previously agreed forfeit $1.5 million, consisting of illegal profits obtained from his illegal sales of oxycodone and his submission of fraudulent bills to health care benefit providers.

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

Oxycodone, the active ingredient in brand name pills such as Oxycontin, is a Schedule II controlled substance B meaning that it has a high potential for abuse, a currently accepted medical use with severe restrictions, and abuse of the drug may lead to severe psychological or physical dependence. A pharmacist can only dispense a Schedule II controlled substance when presented with a written prescription from a doctor.

On at least six separate occasions from Feb. 1, 2012, to August 6, 2012, Stefanelli sold hundreds of tablets of Oxycontin, without a prescription, in exchange for cash. Each sale took place inside West Orange Pharmacy. On Feb. 8, 2012, Stefanelli sold one bottle of 100-count Oxycontin 30-mg tablets and one bottle of 100-count Oxycontin 15-mg tablets for $1,800.  

Between 1992 and October 2012, Stefanelli conspired with Robert and William Carlucci to submit fraudulent bills to health care benefit providers, including Medicaid and Medicare, reaping at least $921,634 from his scheme. Robert and William Carlucci pleaded guilty on Aug. 6, 2013, to committing health care fraud by participating in a variety of schemes designed to cheat customers and bilk insurance companies out of millions of dollars. On March 13, 2014, the Carluccis were each sentenced to 42 months in prison.

In addition to the prison term, Judge Hochberg sentenced Stefanelli to three years of supervised release, fined him $1 million and permanently barred him from working in the pharmaceutical industry.

U.S. Attorney Fishman credited special agents of the DEA, under the direction of Special Agent in Charge Carl J. Kotowski; and special agents of the Food & Drug Administration’s Office of Criminal Investigations, under the direction of Mark Dragonetti, with the investigation leading to today’s sentencing. He also thanked the Elizabeth, Clinton, Toms River, West Orange and Marlboro police departments, along with the Essex County Sheriff’s Department, for their work on this case.    

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

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Defense counsel: Carlos Ortiz Esq., Morristown, New Jersey

CAMDEN, N.J. – An Ocean County, New Jersey, man who used his position as a loan officer of Wells Fargo Home Mortgage Inc., to get the company to release more than $4.6 million on fraudulent mortgage loan applications was sentenced today to 24 months in prison for his role in a $40.8 million mortgage fraud conspiracy, U.S. Attorney Paul J. Fishman announced.

Robert Serao, 48, of Bayville, New Jersey, previously pleaded guilty following his indictment to one count of conspiracy to commit wire fraud. He was the 10th defendant to plead guilty in the case. U.S. District Judge Joseph E. Irenas imposed the sentence today in Camden federal court.

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

While working in various positions – including branch manager, sales manager and loan officer – within Wells Fargo Home Mortgage Inc., a division of Wells Fargo Bank N.A., Serao entered into a conspiracy to submit mortgage loans to his employer for financially unqualified “straw buyers” based upon false and fraudulent information contained in Uniform Residential Loan Applications, HUD-1 Forms, tax returns and other documents. 

Serao’s conspirators caused fraudulent mortgage loan applications and supporting documents to be submitted to Wells Fargo and numerous other mortgage lenders in various straw buyers’ names, attributing to them inflated income and assets in order to induce the mortgage lenders to approve the loans. Once the loans were approved and the mortgage lenders sent the loan proceeds in connection with the real estate closings on the properties, Serao’s conspirators took a portion of the proceeds from the fraudulent mortgage loans. Wells Fargo Home Mortgage released more than $4.6 million based on fraudulent mortgage loan applications. Serao profited from his role in the conspiracy by increased commissions on the mortgage funds. 

In addition to the prison term, Judge Irenas sentenced Serao to three years of supervised release and ordered him to pay restitution of $1,520,606.

U.S. Attorney Fishman credited special agents of the FBI’s Atlantic City Resident Agency, under the direction of Special Agent in Charge Aaron T. Ford in Newark; and IRS B Criminal Investigation in Mays Landing, under the direction of Acting Special Agent in Charge Jonathan D. Larsen, with the investigation leading to today’s sentencing.

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

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Defense counsel: Robert A. Weir Jr. Esq. and Edward J. Plaza Esq., Red Bank, New Jersey    

CAMDEN, N.J. – Two Atlantic City, N.J., residents were sentenced to prison today for their roles in the kidnapping and death of a 20-year-old Atlantic City woman, U.S. Attorney Paul J. Fishman announced.

Aziz Sanders, 21, was sentenced to 30 years in prison and DeShawn Hicks, 22, was sentenced to 20 years in prison. Each previously pleaded guilty before U.S. District Judge Joseph H. Rodriguez to separate, one-count informations charging them with use of a firearm, and aiding and abetting the use of a firearm, in furtherance of a crime of violence – specifically, the Hobbs Act robbery and kidnapping that resulted in the death of Nadirah Ruffin, whose body was found in Philadelphia in April 2011. Judge Rodriguez imposed the sentences today in Camden federal court.

Henry Ruffin (no relation to Nadirah Ruffin), 43, previously pleaded guilty before Judge Rodriguez to an information charging him with one count of misprision of a felony by concealing what he knew about several people allegedly involved in the home invasion and kidnapping of Nadirah Ruffin.

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

On March 23, 2011, D.H. met with Isiah Ruffin (no relation to the victim) in the courtyard area of a housing complex on North Maryland Avenue, a section of Atlantic City known as “Back Maryland,” to talk to Isiah Ruffin about a dispute between Isiah Ruffin and Victim One. After a brief conversation, D.H. viciously assaulted Isiah Ruffin, knocking Isiah Ruffin unconscious and robbing him of cash. When Isiah Ruffin regained consciousness, D.H. assaulted Isiah Ruffin again. As a result of the assault, Isiah Ruffin was treated at the Atlantic City Medical Center for a possible concussion and facial lacerations. After Isiah Ruffin was released from the hospital, Shamerria Smith, 27, and Sanders visited Isiah Ruffin, during which time Isiah Ruffin told Smith that D.H. had assaulted him.

To retaliate, Smith planned to enter Victim One’s house and assault and rob Victim One of illegal drugs and money. Sanders agreed to help Smith execute her plan and recruited Hicks to participate. Smith supplied the gun, duct-tape and handcuffs.

On March 26, 2011, Smith, Sanders and Hicks entered Victim One’s house and duct-taped Victim One and four other victims, including Nadirah Ruffin, who were present. While in the house, Sanders and Hicks took money from Victim One, some of which Victim One had earned from selling illegal drugs. They took money from another victim, as well as marijuana that the victim was planning to sell. Sanders and Hicks admitted to taking more than $500 dollars and 50 bags of marijuana from the house.

During the robbery, Nadirah Ruffin recognized Smith’s voice. Smith ordered Sanders to punch Nadirah Ruffin. After Sanders hit Nadirah Ruffin, Smith punched her because she did not think Sanders had hit her hard enough. As the defendants were leaving the residence, Smith told Sanders and Hicks to take Nadirah Ruffin from the residence. Smith, Sanders and Hicks then placed Nadirah Ruffin into a green van. They drove to the Clementon area and eventually to Philadelphia. Smith said that because she was a mother she could not kill Nadirah Ruffin. Smith placed the gun near Sanders and told him that they were not leaving until someone else killed Nadirah Ruffin. Sanders and Hicks took Nadirah Ruffin to the banks of the Schuylkill River, where Sanders shot her in the head, killing her. Her body was dumped in the river.

On June 17, 2014, Smith was sentenced to 35 years in prison for her role in the kidnapping and death of Nadirah Ruffin.

In addition to the prison terms, Judge Rodriguez sentenced Hicks and Sanders to five years each of supervised release and ordered them each to pay $1.5 million in restitution.

U.S. Attorney Fishman credited special agents of the FBI, under the direction of Special Agent in Charge Aaron T. Ford; the Atlantic County Prosecutor’s Office and the Atlantic City Police Department, for the investigation leading to the sentencings.

The government is represented by Assistant U.S. Attorneys Jason M. Richardson and Matthew T. Smith of the U.S. Attorney’s Office Criminal Division in Camden, assisted by Assistant U.S. Attorney David Feder of the U.S. Attorney’s Office Appeals Division in Newark, and Mark Coyne, Chief of the Appeals Division.

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Defense counsel:

Sanders: Edward Borden Esq. and Carl J. Herman Esq., Cherry Hill, N.J.
Hicks: Michael Huff Esq. and David Glazer Esq.. Livingston, N.J.

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

Peter Lareau, 77, of Mountain Lakes, N.J., pleaded guilty before U.S. District Judge Esther Salas in Newark federal court to an information charging him with one count of wire fraud.

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

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

In addition to promising greater-than-market returns, Lareau falsely represented that investors’ funds would be used for educational television programming for teenage audiences.
He sent investors prospectuses and other information related to investment opportunities by email and then directed them to wire funds from brokerage accounts in New York to his business accounts in New Jersey.

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

The wire fraud charge carries a maximum potential penalty of 20 years in prison and a maximum fine of $250,000. Sentencing is scheduled for Oct. 14, 2014.

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

The government is represented by U.S. Attorney Lorraine S. Gerson of the Economic Crimes Unit in Newark.

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

Lareau, Peter Information

CAMDEN, N.J. – An accountant from Toms River, N.J., was arrested today by special agents of IRS – Criminal Investigation and the Social Security Administration, Office of the Inspector General (SSA OIG), on charges she allegedly stole $905,000 from client tax refunds and social security benefits, U.S. Attorney Paul J. Fishman announced.

Doreen Gentile, 59, was indicted by a grand jury, charged with 14 counts of mail fraud, nine counts of forging endorsements on treasury checks of the United States, two counts of aggravated identity theft and two counts of filing false income tax returns. Gentile is scheduled to make her initial appearance this afternoon before Magistrate Judge Ann Marie Donio in Camden federal court.

According to the indictment unsealed today: Gentile, owned and operated Doreen A. Gentile & Associates, LLC (“DAG & Associates”), an accounting practice based in Toms River. Gentile maintained clients throughout central and southern New Jersey. In addition to preparing federal and state income tax returns, she also managed property for clients in Salem County.

As part of her scheme, Gentile would show her clients a tax return that indicated that they had no tax or refund due, owed a minimal amount of tax (generally under $40) or were due a refund that was far less then what they were entitled. Gentile then prepared a second set of tax returns, signed without her clients’ permission, that she submitted to the IRS for the full tax refund. Based on the second set of returns, the IRS or the New Jersey issued tax refund checks care of DAG & Associates and mailed them to the DAG & Associates post office box in Toms River. Gentile then deposited the tax refund checks into the DAG & Associates bank account without her clients’ permission.

Gentile also directed clients to make payments to the IRS to pay for various tax liabilities.  After the payments were made, Gentile, without the victims’ knowledge, applied for refunds and had the checks mailed to her.  Once she received the refund checks she forged the victims’ signatures and deposited the refunds into her account.

In addition, when one of her clients died in September 2005, Gentile did not inform the SSA. Instead, Gentile allowed the SSA to continue sending retirement benefits, which she accessed through the deceased victim’s bank account and used for her personal expenses at clothing and jewelry stores.    

On her personal individual tax return, Gentile failed to report the income generated by her theft of her clients’ refund checks and the money she embezzled from the deceased victim’s estate.

The 14 counts of mail fraud alleged in the indictment each carry a maximum potential penalty of 20 years in prison and a $250,000 fine. The nine counts of forging endorsements on treasury checks of the United States and one count of theft of government funds each carry a maximum potential penalty of 10 years in prison and a $250,000 fine. The two counts of filing false income tax returns each carry a maximum potential penalty of three years in prison and a $100,000 fine. The two counts of aggravated identity theft each carry a maximum potential consecutive sentence of two years in prison and a $250,000 fine.

U.S. Attorney Fishman credited special agents of IRS – Criminal Investigation, under the direction of Acting Special Agent in Charge Jonathan D. Larsen, and special agents of SSA OIG under the direction of Special Agent in Charge Edward J. Ryan, with the investigation.

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

The charge 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: Robert Weir Esq., Red Bank, N.J.

Gentile, Doreen Indictment

CAMDEN, N.J. – A former N.J. lawyer today admitted he conspired to participate in a scheme that caused lenders to release $40.8 million based on fraudulent mortgage loan applications and conspired to launder the proceeds of the fraud, U.S. Attorney Paul J. Fishman announced.

Joseph W. Witkowski, 68, of Flemington, N.J., pleaded guilty before U.S. District Judge Joseph E. Irenas in Camden federal court to an indictment charging him with one count each of conspiracy to commit wire fraud and conspiracy to commit money laundering. Witkowski, a former attorney, was released on bail.

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

Witkowski and his conspirators located oceanfront condominiums overbuilt by financially distressed developers in Wildwood Crest, N.,J.; premier real estate in vacation destinations in Georgia and South Carolina; and properties in New Jersey owned by financially distressed homeowners facing foreclosure. They then recruited “straw buyers” – people with good credit scores but lacking the financial resources to qualify for mortgage loans – to purchase those properties.

Witkowski and his conspirators created false documents, including fake W-2 forms, income tax returns, investment statements, and rental agreements, to make the straw buyers appear more creditworthy than they actually were. They also established numerous telephone lines for companies owned by some of the conspirators so that when a lender contacted the telephone number, the conspirators could falsely verify that a straw buyer was employed by the company listed on his or her fraudulent loan application.

Witkowski also caused fraudulent mortgage loan applications in the name of the straw buyers and supporting documents, which attributed to the straw buyers inflated income and assets, to be submitted to mortgage lenders. Once the loans were approved and the mortgage lenders sent the loan proceeds in connection with real estate closings on the properties, Witkowski and his conspirators had some of the funds wired or checks deposited into various accounts that he and his conspirators controlled.

To date, 10 of Witkowski’s conspirators have pleaded guilty to participating in this mortgage fraud conspiracy, including Charles Harvath, Stephen F. Corba Jr., John Siuszko, Michael Williams, William Brown, Mark Kreischer, Crystal Brame, Aku I. Muhammad, George Lachenmayr Jr. and Robert Serao.

The wire fraud conspiracy charge to which Witkowski pleaded guilty carries a maximum potential penalty of 30 years in prison and a $1 million fine. The money laundering conspiracy charge carries a maximum potential penalty of 10 years in prison and a $250,000 fine. Witkowski has agreed to forfeit $2,412,899, representing the proceeds of the fraud. Sentencing is scheduled for Nov. 14, 2014.

U.S. Attorney Fishman credited 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, with the investigation leading to today’s guilty plea.

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

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Defense counsel: Maggie Moy Esq., Assistant Federal Public Defender, Camden

Witkowski, Joseph et. al. Indictment

NEWARK, N.J. – A Cedar Grove, N.J., doctor was sentenced today to 24 months in prison for accepting tens of thousands of dollars in bribes from Parsippany, N.J.,-based Biodiagnostic Laboratory Services LLC (BLS) as part of a long-running scheme operated by the lab, its president, and numerous associates, U.S. Attorney Paul J. Fishman announced.

Dennis Aponte, 46, previously pleaded guilty U.S. District Judge Stanley R. Chesler to violating the Federal Travel Act. Judge Chesler imposed Aponte’s sentence today in Newark federal court.

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

On April 9, 2013, federal agents arrested BLS president and part owner, David Nicoll, 39, of Mountain Lakes, N.J.; Scott Nicoll, 32, of Wayne, N.J., a senior BLS employee and David Nicoll’s brother; and Craig Nordman, 34, of Whippany, N.J., a BLS employee and the CEO of Advantech Sales LLC – an entity used by BLS to make illegal payments. Authorities also arrested New Jersey physician Frank Santangelo, 43, of Boonton, N.J.

On June 10, 2013, David Nicoll, Scott Nicoll, Nordman, and four other associates of BLS pleaded guilty to informations charging them with one count of conspiracy to violate the Anti-Kickback Statute and the Federal Travel Act and one count of money laundering.  On July 24, 2013, Santangelo pleaded guilty to an information charging him with violating the Travel Act, money laundering and failing to file tax returns. The sentences for the BLS employees and Santangelo are pending.

Aponte admitted that he and David Nicoll agreed that BLS would pay Aponte bribes to refer to BLS blood specimens from the patients of his West New York, N.J., medical practice.  From October 2012 to March 2013, Nordman, acting at David Nicoll’s direction, paid Aponte approximately $3,000 per month in cash in return for blood specimens referred to BLS. The lab made more than $175,000 through testing on blood specimens referred by Aponte.

In addition to the prison term, Judge Chesler sentenced Aponte to one year of supervised release, fined him $50,000 and ordered forfeiture of $235,000.

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 Tom O’Donnell; IRS–Criminal Investigation, under the direction of Acting Special Agent in Charge Jonathan D. Larsen, and the U.S. Postal Inspection Service, under the direction of Inspector in Charge Maria L. Kelokates, with the ongoing investigation leading to today’s sentencing.

The government is represented by Senior Litigation Counsel Andrew Leven, Assistant U.S. Attorney Joseph Minish, 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 $535 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.

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Defense counsel: John Vazquez Esq. & Michael Critchley Esq., Roseland, N.J.

Attorney and Company CEO also Convicted in Illegal Takeover and Looting of Publicly Traded Company

CAMDEN, N.J. – A member and an associate of the Lucchese organized crime family and two Texas brothers were convicted today of racketeering and other charges after a six-month trial, U.S. Attorney Paul J. Fishman for the District of New Jersey and Assistant Attorney General Leslie R. Caldwell of the Justice Department’s Criminal Division announced.

Nicodemo S. Scarfo, 49, of Galloway, N.J., a member of the Lucchese organized crime family of La Cosa Nostra (LCN) and Salvatore Pelullo, 47, of Philadelphia, an associate of the Lucchese and Philadelphia LCN families, were convicted of all the counts against them, including racketeering conspiracy and related offenses, including securities fraud, wire fraud, mail fraud, bank fraud, extortion, money laundering and obstruction of justice. Two other defendants, William and John Maxwell, were also convicted. Co-defendants David Adler, Gary McCarthy and Donald Manno were acquitted on all counts.

“Today, four people stand convicted  for giving new meaning to ‘corporate takeover’ – looting a publicly traded company to benefit their criminal enterprise,” U.S. Attorney Fishman said. “The defendants stole more than $12 million from shareholders through rampant self-dealing, fraudulent SEC filings and intimidation. The public should not have to worry that the interests of shareholders are being subverted to benefit organized crime or for other corrupt ends.”

“Nicodemo Scarfo, Salvatore Pellulo and their cohorts used threats of physical and economic harm to take over a publicly traded financial firm, then callously and systematically looted the company out of millions of dollars to buy luxury items for themselves,” Assistant Attorney General Caldwell said. “As a result of today’s guilty verdict, this mafia member and his conspirators now face substantial prison sentences.”   

The jury deliberated two weeks before delivering its verdicts following a six-month trial before U.S. District Judge Robert B. Kugler in Camden federal court. The defendants were charged in an indictment returned in 2011 by a federal grand jury in Camden. It named Nicodemo D. Scarfo (Scarfo Sr.) – Nicodemo S. Scarfo’s father and the imprisoned former boss of the Philadelphia LCN family – and Vittorio Amuso, the imprisoned boss of the Lucchese family, as conspirators.

Five other defendants – Cory Leshner, Howard Drossner, John Parisi, Todd Stark, and Scarfo’s wife, Lisa Murray-Scarfo – have previously pleaded guilty to various charges related to their roles in the criminal scheme.

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

Scarfo is a made member of the Lucchese family, having become a member after an attempt on his life in 1989 following an internal struggle for control of the Philadelphia family.  In the mid-1990s, while Scarfo Sr. and Amuso were in federal prison in Atlanta, Amuso arranged for Scarfo to become a member of the Lucchese family as a favor to Scarfo Sr. As a member of the Lucchese family, Scarfo was required to earn money and participate in the affairs of the Lucchese family.

In April 2007, Scarfo, Pelullo and others devised a scheme to take over FirstPlus Financial Group Inc. (FPFG), a publicly held company in Texas. Scarfo and Pelullo used threats of economic harm to intimidate and remove the prior management and board of directors of replaced those officers with individuals beholden to Scarfo and Pelullo, including William Maxwell, an attorney from Houston, Texas, and his brother, John Maxwell, of Irving, Texas, who acted as the company’s CEO.

Once the takeover was completed, the figurehead board named William Maxwell as “special counsel” to FPFG, a position that he used to funnel $12 million to himself, Scarfo and Pelullo through fraudulent legal services and consulting agreements. The agreements, as well as FPFG’s fraudulent acquisitions of companies controlled by Scarfo and Pelullo, were designed to mask the true identity and nature of the control exerted over FPFG and to conceal the source of the money fraudulently conveyed to Scarfo and Pelullo. 

In a telephone call intercepted by law enforcement, Pelullo called Scarfo to tell him about the sudden death of a former FPFG executive. This former executive had provided information to Pelullo and Maxwell that they used to extort control of FPFG. At the time of his death, he was a member of FPFG’s “compliance team.” Scarfo and Pelullo expressed relief regarding his death. After laughing about how he was “crushed” that “the rat is dead,” Pelullo acknowledged that the executive was “the only connection, the only tie to anything.” Scarfo replied: “Oh boy. Yeah, Sal, you wanna know something though? That’s one that I know you can’t take credit for . . . [laughter] . . . and that’s the natural best thing. You know what I mean? That is so like Enron-ish. You know what I mean?  Kenneth Lay, he bailed out and took a heart attack.”

Scarfo and Pelullo used their illicit gains to fund extravagant purchases, including an $850,000 yacht for both defendants, a luxury home for Scarfo, a Bentley automobile for Pelullo, and thousands of dollars in jewelry for Scarfo’s wife. As a direct result of the enterprise’s criminal activity, FPFG and its shareholders suffered a loss of at least $12 million.

The conspiracy to commit bank fraud count carries a maximum potential penalty of 30 years in prison and a $1 million fine; the RICO conspiracy, wire fraud conspiracy, wire fraud, conspiracy to obstruct justice counts each carry a maximum potential penalty of 20 years in prison and a $250,000 fine; the conspiracy to commit money laundering and felon in possession of a weapon counts each carry a maximum potential penalty of 10 years in prison and a $250,000 fine; the securities fraud conspiracy, conspiracy to make false statements in a loan application and conspiracy to transfer firearms to a prohibited person counts each carry a maximum potential penalty of five years in prison and a $250,000 fine.

Sentencing for Scarfo is scheduled for Oct. 22, 2014; for Pelullo, Oct. 21, 2014; and for both Maxwell brothers, Oct. 23, 2014.

U.S. Attorney Fishman credited special agents of the FBI, under the direction of Special Agent in Charge Aaron T. Ford in Newark; 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 Bureau of Alcohol, Tobacco, Firearms and Explosives, under the direction of Robin Shoemaker in Newark. He also thanked the FBI in Philadelphia, under the direction of Special Agent in Charge Edward J. Hanko, and the U.S. Securities and Exchange Commission for their roles in the investigation.

The government is represented by Assistant U.S. Attorney Steven D’Aguanno and Howard Wiener of the District of New Jersey’s Organized Crime/Gangs Unit and Trial Attorney Adam L. Small of the Criminal Division’s Organized Crime and Gang Section.

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Defense counsel: Scarfo: Michael E. Riley Esq., Mount Holly, N.J.
Pelullo: J. Michael Farrell Esq., Wenonah, N.J.
William Maxwell: Michael N. Huff Esq., Philadelphia
John Maxwell: Mark W. Catanzaro Esq., Mount Holly
David Adler: Barry I. Gross Esq., Philadelphia
Gary McCarthy: Yune T. Do Esq., Philadelphia
Donald Manno: Donald Francis Manno Esq., Cherry Hill, N.J.

NEWARK, N.J. – An Essex County, N.J., man made his initial court appearance today on charges of bank robbery in connection with an attempt to rob a bank in Irvington, N.J., U.S. Attorney Paul J. Fishman announced.

Karim Brunson, 24, of Newark, was charged by complaint with one count of bank robbery and one count of possession of a firearm during the commission of a crime of violence. He made his initial court appearance today before U.S. Magistrate Judge Joseph A. Dickson in Newark federal court.

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

Brunson allegedly entered the front door of the Investors Savings Bank in Irvington at 11:30 a.m. on June 28, 2014, with a dark-colored mask over his face. Brunson pulled out a loaded .357-caliber revolver handgun from his waistband and pointed it into the lobby. An off-duty Irvington Police lieutenant was in uniform and working inside the bank as a security guard. As Brunson entered the lobby, he pointed the handgun at the officer’s head and threw a plastic shopping bag toward one of the bank tellers. Brunson then yelled for the teller to “Put the money in the bag.” 

When Brunson looked away momentarily, the off-duty police officer grabbed Brunson’s hand and the gun and fought with Brunson on the floor of the bank lobby. Another bank employee and a second off-duty police officer arrived to help the Irvington Police lieutenant subdue Brunson.

The bank robbery charge carries a maximum potential penalty of 20 years in prison. The weapons charge carries a mandatory seven years in prison to be served consecutively to his sentence on the bank robbery.

U.S. Attorney Fishman credited special agents of the FBI, under the direction of Special Agent in Charge Aaron T. Ford, and officers of the Irvington Police Department, under the direction of Police Director Joseph Santiago, with the ongoing investigation that led to the charges.

The government is represented by Assistant U.S. Attorney James Donnelly of the Criminal Division in Newark.

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

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

Brunson, Karim Complaint

CAMDEN, N.J. - A South Carolina man was arrested today and charged with tampering with witnesses in a federal criminal trial that concluded last September, U.S. Attorney Paul J. Fishman announced.

Dennis Nadeau, 53, of Myrtle Beach, S.C., was arrested at his home this morning by agents of the FBI and charged by a complaint with misleading conduct with intent to influence the testimony of four actual and potential witnesses in the trial of the U.S. v. Adam Lacerda et al. Nadeau will have an initial appearance before U.S. Magistrate Judge Karen M. Williams in Camden federal court at a later date.

According to documents filed in this case and in the prior criminal case:

From 2010 through 2013, Nadeau worked at the New Jersey-based Vacation Ownership Group LLC and its successor, VO Financial. In 2013, 13 former VO Group employees pleaded guilty to conspiring to defraud timeshare owners. Four other VO Group employees, including VO Group President Adam Lacerda and his wife, Ashley Lacerda, were convicted by a jury of conspiracy and related charges after a seven-week trial that concluded last September. The Lacerdas have been in custody since the trial and all defendants are awaiting sentencing.

Shortly before the start of last year’s trial, Ashley Lacerda allegedly directed Nadeau to call potential trial witnesses and try to convince them that they had not been defrauded. Nadeau called several individuals, made numerous false statements about their dealings with VO, and tried to get them to agree with the false statements. Unbeknownst to three of the witnesses, Nadeau was recording the calls.

The witness tampering count with which Nadeau is charged carries a maximum penalty of 20 years in prison and a fine of the greater of $250,000 or twice the gain or loss caused by the offense.

U.S. Attorney Fishman credited special agents of the FBI’s Atlantic City Resident Agency, under the direction of Special Agent in Charge Aaron T. Ford, with the ongoing investigation leading to today’s charges.

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

The government is represented by Assistant U.S. Attorney R. David Walk Jr. of the U.S. Attorney’s Office in Camden.

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Nadeau, Dennis Complaint

NEWARK, N.J. – A registered sex offender who was formerly employed at a law office in Paterson, N.J., was sentenced today to 180 months in prison for distributing images of child sexual abuse over the Internet, U.S. Attorney Paul J. Fishman announced.

Kevin Rease, 34, of Hackettstown, N.J., previously pleaded guilty to one count of an indictment charging him with distributing images of child pornography. U.S. District Judge Claire C. Cecchi imposed the sentence today in Newark federal court.

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

Rease admitted that on Feb. 12, 2013, he made images and videos of child sexual abuse stored on his work computer available for others to download via an online peer-to-peer file sharing network. On that date, an undercover law enforcement agent successfully downloaded videos of child sexual abuse from Rease through the network.

In addition to the prison term, Judge Cecchi sentenced Rease to a lifetime of supervised release. In sentencing Rease, Judge Cecchi cited the defendant’s previous child exploitation convictions as a reason for the lengthy term.

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 the New Jersey Regional Computer Forensics Laboratory with the investigation.

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

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Defense counsel: William B. Ware Esq., Chester, N.J.

TRENTON, N.J. – A Monmouth County, N.J., doctor who allegedly wrote illegal prescriptions for oxycodone was indicted on charges that he participated in a conspiracy to illegally distribute the medication, laundered money and failed to pay taxes, U.S. Attorney Paul J. Fishman announced.

Dr. Paul DiLorenzo, 60, of Ocean Township, N.J., is charged in a superseding indictment, returned today by a federal grand jury, with one count of conspiracy to distribute oxycodone, one count of structuring financial transactions, one count of conspiracy to launder money and eight counts of failing to collect and pay payroll taxes.

According to documents filed in this case:

Oxycodone, the active ingredient in brand name pills such as Oxycontin, Roxicodone and Percocet, is a Schedule II controlled substance, meaning that it has a high potential for abuse, is only currently accepted in medical use applications with severe restrictions, and abuse of the drug may lead to severe psychological or physical dependence.

Between 2009 and June 27, 2012, DiLorenzo allegedly issued prescriptions to conspirators for drugs containing oxycodone outside the usual course of medical practice and not for any legitimate medical purpose. DiLorenzo charged purported patients $500 in cash for the first visit, $300 in cash for each successive visit and an additional $150 in cash for urine tests.

DiLorenzo employed three conspirators to act as “staff” at his office despite the fact that none of them had any medical training. DiLorenzo provided one of his conspirators with blank prescription pads and stamps in order to generate oxycodone prescriptions for purported patients.  DiLorenzo would allegedly sign the prescriptions, often without any medical examination or only a cursory examination. DiLorenzo’s conspirators would obtain oxycodone pills at pharmacies and then distribute the pills. 

DiLorenzo allegedly agreed to split the proceeds with some of his conspirators, but never reported or paid any employment taxes.

DiLorenzo structured his share of the proceeds, depositing $1,090,939 in cash into various accounts via more than 150 separate transactions. All but one of the deposits was for an amount less than $10,000, which is the amount that requires the filing of a Currency Transaction Report (CTR). The one deposit for more than $10,000 – a $10,044 cash deposit – was accompanied by a deposit slip in the amount of $9,544. After being told by the teller that the amount was in excess of $10,000, DiLorenzo attempted to cancel the deposit rather than have the bank prepare and file a CTR.  DiLorenzo also accumulated $521,212.25 in cash that was found at his house and the house of his parents.

The count of conspiracy to distribute oxycodone carries a maximum potential penalty of 20 years in prison and a $1 million fine. The structuring count carries a maximum potential penalty of 10 years in prison and a $500,000 fine. The conspiracy to launder money count carries a maximum potential penalty of 20 years in prison and a $500,000 fine. The tax counts each carry a maximum potential penalty of five years in prison and a $250, 000 fine.

U.S. Attorney Fishman credited special agents of the FBI, under the direction of Special Agent in Charge Aaron T. Ford; special agents of IRS-Criminal Investigation, under the direction of Acting Special Agent in Charge Jonathan D. Larsen; and special agents of the Drug Enforcement Administration, under the direction of Special Agent in Charge Carl Kotowski, with the investigation leading to today’s indictment.

The government is represented by Assistant U.S. Attorney R. Joseph Gribko of the U.S. Attorney’s Office in Trenton and Tino Lisella, trial attorney with the U.S. Department of Justice, Tax Division.

The charge 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: Robert DeGroot Esq., Newark

DiLorenzo, Paul Superceding Indictment

TRENTON, N.J. - A Bergen County, N.J., man admitted today that he downloaded images and videos depicting child sexual abuse on a computer at his parents’ house, U.S. Attorney Paul J. Fishman announced.

Joshua Babilonia, 24, of Fair Lawn, N.J., pleaded guilty before U.S. District Judge Joel A. Pisano in Trenton federal court to an information charging him with one count of receiving images of child sex abuse over the Internet.

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

Special agents of the U.S. Department of Immigration and Customs Enforcement, Homeland Security Investigations (ICE HSI) executed a search warrant on Sept. 13, 2012, at the Fair Lawn residence of Babilonia’s parents. Agents seized digital evidence that contained more than 600 images and a large number of videos depicting child sexual abuse, including material that involved prepubescent minors and portrayed sadistic or masochistic conduct. The evidence seized included three files previously downloaded from Babilonia by law enforcement agents working in an undercover capacity on a peer-to-peer network.

During today’s guilty plea proceeding, Babilonia admitted he was a member of the online network between January 2011 and September 2012, and searched for and downloaded images of child sexual abuse. He also admitted that his files were viewable and downloadable by others on the network.

Babilonia faces a mandatory minimum penalty of five years in prison, and a maximum potential penalty of 20 years in prison and a $250,000 fine. Sentencing is currently scheduled for Oct. 15, 2014. Babilonia will also be required to register as a sex offender.

U.S. Attorney Fishman credited special agents of ICE HSI, under the direction of Special Agent in Charge Andrew M. McLees in Newark, with the investigation.

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: Adolph Galluccio Esq., Totowa, N.J.

Babilonia, Joshua Information

NEWARK, N.J. - A Pennsylvania man was sentenced today to 27 months in prison for misappropriating over 900 cellular telephones, handheld devices and accessories belonging to Verizon Wireless and selling those items online for a profit, U.S. Attorney Paul J. Fishman announced.

James Hopkins, 35, of Telford, Pa., previously pleaded guilty before U.S. District Judge William H. Walls to an information charging him with mail fraud. Judge Walls imposed the sentence in Newark federal court.

According to documents filed in this case and statements made in court: Hopkins worked as an account executive at a branch office for Verizon Wireless in Trevose, Pa. From February through November 2009, Hopkins placed numerous orders for Verizon Wireless cellular telephones, handheld devices and accessories in the names of existing Verizon Wireless customers without their knowledge. After arranging for the merchandise to be shipped to the home of a relative in New Jersey, the defendant manipulated Verizon’s computer database to conceal the fraudulent orders and shipments. Hopkins received $328,517 worth of stolen Verizon Wireless merchandise, which he sold on eBay for a profit of $272,290.

In addition to the prison term, Judge Walls sentenced Hopkins to serve two years of supervised release, ordered him to pay $303,623 in restitution, and forfeit $272,290.

U.S. Attorney Fishman credited postal inspectors of the U.S. Postal Inspection Service, under the direction of Inspector in Charge Maria L. Kelokates, for the investigation leading to today’s sentencing.

The government is represented by Assistant U.S. Attorney Joseph B. Shumofsky of the U.S. Attorney’s Office Economic Crime Unit in Newark.

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Defense counsel: Wayne Powell Esq., Cherry Hill, N.J.

NEWARK, N.J. – A Georgia business owner who held himself out to be an investor and loan broker admitted his role in defrauding investors of more than $800,000, U.S. Attorney Paul J. Fishman announced.

Ronnie Singleton, 41, of Lithonia, Ga., pleaded guilty before U.S. District Judge Esther Salas in Newark federal court to Count One of an indictment charging him with conspiring to commit wire fraud.

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

Singleton owned and operated a business called Wonder World Inc. and held himself out to be a financier. Using the Internet and telephone, he met his codefendant, Michael Woodruff, 66, of Peeples Valley, Ariz., and the two agreed to work together to find investors. Singleton falsely represented that he would providing financing for real estate deals through a “European system of financing” that involved leasing financial instruments. Singleton received more than $800,000 in investors’ funds, $360,000 of which he wired to Woodruff. Instead of obtaining the promised financing for the real estate projects, Singleton instead used the investors’ money for his own personal benefit.

The count to which Singleton pleaded guilty carries a maximum potential penalty of 20 years in prison and a fine of $250,000 or twice the gross amount of any gain or loss from the offense. Sentencing is scheduled for Sept. 30, 2014. The charges against Woodruff are pending.

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

The government is represented by Assistant U.S. Attorney Jenny Kramer of the Economic Crimes Unit and Assistant U.S. Attorney Charlton Rugg of the Criminal Division.

The charges and allegations against Woodruff are merely accusations and he remains innocent unless and until proven guilty.

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Defense counsel: Paul Condon Esq., Jersey City, N.J.

Singleton, Ronnie Indictment

TRENTON, N.J. – A Burlington County, N.J., man was arrested this morning for allegedly orchestrating a large scale check-kiting scheme that caused $8.8 million in losses to three banks in New Jersey, U.S. Attorney Paul J. Fishman announced.

Luis G. Rogers Sr., 71, of Beverly, N.J., is charged by complaint with one count of bank fraud.  He is scheduled to make his initial appearance today in Trenton federal court before U.S. Magistrate Judge Tonianne J. Bongiovanni.

According to the complaint:

Rogers was the chief executive officer of Lease Group Resources Inc. (LGR), an office equipment leasing company based in Mount Holly, N.J., and was also the principal of several other business entities (the LGR Entities). From November 2012 through April 2013, Rogers maintained and controlled numerous checking accounts in the names of the LGR Entities at three separate banks: Liberty Bell Bank, Roma Financial, and Susquehanna Bank.

Rogers allegedly engaged in what is known as a “check-kiting” scheme – creating artificial balances in his bank accounts by causing checks to be written against the accounts knowing the money was not there to cover them. Rogers would allegedly deposit the checks into other accounts he controlled to artificially inflate the balances of those accounts. Rogers, or others acting on his behalf, allegedly deposited hundreds of millions of dollars into the LGR Entities’ accounts, amounts that far exceeded LGR’s annual revenues. In April 2013, the banks discovered the scheme and either returned or dishonored many of the pending checks and charged back the amounts of the checks against the LGR Entities’ accounts. This resulted in the accounts being overdrawn and the banks sustaining millions of dollars in losses. Specifically, Liberty Bell lost $3.7 million, Roma Bank lost $2.1 million, and Susquehanna lost $3 million.   

The charge of bank fraud carries a maximum potential penalty of 30 years in prison and a $1 million fine. 
U.S. Attorney Fishman credited special agents of the FBI, under the direction of Special Agent in Charge Aaron T. Ford, for the investigation leading to today’s arrest.

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

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

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Rogers, Luis Complaint

Cellular Next LLC Allegedly Participated in Drug Money Laundering
Through Black Market Peso Exchange

NEWARK, N.J. - The United States filed a civil forfeiture complaint today seeking to forfeit $1,742,289, previously seized from cellular phone wholesale company Cellular Next LLC, which allegedly represents narcotics proceeds laundered through the Black Market Peso Exchange (BMPE), U.S. Attorney Paul J. Fishman announced.

According to the complaint filed today in Newark federal court:

Cellular Next, which operates out of New York and Miami and is registered as a business entity in New Jersey, has a history of receiving narcotics proceeds. Drug Enforcement Administration (DEA), New York Drug Enforcement Task Force (NYDETF) and Immigration and Customs Enforcement, Homeland Security Investigations (HSI) undercover agents have sent wire transfers of such proceeds to the company at the direction of BMPE brokers based in Colombia.

The BMPE is a currency exchange system which uses illegal drug proceeds in the United States to pay for goods that then are shipped to Colombia. It is the primary method used by Colombian narcotics traffickers to launder their illicit funds. The recipients in Colombia pay for those goods in pesos, which are then forwarded to the narcotics traffickers. The system allows narcotics traffickers to launder and transport their narcotics dollars through the United States financial system by using domestic accounts held by businesses or individuals doing business in the United States. Seizure and forfeiture actions are aimed at disrupting and destroying the flow of these narcotics dollars by targeting the domestic accounts and the entities that receive these illicit funds.

Representatives of Cellular Next have, on numerous occasions, received narcotics proceeds without asking for the appropriate identification or filing the appropriate paperwork to comply with the Bank Secrecy Act, which was designed to combat money laundering. Cellular Next has a history of having its bank accounts closed by financial institutions for misuse, for having allowed large numbers of structured cash deposits from at least 2010 through 2013.

One money laundering customer sent the $1.7 million the government seeks to forfeit to Cellular Next LLC using BMPE.

U.S. Attorney Fishman credited the New York Drug Enforcement Task Force, comprising agents and officers from DEA New York, New York City Police Department and New York State Police; and agents and officers of U.S. Immigration and Customs Enforcement, Homeland Security Investigations, under the direction of Special Agent in Charge Andrew M. McLees in Newark, with the ongoing investigation.

The government is represented by Assistant U.S. Attorney Evan S. Weitz of the U.S. Attorney's Office Asset Forfeiture and Money Laundering Unit.       

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Cellular Next Complaint

TRENTON, N.J. - A Mercer County, N.J., man today admitted his role in the March 2013 robbery of a commercial establishment, U.S. Attorney Paul J. Fishman announced.

Felix M. Lugo, 39, formerly of Trenton, N.J., 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 Hobbs Act robbery.   

According to documents filed in this case and statements made in court: Lugo conspired with Arturo Delacruz, 35, and Samuel Matias Cruz, 33, both of Trenton, to rob the Rapido Flores Multiservices Agency in Trenton. Lugo and Cruz committed the robbery, during which at least one victim was physically assaulted and restrained. Lugo and Cruz stole more than $6,000 and fled the scene in a vehicle driven by Delacruz.

Delacruz and Cruz were previously arrested by special agents from the Bureau of Alcohol, Tobacco, Firearms, and Explosives (ATF) on criminal complaints charging each with one count of conspiracy to commit Hobbs Act robbery. Those charges remain pending.  

The Hobbs Act conspiracy to which Lugo pleaded guilty carries a maximum potential penalty of 20 years in prison, as well as a maximum fine of $250,000, or twice the gross gain or loss arising out of the offense. Sentencing is scheduled for Oct. 6, 2014.

U.S. Attorney Fishman credited special agents of the ATF, under the direction of Special Agent in Charge Stephanie R. Shoemaker; the Mercer County Prosecutor’s Office, under the direction of Prosecutor Joseph L. Bocchini Jr.; the Burlington County Prosecutor’s Office, under the direction of Prosecutor Robert D. Bernardi; troopers from N.J. State Police, under the direction of Col. Rick Fuentes; the Trenton Police Department, under the direction of Police Chief Ralph Rivera Jr.; and the Westampton Police Department, under the direction of Police Chief Ricky W. Smith, for their investigation leading to today’s guilty plea.

The government is represented by Assistant U.S. Attorney Dennis C. Carletta of the U.S. Attorney’s Office National Security Unit in Newark.

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Defense counsel: Henry E. Klingeman Esq., Newark

Lugo, Felix Information

NEWARK, N.J. – One of the leaders of a massive, international counterfeit goods conspiracy was sentenced today to 120 months in prison for his role in the scheme, U.S. Attorney Paul J. Fishman announced.

Hai Dong Jiang, a/k/a “Jimmy,” a/k/a “Dong,” 37, of Staten Island, N.Y., previously pleaded guilty before U.S. District Judge Esther Salas in Newark federal court to an information charging him with one count of conspiracy to traffic in counterfeit goods.

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

From November 2009 through February 2012, Dong Jiang and his co-defendants ran one of the largest counterfeit goods smuggling and distribution conspiracies ever charged by the Department of Justice. The defendants and others conspired to import hundreds of containers of counterfeit goods – primarily handbags, and footwear, and perfume – from China into the United States in furtherance of the conspiracy. These goods, if legitimate, would have had a retail value of more than $300 million.

The counterfeit goods were manufactured in China and smuggled into the United States through containers fraudulently associated with legitimate importers, with false and fraudulent shipping paperwork playing a critical role in the smuggling scheme. Some of the conspirators created and managed the flow of false shipping paperwork between China and the United States, and supervised the importation of counterfeit goods, and others controlled the importation of the counterfeit goods into the United States.

Other conspirators managed the distribution of counterfeit goods once those goods arrived in the United States. After importation, the counterfeit goods were delivered to warehouses, and distributed throughout New York, New Jersey, and elsewhere. Certain conspirators paid large amounts of cash to undercover law enforcement officers to assist in the removal of counterfeit goods from the port.

Some conspirators acted as wholesalers for the counterfeit goods, supplying retailers who sold counterfeit goods to customers in the United States. Other conspirators were money structurers, who arranged for cash to be wired to China in amounts small enough to avoid applicable financial reporting requirements, to evade detection of the smuggling scheme and related proceeds. 

Law enforcement introduced several undercover special agents (collectively, the UCs) to the conspirators. The UCs purported to have unspecified “connections” at the port, which allowed the UCs to release containers that were on hold and pass them through to the conspirators. The conspirators paid the UCs for these “services.”  In total, during the course of this investigation, the conspirators provided the UCs more than $2 million.

UCs recorded dozens of phone calls and in-person meetings with various conspirators.  The investigation also utilized several court-authorized wiretaps of telephones and electronic communications.

Dong Jiang served as one of the directors of the smuggling scheme. Dong Jiang ordered counterfeit merchandise from China; negotiated shipments of counterfeit goods from China; arranged for payment for that merchandise and supervised the distribution of that merchandise in and around the New York/New Jersey area.

In addition to the prison term, Judge Salas sentenced Dong Jiang to two years of supervised release ordered forfeiture of cash and property as described in the plea agreement (attached).

U.S. Attorney Fishman praised special agents of Immigration and Customs Enforcement (ICE) Homeland Security Investigations (HSI), under the direction of Special Agent in Charge Andrew M. McLees, and special agents of the FBI, under the direction of Special Agent in Charge Aaron T. Ford, for the investigation leading to today’s sentencing.

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 and Nicholas Grippo of the U.S. Attorney’s Office in Trenton.

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Defense counsel: Joseph Conway Esq., Mineola, N.Y.

Dong Jiang, Hai Plea Agreement

NEWARK, N.J. – A Dominican national who was extradited from Canada earlier this year today admitted his role in one of the nation’s largest and longest-running stolen identity refund fraud schemes ever identified, U.S. Attorney Paul J. Fishman announced. 

Alejandro Javier, 51, pleaded guilty before U.S. District Judge Claire C. Cecchi to an information charging him with one count of conspiracy to steal government funds and one count of theft of government funds.

Javier and others participated in a scheme that caused more than 8,000 fraudulent U.S. income tax returns to be filed, which sought more than $65 million in tax refunds, and which resulted in the losses to the United States of more than $12 million. A Dominican national, Javier evaded capture until July 2, 2013, when Canadian law enforcement authorities arrested him as he tried to illegally enter Canada. He had been incarcerated there until he was extradited to New Jersey on Jan. 10, 2014.

According to documents filed in this case and statements made in court: Stolen Identity Refund Fraud

Stolen Identity Refund Fraud (SIRF) is a common type of fraud committed against the United States government that results in more than $2 billion in losses annually to the United States Treasury. SIRF schemes generally share a number of hallmarks: • SIRF perpetrators obtain personal identifying information, including Social Security numbers and dates of birth, from unwitting individuals, who often reside in the Commonwealth of Puerto Rico.

• SIRF perpetrators complete Individual Income Tax Return Form 1040s (Form 1040) using the fraudulently-obtained information, and falsifying wages earned, taxes withheld and other data. Perpetrators use data to make it appear that the “taxpayers” listed on the fraudulent 1040 forms are entitled to tax refunds – when in fact, the various tax withholdings indicated on the fraudulent 1040s have not been paid by the listed “taxpayers,” and no refunds are due.

• Perpetrators direct the U.S. Treasury Department to issue the refunds through checks  generated by the fraudulent 1040 forms to locations they control or can access, in various ways.

• Certain SIRF perpetrators sell the tax refund checks at a discount to face value. In turn, the buyers then cash the checks, either themselves or using straw account holders, by cashing checks at banks or check cashing businesses, or by depositing checks into bank accounts. When cashing or depositing refund checks, SIRF perpetrators often present false or fraudulent identification documents in the names of the “taxpayers” to whom the checks are payable.

The Investigation

Federal law enforcement agencies created a multi-agency task force in New Jersey composed of investigators from the IRS and the U.S. Postal Inspection Service, along with the U.S. Secret Service, and with assistance from the Drug Enforcement Administration. The New Jersey Task Force, with assistance from U.S. Immigration and Customs Enforcement, Homeland Security Investigations, revealed that from at least 2007, dozens of individuals in the New Jersey and New York area engaged in a large-scale, long running SIRF scheme.

Javier and others obtained personal identifiers, such as dates of birth and Social Security numbers, belonging to Puerto Rican citizens. Javier and others used those identifiers to create fraudulent 1040 forms, which falsely reported wages purportedly earned by the “taxpayers” and taxes purportedly withheld, to create the appearance that the “taxpayers” were entitled to tax refunds.

The fraudulent 1040 forms were created and filed electronically. By tracing the specific IP addresses that submitted the electronically-filed 1040s, law enforcement officers learned that just a handful of IP addresses created many of the fraudulent 1040 forms, which, in turn, led to the issuance of tax refund checks that the conspirators obtained, sold, cashed, and spent.

Conspirators purchased mail routes, that is, lists of addresses covered by a single mail carrier. Conspirators applied for tax refunds, inserted addresses along the mail route as the purported home addresses of the “taxpayers,” and obtained the checks sent to the addresses. In other instances, the conspirators applied for checks using addresses otherwise controlled by, or accessible by, certain conspirators, and collected the checks after they were delivered to those addresses. Hundreds of refund checks were mailed to just a few different addresses in a few towns, including Nutley, Somerset and Newark in New Jersey and Shirley, N.Y. After receiving the checks, Javier and others cashed the checks and divided the proceeds.  

Members of the New Jersey Task Force identified certain “hot spots” of activity related to the scheme, where conspirators were directing millions of dollars of refunds just a few towns and cities. New Jersey Task Force members then interacted with U.S. Postal Service employees in these hot spots, and identified the characteristics of refund checks connected to the scheme. More than $22 million in fraudulently applied for refund checks were interdicted by law enforcement and never delivered.

The conspiracy count to which Javier pleaded guilty carries a maximum potential penalty of five years in prison and up to a $250,000 fine. The substantive count of theft of government property carries a maximum potential penalty of 10 years in prison and up to a $250,000 fine. Sentencing for Javier is scheduled for Oct. 8, 2014.

U.S. Attorney Fishman praised special agents of the DEA, under the direction of special agent in charge Carl J. Kotowski; 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 investigation leading to today’s guilty plea. He also thanked the U.S. Secret Service, under the direction of Special Agent in Charge James Mottola; and HSI-ICE, under the direction of Special Agent in Charge Andrew M. McLees, for their roles.

The government is represented by Assistant U.S. Attorneys Lakshmi Srinivasan Herman, Zach Intrater, and Danielle Walsman of the U.S. Attorney’s Office Criminal Division in Newark, and Mala Harker of the Special Prosecutions Division.  

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Defense Counsel: David Oakley Esq., Princeton, N.J.

Javier, Alejandro Information

TRENTON, N.J. – A New Jersey jewelry store owner who used his business to further one of the largest credit card fraud schemes ever charged by the Justice Department today became the 18th conspirator to admit his role in the scheme, U.S. Attorney Paul J. Fishman announced.

Vijay Verma, 46, of Iselin, N.J., pleaded guilty before U.S. District Judge Anne E. Thompson in Trenton federal court to an information charging him with one count of access device fraud.
  
According to documents filed in this case and statements made in court:

Verma was indicted in October 2013 as part of a scheme to fabricate more than 7,000 false identities to obtain tens of thousands of credit cards. Participants in the scheme doctored credit reports to pump up the spending and borrowing power associated with the cards. They then borrowed or spent as much as they could, based on the phony credit history, but did not repay the debts – causing more than $200 million in confirmed losses to businesses and financial institutions. These debts were incurred at Verma’s jewelry store, among many other locations, where Verma would allow fraudulently obtained credit cards to be swiped in phony transactions.

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

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

Verma admitted he allowed others who came to his Jersey City, N.J., store to swipe cards he knew did not legitimately belong to them. Verma would then split the proceeds of the phony transactions with these other conspirators.

The count to which Verma pleaded guilty carries a maximum potential penalty of 15 years in prison and a $250,000 fine, or twice the gain or loss caused by the offense. Sentencing is scheduled for Sept. 25, 2014.
  
U.S. Attorney Fishman credited special agents of the FBI’s Cyber Division, under the direction of Special Agent in Charge Aaron T. Ford; postal inspectors from the U.S. Postal Inspection Service, under the direction of Postal Inspector in Charge Maria L. Kelokates; and special agents of the U.S. Secret Service, under the direction of Special Agent in Charge James Mottola, with the investigation leading to today’s guilty plea. He also thanked the U.S. Social Security Administration Office of Inspector General, Office of Investigations in New Jersey for assisting in the investigation.

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

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

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Defense counsel: Gerald Krovatin Esq., Newark

Verma, Vijay Information

NEWARK, N.J. - A Bergen County, N.J., man who was re-entering the United States from a trip abroad was arrested today at Newark International Airport on charges that he allegedly orchestrated a scheme to defraud a foreign nation of more than $3.5 million, U.S. Attorney Paul J. Fishman announced today.

Bobby Boye, a/k/a “Bobby Ajiboye,” a/k/a “Bobby Aji-Boye,” 50, of Franklin Lakes, N.J., is charged by complaint with one count of wire fraud conspiracy and six counts of wire fraud. He is scheduled to make his initial appearance tomorrow before U.S. Magistrate Judge Mark Falk in Newark federal court.

According to the complaint: Beginning in July 2010, Boye worked as an international legal advisor for the victim nation, which is referred to in the complaint as “Country A.” Boye served on a three-member committee responsible for reviewing and evaluating bids, solicited in February 2012, for a multi-million dollar contract to provide legal and tax accounting advice to Country A.  Boye allegedly deceived Country A representatives into awarding the lucrative contract to Opus & Best Services LLC (Opus & Best), a sham New York law and accounting firm that, unbeknownst to Country A, was secretly controlled by Boye.
 
On March 17, 2012, Boye allegedly caused Opus & Best to submit by email a bid for the contract with Country A. The bid documents, which allegedly were authored by Boye and a conspirator (CC-1), contained multiple, material misrepresentations and omissions, including: (1) a false claim that Opus & Best was founded in 1985, when in fact it was not founded until late March 2012; (2) a fraudulent listing of several purported employees of Opus & Best, who were described in the bid as a “first class talent of attorneys, accountants and economists.” There was no record of individuals of those same names as being admitted to practice law in New York or New Jersey or as being New York-licensed certified public accountants; (3) a false representation that Opus & Best had no conflicts of interest; Boye was both the sole member of Opus & Best and a member of the committee reviewing the bids; (4) a reference to prior consulting work purportedly performed by Opus & Best for another foreign country when that country had never awarded any type of consulting services contract to Opus & Best; and (5) a false representation that there were no third-party beneficiaries to the proposed contract between Opus & Best and Country A, when Boye himself was an undisclosed third-party beneficiary, given his alleged concealed intent to misappropriate the contract for his own benefit.
 
Unaware that Opus & Best allegedly was a sham firm, and relying on the recommendation of Boye, Country A awarded the contract to Opus & Best in June 2012.  Under the terms of the consulting contract, Boye was one of the two project coordinators acting on behalf of Country A and had authority to receive and approve invoices for payment.

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

The conspiracy and wire fraud counts with which Boye is charged each carry a maximum potential penalty of 20 years in prison and a fine of up to $250,000, or twice the gain or loss from the offense.

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 the arrest.

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

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

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

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Defense counsel:  TBD

Boye, Bobby Complaint

NEWARK, N.J. – A Miami man today admitted his role in a multi-state conspiracy to possess and sell prescription medication taken from a stolen tractor trailer, U.S. Attorney Paul J. Fishman announced.

Martin Lopez, a/k/a “El Negro,” 47, pleaded guilty before U.S. District Judge William J. Martini in Newark federal court to an information charging him with conspiracy to possess stolen prescription medicine.

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

On Dec. 2, 2009, a full shipment of prescription respiratory medicine manufactured by Dey LLP in Allen, Texas, was stolen on its way to Sandoz Inc. in Mechanicsburg, Pa. Lopez admitted that from December 2009 through March 2010, he conspired with others to acquire and sell medicine stolen from the shipment.

In early 2010, Lopez spoke with Ernesto Romero-Vidal, a/k/a “Bemba,” 48, of Hallandale, Fla., to identify a potential buyer for the stolen medicine. On March 2, 2010, Lopez arranged to have the medicine delivered to a buyer in New Jersey. Two days later, two other conspirators delivered the stolen goods to the buyer in return for $64,000 in cash, which they split with Lopez.

The conspiracy charge carries a maximum potential penalty of five years in prison and a $250,000 fine. Sentencing is scheduled for Sept. 24, 2014.

On Dec. 18, 2013, Romero-Vidal was sentenced by Judge Martini to 80 months in prison for his role in the scheme and other federal charges.

U.S. Attorney Fishman credited special agents of the FBI, 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 detectives of the North Bergen Police Department, under the direction of Chief Robert J. Dowd, with the investigation leading to today’s guilty plea.

The government is represented by Senior Litigation Counsel Leslie Faye Schwartz and Assistant U.S. Attorney Jane H. Yoon of the U.S. Attorney’s Office Criminal Division in Newark.

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Defense counsel: Kathleen M. Theurer Esq., Jersey City, N.J.

Lopez, Martin Information

TRENTON, N.J. – A New Jersey jewelry store owner who used his business to further one of the largest credit card fraud schemes ever charged by the Justice Department today admitted his role in the scheme, the 17th conspirator to do so, New Jersey U.S. Attorney Paul J. Fishman announced.

Vinod Dadlani, 51, of Lyndhurst, N.J., pleaded guilty today before U.S. District Judge Anne E. Thompson in Trenton federal court to an information charging him with one count of conspiracy to commit bank fraud.
  
According to documents filed in this case and statements made in court:

Dadlani was indicted in October 2013 as part of a conspiracy to fabricate more than 7,000 false identities to obtain tens of thousands of credit cards. Members of the conspiracy doctored credit reports to pump up the spending and borrowing power associated with the cards. They then borrowed or spent as much as they could, based on the phony credit history, but did not repay the debts – causing more than $200 million in confirmed losses to businesses and financial institutions.  These debts were incurred at Dadlani’s jewelry store, among many other locations, where Dadlani would allow fraudulently obtained credit cards to be swiped in phony transactions.

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

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

During his guilty plea proceeding, Dadlani admitted he worked with other conspirators, who came to his Jersey City, N.J., store and allowed them to swipe cards he knew did not legitimately belong to them. Dadlani would then split the proceeds of the phony transactions with the conspirators.

The count to which Dadlani pleaded guilty carries a maximum potential penalty of 30 years in prison and a $1 million fine, or twice the gain or loss caused by the offense.

Dadlani is scheduled for sentencing by JudgeThompson on Sept. 24, 2014.
  
U.S. Attorney Fishman praised special agents of the FBI’s Cyber Division, under the direction of Special Agent in Charge Aaron T. Ford, for the investigation; as well as postal inspectors from the U.S. Postal Inspection Service, under the direction of Postal Inspector in Charge Maria L. Kelokates; and special agents of the U.S. Secret Service, under the direction of Special Agent in Charge James Mottola. He also thanked the U.S. Social Security Administration Office of Inspector General, Office of Investigations in New Jersey for assisting in the investigation.

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

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

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Defense counsel: Vincent Sarubbi Esq., Haddonfield, N.J.

Dadlani, Vinod Information

NEWARK, N.J. - Fourteen people – including a former U.S. Citizenship and Immigration Services officer and a U.S. Postal Service worker – have been arrested and charged for their alleged roles in a multi-state drug trafficking ring supplying large quantities of methamphetamine to the Jersey City area, U.S. Attorney Paul J. Fishman announced today.

Nine alleged members of the ring were arrested June 16 to 18, 2014, by agents of the Drug Enforcement Administration (DEA) as well as state and local law enforcement following a one-year investigation led by the DEA. They were charged by complaint with conspiracy to distribute methamphetamine. The New Jersey defendants made their initial court appearances before U.S. Magistrate Judge Cathy L. Waldor in Newark federal court.

Among the 14 people charged today are defendants from Las Vegas, Nev., Los Angeles, Calif., and Phoenix, Ariz.

According to the documents filed in this case and statements made in court: Since July 2013 law enforcement has been investigating a drug trafficking organization (DTO) operating in Jersey City. The DTO coordinated shipments of methamphetamine from suppliers in Arizona, California, and Nevada through the mail to locations in northern New Jersey. Suppliers concealed the methamphetamine inside parcels that were shipped to addresses provided by the New Jersey-based conspirators, who would repackage the drugs for sale to lower level distributors.

John Freehauf, 36, a/k/a “Johnnie Rocket,” a/k/a “Agent,” of Jersey City, a former officer with the U.S. Citizenship and Immigration Service (USCIS), allegedly coordinated the acquisition of the methamphetamine, ordering several pounds per month from various interstate suppliers. Freehauf negotiated the price and provided New Jersey addresses for his suppliers. He and Benjamin Navarro, 44, a/k/a “Kristie,” of Jersey City, repackaged the drugs for distribution to lower level suppliers and retailers. 

Maria Lisa Pascual, 36, of North Bergen, N.J., used her position with the U.S. Postal Service to track and oversee the shipment of parcels. Pascual, Arnold Balagtas, 54, of Jersey City, and other conspirators redistributed smaller quantities of methamphetamine to lower level dealers and retailers. Pascual and Freehauf agreed to use the same sources of supply and to work together to set a common “market price” for methamphetamine in the northern New Jersey area. Pascual and Freehauf also assisted each other in distributing methamphetamine to lower level dealers.  Pascual has recently been terminated by the U.S. Postal Service. The defendants are:

Name

Age

Residence

36

Jersey City

Benjamin Navarro*

44

Jersey City

Maria Lisa Pascual

36

North Bergen, N.J.

Arnold Balagtas

54

Jersey City

Margaret Tiangco*

38

Jersey City

Javier Diaz

30

Los Angeles, Calif.

Candace Healy

21

Fresh Meadows, N.Y.

Ricce Anciado Jr.

44

Union, N.J.

Stephanie Luna*

36

Bergenfield, N.J.

Benedict Cipriano

51

Jersey City

Ricky Tulud

43

Belleville, N.J.

Janice Vidallon

31

Belleville

Ryan Bontempi

34

Phoenix, Ariz.

Howard Taylor

49

Phoenix

*Denotes fugitive

Freehauf, Pascual, Balagtas, Anciado, Tulud, Healy and Vidallon all appeared June 17, 2014, before U.S. Magistrate Judge Waldor in Newark federal court.  Diaz appeared in federal court in Los Angeles June 17, 2014, and is scheduled to appear in Newark federal court on June 30, 2014. Cipriano appeared before Judge Waldor today. Navarro, Luna and Tiangco remains at large. 

Bontempi, a/k/a “Rooster;” and Taylor were both arrested on May 12, 2014, in Phoenix, Arizona. Both were detained and transported to New Jersey, where they made their initial appearances today before Judge Waldor.

The count with which each of the defendants is charged carries a minimum penalty of 10 years in prison and a maximum potential penalty of life in prison and a $10 million fine. 

U.S. Attorney Fishman credited special agents of the DEA, under the direction of Special Agent in Charge Carl J. Kotowski; U.S. Postal Inspectors under the direction of Inspector in Charge Maria L. Kelokates; law enforcement officers from the N.J. National Guard Counter Drug Task Force, under the direction of the Adjutant General, Brig. Gen. Michael L. Cunniff; the N.J. State Police, under the direction of Superintendent Rick Fuentes; the Edison Police Department, under the direction of Chief Thomas Bryan; and the Jersey City Police Department, under the direction of Chief Robert Cowan, with the investigation leading to the charges.

The government is represented by Assistant U.S. Attorneys Adam N. Subervi and Charlton Rugg of the U.S. Attorney’s Office Narcotics Unit in Newark.

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

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Defense counsel:

Freehauf: Joseph Rubino Esq., West Orange, N.J.
Navarro: Pascual: Gregory Tomczak Esq., Montclair, N.J.
Balagtas: Angelo Servidio Esq., Nutley, N.J.
Tiangco: Diaz: TBD
Healy: Elizabeth Smith Esq., Mendham, N.J.
Anciado Jr.: Bruce Rosen Esq., Florham Park, N.J.
Luna: Cipriano: Zahid Quaraishi Esq., Morristown, N.J.
Tulud: Candace Hom Esq., Assistant Federal Public Defender, Newark
Vidallon: Stephen Truano Esq., Newark
Bontempi: David Ruhnke Esq., Montclair
Taylor: Kathleen Theurer Esq., Jersey City

Freehauf, John et al., Complaint
Bontempi - Taylor Complaint

CAMDEN, N.J. – An Atlantic City, N.J., woman was sentenced today to 35 years in prison for her role in the kidnapping and death of a 20-year-old Atlantic City woman, U.S. Attorney Paul J. Fishman announced.

Shamerria Smith, 27, previously pleaded guilty before U.S. District Judge Joseph H. Rodriguez to an information charging her with one count of use of a firearm in furtherance of a crime of violence – specifically, the Hobbs Act robbery and kidnapping that resulted in the death of Nadirah Ruffin. Judge Rodriguez imposed the sentence today in Camden federal court.

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

On March 23, 2011, a person identified as “D.H.” met with Isiah Ruffin (no relation to the victim) in the courtyard area of a housing complex on North Maryland Avenue, a section of Atlantic City known as “Back Maryland,” to talk to Isiah Ruffin about a dispute between Isiah Ruffin and Victim One. After a brief conversation, D.H. viciously assaulted Isiah Ruffin, knocking Isiah Ruffin unconscious and robbing him of cash. When Isiah Ruffin regained consciousness, D.H. assaulted him again. As a result of the assault, Isiah Ruffin was treated at the Atlantic City Medical Center for a possible concussion and facial lacerations. After Isiah Ruffin was released from the hospital, Smith and Aziz Sanders, 21, of Atlantic City, visited Isiah Ruffin, during which time Isiah Ruffin told Smith that D.H. had assaulted him.

 To retaliate, Smith planned to enter Victim One’s house and assault and rob Victim One of illegal drugs and money. Sanders agreed to help Smith execute her plan and recruited a third co-defendant, DeShawn Hicks, 22, of Atlantic City, to participate. Smith supplied the gun, duct-tape and handcuffs.

On March 26, 2011, Smith, Sanders, and Hicks entered Victim One’s house and duct-taped Victim One and four other victims, including Nadirah Ruffin, who were present. While in the house, Sanders and Hicks took money from Victim One, some of which Victim One had earned from selling illegal drugs. They took money from another victim, as well as marijuana that the victim was planning to sell. Sanders and Hicks admitted to taking more than $500 dollars and 50 bags of marijuana from the house.

During the robbery, Nadirah Ruffin recognized Smith’s voice. Smith ordered Sanders to punch Nadirah Ruffin. After Sanders hit Nadirah Ruffin, Smith punched her because she did not think Sanders had hit her hard enough. As the three defendants were leaving the residence, Smith told Sanders and Hicks to take Nadirah Ruffin from the residence. Smith, Sanders and Hicks then placed Nadirah Ruffin in a green van. They drove first to the Clementon area and eventually to Philadelphia. Smith said that because she was a mother she could not kill Nadirah Ruffin. Smith placed the gun near Sanders and told him that they were not leaving until someone else killed Nadirah Ruffin. Sanders and Hicks took Nadirah Ruffin to the banks of the Schuylkill River, where Sanders shot her in the head, killing her. Her body was dumped in the river.

In addition to the prison terms, Judge Rodriguez sentenced Smith five years of supervised release and ordered her to pay restitution of $1,512,840.  Hicks and Sanders have also pleaded guilty and both are scheduled to be sentenced July 9, 2014.

U.S. Attorney Fishman credited special agents of the FBI, under the direction of Special Agent in Charge Aaron T. Ford; the Atlantic County Prosecutor’s Office, under the direction of Acting Prosecutor James P. McClain; and the Atlantic City Police Department, under the direction of Chief Henry White, for the investigation leading to today’s sentencing.

The government is represented by Assistant U.S. Attorneys Jason M. Richardson and Matthew T. Smith of the U.S. Attorney’s Office Criminal Division in Camden, assisted by Assistant U.S. Attorney David Feder of the U.S. Attorney’s Office Appeals Division in Newark, and Mark Coyne, Chief of the Appeals Division.

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Defense counsel: Smith: Christopher O’Malley Esq., Assistant Federal Public Defender, Camden
Sanders: Edward Borden Esq., Cherry Hill, N.J., and Carl J. Herman Esq., West Orange, N.J.
Hicks: Michael Huff Esq., Camden, and David Glazer Esq.

Investigation Led to Conviction of More Than 600 American Subscribers to Illegal Site

NEWARK, N.J. – A Ukrainian man who founded and ran an international hardcore child sexual abuse website was sentenced today to 360 months in prison for his role in a child exploitation enterprise, U.S. Attorney Paul J. Fishman announced.

Maksym Shynkarenko, 35, of Kharkov, Ukraine, previously pleaded guilty to Count 31 of an indictment charging him with conducting a child exploitation enterprise in connection with a website he operated between 2005 and 2008. The investigation into that website has led to convictions in 47 states of more than 600 American consumers of hardcore images of children being sexually assaulted and abused.

Shynkarenko was initially detained in Thailand in January 2009 pending extradition. He was transported to the United States, where he has been in custody since making his initial court appearance in June 2012. He pleaded guilty to the charge Jan. 8, 2014, before U.S. District Judge William H. Walls, who also imposed the sentence today in Newark federal court.

“Shynkarenko worked the supply side of a market that sells images of the most depraved, predatory abuse of children,” said U.S. Attorney Fishman. “Those images endure – as do the wounds inflicted when they were created and when others look at them. Shynkareko appropriately will spend decades of his life paying for significantly fostering the international consumption of documented child sex abuse.”

“The massive HSI investigation that led to today’s sentencing of an international, hardcore child sex abuse website founder is directly tied to more than 600 other criminal convictions for child pornography across 47 states, including dozens of individuals who were already convicted sex offenders,” said Andrew McLees, special agent in charge of U.S. Immigration and Customs Enforcement, Homeland Security Investigations (HSI) Newark. “Today’s sentencing illustrates HSI Newark’s ongoing commitment to identify and seek prosecution of criminals who destroy lives by preying on innocent children. The website operated by Shynkarenko not only offered subscribers access to thousands of images and videos showing graphic, unimaginable child sexual abuse, but it further exploited these victims by making money off their mistreatment. As we did in this case, HSI and our international law enforcement partners will continue to use every tool at our disposal to track down those who exploit children and bring them to justice.”

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

From at least 2005 through mid-2008, Shynkarenko operated from Ukraine a website, that he helped design, which offered access to thousands of images and videos of child sexual abuse. Subscribers typically paid a fee of $79.99 for a 20-day subscription to the website. Shynkarenko worked in conjunction with other individuals, including one from Siberia who helped process credit card payments in a way that disguised the true nature of the purchases. Shynkarenko and the others operating the website granted access to images and videos to subscribers on hundreds of occasions from 2005 to 2008.

During his guilty plea proceeding, Shynkarenko said he worked with other individuals who advertised the child pornography website over the Internet under names such as “Illegal.CP” and “Pedo Heaven.”

HSI agents first located the child pornography website operated by Shynkarenko in October 2005 – based in part on e-mails recovered from the computer of an individual in Long Branch, N.J. At that time, the banner page of the site identified it as “Illegal.CP,” and the page featured more than a dozen images of minors engaged in sexual acts with other minors and adults. That page declared “[n]ow you are in [sic] few minutes away from the best children porn site on the net!” and “[i]f you join this site you will get tons of uncensored forbidden pics . . . forbidden stories, of course, many videos.” The words “join now” appeared at the top and bottom of the page.

Working with the U.S. Attorney’s Office for the District of New Jersey, HSI agents in Newark were able to identify hundreds of individuals who subscribed to the “Illegal.CP” website between November 2005 and February 2006. Those leads, largely developed through agents’ monitoring of the website, led to what became a three-phase investigation: Operation Emissary, Emissary II, and Thin Ice. In late 2006, agents recovered a database of hundreds of additional individuals whose credit cards had been processed while subscribing to the “Illegal.CP” website. During the third phase in 2008, the continued investigation by HSI agents focused more on the operators of the website, including Shynkarenko, and recovered evidence of hundreds of additional individuals who had attempted to subscribe. 

The leads, along with master search warrants prepared by the New Jersey U.S. Attorney’s Office, were distributed to HSI offices and U.S. Attorney’s Offices throughout the nation. The investigation has led to the conviction of more than 600 individuals in 47 states, making the investigation one of the most successful child sexual abuse investigations in the nation’s history. A list of the more than 600 American consumers of images of child sexual abuse convicted as a result of the investigation and the sentences they received was made available at the time of Shynkarenko’s guilty plea, and can be accessed at http://go.usa.gov/9c93.

In addition to the prison term, Judge Walls sentenced Shynkarenko to serve a lifetime of supervised release, and noted he would be required to register as a sex offender, but would likely be deported. In sentencing Shynkarenko, Judge Walls referred to his conduct as “one of the most serious crimes imaginable in our culture as human beings.”

U.S. Attorney Fishman credited HSI special agents, under the direction of Special Agent in Charge McLees, for the investigation leading to today’s guilty plea. He also thanked the United States Marshals Service, under the direction of U.S. Marshal Juan Mattos Jr., for its work in transporting Shynkarenko from Thailand, and acknowledged the important work of Thai authorities. U.S. Attorney Fishman also thanked the numerous HSI offices and U.S. Attorney’s Offices around the country which prosecuted the cases that secured the 600 convictions achieved during Operations Emissary and Operation Thin ICE, and thanked the Department of Justice’s Office of International Affairs and Child Exploitation and Obscenity Section for their important roles.

The government is represented by Senior Litigation Counsel Mark J. McCarren and Assistant U.S. Attorney Danielle Walsman of the U.S. Attorney’s Office in Newark and Attorney in Charge Harvey Bartle IV in Trenton.

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Defense counsel: Nicholas Wooldridge Esq. and Arkady Bukh Esq., Brooklyn, N.Y.

TRENTON, N.J. – The owner of several New Jersey businesses was sentenced today to46 months in prison for evading taxes on income from his ownership of a casino in Trinidad, costing the United States approximately $1.3 million in tax losses, U.S. Attorney Paul J. Fishman announced.

David Migliore, 51, of Brielle, N.J., previously pleaded guilty before U.S. District Judge Mary L. Cooper to one count of an indictment charging him with evading taxes with respect to his 2011 personal tax return. Judge Cooper imposed the sentence today in Trenton federal court.   

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

Migliore owns Brielle Investment LLC, Brielle Investments & Management Co. LLC and La Soufriere Maritime Inc. – all headquartered in New Jersey – as well as Island Club Casino in Trinidad.

From 2009 to 2011, Migliore earned millions of dollars from Island Club Casino, resulting in $1,286,657 in taxes due. During that time, Migliore took steps to conceal his income and assets from the IRS. At his guilty plea proceeding, Migliore admitted to using unreported bank accounts in Trinidad to deposit personal income, using U.S. bank accounts in the names of his New Jersey business entities to receive income from Island Club Casino and to using those business entities to pay for personal expenses.

Migliore also admitted to transferring income from Island Club Casino directly to vendors in the U.S. for personal expenses and directing Island Club Casino employees to send his income through Western Union to individuals in New Jersey who collected the cash on his behalf. 

In addition to the prison term, Judge Cooper sentenced Migliore to serve three years of supervised release. As part of his guilty plea and sentence, Migliore also has paid restitution of $1,286,657 to the IRS.

U.S. Attorney Fishman credited special agents of IRS-Criminal Investigation, under the direction of Acting Special Agent in Charge Jonathan D. Larsen; the FBI, under the direction of Special Agent in Charge Aaron T. Ford in Newark; and U.S. Immigration and Customs Enforcement, Homeland Security Investigations, under the direction of Special Agent in Charge Andrew M. McLees in Newark; as well as law enforcement officers from the Monmouth County Prosecutor’s Office, under the direction of Acting Monmouth County Prosecutor Christopher J. Gramiccioni; police officers from Wall Township Police Department, under the direction of Chief Robert Brice; and international assistance from the Financial Intelligence Unit for Trinidad & Tobago, with the investigation. U.S. Attorney Fishman also thanked the Department of Justice’s Office of International Affairs for assistance provided.

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

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Defense counsel: Robert Weir Esq., Red Bank, N.J.

NEWARK, N.J. – An Orange County, N.Y., man who owned a New Jersey company was sentenced today to 18 months in prison for filing false income tax returns, U.S. Attorney Paul J. Fishman announced.

Richard Jackowitz, 61, of Warwick, N.Y., previously pleaded guilty before U.S. District Judge Susan D. Wigenton in Newark federal court to an information charging him with two counts of filing false tax returns.

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

Jackowitz owned and operated Branded Marketing, a Haskell, N.J., company that sold debit cards. For the 2007 and 2008 tax years, Jackowitz had unreported income from his company of $105,512 and $359, 677, respectively. Jackowitz’s false tax returns caused a loss to the IRS of more than $300,000.

In addition to the prison term, Judge Wigenton sentenced Jackowitz to one year of supervised release and fined him $4,000. As part of his plea agreement, Jackowitz also agreed to pay $319,940 in restitution to the government.

U.S. Attorney Fishman credited special agents of IRS-Criminal Investigation, under the direction of Acting Special Agent in Charge Jonathan D. Larsen; and special agents of the FBI, 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 Joseph B. Shumofsky and Jenny Kramer of the U.S. Attorney’s Office Economic Crimes Unit in Newark.

14-217                                                    

Defense counsel: John D. Williams Esq., Vernon, N.J.

TRENTON, N.J. – The former president of a Burlington, N.J.,-based defense contracting business was arrested and charged today with allegedly stealing $3 million through fraudulent contracts with the U.S. Department of Defense, U.S. Attorney Paul J. Fishman announced.

Richard Melton, 44, of Moorestown, N.J., was charged by complaint with one count of conspiracy to commit wire fraud for receiving $3 million from 2008 to 2009 as a result of allegedly fraudulent contracts with the U.S. Department of Defense (DoD). Melton is scheduled to make his initial court appearance this afternoon before U.S. Magistrate Judge Tonianne J. Bongiovanni in Trenton federal court.

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

Melton was the founder, owner, and president of Partz Network LLC (Partz Network), a company located in Burlington. Melton owned and operated Partz Network from April 2003 to December 2009. Partz Network contracted with the government to supply the DoD with parts on small-dollar contracts. The majority of the contracts were for replacement parts for military rolling stock: trucks, trailers, and engineering equipment. The majority of Partz Network’s DoD contracts required that the items provided be manufactured by DoD-recognized qualified manufacturers.

Melton and his conspirators allegedly lied on Partz Network’s bids for DoD contracts, stating that they would be providing the “exact product” sought by the DoD, meaning that the product was manufactured by a DoD-recognized qualified manufacturer. In fact, Partz Network was allegedly providing parts made by unapproved, and oftentimes unknown, sources.

In 2007, the Defense Logistics Agency (DLA), a DoD contracting agency, became aware of reports of nonconforming parts being received from Partz Network. As a result, DLA required Partz Network to provide “traceability documents” to confirm that the items it was supplying were actually being manufactured by DoD recognized qualified manufacturers. Partz Network provided traceability documents and invoices to DLA regarding items provided under the DoD contracts.  When DLA researched the traceability documents supplied by Partz Network, DLA learned that the documents were either altered or completely fictitious.

For example, on Nov. 15, 2007, Partz Network submitted a bid electronically through the DoD’s internet bid system to supply the DoD with 1,400 oil pans for $53.85 per item. Partz Network represented that the company was providing the exact product manufactured by one of the two DoD-recognized qualified manufacturers. Partz Network was subsequently awarded the contract for 1,400 oil pans for a total contract price of $75,390. Both the request for quotation (RFQ) and the final contract included the language that the exact product was required. The items ultimately provided by Partz Network were not the exact products required under the contract because the items were not manufactured by a qualified manufacturer. In fact, on Nov. 10, 2007, five days prior to Partz Network submitting its bid for the contract, Melton sent an e-mail to a Partz Network employee with a link to the DoD RFQ that stated the following: “Bid these (1400) HMMWW oil pans at $53.85 and I will have them made overseas by [a company located in the People’s Republic of China] or another overseas firm, 200-day lead time.” Based on Partz Network documents related to that contract, Partz Network purchased the oil pans that were provided to the DoD from a company located in India in January 2008.

On Aug. 27, 2009, Partz Network was awarded a contract to supply the DoD with 887 bearing half sets for a total contract price of $16,010.35. Partz Network certified that the items would be the exact product required under the contract. The items ultimately provided by Partz Network under the contract were not the exact products required because the items were not manufactured by the qualified manufacturer. DoD ultimately inspected the items and determined that the items were manufactured by an unapproved source.

The wire fraud conspiracy count with which Melton is charged carries a maximum potential penalty of 20 years in prison and a fine of $250,000, or twice the gain or loss from the offense. 

U.S. Attorney Fishman credited special agents of the U.S. Department of Defense, Criminal Investigative Service, under the direction of Director James Burch; special agents of Immigration and Customs Enforcement (ICE), Homeland Security Investigations (HIS), under the direction of Special Agent in Charge Andrew M. McLees, with the investigation leading to today’s arrest.

The government is represented by Assistant U.S. Attorneys Fabiana Pierre-Louis of the U.S. Attorney’s Office Criminal Division in Trenton and Evan Weitz of the Office’s Asset Forfeiture Unit in Newark.

The charge 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: Scott S. Christie Esq., Newark

Melton, Richard Complaint

NEWARK, N.J. – A doctor who was convicted at trial of receiving cash kickbacks for diagnostic testing referrals was sentenced today to 21 months in prison, U.S. Attorney Paul J. Fishman announced today. 

Maryam Jafari, 43, was convicted Feb. 4, 2014, of all three counts of a superseding indictment charging her with conspiracy and two counts of violating the federal health care anti-kickback statute after a three-week trial before U.S. District Judge Claire C. Cecchi, who imposed the sentence today in Newark federal court.

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

Jafari was a doctor licensed in New Jersey to practice internal medicine and operated an office in Newark. From 2010 through December 2011, Jafari solicited and received cash kickbacks from Orange Community MRI LLC (Orange MRI) in exchange for MRIs and CAT scans she referred to the diagnostic testing facility.

At the end of each month, OCM printed patient reports that included information such as dates of service, patient name, referring health care practitioner and medical insurance to be billed. The reports were used to tally the number of tests referred by each doctor and determine the amount of kickback payment paid to the referring healthcare provider.

On Nov. 22, 2011, Jafari met with a cooperating witness at Jafari’s office and accepted a white envelope containing $1,965 in cash, payments for three months of tests Jafari referred to Orange MRI. On Dec. 6, she accepted another payment of $420 in cash for referrals from October 2011. A trial on these charges in 2012 ended in a mistrial when the jury could not reach a unanimous verdict.    

In addition to the prison term, Judge Cecchi sentenced Jafari to two years of supervised release, fined her $45,000 and ordered forfeiture of $40,261.

U.S. Attorney Fishman credited special agents of the U.S. Department of Health and Human Services, Office of Inspector General, under the direction of Special Agent in Charge Tom O’Donnell, who investigated the case with criminal investigators from the U.S. Attorney’s Office.  

The government is represented by Assistant U.S. Attorneys Scott B. McBride, deputy chief of the Economic Crimes Unit, and Joseph G. Mack, deputy chief of the U.S. Attorney’s Office’s Health Care and Government Fraud Unit in Newark.

U.S. Attorney Paul J. Fishman reorganized the health care fraud practice at the New Jersey U.S. Attorney’s Office shortly after taking office, including creating a stand-alone Health Care and Government Fraud Unit to handle both criminal and civil investigations and prosecutions of health care fraud offenses. Since 2010, the office has recovered more than $535 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.

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Defense counsel: Maria Noto Esq., Matawan, N.J.

NEWARK, N.J. - The owner and operator of Larino Masonry Inc., a construction company based in northern New Jersey, today admitted underreporting more than $1 million diverted from his business for his personal benefit, U.S. Attorney Paul J. Fishman announced.

Juan Larino, 53, of West New York, N.J., pleaded guilty before U.S. District Judge Katherine S. Hayden in Newark federal court to an information charging him with one count of filing a false federal personal income tax return.

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

During his operation of the business, Larino received checks made payable to Larino Masonry Inc. Larino admitted that instead of depositing all of the payments into bank accounts held by the business, he cashed some of the checks for his own personal benefit.

For the tax years 2010 through 2011, Larino filed individual income tax returns in which he claimed to report all of his income from the construction business. However, Larino failed to report approximately $1.1 million in cash that he kept from checks made payable to Larino Masonry Inc. Larino’s failure to truthfully disclose income he received as owner of the company resulted in a tax loss to the United States of $200,000 to $400,000.

As part of his guilty plea, Larino agreed to make full restitution for all losses resulting from his false tax returns. He also agreed to forfeit $575,000 in a related civil case with the U.S. Attorney's Office.

The subscribing to false tax returns charge carries a maximum potential penalty of three years in prison and a $100,000 fine. Sentencing is scheduled for Sept. 29, 2014.

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

The government is represented by Assistant U.S. Attorney Evan S. Weitz of the U.S. Attorney's Office Asset Forfeiture and Money Laundering Unit.

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Defense counsel: Vincent Martinelli Esq., Staten Island, N.Y.

Larino, Juan Information

NEWARK, N.J. - A Sussex County, N.J., chiropractor today admitted destroying patient appointment records sought by federal agents investigating potential billing fraud at her medical office, U.S. Attorney Paul J. Fishman announced.

Mary Jean Negri, 57, of Lafayette, N.J., pleaded guilty before U.S. District Judge Katharine S. Hayden in Newark federal court to an information charging her with one count of obstructing an investigation of a health care offense.

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

For the past 24 years, Negri, a licensed chiropractor and registered nurse in New Jersey, has owned Lafayette Hilltop Chiropractic Center (Lafayette Hilltop). In May 2012 she discovered the FBI and the U.S. Attorney’s Office were investigating Lafayette Hilltop for potentially fraudulent billing practices. Negri suspected that investigators were interested in obtaining Lafayette Hilltop’s patient appointment books as evidence of potential fraud. In an effort to obstruct the government’s investigation, she discarded those patient appointment books.  

The obstruction charge carries a maximum potential penalty of five years in prison and a maximum $250,000 fine, or twice the gain or loss caused by the offense. Sentencing is scheduled for Sept. 29, 2014.

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

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

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Defense counsel: John M. Vazquez Esq., Roseland, N.J.

Negri, Mary Jean Information

NEWARK, N.J. – A Michigan woman today admitted her role in one of the nation’s largest and longest running stolen identity refund fraud schemes ever prosecuted, U.S. Attorney Paul J. Fishman announced.

Rosa Marmol, 36, of Grand Rapids, Mich., pleaded guilty today before U.S. District Judge Claire C. Cecchi, to a superseding information charging her with conspiracy to defraud the United States and theft of government property. Marmol had been previously indicted on these charges in February 2014.

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

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

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

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

An investigation led by the New Jersey Task Force with assistance from U.S. Immigration and Customs Enforcement, Homeland Security Investigations, has revealed that starting as early as 2007, dozens of individuals in the New Jersey and New York area have been engaged in large-scale, long-running SIRF scheme that has caused more than 8,000 fraudulent 1040 forms to be filed, seeking more than $65 million in tax refunds, with losses to the U.S. Treasury of more than $12 million.

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

Marmol and the other members of the conspiracy then gained control of checks, sometimes bribing mail carriers to intercept checks and deliver them to other members of the conspiracy.  Marmol used the bank accounts of her family’s bodega and check cashing business, Tienda Guadalajara Jalisco, in Grand Rapids to negotiate the checks she cashed.

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

U.S. Attorney Fishman praised special agents of IRS-Criminal Investigation, under the direction of Acting Special Agent in Charge Jonathan D. Larsen; the U.S. Postal Inspection Service, under the direction of Inspector in Charge Maria L. Kelokates; the U.S. Secret Service, under the direction of Special Agent In Charge James Mottola; and the Drug Enforcement Administration, under the direction of Acting Special Agent in Charge Carl Kotowski, for the investigation leading to today’s guilty plea.

The conspiracy count carries a maximum potential penalty of five years in prison and a $250,000 fine. The count of theft of government property carries a maximum potential penalty of 10 years in prison and up to a $250,000 fine. Sentencing is scheduled for Sept. 10, 2014.

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

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Defense counsel: Damian Conforti Esq., Newark                                                                                                               

Marmol, Rosa Superseding Information

TRENTON N.J. - An Essex County, N.J. contractor who was paid nearly $100,000 to renovate the home of a Bronx, N.Y., woman, today admitted his role in defrauding her of the money in connection with the remodeling project, U.S. Attorney Paul J. Fishman announced today.

Raymond Norville, 45, of Orange, N.J., owner of RRL Unique Homes Inc., a construction company, pleaded guilty before U.S. District Judge Joel A. Pisano in Trenton federal court to a superseding information charging him with one count of conspiracy to commit wire fraud.

According to documents filed in this case and statements made in court: In 2011, Norville was a contractor who owned RRL Unique Homes Inc. The victim, identified only as “C.P.,” wanted to renovate her newly purchased home in the Riverdale section of Bronx. Norville agreed to perform the renovations on the residence for $250,000.  He submitted invoices to C.P., inducing her to pay him $98,600 in cash for the purchase of materials, supplies, architectural plans, rental equipment and permits needed for the project. Norville emailed pictures of materials that he intended to purchase. Norville neither delivered to the job site, nor provided proofs of purchase for the materials. By May 2011, work on the project had not started and C.P. demanded either a refund or the materials and supplies Norville promised to buy. Norville attempted to repay a portion of the $98,600 by providing C.P. with a check for $24,500, which was rejected for insufficient funds.

The count of conspiracy to commit wire fraud carries a maximum potential penalty of five years in prison and a fine of $250,000 or twice the gross gain or loss from the offense. Sentencing is scheduled for Sept. 17, 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 for the New York Region; and detectives of the Waterfront Commission of New York Harbor, under the direction of Commissioner Jan Gilhooly, for the investigation leading to today’s guilty plea.

The government is represented by Senior Litigation Counsel V. Grady O’Malley in Newark.

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Defense counsel: David P. Schroth Esq., Trenton

Norville, Ray Information

NEWARK, N.J. – Two members of a massive, international counterfeit goods conspiracy today admitted their roles in the scheme, U.S. Attorney Paul J. Fishman announced.

Ke Dao Jiang, 37, of Queens, and Wu Lin, 31, of Maspeth, N.Y., each pleaded guilty before U.S. District Judge Esther Salas in Newark federal court to an information charging them with one count of conspiracy to traffic in counterfeit goods.

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

From November 2009 through February 2012, the defendants and their conspirators ran one of the largest counterfeit goods smuggling and distribution conspiracies ever charged by the Department of Justice.  The defendants and others conspired to import hundreds of containers of counterfeit goods – primarily handbags, and footwear, and perfume – from China into the United States in furtherance of the conspiracy. These goods, if legitimate, would have had a retail value of more than $300 million.

The counterfeit goods were manufactured in China and smuggled into the United States through containers fraudulently associated with legitimate importers, with false and fraudulent shipping paperwork playing a critical role in the smuggling scheme. Some of the conspirators created and managed the flow of false shipping paperwork between China and the United States, and supervised the importation of counterfeit goods, and others controlled the importation of the counterfeit goods into the United States.

Other conspirators managed the distribution of counterfeit goods once those goods arrived in the United States. After importation, the counterfeit goods were delivered to warehouses, and distributed throughout New York, New Jersey, and elsewhere. Certain conspirators paid large amounts of cash to undercover law enforcement officers to assist in the removal of counterfeit goods from the port.

Some conspirators acted as wholesalers for the counterfeit goods, supplying retailers who sold counterfeit goods to customers in the United States. Other conspirators were money structurers, who arranged for cash to be wired to China in amounts small enough to avoid applicable financial reporting requirements, to evade detection of the smuggling scheme and related proceeds. 

Both Jiang and Wu served as wholesalers and worked with other conspirators to distribute the counterfeit goods to small-scale retailers in New Jersey and New York.

Law enforcement introduced several undercover special agents (collectively, the UCs) to the conspirators.  The UCs purported to have unspecified “connections” at the port, which allowed the UCs to release containers that were on hold, and pass them through to the conspirators.  The conspirators paid the UCs for these “services.”  In total, during the course of this investigation, the conspirators provided the UCs more than $2 million.

The UCs recorded dozens of phone calls and in-person meetings with various conspirators. The investigation also utilized several court-authorized wiretaps of telephones and electronic communications.

The conspiracy to traffic in counterfeit goods count carries a maximum potential penalty of 10 years in prison and a fine of $2 million. Sentencing for Lin is scheduled for Oct. 6, 2014, and for Jiang, Oct. 7, 2014.

U.S. Attorney Fishman credited special agents of Immigration and Customs Enforcement (ICE) Homeland Security Investigations (HSI), under the direction of Special Agent in Charge Andrew M. McLees, and special agents of the FBI, under the direction of Special Agent in Charge Aaron T. Ford, for the investigation leading to the guilty pleas.

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 and Nicholas Grippo of the U.S. Attorney’s Office in Trenton.

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Defense counsel: Jiang: Warren Sutnick Esq., Hackensack, N.J.
Lin: Wanda Akin Esq., Newark

Jiang, Ke Dao Information
Lin, Wu Information

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

Abiodun Adejohn, a/k/a “James Williams,” a/k/a “Olawale Adeyemi,” a/k/a “Abiodun Ade John,” a/k/a “Abiodun Ade-John,” 30, of Nigeria, pleaded guilty before U.S. District Judge William H. Walls in Newark federal court to an information charging him with one count of wire fraud conspiracy.

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

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

Adejohn was arrested in Arizona on Sept. 24, 2013, and has been detained since his arrest.

 The wire fraud conspiracy to which Adejohn pleaded guilty carries a maximum potential penalty of 20 years in prison and a $250,000 fine. Sentencing is scheduled for Sept. 9, 2014.

 U.S. Attorney Fishman credited special agents of the EPA Office of Inspector General (OIG), under the direction of Special Agent in Charge Thomas Muskett; General Services Administration OIG, under the direction of Special Agent in Charge Paul Walton; Department of Commerce OIG, under the direction of Todd J. Zinser; Department of Defense, Criminal Investigative Service, under the direction of Director James Burch; and special agents of the FBI, under the direction of Special Agent in Charge Aaron T. Ford in Newark, with the investigation leading to today’s guilty plea.

The government is represented by Assistant U.S. Attorney Shana W. Chen, of the U.S. Attorney’s Office Economic Crimes Unit in Newark.
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Defense counsel:  John Yauch Esq., Assistant Federal Public Defender

Adejohn, Abiodun Information

NEWARK, N.J. - A Newark man today admitted his role in three gunpoint carjackings and an attempted carjacking within a one-week period and to firing his gun during one of the robberies, U.S. Attorney Paul J. Fishman announced.

Corey Thermitus, 22, pleaded guilty before U.S. District Judge William H. Walls in Newark federal court to an information charging him with three counts of theft of a motor vehicle by force, violence and intimidation; one count of attempted theft of a motor vehicle by force, violence and intimidation; and one count of discharging a firearm in furtherance of a violent crime.

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

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

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

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

Each carjacking and attempted carjacking charge carries a maximum potential penalty of 15 years in prison. The discharge of a firearm in furtherance of a violent crime charge carries a mandatory minimum penalty of 10 years in prison and a maximum penalty of life in prison, which must be consecutive to any term imposed on the underlying carjacking offenses. Each charge carries a statutory maximum fine equal to the greatest of $250,000, twice the gross amount of any pecuniary gain that any persons derived from the offense, or twice the gross amount of any pecuniary loss sustained by any victims of the offense. Thermitus must also pay restitution to the carjacking victims. Sentencing is scheduled for Sept. 10, 2014.

U.S. Attorney Fishman credited special agents of the FBI, 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 Newark Police Department, under the direction of Director Sheilah A. Coley and Chief Ivonne Roman, with the investigation leading to today’s guilty plea.

The government is represented by Assistant U.S. Attorney Dara Aquila Govan of the
Organized Crimes/Gangs Unit in Newark.

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

Thermitus, Corey Information

NEWARK, N.J. – A Newark, N.J., man today admitted committing six armed robberies of Newark convenience stores – including the same grocery store twice within a week, U.S. Attorney Paul J. Fishman announced.

Larry McRae, 27, of Newark, N.J., pleaded guilty before U.S. District Judge Kevin McNulty in Newark federal court to an information charging him with six counts of Hobbs Act robbery and one count of discharging a firearm in furtherance of a crime of violence.

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

From June 30, 2012, through Sept. 15, 2012, McRae entered convenience stores in Newark on six different occasions and robbed the store clerks at gunpoint. During the Sept. 15, 2012, robbery he discharged one round from a handgun as he exited the store. He was apprehended by the Newark Police Department later that morning.

Each of the Hobbs Act robbery charges carries a maximum sentence of up to 20 years in prison and a fine of up to $250,000. The charge of discharging a firearm in furtherance of a crime of violence carries a mandatory minimum of 10 years in prison, a maximum of life in prison and a fine up to $250,000. The sentence on the discharging of the firearm will run consecutively to the sentence for the six robberies. Sentencing is scheduled for Sept. 15, 2014.

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 Newark Police Department for their contribution to the investigation.

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

McRae, Larry Information

TRENTON, N.J. – A Mercer County, N.J., woman today admitted paying bribes to a former Department of Veterans Affairs (VA) employee who worked as a supervisory engineer at the VA’s campus in East Orange, N.J., U.S. Attorney Paul J. Fishman announced.

Donna Doremus, 46, of Hopewell, N.J., pleaded guilty today before U.S. District Judge Mary L. Cooper in Trenton federal court to three counts of a four-count information charging her with one count of bribing a public official, one count of conspiracy to defraud the United States and two counts of making and subscribing to false federal tax returns.

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

The bribes were paid in connection with VA contracts awarded to companies Doremus owned. She also admitted to a conspiracy to defraud the United States by falsely representing that one of her companies was owned and controlled by a service-disabled veteran.

From 2007 to July 2012, Doremus paid approximately $671,000 in bribes to a former VA official, Jarod Machinga, 44, also of Hopewell, in connection with VA contracts awarded to three companies she owned and controlled. In his position as a supervisory engineer, Machinga had the authority and influence to direct certain VA construction contracts to particular companies. Machinga directed more than $6 million of VA construction projects to Doremus’ companies. 

One of Doremus’s companies, Tyro General Construction (Tyro), entered into a service-disabled, veteran-owned small business contract with the VA. Congress has established a program whereby certain VA contracts are reserved for small businesses that are owned and controlled by service-disabled veterans. Doremus conspired with Machinga to falsely represent to the VA that Tyro was a service-disabled, veteran-owned small business so that Tyro could improperly obtain a lucrative construction contract from the VA. Machinga then used his official position and influence at the VA to award such a contract to Tyro. In total, Tyro was paid more than $3 million by the VA in connection with this service-disabled veteran-owned contract.

Doremus also engaged in a tax crime. For tax years 2009 and 2010, she intentionally falsely reported on her federal tax returns that certain of the bribe payments she made to Machinga, as well as certain of her personal expenditures, were her companies’ business expenses. As a result, she failed to pay $250,374 in federal income taxes that she owed the IRS.   

On Sept.18, 2013, Machinga pleaded guilty before Judge Cooper in connection with his accepting kickbacks from Doremus and engaging in a scheme to defraud the VA. He is awaiting sentencing.

The bribery count to which Doremus pleaded guilty carries a maximum potential penalty of 15 years in prison and a fine of the greater of $250,000; twice the gross pecuniary loss or gain; or three times the value of the bribe paid. The conspiracy to defraud the United States count to which Doremus pleaded guilty carries a maximum potential penalty of five years in prison and a fine equal to the greatest of $250,000 or twice the pecuniary gain or loss. The false tax return count to which Doremus pleaded guilty carries a maximum potential penalty of three years in prison and a $250,000 fine. Sentencing is scheduled for Sept. 22, 2014.

U.S. Attorney Fishman praised special agents of the Department of Veterans Affairs, Office of Inspector General, under the direction of Special Agent in Charge Jeffrey Hughes; 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 their work leading to today’s guilty plea.

The government is represented by Assistant U.S. Attorneys Vikas Khanna of the U.S. Attorney’s Office Special Prosecutions Division and Peter Gaeta of the U.S. Attorney’s Office Asset Forfeiture and Money Laundering Unit in Newark.

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Defense counsel: Michael A. Caudo Esq., Philadelphia, Pa.

Doremus, Donna Information

NEWARK, N.J. – A Morris County, N.J., couple who owned a mobile diagnostic testing company were arrested this morning and charged with conspiring to commit health care fraud, U.S. Attorney Paul J. Fishman announced.

Nita K. Patel, 51, and Kirtish N. Patel, 51, of Rockaway, N.J., owners and operators of Biosound Medical Services Inc. and Heart Solutions of Parsippany, N.J., were charged by complaint with one count of conspiracy to commit health care fraud. They made their initial appearance today before U.S. Magistrate Judge James B. Clark III in Newark federal court.

According to the complaint and statements made in Court:

From June 2012 through June 2014 Nita and Kirtish Patel owned and operated Biosound Medical Services and Heart Solutions (collectively, “Biosound”), which were mobile diagnostic companies and approved Medicare providers. The companies provided mobile diagnostic testing, including ultrasounds, echocardiograms, and nerve conduction studies.

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

According to the complaint, about half of the diagnostic reports generated by Biosound in the past two years had a photocopied signature from a reading physician when no physician had actually seen, reviewed or interpreted the results. Rather than pay compensation to a reading physician, Kirtish N. Patel allegedly would interpret the diagnostic results himself, and Nita K. Patel would either photocopy or electronically cut and paste a physician’s signature onto a diagnostic report that was drafted by an employee of Biosound and forwarded to the referring physician who ordered the testing.

The charge of conspiracy to commit health care fraud carries a maximum penalty of 10 years in prison and a $250,000 fine. Nita K. Patel and Kirtish N. Patel were each released on $100,000 unsecured bond, with travel restricted to New Jersey unless given prior approval by pretrial services, and they must surrender their United States and India passports.

U.S. Attorney Fishman credited special agents of the FBI under the direction of Special Agent in Charge Aaron T. Ford; and the U.S. Department of Health and Human Services – Office of the Inspector General, under the direction of Special Agent in Charge Tom O’Donnell, with the investigation leading to today’s charges.

The government is represented by Assistant U.S. Attorney Danielle Alfonzo Walsman of the U.S. Attorney’s Office Health Care and Government Fraud 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 $535 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.

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Defense counsel: Kirtish Patel: Richard Asche Esq., New York
Nita Patel: John Yauch Esq., Assistant Federal Public Defender, Newark

Patel, Nita and Kirtish Complaint

NEWARK, N.J. – An Essex County, N.J., man was sentenced today 114 months in prison for his role in an armed carjacking in Newark on Nov. 8, 2012, U.S. Attorney Paul J. Fishman announced.

Nathaniel Tullies, 20, of East Orange, N.J., previously pleaded guilty before U.S. District Judge Katharine S. Hayden in Newark federal court to an information charging him with one count of theft of a motor vehicle by force, violence, and intimidation, and one count of use of a firearm in furtherance of a crime of violence. Judge Hayden imposed the sentence today in Newark federal court.

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

On Nov. 8, 2012, an individual got out of a 2006 Chevrolet Impala to open a garage door when Tullies and an accomplice got on either side of the car, took it from the victim at gunpoint and drove away. The victim called police, who responded within minutes. A Newark police detective spotted the vehicle and a high-speed chase ensued, ending when the Impala crashed on the shoulder of Routes 1/9, the suspects fled on foot and the detective chased and captured Tullies.

In addition to the prison term, Judge Hayden sentenced Tullies to three years of supervised release and ordered him to pay restitution of $6,486.

U.S. Attorney Fishman credited detectives with the Essex County Prosecutor’s Office, under the Direction of Acting Prosecutor Carolyn A. Murray, and investigators in the U.S. Attorney’s Office with the investigation leading to today’s sentencing.

The government is represented by Assistant U.S. Attorney Elizabeth M. Harris and Assistant U.S. Attorney Jonathan Romankow, acting deputy chief of the general crimes unit, in Newark.

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

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Hernandez, Raymundo Information

CAMDEN, N.J. – A Camden man was sentenced today to 37 months in prison for stealing more than $2.5 million dollars from the U.S. Government through a food stamps scheme, U.S. Attorney Paul J. Fishman announced.

Alexander D. Vargas, 35, previously pleaded guilty before U.S. District Court Judge Joseph H. Rodriguez to an information charging him with stealing U.S. Government monies during a scheme in which he purchased Supplemental Nutrition and Assistance Program (SNAP) benefits (formerly known as food stamps) for approximately 50 cents on the dollar at the local grocery store he managed in Camden. Vargas was detained after his arrest on May 16, 2013, and his detention was continued. 

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

From January 2012 through December 2012 Vargas managed Eddie’s Grocery Store, a small store in Camden that was authorized to accept SNAP benefits. The program is administered by the U.S. Department of Agriculture. Retail food stores approved for participation in SNAP may sell food in exchange for food stamp benefits. However, they may not exchange food stamp benefits for cash.

Every food stamp recipient receives an Electronic Benefits Transfer (EBT) card, similar to a debit card, with which to make purchases. Every retailer authorized to accept food stamp benefits has an EBT terminal. Food purchases are made by swiping the card at the terminal. After the customer enters a secret Personal Identification Number (PIN), the EBT terminal verifies the PIN, determines whether the customer’s account balance is sufficient to cover the proposed transaction and informs the retailer whether the transaction should be authorized or denied. If the transaction is authorized, the amount of the purchase is then deducted electronically from the food stamp benefits reserved for the customer, and the amount is credited to the retailer’s designated bank account.

Eddie’s Grocery designated a bank account at Sovereign Bank to receive the reimbursements for SNAP benefits. Bank records listed Vargas and another individual as managers of Eddie’s Grocery.

Eddie’s Grocery was first approved to participate in the SNAP program in 2007. In his application to participate in SNAP, the owner estimated that Eddie’s Grocery would generate receipts of approximately $280,000 annually, or an average of $23,333 per month. The volume of SNAP benefits reimbursement received at Eddie’s Grocery substantially exceeded those estimates, indicating large scale food stamp fraud. From February 2012 through November 2012 the SNAP redemptions were more than $2.8 million greater than the estimates.

In addition to the high volume of SNAP benefits redemptions, law enforcement agents verified the fraudulent exchange of SNAP benefits for cash through the use of a cooperating witness and an undercover law enforcement officer. During a series of five transactions from June 7, 2012, through Oct. 4, 2012, law enforcement agents directed a cooperating witness and an undercover law enforcement officer to go into Eddie’s Grocery and exchange $1,359.75 in SNAP benefits for $650 cash.

A review of the bank records for the Eddie’s Grocery account showed total cash withdrawals of $3,109,776 for the 2012 calendar year. Records from Feb. 15, 2012, (when defendant Alexander Vargas was added as an authorized cosigner on the account) through December 2012, showed $2,548,510 in cash withdrawals – of which Vargas’ name was on 40 withdrawals totaling $1,869,266.

In addition to the prison term, Judge Rodriguez sentenced Vargas to three years of supervised release and ordered him to pay $2,791,430 in restitution.

U.S. Attorney Fishman credited special agents of the U.S. Department of Agriculture, Office of Inspector General, under the direction of Special Agent in Charge William G. Squires Jr. in New York; the Department of Homeland Security, Homeland Security Investigations, under the direction of Special Agent in Charge Andrew M. McLees; 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. Attorney Diana Carrig of the U.S. Attorney’s Office in Camden.

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Defense counsel: Jeffrey C. Zucker Esq., Camden

NEWARK, N.J. – A board-certified pediatrician and internist from Morris County, N.J., was sentenced today to 20 months in prison for soliciting and taking cash and rental payments as kickbacks for his patients’ diagnostic testing referrals, U.S. Attorney Paul J. Fishman announced. 

Chikezie Onyenso, 55, of Randolph, N.J., was convicted on Oct. 15, 2013, after a three-week trial before U.S. District Judge Claire C. Cecchi, of conspiracy to solicit and receive kickbacks from a diagnostic testing facility called Orange Community MRI LLC (Orange MRI), and of soliciting and taking such kickbacks from Orange MRI. Judge Cecchi imposed the sentence today in Newark federal court.    

Including Onyenso, 18 defendants – including 16 doctors – have been convicted in connection with the government’s ongoing investigation of illegal payments made by Orange MRI.

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

Onyenso was a licensed and board-certified pediatrician and internist who owned his own medical practice, Total Support Medical Group, in Irvington, N.J. From the summer of 2010 through December 2011 he conspired to take illegal kickbacks in exchange for sending his patients to Orange MRI. Onyenso sought and accepted thousands of dollars of cash in envelopes in exchange for referring his Medicare and Medicaid patients to Orange MRI for MRIs and CAT scans. For his ultrasound referrals, Onyenso received from Orange MRI more than $25,000 in kickback payments disguised as rental payments and documented by a bogus, $1,000-per-square-foot lease. He was recorded taking cash kickbacks in his Irvington office on Oct. 11, 2011, and Nov. 22, 2011.   

In addition to the prison term, Judge Cecchi sentenced Onyenso to two years of supervised release, fined him $40,000 and ordered him to forfeit $42,176. 

Ashokkumar Babaria, 64, of Moorestown, N.J., Orange MRI’s former medical director, has been ordered to forfeit $2 million in revenue from corrupt referrals. Chirag Patel, 38, of Warren, N.J., Orange MRI’s former executive director, awaits sentencing and has agreed to forfeit $89,180 in corrupt gains. In addition, health care providers, including Onyenso, have agreed to or been ordered to forfeit a total of $429,666 in illegal cash kickbacks.

U.S. Attorney Fishman credited special agents of the U.S. Department of Health and Human Services, Office of Inspector General, under the direction of Special Agent in Charge Tom O’Donnell, and criminal investigators from the U.S. Attorney’s Office, with the investigation leading to today’s sentencing.  

The government is represented by Assistant U.S. Attorneys Scott B. McBride, deputy chief of the Economic Crimes Unit, and Joseph G. Mack, deputy chief of the Health Care and Government Fraud Unit, in Newark.

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 $500 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.

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Defense counsel: Alan L. Zegas Esq., Chatham, NJ

NEWARK, N.J.  – A Middlesex County, N.J., man today admitted robbing a TD Bank in Saddle Brook, N.J., U.S. Attorney Paul J. Fishman announced.

Jorge Rodriguez, 46, of South River, N.J., pleaded guilty before U.S. District Judge William J. Martini in Newark federal court to an information charging him with one count of bank robbery.

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

Rodriguez admitted using a BB air pistol to rob a TD Bank in Saddle Brook on April 19, 2013.  Rodriguez entered the bank wearing a disguise, which included a hat with a dreadlocks wig attached to it. During the robbery, Rodriguez brandished the BB air pistol, handed a bag to a bank teller and said, “Give me the money or I’ll shoot. You have two seconds.” The teller complied and Rodriguez then fled the bank with the bag of money, which also included a dye pack.  Rodriguez was apprehended shortly after the robbery, after the dye pack exploded.

The bank robbery count carries a maximum sentence of up to 20 years in prison and a fine of up to $250,000. Sentencing is scheduled for Sept. 23, 2014.

U.S. Attorney Fishman credited special agents of the FBI, under the direction of Special Agent in Charge Aaron T. Ford in Newark, along with the Saddle Brook Police Department and the Bergen County Prosecutor’s Office for the investigation leading to today’s guilty plea.

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

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

Rodriguez, Jorge Information

CAMDEN COUNTY COLLEGE, BLACKWOOD, N.J.

Thank you, President Yannuzzi, for that introduction. It is always a privilege for me to speak with uniformed officers and it is a special thrill to be the keynote speaker on such a momentous occasion. The presence of so many public figures shows just how significant today is. And while I don’t want to run the risk of picking and choosing among elected and non-elected officials, I do want to single out two people. First, I want to thank Warren Faulk for his service as Camden County Prosecutor and for his friendship and for being such a great partner. I want to thank Chief Scott Thompson of the Camden County Police Department, with whom I have worked so closely over the last several years for his vision, his resolution, his flexibility and his leadership.

One morning, a few months from now, a woman will walk out of her door in the Parkside neighborhood in Camden with her new baby. And she will see one of you – maybe Officer Diana Deren or Ken Egan or Keyana Smith – walking up the block. And she will feel safer.

On a Tuesday afternoon in October, a retired couple will be taking a walk on the trail as the leaves change in Wood Lake Park in Edgewater Park. And maybe they will see Officer Kyle McPhillips or Charles Ryder pull into the parking lot. And they will feel safer.

Early one evening, a young family will get into their car after eating at one of the restaurants on Blackwood – Clementon Road as Matt Gray, or Joe Thomson, pulls in on a coffee break. And the kids will wave and the officers will wave back. And the parents will smile and feel safer.

And on a Sunday afternoon, a couple of teenagers will be riding their bikes to play ball at Legion Field in Fieldsboro. Maybe they’ll see Officer James or Officer Palma patrolling on Front Street or Washington Street. And they will be safer. And maybe one of those kids might think that he or she wants to be just like them.

Today we celebrate all of that. Today we recognize that all of you have chosen a career that will give you the chance to change people’s lives. Today we celebrate that all of you will, simply by doing your jobs, make our streets and our neighborhoods safer in 13 different communities – from Ocean City to Camden, and from Washington Township to Gloucester City.  And today we congratulate you for having made it through a rigorous, demanding, state of the art academy that has prepared you to handle those responsibilities in the best possible way.

You each have come to this career, and to this day, for different reasons and by different paths. For some of you, this work is literally in your blood and you are part of a family tradition and the next in a line of dedicated officers. Recruits Bagby, Camacho and Melendez are following in the footsteps of parents who have served these same communities.

Others of you are like those teenagers on their bikes, who have always wanted to be cops and have imagined wearing these uniforms since you played at arresting your friends on the playground. Four of you have already served your country in the armed forces, and this work is a natural extension of that extraordinary service. Several of you have already finished college, and three of you have advanced degrees.

And all of you, I suspect, have some deep, personal reasons to make a difference.
 
Chief Thomson shared Recruit CaBria Davis’ story with me, and that alone would be enough to make me proud to be here today. In 1994, her father was tragically murdered at the Crestbury Apartments in Camden. She and her brother were raised on the 500 block of Mechanic Street by their mother who struggled to make ends meet while on government assistance. There are a lot of ways Recruit Davis could have turned as a result of those experiences. But instead, she worked two jobs to assist her mother and brother  -- all while paying her own way to attend Camden County College and Rowan University, where she earned a bachelor’s degree in Criminal Justice. It is a testament to her resolve and an inspiration to all of us that she is motivated to use that experience and that education as a police officer in the City of Camden.

As the United States Attorney, I have a lot of opportunities to speak about the importance of public service and its rewards and obligations. For the better part of my 30-year career, I have been proud to tell people that I work for the Department of Justice, and it never gets old to say I represent the United States. As you all know, there is no greater honor than the opportunity to serve our country and our communities.

But while what I do is satisfying, rewarding and intellectually challenging, it’s not dangerous, and it’s not scary. I don’t get up in the morning and put on a uniform, and a badge, and strap on a gun. I’ve never put my body through the grueling training required to do the job and save lives; and I’ve never been involved in a high-speed chase with a dangerous felon.  I've never had to run into a burning building to save someone else. And I've never pulled over and approached a car with tinted windows on a deserted street, not knowing who was behind the glass or what they were holding.

To do that; to be willing to do that; to ask to do that – that requires a special kind of dedication and commitment. It means making a choice – and sometimes it’s just an instinct – to put the safety and welfare of others ahead of your own.

It is no coincidence that your badges are pinned over your hearts.

That kind of public service demands the sacrifice of time, compensation, and the companionship of family and friends. It’s lost weekends, and all-nighters, and missed school concerts and baseball games.

That sacrifice is shared – if not exceeded – by your family and friends. If you love someone who is on the job – if your husband or your wife is on patrol; if your mom or your dad is on a stakeout; if your sister or your brother or your friend is making an undercover buy – you bear burdens and worries and sleepless nights that others just can’t fully understand or appreciate. To the families of these brave men and women, I want to thank you in advance for carrying that weight.

Today we also celebrate something else. A little more than a year ago, the Camden County Police Department was launched. After all of the raised expectations this change created, it is your class – finally bringing the ranks to nearly full staffing – that will be able to deliver.

As budgets have tightened, we have all done “more with less.” All over New Jersey, we and our law enforcement partners have thwarted terrorist plots, stopped corrupt public officials, crippled cyber thieves who steal our most valuable information, held corporations accountable and locked up white collar criminals who have defrauded victims and markets and illegally used our healthcare system as a cash cow. We’ve taken guns and drugs off the streets, stopped producers and traders of images of sexually abused children and protected our delicate environment. Every day, I see my colleagues throughout the law enforcement community do their jobs with professionalism, dedication and pride.

But at a certain point, we can only do less with less. Even the most resilient are not immune from the constant stress of budget cuts, shutdown, furloughs or lay-offs. In today’s economy, this has been the reality for all of us in law enforcement. But the police in Camden – and the people of its neighborhoods and communities – have felt a particularly harsh bite. I and your other partners in this work are thrilled to see the cavalry has arrived.

Not that the force hasn’t been doing amazing work. Even with significantly challenged staffing levels, the men and women of this department have worked to reduce violent crime by 10 percent, homicides by 20 percent, and shootings by 25 percent. And crime is down in every category.

So imagine how much more we can do now. Those of you graduating today will boost the new County force to almost 390, full stop. That will allow deployments to further drive down the crime rate and it will give the department the flexibility to really employ a model of community policing. More officers will walk beats, patrol neighborhoods on bikes, and make real connections with the people they protect and serve. The fact that the force is so diverse, and reflects more and more who lives in those neighborhoods, will help to establish and maintain that trust. And it will be a huge advantage that you can communicate in 11 different languages.

We in the federal government have been and remain dedicated to supporting you in so many ways. For example, ten of you in this class were funded by a grant from the Justice Department’s Community Orienting Policing Services – or COPS – Hiring Program of 2013, which awarded Camden more than $2.2 million to bring them on board.

Last September, with the support of my office, the Justice Department’s Office of Juvenile Justice and Delinquency Prevention awarded Camden a roughly $1.4 million Community-Based Violence Prevention Demonstration Program grant to implement a public health based violence-reduction program called Cure4Camden, which will use Outreach Workers and Violence Interrupters to target those who are threatening Camden’s four most challenged neighborhoods:  Cooper-Lanning, Liberty Park, Whitman Park and Centerville.

OJJDP, as that office is known, also awarded Camden another quarter of a million dollars in a National Forum on Youth Violence Prevention grant in September to support the Mayor’s Task Force on Youth Violence Prevention – a multi-agency partnership that began meeting in the fall of 2012 to identify, plan and direct a number of strategic initiatives in the areas of prevention, intervention, enforcement and re-entry. I’m proud that my office is playing a major role in that initiative as well.

And just over two years ago, the federal Department of Education awarded Camden a half-million dollars Promise Neighborhood grant to ramp up services to children and families in the Cooper Plaza and Lanning Square neighborhoods; and the Department of Housing and Urban Development awarded Camden a $300,000 Choice Neighborhood grant to focus on addressing housing, transportation, education, employment, healthy living and health care for public housing residents in the Liberty Park, Whitman Park and Centerville neighborhoods.

As I know from my conversations with the mayor and the Chief, these resources are incredibly important, particularly in these lean days. But the federal commitment can’t be and isn’t just about big checks. It must also be about big ideas and new strategies.

We always preach that we work best and are most effective when we work together at all levels of law enforcement. But in my thirty years of experience, I have never seen a better model than how we’re doing that in Camden in what we call the Camden County Crime Collaboration, or “C-4.” Every federal, state, county, and local law enforcement agency responsible for combating drug trafficking, gang activity and violent crime in Camden has assigned personnel – including agents, cops, intelligence analysts and prosecutors – to work out of a single location in the city. Every morning at 10 o’clock, in a meeting that has become known as the “huddle,” senior supervisors of those agencies share real-time information about homicides, shootings, and – most important – the details of ongoing criminal investigations. The kind of information that is exchanged, and the trust among those agencies, is extraordinary, and this kind of cooperation and collaboration is truly unprecedented. Not only is there nothing else like it in New Jersey, but I don’t know of a similar program anywhere else in the country. It is smart, creative law enforcement, and I hope that many of you in this class will have the opportunity to work directly with this impressive group.

But whatever your assignment, no matter what community you serve, the moment is now yours.  Regardless of all of our cooperation, and all of our partnerships, and all we do as a team – in those moments of crisis in those neighborhoods and on those streets, it will be you who is there. When there is a call of shots fired; when the blaze is still burning; when the scene is not yet secure; when the ambulance hasn’t yet arrived; when the lost child has not yet been found – it will be you who is there. You are literally the first to respond.

Today we say, “You are ready.” You have trained hard and well, and will continue to hone your instincts through years of experience on the job.

It isn’t just about the fact that you keep people safe, it is also about how you keep people safe – always mindful of the civil liberties you are sworn to defend and the trust of the public you protect.

For the people of your communities, you – each of you – is an ambassador. For many, their interaction with the police is the closest contact they will ever have with their government. It is on you to represent all of us in a professional and positive light. You will need to be that much better; your skin will need to be that much thicker; and you will need to be that much more resistant to the temptation of corruption and the abuse of your power. Remember that everything you do – the way you handle every encounter – reflects not just on you but on all of your brother and sister officers.

Throughout my career, I have been lucky and privileged to work with law enforcement officers at every level of government: local, county state and federal. At every turn, I have been moved by the willingness of the New Jersey law enforcement community – the one I know best – to stand against those who won’t or can’t abide by the laws of our society, particularly those who commit crimes of violence. You have made it your life’s work – your chosen career – to help keep our communities safe.

The work will be hard, but it will be hugely satisfying.

In the communities you will serve, your patrol will be a welcome sight. In the communities you will serve, you will build relationships that will yield rewards for years. In the communities you will serve, criminals will be more afraid to carry guns and the law abiding people who work, live, play, and go to school there will carry themselves with less fear – and more pride.

Thank you all for letting me mark this milestone with you today. Thank you for your service.  And Congratulations Academy Class 63.

TRENTON, N.J. – A Monmouth County, N.J., man is expected to make his initial court appearance today on a charge that he received sexually explicit images of a 12-year old Pennsylvania girl with whom he had an online relationship, U.S. Attorney Paul J. Fishman announced.

Chad C. Weber, 21, of Colts Neck, N.J., is charged by complaint with one count of receiving child pornography. He surrendered this morning and made his initial court appearance before U.S. Magistrate Judge Tonianne J. Bongiovanni in Trenton federal court.

According to the complaint:

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

Weber was released on $100,000 bond and will be subject to home detention with electronic monitoring, no possession or use of computers and no contact with minors unless in the presence of a parent or guardian who is notified about this case.

The charge of receiving child pornography carries a mandatory minimum term of five years in prison and a maximum of 20 years in prison and a $250,000 fine.  
U.S. Attorney Fishman credited special agents of the U.S. Department of Homeland Security Immigration and Customs Enforcement, Homeland Security Investigations, under the direction of Special Agent in Charge Andrew M. McLees in Newark, for the investigation leading to the charges.
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: Brian P. Reilly Esq., Assistant Federal Public Defender, Trenton

Weber, Chad Complaint